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, 49th 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:
April 30
Date of reporting period:
January 31, 2013
ITEM 1.
|
SCHEDULE OF INVESTMENTS.
|
LEGG MASON PARTNERS EQUITY TRUST
LEGG MASON CAPITAL MANAGEMENT ALL CAP FUND
FORM N-Q
JANUARY 31, 2013
LEGG MASON CAPITAL MANAGEMENT ALL CAP FUND
|
|
|
Schedule of Investments (unaudited)
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
SECURITY
|
|
SHARES
|
|
|
VALUE
|
|
COMMON STOCKS - 98.1%
|
|
|
|
|
|
|
|
|
CONSUMER DISCRETIONARY - 11.2%
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure - 1.5%
|
|
|
|
|
|
|
|
|
Bwin.Party Digital Entertainment PLC
|
|
|
2,405,000
|
|
|
$
|
4,241,535
|
|
Yum! Brands Inc.
|
|
|
38,000
|
|
|
|
2,467,720
|
|
|
|
|
|
|
|
|
|
|
Total Hotels, Restaurants & Leisure
|
|
|
|
|
|
|
6,709,255
|
|
|
|
|
|
|
|
|
|
|
Media - 6.4%
|
|
|
|
|
|
|
|
|
Time Warner Cable Inc.
|
|
|
50,500
|
|
|
|
4,511,670
|
|
Time Warner Inc.
|
|
|
249,800
|
|
|
|
12,619,896
|
|
Viacom Inc., Class B Shares
|
|
|
197,500
|
|
|
|
11,919,125
|
|
|
|
|
|
|
|
|
|
|
Total Media
|
|
|
|
|
|
|
29,050,691
|
|
|
|
|
|
|
|
|
|
|
Multiline Retail - 1.9%
|
|
|
|
|
|
|
|
|
Dollar General Corp.
|
|
|
187,300
|
|
|
|
8,657,006
|
*
|
|
|
|
|
|
|
|
|
|
Specialty Retail - 1.4%
|
|
|
|
|
|
|
|
|
Best Buy Co. Inc.
|
|
|
150,600
|
|
|
|
2,448,756
|
|
Chicos FAS Inc.
|
|
|
207,000
|
|
|
|
3,711,510
|
|
Total Specialty Retail
|
|
|
|
|
|
|
6,160,266
|
|
|
|
|
|
|
|
|
|
|
TOTAL CONSUMER DISCRETIONARY
|
|
|
|
|
|
|
50,577,218
|
|
|
|
|
|
|
|
|
|
|
CONSUMER STAPLES - 8.4%
|
|
|
|
|
|
|
|
|
Beverages - 2.1%
|
|
|
|
|
|
|
|
|
PepsiCo Inc.
|
|
|
128,500
|
|
|
|
9,361,225
|
|
|
|
|
|
|
|
|
|
|
Food & Staples Retailing - 4.1%
|
|
|
|
|
|
|
|
|
CVS Caremark Corp.
|
|
|
215,000
|
|
|
|
11,008,000
|
|
Wal-Mart Stores Inc.
|
|
|
110,000
|
|
|
|
7,694,500
|
|
|
|
|
|
|
|
|
|
|
Total Food & Staples Retailing
|
|
|
|
|
|
|
18,702,500
|
|
|
|
|
|
|
|
|
|
|
Food Products - 1.2%
|
|
|
|
|
|
|
|
|
Unilever NV
|
|
|
132,000
|
|
|
|
5,343,360
|
|
|
|
|
|
|
|
|
|
|
Household Products - 1.0%
|
|
|
|
|
|
|
|
|
Procter & Gamble Co.
|
|
|
59,000
|
|
|
|
4,434,440
|
|
|
|
|
|
|
|
|
|
|
TOTAL CONSUMER STAPLES
|
|
|
|
|
|
|
37,841,525
|
|
|
|
|
|
|
|
|
|
|
ENERGY - 11.6%
|
|
|
|
|
|
|
|
|
Energy Equipment & Services - 3.4%
|
|
|
|
|
|
|
|
|
Baker Hughes Inc.
|
|
|
128,000
|
|
|
|
5,724,160
|
|
Halliburton Co.
|
|
|
111,700
|
|
|
|
4,543,956
|
|
National-Oilwell Varco Inc.
|
|
|
69,000
|
|
|
|
5,115,660
|
|
|
|
|
|
|
|
|
|
|
Total Energy Equipment & Services
|
|
|
|
|
|
|
15,383,776
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels - 8.2%
|
|
|
|
|
|
|
|
|
Apache Corp.
|
|
|
34,800
|
|
|
|
2,914,848
|
|
ConocoPhillips
|
|
|
102,500
|
|
|
|
5,945,000
|
|
Devon Energy Corp.
|
|
|
60,000
|
|
|
|
3,431,400
|
|
Exxon Mobil Corp.
|
|
|
87,801
|
|
|
|
7,899,456
|
|
Kinder Morgan Inc.
|
|
|
125,000
|
|
|
|
4,682,500
|
|
Noble Energy Inc.
|
|
|
32,000
|
|
|
|
3,449,280
|
|
Phillips 66
|
|
|
51,250
|
|
|
|
3,104,212
|
|
Valero Energy Corp.
|
|
|
134,000
|
|
|
|
5,859,820
|
|
|
|
|
|
|
|
|
|
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
37,286,516
|
|
|
|
|
|
|
|
|
|
|
TOTAL ENERGY
|
|
|
|
|
|
|
52,670,292
|
|
|
|
|
|
|
|
|
|
|
FINANCIALS - 15.0%
|
|
|
|
|
|
|
|
|
Capital Markets - 6.6%
|
|
|
|
|
|
|
|
|
Blackstone Group LP
|
|
|
300,000
|
|
|
|
5,550,000
|
|
E*TRADE Financial Corp.
|
|
|
340,000
|
|
|
|
3,607,400
|
*
|
Morgan Stanley
|
|
|
185,000
|
|
|
|
4,227,250
|
|
State Street Corp.
|
|
|
112,400
|
|
|
|
6,255,060
|
|
TD Ameritrade Holding Corp.
|
|
|
526,000
|
|
|
|
10,199,140
|
|
|
|
|
|
|
|
|
|
|
Total Capital Markets
|
|
|
|
|
|
|
29,838,850
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Schedule of Investments.
1
LEGG MASON CAPITAL MANAGEMENT ALL CAP FUND
|
|
|
Schedule of Investments (unaudited) (contd)
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
SECURITY
|
|
SHARES
|
|
|
VALUE
|
|
Commercial Banks - 2.0%
|
|
|
|
|
|
|
|
|
Huntington Bancshares Inc.
|
|
|
770,000
|
|
|
$
|
5,359,200
|
|
PNC Financial Services Group Inc.
|
|
|
60,000
|
|
|
|
3,708,000
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
9,067,200
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services - 1.6%
|
|
|
|
|
|
|
|
|
JPMorgan Chase & Co.
|
|
|
152,000
|
|
|
|
7,151,600
|
|
|
|
|
|
|
|
|
|
|
Insurance - 4.1%
|
|
|
|
|
|
|
|
|
Allstate Corp.
|
|
|
89,500
|
|
|
|
3,929,050
|
|
Assured Guaranty Ltd.
|
|
|
388,000
|
|
|
|
7,034,440
|
|
MetLife Inc.
|
|
|
185,000
|
|
|
|
6,907,900
|
|
Syncora Holdings Ltd.
|
|
|
1,530,000
|
|
|
|
918,000
|
*
|
|
|
|
|
|
|
|
|
|
Total Insurance
|
|
|
|
|
|
|
18,789,390
|
|
|
|
|
|
|
|
|
|
|
Real Estate Management & Development - 0.7%
|
|
|
|
|
|
|
|
|
Realogy Holdings Corp.
|
|
|
69,000
|
|
|
|
3,089,130
|
*
|
|
|
|
|
|
|
|
|
|
TOTAL FINANCIALS
|
|
|
|
|
|
|
67,936,170
|
|
|
|
|
|
|
|
|
|
|
HEALTH CARE - 12.4%
|
|
|
|
|
|
|
|
|
Biotechnology - 1.5%
|
|
|
|
|
|
|
|
|
Celgene Corp.
|
|
|
70,000
|
|
|
|
6,927,200
|
*
|
|
|
|
|
|
|
|
|
|
Health Care Equipment & Supplies - 1.5%
|
|
|
|
|
|
|
|
|
Medtronic Inc.
|
|
|
146,100
|
|
|
|
6,808,260
|
|
|
|
|
|
|
|
|
|
|
Health Care Providers & Services - 4.9%
|
|
|
|
|
|
|
|
|
McKesson Corp.
|
|
|
66,500
|
|
|
|
6,997,795
|
|
UnitedHealth Group Inc.
|
|
|
188,000
|
|
|
|
10,379,480
|
|
WellPoint Inc.
|
|
|
75,100
|
|
|
|
4,867,982
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Providers & Services
|
|
|
|
|
|
|
22,245,257
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals - 4.5%
|
|
|
|
|
|
|
|
|
Flamel Technologies SA, ADR
|
|
|
728,850
|
|
|
|
2,966,420
|
*
|
GlaxoSmithKline PLC, ADR
|
|
|
130,000
|
|
|
|
5,929,300
|
|
Merck & Co. Inc.
|
|
|
249,300
|
|
|
|
10,782,225
|
|
Zoetis Inc.
|
|
|
18,700
|
|
|
|
486,200
|
|
|
|
|
|
|
|
|
|
|
Total Pharmaceuticals
|
|
|
|
|
|
|
20,164,145
|
|
|
|
|
|
|
|
|
|
|
TOTAL HEALTH CARE
|
|
|
|
|
|
|
56,144,862
|
|
|
|
|
|
|
|
|
|
|
INDUSTRIALS - 14.4%
|
|
|
|
|
|
|
|
|
Aerospace & Defense - 1.0%
|
|
|
|
|
|
|
|
|
Northrop Grumman Corp.
|
|
|
48,800
|
|
|
|
3,173,952
|
|
Raytheon Co.
|
|
|
30,219
|
|
|
|
1,591,937
|
|
|
|
|
|
|
|
|
|
|
Total Aerospace & Defense
|
|
|
|
|
|
|
4,765,889
|
|
|
|
|
|
|
|
|
|
|
Air Freight & Logistics - 1.3%
|
|
|
|
|
|
|
|
|
United Parcel Service Inc., Class B Shares
|
|
|
75,500
|
|
|
|
5,986,395
|
|
|
|
|
|
|
|
|
|
|
Airlines - 2.4%
|
|
|
|
|
|
|
|
|
Delta Air Lines Inc.
|
|
|
423,300
|
|
|
|
5,879,637
|
*
|
United Continental Holdings Inc.
|
|
|
200,000
|
|
|
|
4,830,000
|
*
|
|
|
|
|
|
|
|
|
|
Total Airlines
|
|
|
|
|
|
|
10,709,637
|
|
|
|
|
|
|
|
|
|
|
Commercial Services & Supplies - 0.8%
|
|
|
|
|
|
|
|
|
TMS International Corp., Class A Shares
|
|
|
269,900
|
|
|
|
3,762,406
|
*
|
|
|
|
|
|
|
|
|
|
Electrical Equipment - 1.4%
|
|
|
|
|
|
|
|
|
Emerson Electric Co.
|
|
|
108,000
|
|
|
|
6,183,000
|
|
|
|
|
|
|
|
|
|
|
Industrial Conglomerates - 3.9%
|
|
|
|
|
|
|
|
|
3M Co.
|
|
|
95,000
|
|
|
|
9,552,250
|
|
United Technologies Corp.
|
|
|
93,300
|
|
|
|
8,170,281
|
|
|
|
|
|
|
|
|
|
|
Total Industrial Conglomerates
|
|
|
|
|
|
|
17,722,531
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Schedule of Investments.
2
LEGG MASON CAPITAL MANAGEMENT ALL CAP FUND
|
|
|
Schedule of Investments (unaudited) (contd)
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
SECURITY
|
|
SHARES
|
|
|
VALUE
|
|
Machinery - 1.4%
|
|
|
|
|
|
|
|
|
Stanley Black & Decker Inc.
|
|
|
82,000
|
|
|
$
|
6,300,060
|
|
|
|
|
|
|
|
|
|
|
Road & Rail - 2.2%
|
|
|
|
|
|
|
|
|
Hertz Global Holdings Inc.
|
|
|
295,200
|
|
|
|
5,396,256
|
*
|
Old Dominion Freight Line Inc.
|
|
|
120,200
|
|
|
|
4,481,056
|
*
|
|
|
|
|
|
|
|
|
|
Total Road & Rail
|
|
|
|
|
|
|
9,877,312
|
|
|
|
|
|
|
|
|
|
|
TOTAL INDUSTRIALS
|
|
|
|
|
|
|
65,307,230
|
|
|
|
|
|
|
|
|
|
|
INFORMATION TECHNOLOGY - 19.9%
|
|
|
|
|
|
|
|
|
Communications Equipment - 1.6%
|
|
|
|
|
|
|
|
|
Cisco Systems Inc.
|
|
|
340,000
|
|
|
|
6,993,800
|
|
|
|
|
|
|
|
|
|
|
Computers & Peripherals - 3.3%
|
|
|
|
|
|
|
|
|
EMC Corp.
|
|
|
599,700
|
|
|
|
14,758,617
|
*
|
|
|
|
|
|
|
|
|
|
Electronic Equipment, Instruments & Components - 1.9%
|
|
|
|
|
|
|
|
|
Avnet Inc.
|
|
|
107,500
|
|
|
|
3,801,200
|
*
|
Jabil Circuit Inc.
|
|
|
258,000
|
|
|
|
4,878,780
|
|
|
|
|
|
|
|
|
|
|
Total Electronic Equipment, Instruments & Components
|
|
|
|
|
|
|
8,679,980
|
|
|
|
|
|
|
|
|
|
|
Internet Software & Services - 1.5%
|
|
|
|
|
|
|
|
|
eBay Inc.
|
|
|
123,300
|
|
|
|
6,896,169
|
*
|
|
|
|
|
|
|
|
|
|
IT Services - 3.8%
|
|
|
|
|
|
|
|
|
Cognizant Technology Solutions Corp., Class A Shares
|
|
|
89,100
|
|
|
|
6,965,838
|
*
|
Lender Processing Services Inc.
|
|
|
233,600
|
|
|
|
5,615,744
|
|
MasterCard Inc., Class A Shares
|
|
|
8,500
|
|
|
|
4,406,400
|
|
|
|
|
|
|
|
|
|
|
Total IT Services
|
|
|
|
|
|
|
16,987,982
|
|
|
|
|
|
|
|
|
|
|
Semiconductors & Semiconductor Equipment - 2.3%
|
|
|
|
|
|
|
|
|
Micron Technology Inc.
|
|
|
615,000
|
|
|
|
4,649,400
|
*
|
Texas Instruments Inc.
|
|
|
180,000
|
|
|
|
5,954,400
|
|
|
|
|
|
|
|
|
|
|
Total Semiconductors & Semiconductor Equipment
|
|
|
|
|
|
|
10,603,800
|
|
|
|
|
|
|
|
|
|
|
Software - 5.5%
|
|
|
|
|
|
|
|
|
Adobe Systems Inc.
|
|
|
125,000
|
|
|
|
4,728,750
|
*
|
FleetMatics Group PLC
|
|
|
50,100
|
|
|
|
1,256,007
|
*
|
MICROS Systems Inc.
|
|
|
134,400
|
|
|
|
6,186,432
|
*
|
Nuance Communications Inc.
|
|
|
225,000
|
|
|
|
5,411,250
|
*
|
Red Hat Inc.
|
|
|
119,500
|
|
|
|
6,639,420
|
*
|
ServiceNow Inc.
|
|
|
29,900
|
|
|
|
828,828
|
*
|
|
|
|
|
|
|
|
|
|
Total Software
|
|
|
|
|
|
|
25,050,687
|
|
|
|
|
|
|
|
|
|
|
TOTAL INFORMATION TECHNOLOGY
|
|
|
|
|
|
|
89,971,035
|
|
|
|
|
|
|
|
|
|
|
MATERIALS - 3.4%
|
|
|
|
|
|
|
|
|
Chemicals - 3.4%
|
|
|
|
|
|
|
|
|
Air Products & Chemicals Inc.
|
|
|
44,000
|
|
|
|
3,846,920
|
|
Eastman Chemical Co.
|
|
|
80,500
|
|
|
|
5,727,575
|
|
LyondellBasell Industries NV, Class A Shares
|
|
|
95,000
|
|
|
|
6,024,900
|
|
|
|
|
|
|
|
|
|
|
TOTAL MATERIALS
|
|
|
|
|
|
|
15,599,395
|
|
|
|
|
|
|
|
|
|
|
TELECOMMUNICATION SERVICES - 1.1%
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services - 1.1%
|
|
|
|
|
|
|
|
|
AT&T Inc.
|
|
|
137,300
|
|
|
|
4,776,667
|
|
|
|
|
|
|
|
|
|
|
UTILITIES - 0.7%
|
|
|
|
|
|
|
|
|
Independent Power Producers & Energy Traders - 0.7%
|
|
|
|
|
|
|
|
|
AES Corp.
|
|
|
311,800
|
|
|
|
3,379,912
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS
(Cost - $354,102,923)
|
|
|
|
|
|
|
444,204,306
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Schedule of Investments.
3
LEGG MASON CAPITAL MANAGEMENT ALL CAP FUND
|
|
|
Schedule of Investments (unaudited) (contd)
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITY
|
|
RATE
|
|
|
MATURITY
DATE
|
|
|
FACE
AMOUNT
|
|
|
VALUE
|
|
SHORT-TERM INVESTMENTS - 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Agreements - 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest in $155,753,000 joint tri-party repurchase agreement dated 1/31/13 with Deutsche Bank Securities Inc.; Proceeds at
maturity - $6,058,027; (Fully collateralized by various U.S. government agency obligations, 0.375% to 1.250% due 12/21/15 to 9/28/16; Market value - $6,179,173)
(Cost - $6,058,000)
|
|
|
0.160
|
%
|
|
|
2/1/13
|
|
|
$
|
6,058,000
|
|
|
$
|
6,058,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS - 99.4%
(Cost - $360,160,923#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450,262,306
|
|
Other Assets in Excess of Liabilities - 0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,812,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL NET ASSETS - 100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
453,074,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Non-income producing security.
|
#
|
Aggregate cost for federal income tax purposes is substantially the same.
|
Abbreviation used in this schedule:
|
|
|
|
|
ADR
|
|
American Depositary Receipts
|
See
Notes to Schedule of Investments.
4
Notes to Schedule of Investments (unaudited)
1. Organization and significant accounting policies
Legg Mason Capital Management All Cap Fund (the Fund) is a non-diversified separate 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:
5
Notes to Schedule of Investments (unaudited) (continued)
|
|
|
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)
|
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 carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
DESCRIPTION
|
|
QUOTED PRICES
(LEVEL 1)
|
|
|
OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2)
|
|
|
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL
3)
|
|
|
TOTAL
|
|
Common stocks
|
|
$
|
444,204,306
|
|
|
|
|
|
|
|
|
|
|
$
|
444,204,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
|
|
|
|
$
|
6,058,000
|
|
|
|
|
|
|
|
6,058,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
$
|
444,204,306
|
|
|
$
|
6,058,000
|
|
|
|
|
|
|
$
|
450,262,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
(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.
(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)
|
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:
6
Notes to Schedule of Investments (unaudited) (continued)
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
121,887,645
|
|
Gross unrealized depreciation
|
|
|
(31,786,262
|
)
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
90,101,383
|
|
|
|
|
|
|
3. Derivative instruments and hedging activities
GAAP requires enhanced disclosure about an entitys derivative and hedging activities.
During the period ended
January 31, 2013, the Fund did not invest in any derivative instruments.
7
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.
|
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
|