Western Asset Variable Rate Strategic Fund NPORT-P Western Asset Variable Rate Strategic Fund Inc. (Jun 2020 report)

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Corporate Bonds & Notes - 44.1%
Communication Services - 5.3%
Diversified Telecommunication Services - 1.7%
AT&T Inc., Senior Notes		3.600	%		2/17/23		810,000	$	870,037	(a)
Verizon Communications Inc., Senior Notes		3.376	%		2/15/25		30,000		33,401
Verizon Communications Inc., Senior Notes (3 mo. USD LIBOR + 1.100%)		1.492	%		5/15/25		380,000		384,891	(a)(b)
Total Diversified Telecommunication Services									1,288,329
Media - 1.1%
Charter Communications Operating LLC/
Charter Communications Operating Capital
Corp., Senior Secured Notes		4.908	%		7/23/25		240,000		275,239
Comcast Corp., Senior Notes		3.950	%		10/15/25		10,000		11,468
Comcast Corp., Senior Notes		3.150	%		3/1/26		20,000		22,362
DISH DBS Corp., Senior Notes		5.875	%		7/15/22		190,000		193,615
DISH DBS Corp., Senior Notes		5.875	%		11/15/24		270,000		269,113
DISH DBS Corp., Senior Notes		7.750	%		7/1/26		75,000		79,640
Fox Corp., Senior Notes		4.030	%		1/25/24		40,000		44,367
Total Media									895,804
Wireless Telecommunication Services - 2.5%
Sprint Corp., Senior Notes		7.250	%		9/15/21		530,000		556,238
Sprint Corp., Senior Notes		7.625	%		2/15/25		740,000		855,373
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC, Senior Secured Notes		3.360	%		9/20/21		171,875		174,237	(c)
T-Mobile USA Inc., Senior Secured Notes		3.500	%		4/15/25		100,000		109,027	(c)
Vodafone Group PLC, Senior Notes (3 mo. USD LIBOR + 0.990%)		2.166	%		1/16/24		220,000		219,090	(a)(b)
Total Wireless Telecommunication Services									1,913,965
Total Communication Services									4,098,098
Consumer Discretionary - 3.7%
Auto Components - 0.3%
ZF North America Capital Inc., Senior Notes		4.750	%		4/29/25		200,000		200,726	(c)
Automobiles - 2.2%
Ford Motor Credit Co. LLC, Senior Notes		5.875	%		8/2/21		250,000		252,930
General Motors Financial Co. Inc., Senior Notes		4.375	%		9/25/21		400,000		410,910	(a)
General Motors Financial Co. Inc., Senior Notes		4.250	%		5/15/23		1,000,000		1,045,051	(a)
Total Automobiles									1,708,891

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       1

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Hotels, Restaurants & Leisure - 0.1%
McDonald’s Corp., Senior Notes		3.300	%		7/1/25		90,000	$	100,099
McDonald’s Corp., Senior Notes		1.450	%		9/1/25		10,000		10,264
Total Hotels, Restaurants & Leisure									110,363
Internet & Direct Marketing Retail - 0.5%
Amazon.com Inc., Senior Notes		1.900	%		8/21/20		370,000		370,887
Specialty Retail - 0.4%
Home Depot Inc., Senior Notes (3 mo. USD LIBOR + 0.310%)		0.660	%		3/1/22		200,000		200,253	(a)(b)
Target Corp., Senior Notes		2.250	%		4/15/25		70,000		74,949
TJX Cos. Inc., Senior Notes		3.500	%		4/15/25		10,000		11,144
Total Specialty Retail									286,346
Textiles, Apparel & Luxury Goods - 0.2%
NIKE Inc., Senior Notes		2.400	%		3/27/25		170,000		182,948	(a)
Total Consumer Discretionary									2,860,161
Consumer Staples - 2.9%
Beverages - 0.6%
Anheuser-Busch InBev Finance Inc., Senior Notes (3 mo. USD LIBOR + 1.260%)		1.816	%		2/1/21		440,000		442,745	(b)
Coca-Cola Co., Senior Notes		2.950	%		3/25/25		20,000		22,025
PepsiCo Inc., Senior Notes		2.250	%		3/19/25		10,000		10,694
Total Beverages									475,464
Food & Staples Retailing - 0.8%
Walmart Inc., Senior Notes		1.900	%		12/15/20		560,000		563,771	(a)
Walmart Inc., Senior Notes		3.400	%		6/26/23		20,000		21,800
Total Food & Staples Retailing									585,571
Food Products - 0.8%
Kraft Heinz Foods Co., Senior Notes		3.950	%		7/15/25		576,000		611,555
Mondelez International Inc., Senior Notes		2.125	%		4/13/23		10,000		10,364
Total Food Products									621,919
Household Products - 0.0%††
Procter & Gamble Co., Senior Notes		2.450	%		3/25/25		10,000		10,860
Procter & Gamble Co., Senior Notes		2.800	%		3/25/27		10,000		11,131
Total Household Products									21,991
Tobacco - 0.7%
BAT Capital Corp., Senior Notes		2.764	%		8/15/22		450,000		466,142	(a)
Cargill Inc., Senior Notes		1.375	%		7/23/23		20,000		20,353	(c)
Total Tobacco									486,495
Total Consumer Staples									2,191,440

See Notes to Schedule of Investments.

  2     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Energy - 4.6%
Energy Equipment & Services - 0.2%
Halliburton Co., Senior Notes		3.250	%		11/15/21		170,000	$	173,748	(a)
Oil, Gas & Consumable Fuels - 4.4%
Anadarko Petroleum Corp., Senior Notes		4.850	%		3/15/21		351,000		347,490
BP Capital Markets PLC, Senior Notes		3.561	%		11/1/21		190,000		197,623	(a)
BP Capital Markets PLC, Senior Notes		3.062	%		3/17/22		10,000		10,413
Chevron Corp., Senior Notes		2.100	%		5/16/21		330,000		334,561	(a)
Cimarex Energy Co., Senior Notes		4.375	%		6/1/24		120,000		126,735
Continental Resources Inc., Senior Notes		5.000	%		9/15/22		344,000		338,453
Exxon Mobil Corp., Senior Notes		1.571	%		4/15/23		190,000		195,133
Exxon Mobil Corp., Senior Notes		2.992	%		3/19/25		10,000		10,870
Occidental Petroleum Corp., Senior Notes		4.100	%		2/1/21		40,000		40,360
Petrobras Global Finance BV, Senior Notes		6.125	%		1/17/22		418,000		439,324
Shell International Finance BV, Senior Notes		1.875	%		5/10/21		600,000		606,460	(a)
Shell International Finance BV, Senior Notes		1.750	%		9/12/21		120,000		121,774	(a)
Transcontinental Gas Pipe Line Co. LLC, Senior Notes		7.850	%		2/1/26		210,000		273,658	(a)
Williams Cos. Inc., Senior Notes		4.550	%		6/24/24		250,000		277,506	(a)
Total Oil, Gas & Consumable Fuels									3,320,360
Total Energy									3,494,108
Financials - 22.1%
Banks - 16.2%
ABN AMRO Bank NV, Senior Notes (3 mo. USD LIBOR + 0.570%)		0.939	%		8/27/21		430,000		432,235	(a)(b)(c)
Banco Santander Chile, Senior Notes		2.500	%		12/15/20		210,000		211,725	(c)
Banco Santander SA, Senior Notes		3.125	%		2/23/23		200,000		208,405	(a)
Bank of America Corp., Junior Subordinated Notes (6.250% to 9/5/24 then 3 mo. USD LIBOR + 3.705%)		6.250	%		9/5/24		650,000		674,100	(b)(d)
Bank of America Corp., Subordinated Notes		4.000	%		1/22/25		660,000		729,333	(a)
Bank of Montreal, Senior Notes		1.850	%		5/1/25		60,000		62,161
BNP Paribas SA, Senior Notes (4.705% to 1/10/24 then 3 mo. USD LIBOR + 2.235%)		4.705	%		1/10/25		200,000		221,579	(a)(b)(c)
Citigroup Inc., Junior Subordinated Notes (6.300% to 5/15/24 then 3 mo. USD LIBOR + 3.423%)		6.300	%		5/15/24		570,000		571,388	(b)(d)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       3

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Banks - continued
Citigroup Inc., Senior Notes (3.106% to 4/8/25 then SOFR + 2.750%)		3.106	%		4/8/26		20,000	$	21,550	(b)
Citigroup Inc., Subordinated Notes		4.400	%		6/10/25		900,000		1,008,502	(a)
Cooperatieve Rabobank UA, Senior Notes (3 mo. USD LIBOR + 0.430%)		1.421	%		4/26/21		600,000		601,816	(a)(b)
Fifth Third Bancorp, Senior Notes		3.650	%		1/25/24		40,000		43,681
JPMorgan Chase & Co., Junior Subordinated Notes (5.150% to 5/1/23 then 3 mo. USD LIBOR + 3.250%)		5.150	%		5/1/23		1,320,000		1,289,248	(b)(d)
Lloyds Banking Group PLC, Senior Notes (3.870% to 7/9/24 then 1 year Treasury Constant Maturity Rate + 3.500%)		3.870	%		7/9/25		210,000		228,383	(a)(b)
M&T Bank Corp., Junior Subordinated Notes (6.450% to 2/15/24 then 3 mo. USD LIBOR + 3.610%)		6.450	%		2/15/24		1,190,000		1,232,477	(b)(d)
Mitsubishi UFJ Financial Group Inc., Senior Notes		3.218	%		3/7/22		380,000		396,479	(a)
Nordea Bank Abp, Subordinated Notes		4.875	%		5/13/21		310,000		320,499	(a)(c)
PNC Financial Services Group Inc., Junior Subordinated Notes (4.850% to 6/1/23 then 3 mo. USD LIBOR + 3.040%)		4.850	%		6/1/23		990,000		956,425	(b)(d)
Royal Bank of Canada, Senior Notes		1.600	%		4/17/23		50,000		51,313
Santander UK Group Holdings PLC, Senior Notes		3.571	%		1/10/23		200,000		207,622	(a)
U.S. Bank N.A., Senior Notes (3 mo. USD LIBOR + 0.320%)		1.311	%		4/26/21		640,000		641,376	(a)(b)
Wachovia Capital Trust III Ltd., Junior Subordinated Bonds (the greater of 3 mo. USD LIBOR + 0.930% or 5.570%)		5.570	%		7/31/20		1,800,000		1,789,776	(b)(d)
Wells Fargo & Co., Senior Notes		3.500	%		3/8/22		450,000		471,451	(a)
Wells Fargo & Co., Senior Notes (2.188% to 4/30/25 then SOFR + 2.000%)		2.188	%		4/30/26		60,000		62,109	(b)
Total Banks									12,433,633
Capital Markets - 3.5%
Bank of New York Mellon Corp., Junior Subordinated Notes (4.500% to 6/20/23 then 3 mo. USD LIBOR + 2.460%)		4.500	%		6/20/23		1,340,000		1,287,479	(b)(d)
Bank of New York Mellon Corp., Senior Notes		1.600	%		4/24/25		20,000		20,734
Credit Suisse AG, Senior Notes		2.950	%		4/9/25		250,000		271,624	(a)

See Notes to Schedule of Investments.

  4     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Capital Markets - continued
Goldman Sachs Capital III Ltd. (3 mo. USD LIBOR + 0.770%, 4.000% floor)		4.000	%		7/31/20		43,000	$	35,848	(b)(d)
Goldman Sachs Group Inc., Senior Notes		3.625	%		2/20/24		650,000		707,610	(a)
Goldman Sachs Group Inc., Senior Notes		3.500	%		4/1/25		20,000		21,954
Morgan Stanley, Senior Notes (2.188% to 4/28/25 then SOFR + 1.990%)		2.188	%		4/28/26		110,000		114,664	(b)
UBS AG, Senior Notes		1.750	%		4/21/22		200,000		203,876	(a)(c)
Total Capital Markets									2,663,789
Consumer Finance - 0.7%
American Express Co., Senior Notes		2.650	%		12/2/22		517,000		541,693	(a)
Diversified Financial Services - 0.9%
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Senior Notes		4.875	%		1/16/24		150,000		149,162
International Lease Finance Corp., Senior Notes		8.625	%		1/15/22		290,000		311,687	(a)
International Lease Finance Corp., Senior Notes		5.875	%		8/15/22		190,000		199,986	(a)
Total Diversified Financial Services									660,835
Insurance - 0.8%
Ambac Assurance Corp., Subordinated Notes		5.100	%		6/7/21		4,066		5,459	(c)(d)
Ambac LSNI LLC, Senior Secured Notes (3 mo. USD LIBOR + 5.000%)		6.000	%		2/12/23		15,290		15,147	(b)(c)
MetLife Inc., Junior Subordinated Notes (3 mo. USD LIBOR + 3.575%)		3.888	%		7/31/20		680,000		614,975	(b)(d)
Total Insurance									635,581
Total Financials									16,935,531
Health Care - 1.8%
Biotechnology - 0.0%††
AbbVie Inc., Senior Notes		3.750	%		11/14/23		10,000		10,876
Health Care Equipment & Supplies - 0.8%
Becton Dickinson and Co., Senior Notes		3.734	%		12/15/24		139,000		153,427
Becton Dickinson and Co., Senior Notes (3 mo. USD LIBOR + 1.030%)		1.348	%		6/6/22		250,000		250,698	(b)
Medtronic Inc., Senior Notes		3.500	%		3/15/25		196,000		221,322	(a)
Total Health Care Equipment & Supplies									625,447
Health Care Providers & Services - 0.7%
Cigna Corp., Senior Notes		3.750	%		7/15/23		10,000		10,861

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       5

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Health Care Providers & Services - continued
CVS Health Corp., Senior Notes		3.350	%		3/9/21		478,000	$	487,517	(a)
UnitedHealth Group Inc., Senior Notes		3.500	%		6/15/23		20,000		21,800
Total Health Care Providers & Services									520,178
Pharmaceuticals - 0.3%
Bristol-Myers Squibb Co., Senior Notes		2.900	%		7/26/24		10,000		10,830	(c)
Bristol-Myers Squibb Co., Senior Notes		3.875	%		8/15/25		20,000		22,767	(c)
Teva Pharmaceutical Finance Co. BV, Senior Notes		2.950	%		12/18/22		100,000		96,722
Teva Pharmaceutical Finance IV BV, Senior Notes		3.650	%		11/10/21		30,000		30,037
Teva Pharmaceutical Finance Netherlands III BV, Senior Notes		2.200	%		7/21/21		60,000		58,915
Total Pharmaceuticals									219,271
Total Health Care									1,375,772
Industrials - 1.9%
Aerospace & Defense - 0.5%
General Dynamics Corp., Senior Notes (3 mo. USD LIBOR + 0.380%)		0.828	%		5/11/21		370,000		370,924	(a)(b)
Airlines - 0.0%††
Delta Air Lines Pass-Through Certificates Trust		8.021	%		8/10/22		20,003		18,812
Industrial Conglomerates - 1.4%
General Electric Co., Junior Subordinated Notes (5.000% to 1/21/21 then 3 mo. USD LIBOR + 3.330%)		5.000	%		1/21/21		1,312,000		1,026,787	(b)(d)
Trading Companies & Distributors - 0.0%††
United Rentals North America Inc., Senior Notes		6.500	%		12/15/26		20,000		21,038
Total Industrials									1,437,561
Information Technology - 0.6%
Semiconductors & Semiconductor Equipment - 0.2%
Broadcom Inc., Senior Notes		4.700	%		4/15/25		80,000		90,238	(c)
Micron Technology Inc., Senior Notes		2.497	%		4/24/23		30,000		31,204
Total Semiconductors & Semiconductor Equipment									121,442
Technology Hardware, Storage & Peripherals - 0.4%
Dell International LLC/EMC Corp., Senior Secured Notes		4.420	%		6/15/21		340,000		349,533	(a)(c)
Total Information Technology									470,975

See Notes to Schedule of Investments.

  6     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Materials - 0.8%
Chemicals - 0.4%
Equate Petrochemical BV, Senior Notes		3.000	%		3/3/22		280,000	$	283,682	(c)
Metals & Mining - 0.4%
Anglo American Capital PLC, Senior Notes		4.125	%		4/15/21		320,000		325,459	(c)
Total Materials									609,141
Utilities - 0.4%
Electric Utilities - 0.4%
FirstEnergy Corp., Senior Notes		2.850	%		7/15/22		290,000		300,966	(a)
Total Corporate Bonds & Notes (Cost - $32,447,138)									33,773,753
Collateralized Mortgage Obligations(e) - 41.0%
Adjustable Rate Mortgage Trust, 2005-11 5A1 (1 mo. USD LIBOR + 0.540%)		0.725	%		2/25/36		72,792		46,358	(b)
Alternative Loan Trust, 2004-6CB A (1 mo. USD LIBOR + 0.580%)		0.765	%		5/25/34		6,946		6,951	(b)
Banc of America Funding Corp., 2015-R3 2A2		0.298	%		2/27/37		1,634,303		1,396,950	(b)(c)
Banc of America Funding Trust, 2004-B 6A1		2.466	%		12/20/34		264,520		207,191	(b)
Banc of America Funding Trust, 2005-E 8A1 (Cost of Funds for the 11th District of San Francisco + 1.430%, min. coupon of 1.430%)		2.170	%		6/20/35		184,424		135,106	(b)
Bear Stearns ALT-A Trust, 2004-3 A1 (1 mo. USD LIBOR + 0.640%)		0.825	%		4/25/34		179,379		176,396	(b)
BHMS, 2018-ATLS A (1 mo. USD LIBOR + 1.250%)		1.435	%		7/15/35		100,000		95,190	(b)(c)
BHMS, 2018-ATLS D (1 mo. USD LIBOR + 2.250%)		2.435	%		7/15/35		280,000		243,199	(b)(c)
BX Commercial Mortgage Trust, 2020-BXLP A (1 mo. USD LIBOR + 0.800%)		0.985	%		12/15/36		320,000		317,632	(b)(c)
BXMT Ltd., 2020-FL2 A (1 mo. USD LIBOR + 0.900%)		1.094	%		2/16/37		290,000		282,097	(b)(c)
CD Mortgage Trust, 2016-CD2 A4		3.526	%		11/10/49		250,000		278,107	(b)
CD Mortgage Trust, 2017-CD6 XA, IO		1.098	%		11/13/50		6,486,043		277,488	(b)
CFK Trust, 2020-MF2 F		3.573	%		3/15/39		210,000		184,708	(b)(c)
CGDB Commercial Mortgage Trust, 2019- MOB A (1 mo. USD LIBOR + 0.950%)		1.135	%		11/15/36		210,000		210,291	(b)(c)
Chevy Chase Funding LLC Mortgage- Backed Certificates, 2004-2A A1 (1 mo. USD LIBOR + 0.270%)		0.455	%		5/25/35		132,512		126,384	(b)(c)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       7

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Chevy Chase Funding LLC Mortgage- Backed Certificates, 2004-3A A1 (1 mo. USD LIBOR + 0.250%)		0.435	%		8/25/35		115,302	$	111,617	(b)(c)
CHL Mortgage Pass-Through Trust, 2004-20 2A1		3.084	%		9/25/34		193,277		147,948	(b)
CHL Mortgage Pass-Through Trust, 2004-29 2A1 (1 mo. USD LIBOR + 0.660%)		0.845	%		2/25/35		13,886		12,346	(b)
CHL Mortgage Pass-Through Trust, 2005- HYB9 3A1A (12 mo. USD LIBOR + 1.750%)		3.711	%		2/20/36		160,022		140,708	(b)
Citigroup Commercial Mortgage Trust, 2013-375P A		3.251	%		5/10/35		340,000		354,859	(c)
Citigroup Commercial Mortgage Trust, 2019-SST2 A (1 mo. USD LIBOR + 0.920%)		1.105	%		12/15/36		270,000		265,083	(b)(c)
Countrywide Home Loans Reperforming REMIC Trust, 2004-R1 2A		6.500	%		11/25/34		22,518		22,406	(c)
Countrywide Home Loans Reperforming REMIC Trust, 2005-R2 2A1		7.000	%		6/25/35		67,761		71,592	(c)
Countrywide Home Loans Reperforming REMIC Trust, 2006-R2 AF1 (1 mo. USD LIBOR + 0.420%)		0.605	%		7/25/36		53,175		46,901	(b)(c)
CSMC Trust, 2015-2R 7A2		3.482	%		8/27/36		1,108,621		850,475	(b)(c)
CSMC Trust, 2015-10R 3A2 (Federal Reserve U.S. 12 mo. Cumulative Avg 1 Year CMT + 0.840%)		2.531	%		10/27/46		1,110,000		1,087,437	(b)(c)
CSMC Trust, 2018-J1 B2		3.662	%		2/25/48		825,340		832,693	(b)(c)
CSMC Trust, 2019-NQM1 A2		2.860	%		10/25/59		279,572		285,304	(c)
CSMC Trust, 2019-UVIL A		3.160	%		12/15/41		490,000		474,302	(c)
DBJPM Mortgage Trust, 2016-C1 ASB		3.038	%		5/10/49		250,000		262,416
Deutsche Mortgage Securities Inc. Mortgage Loan Trust, 2004-4 3AR1		3.875	%		6/25/34		155,259		151,630	(b)
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2013-DN1 M2 (1 mo. USD LIBOR + 7.150%)		7.335	%		7/25/23		309,670		276,609	(b)
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2015-HQ1 M3 (1 mo. USD LIBOR + 3.800%)		3.985	%		3/25/25		107,197		109,146	(b)

See Notes to Schedule of Investments.

  8     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2016-DNA4 M2 (1 mo. USD LIBOR + 1.300%)		1.485	%		3/25/29		34,960	$	34,934	(b)
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2017-DNA2 B2 (1 mo. USD LIBOR + 11.250%)		11.435	%		10/25/29		367,175		351,164	(b)
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2018-HRP1 B2 (1 mo. USD LIBOR + 11.750%)		11.935	%		4/25/43		244,600		234,199	(b)(c)
Federal Home Loan Mortgage Corp. (FHLMC) Structured Agency Credit Risk Debt Notes, 2018-HRP2 B2 (1 mo. USD LIBOR + 10.500%)		10.685	%		2/25/47		520,000		500,801	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2013-C01 M2 (1 mo. USD LIBOR + 5.250%)		5.435	%		10/25/23		226,889		207,865	(b)
Federal National Mortgage Association (FNMA) - CAS, 2014-C01 M2 (1 mo. USD LIBOR + 4.400%)		4.585	%		1/25/24		293,247		262,316	(b)
Federal National Mortgage Association (FNMA) - CAS, 2014-C03 1M1 (1 mo. USD LIBOR + 3.000%)		3.185	%		7/25/24		219,077		193,784	(b)
Federal National Mortgage Association (FNMA) - CAS, 2014-C04 1M2 (1 mo. USD LIBOR + 4.900%)		5.085	%		11/25/24		298,926		309,610	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2016-C01 1B (1 mo. USD LIBOR + 11.750%)		11.935	%		8/25/28		257,328		285,241	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2016-C02 1M2 (1 mo. USD LIBOR + 6.000%)		6.185	%		9/25/28		186,229		194,565	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2016-C04 1B (1 mo. USD LIBOR + 10.250%)		10.435	%		1/25/29		895,338		975,080	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2016-C04 1M2 (1 mo. USD LIBOR + 4.250%)		4.435	%		1/25/29		783,187		817,353	(b)(c)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       9

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Federal National Mortgage Association (FNMA) - CAS, 2016-C06 1B (1 mo. USD LIBOR + 9.250%)		9.435	%		4/25/29		1,007,371	$	1,083,207	(b)(c)
Federal National Mortgage Association (FNMA) - CAS, 2020-R01 1M1 (1 mo. USD LIBOR + 0.800%)		0.985	%		1/25/40		243,566		243,169	(b)(c)
Federal National Mortgage Association (FNMA) REMIC, 2013-25 BI, IO		3.000	%		3/25/33		4,775,882		408,295
Federal National Mortgage Association (FNMA) REMIC, 2013-62 AI, IO		3.000	%		6/25/33		3,726,895		328,982
Federal National Mortgage Association (FNMA) REMIC, 2019-38 CF (1 mo. USD LIBOR + 0.450%)		0.635	%		7/25/49		757,879		759,919	(b)
Federal National Mortgage Association (FNMA) STRIPS, 347 2, IO		5.000	%		1/25/34		507,963		92,023
Galton Funding Mortgage Trust, 2017-1 A22		3.000	%		7/25/56		85,226		87,273	(b)(c)
GMACM Mortgage Loan Trust, 2005-AF2 A1		6.000	%		12/25/35		628,157		591,663
Government National Mortgage Association (GNMA), 2010-H03 FA (1 mo. USD LIBOR + 0.550%)		0.724	%		3/20/60		77,519		77,590	(a)(b)
Government National Mortgage Association (GNMA), 2010-H10 FC (1 mo. USD LIBOR + 1.000%)		1.174	%		5/20/60		61,391		62,093	(b)
Government National Mortgage Association (GNMA), 2010-H11 FA (1 mo. USD LIBOR + 1.000%)		1.174	%		6/20/60		443,146		449,235	(a)(b)
Government National Mortgage Association (GNMA), 2011-H01 AF (1 mo. USD LIBOR + 0.450%)		0.753	%		11/20/60		837,780		836,526	(b)
Government National Mortgage Association (GNMA), 2011-H03 FA (1 mo. USD LIBOR + 0.500%)		0.803	%		1/20/61		85,669		85,650	(b)
Government National Mortgage Association (GNMA), 2011-H05 FA (1 mo. USD LIBOR + 0.500%)		0.803	%		12/20/60		148,418		148,391	(a)(b)
Government National Mortgage Association (GNMA), 2011-H05 FB (1 mo. USD LIBOR + 0.500%)		0.803	%		12/20/60		153,051		153,013	(a)(b)

See Notes to Schedule of Investments.

  10     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Government National Mortgage Association (GNMA), 2011-H6 FA (1 mo. USD LIBOR + 0.450%)		0.753	%		2/20/61		361,903	$	361,356	(a)(b)
Government National Mortgage Association (GNMA), 2011-H07 FA (1 mo. USD LIBOR + 0.500%)		0.803	%		2/20/61		207,556		207,533	(a)(b)
Government National Mortgage Association (GNMA), 2011-H08 FD (1 mo. USD LIBOR + 0.500%)		0.803	%		2/20/61		211,870		211,825	(a)(b)
Government National Mortgage Association (GNMA), 2011-H9 AF (1 mo. USD LIBOR + 0.500%)		0.803	%		3/20/61		420,223		420,147	(a)(b)
Government National Mortgage Association (GNMA), 2011-H11 FB (1 mo. USD LIBOR + 0.500%)		0.803	%		4/20/61		92,431		92,413	(b)
Government National Mortgage Association (GNMA), 2012-H18 NA (1 mo. USD LIBOR + 0.520%)		0.823	%		8/20/62		344,178		344,290	(a)(b)
Government National Mortgage Association (GNMA), 2012-H23 SA (1 mo. USD LIBOR + 0.530%)		0.833	%		10/20/62		323,046		323,394	(a)(b)
Government National Mortgage Association (GNMA), 2012-H23 WA (1 mo. USD LIBOR + 0.520%)		0.823	%		10/20/62		396,943		397,050	(b)
GSMPS Mortgage Loan Trust, 2006-RP2 1AF1 (1 mo. USD LIBOR + 0.400%)		0.585	%		4/25/36		183,164		149,484	(b)(c)
HarborView Mortgage Loan Trust, 2004-10 4A		3.634	%		1/19/35		71,266		67,506	(b)
HarborView Mortgage Loan Trust, 2005-14 3A1A		4.138	%		12/19/35		32,022		30,008	(b)
IndyMac INDX Mortgage Loan Trust, 2004- AR7 A2 (1 mo. USD LIBOR + 0.860%)		1.045	%		9/25/34		102,291		94,871	(b)
JPMBB Commercial Mortgage Securities Trust, 2013-C17 ASB		3.705	%		1/15/47		107,799		112,285
JPMorgan Chase Commercial Mortgage Securities Trust, 2020-NNN FFL (1 mo. USD LIBOR + 2.500%)		2.695	%		1/16/37		400,000		356,592	(b)(c)
JPMorgan Chase Commercial Mortgage Securities Trust, 2020-NNN GFL (1 mo. USD LIBOR + 3.000%)		3.195	%		1/16/37		400,000		335,405	(b)(c)
JPMorgan Chase Commercial Mortgage Securities Trust, 2020-NNN GFX		4.688	%		1/16/37		390,000		346,681	(b)(c)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       11

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
JPMorgan Mortgage Trust, 2005-A3 3A4		3.513	%		6/25/35		67,892	$	66,978	(b)
Lanark Master Issuer PLC, 2018-1A 1A (3 mo. USD LIBOR + 0.420%)		0.778	%		12/22/69		361,800		358,902	(b)(c)
MASTR Adjustable Rate Mortgages Trust, 2003-6 2A1		3.385	%		12/25/33		31,843		30,254	(b)
MASTR Reperforming Loan Trust, 2005-2 1A1F (1 mo. USD LIBOR + 0.350%)		0.535	%		5/25/35		623,890		293,265	(b)(c)
MASTR Reperforming Loan Trust, 2006-2 2A1		3.865	%		5/25/36		62,207		56,951	(b)(c)
Morgan Stanley Bank of America Merrill Lynch Trust, 2016-C32 ASB		3.514	%		12/15/49		350,000		377,094
Morgan Stanley Capital I Trust, 2017-ASHF A (1 mo. USD LIBOR + 0.850%)		1.035	%		11/15/34		112,564		105,145	(b)(c)
Morgan Stanley Capital I Trust, 2019-BPR A (1 mo. USD LIBOR + 1.400%)		1.585	%		5/15/36		160,000		142,632	(b)(c)
Morgan Stanley Mortgage Loan Trust, 2006-6AR 2A		3.597	%		5/25/36		249,680		227,976	(b)
Morgan Stanley Re-REMIC Trust, 2015-R2 1A1 (Federal Reserve U.S. 12 mo. Cumulative Avg 1 Year CMT + 0.710%)		2.401	%		12/27/46		86,856		90,753	(b)(c)
Morgan Stanley Re-REMIC Trust, 2015-R2 1B (Federal Reserve U.S. 12 mo. Cumulative Avg 1 Year CMT + 0.710%)		2.401	%		12/27/46		1,436,841		1,118,061	(b)(c)
Morgan Stanley Re-REMIC Trust, 2015-R6 1A1 (1 mo. USD LIBOR + 0.260%)		0.688	%		7/26/45		93,062		90,610	(b)(c)
MortgageIT Trust, 2005-3 A1 (1 mo. USD LIBOR + 0.600%)		0.785	%		8/25/35		132,607		128,440	(b)
Natixis Commercial Mortgage Securities Trust, 2019-TRUE A (1 mo. USD LIBOR + 2.011%)		2.204	%		4/18/24		410,000		402,923	(b)(c)
New Residential Mortgage Loan Trust, 2015-1A A3		3.750	%		5/28/52		233,637		251,173	(b)(c)
New Residential Mortgage Loan Trust, 2017-1A A1		4.000	%		2/25/57		367,992		396,928	(b)(c)
Nomura Asset Acceptance Corp. Alternative Loan Trust, 2007-1 1A4		6.138	%		3/25/47		259,796		264,104
Nomura Resecuritization Trust, 2015-1R 2A2		2.072	%		10/26/36		122,474		123,676	(b)(c)
One Market Plaza Trust, 2017-1MKT A		3.614	%		2/10/32		320,000		335,808	(c)
PMT Credit Risk Transfer Trust, 2019-1R A (1 mo. USD LIBOR + 2.000%)		2.184	%		3/27/24		355,772		350,638	(b)(c)

See Notes to Schedule of Investments.

  12     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Prime Mortgage Trust, 2006-DR1 2A2		6.000	%		5/25/35		352,155	$	289,395	(c)
Structured Asset Mortgage Investments II Trust, 2004-AR3 1A1 (1 mo. USD LIBOR + 0.600%)		0.794	%		7/19/34		122,043		117,472	(b)
Structured Asset Securities Corp., 2005- RF2 A (1 mo. USD LIBOR + 0.350%)		0.535	%		4/25/35		116,984		105,446	(b)(c)
Tharaldson Hotel Portfolio Trust, 2018-THL D (1 mo. USD LIBOR + 2.000%)		2.175	%		11/11/34		267,327		230,763	(b)(c)
UBS Commercial Mortgage Trust, 2017-C4 A4		3.563	%		10/15/50		410,000		454,306
WaMu Mortgage Pass-Through Certificates Trust, 2004-AR11 A		4.088	%		10/25/34		56,037		54,757	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2004-AR12 A2A (1 mo. USD LIBOR + 0.780%)		0.965	%		10/25/44		55,832		53,958	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-4 CB9 (1 mo. USD LIBOR + 0.400%)		0.585	%		6/25/35		301,181		240,263	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR1 A2A3 (1 mo. USD LIBOR + 0.800%)		0.985	%		1/25/45		47,872		47,304	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR6 2A1A (1 mo. USD LIBOR + 0.460%)		0.645	%		4/25/45		235,463		229,792	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR8 2AB3 (1 mo. USD LIBOR + 0.720%)		0.905	%		7/25/45		367,402		335,155	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR13 A1B3 (1 mo. USD LIBOR + 0.360%)		0.545	%		10/25/45		216,595		208,301	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR13 A1C3 (1 mo. USD LIBOR + 0.490%)		0.675	%		10/25/45		92,373		87,317	(b)
WaMu Mortgage Pass-Through Certificates Trust, 2006-AR13 2A (Cost of Funds for the 11th District of San Francisco + 1.500%, min. coupon of 1.500%)		2.240	%		10/25/46		210,310		186,802	(b)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       13

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Collateralized Mortgage Obligations(e) - continued
Wells Fargo Commercial Mortgage Trust, 2015-C31 D		3.852	%		11/15/48		364,630	$	258,592
Wells Fargo Commercial Mortgage Trust, 2015-NXS3 ASB		3.371	%		9/15/57		140,000		147,178
Total Collateralized Mortgage Obligations (Cost - $31,670,964)									31,371,413
Asset-Backed Securities - 26.0%
ACIS CLO Ltd., 2014-3A A1A (3 mo. USD LIBOR + 1.510%)		2.197	%		2/1/26		41,459		41,459	(b)(c)
ACIS CLO Ltd., 2014-3A A2A (3 mo. USD LIBOR + 1.550%)		2.237	%		2/1/26		13,653		13,655	(b)(c)
ACIS CLO Ltd., 2015-6A A1 (3 mo. USD LIBOR + 1.590%)		2.277	%		5/1/27		180,305		180,318	(b)(c)
Allegro CLO II-S Ltd., 2014-1RA A1 (3 mo. USD LIBOR + 1.080%)		2.189	%		10/21/28		250,000		245,607	(b)(c)
Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through Certificates, 2002-AR1 M1 (1 mo. USD LIBOR + 1.065%)		1.239	%		9/25/32		55,185		55,357	(b)
Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through Certificates, 2005-R7 M2 (1 mo. USD LIBOR + 0.500%)		0.685	%		9/25/35		175,702		175,395	(b)
Apex Credit CLO Ltd., 2017-1A A1 (3 mo. USD LIBOR + 1.470%)		2.490	%		4/24/29		198,522		195,860	(b)(c)
Ares XLIV CLO Ltd., 2017-44A C (3 mo. USD LIBOR + 3.450%)		4.669	%		10/15/29		250,000		239,869	(b)(c)
Argent Securities Inc., Asset-Backed Pass- Through Certificates, 2003-W3 M1 (1 mo. USD LIBOR + 1.125%)		1.310	%		9/25/33		24,093		22,235	(b)
Avis Budget Rental Car Funding AESOP LLC, 2019-1A C		4.530	%		3/20/23		108,000		101,610	(c)
Bear Stearns Asset-Backed Securities Trust, 2007-SD1 1A2A		6.000	%		10/25/36		436,234		310,804
Bowman Park CLO Ltd., 2014-1A AR (3 mo. USD LIBOR + 1.180%)		1.540	%		11/23/25		72,895		72,701	(b)(c)
Canyon CLO Ltd., 2020-1A A (3 mo. USD LIBOR + 1.920%)		2.319	%		7/15/28		250,000		250,625	(b)(c)
Carlyle Global Market Strategies CLO Ltd., 2014-3RA A1A (3 mo. USD LIBOR + 1.050%)		2.041	%		7/27/31		248,021		240,641	(b)(c)
Carlyle US CLO Ltd., 2017-2A A1B (3 mo. USD LIBOR + 1.220%)		2.355	%		7/20/31		250,000		241,139	(b)(c)

See Notes to Schedule of Investments.

  14     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Asset-Backed Securities - continued
Carlyle US CLO Ltd., 2017-2A C (3 mo. USD LIBOR + 3.700%)		4.835	%		7/20/31		250,000	$	234,667	(b)(c)
Chase Funding Trust, 2004-1 1A7		4.985	%		11/25/33		150,928		156,750
Citigroup Mortgage Loan Trust Inc., 2005- OPT1 M1 (1 mo. USD LIBOR + 0.630%)		0.815	%		2/25/35		193,303		184,598	(b)
Conseco Finance Corp., 1997-4 M1		7.220	%		2/15/29		234,828		224,682	(b)
Countrywide Asset-Backed Certificates Trust, 2007-13 2A1 (1 mo. USD LIBOR + 0.900%)		1.085	%		10/25/47		491,815		464,232	(b)
Countrywide Home Equity Loan Trust, 2006-HW 2A1B (1 mo. USD LIBOR + 0.150%)		0.335	%		11/15/36		253,976		219,019	(b)
Credit-Based Asset Servicing & Securitization LLC, 2007-SP1 A4		5.184	%		12/25/37		132,004		135,155	(c)
Domino’s Pizza Master Issuer LLC, 2017-1A A2I (3 mo. USD LIBOR + 1.250%)		2.241	%		7/25/47		487,500		485,609	(b)(c)
GoldenTree Loan Opportunities IX Ltd., 2014-9A AR2 (3 mo. USD LIBOR + 1.110%)		1.951	%		10/29/29		250,000		246,898	(b)(c)
GreenPoint Home Equity Loan Trust, 2004-4 A (1 mo. USD LIBOR + 0.280%)		0.465	%		8/15/30		16,820		16,377	(b)
Grippen Park CLO Ltd., 2017-1A D (3 mo. USD LIBOR + 3.300%)		4.435	%		1/20/30		500,000		469,464	(b)(c)
GSAA Home Equity Trust, 2006-5 2A3 (1 mo. USD LIBOR + 0.270%)		0.455	%		3/25/36		597,879		374,805	(b)
GSAMP Trust, 2004-OPT B1 (1 mo. USD LIBOR + 2.400%)		2.585	%		11/25/34		47,651		38,168	(b)
GSRPM Mortgage Loan Trust, 2007-1 A (1 mo. USD LIBOR + 0.400%)		0.585	%		10/25/46		216,955		192,627	(b)(c)
Halcyon Loan Advisors Funding Ltd., 2015-2A AR (3 mo. USD LIBOR + 1.080%)		2.071	%		7/25/27		153,705		151,762	(b)(c)
Home Equity Loan Trust, 2006-HSA3 A (1 mo. USD LIBOR + 0.130%)		0.315	%		5/25/36		284,751		277,458	(b)
Home Equity Mortgage Loan Asset-Backed Trust, 2005-C M2 (1 mo. USD LIBOR + 0.500%)		0.685	%		10/25/35		790,000		744,256	(b)
Home Equity Mortgage Loan Asset-Backed Trust, 2006-A A (1 mo. USD LIBOR + 0.260%)		0.445	%		6/25/36		1,966,468		169,685	(b)
Jamestown CLO X Ltd., 2017-10A A2 (3 mo. USD LIBOR + 1.850%)		2.985	%		7/17/29		250,000		241,513	(b)(c)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       15

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Asset-Backed Securities - continued
LCM XVIII LP, 19A AR (3 mo. USD LIBOR + 1.240%)		2.459	%		7/15/27		250,000	$	248,246	(b)(c)
LCM XX LP, 20A AR (3 mo. USD LIBOR + 1.040%)		2.175	%		10/20/27		250,000		246,792	(b)(c)
Legacy Mortgage Asset Trust, 2019-GS1 A1		4.000	%		1/25/59		601,620		617,065	(c)
Lehman XS Trust, 2006-8 2A4A (1 mo. USD LIBOR + 0.260%)		0.445	%		6/25/36		992,254		860,883	(b)
Long Beach Mortgage Loan Trust, 2001-3 M1 (1 mo. USD LIBOR + 0.825%)		1.010	%		9/25/31		8,591		8,544	(b)
Long Beach Mortgage Loan Trust, 2002-1 2M1 (1 mo. USD LIBOR + 1.125%)		1.310	%		5/25/32		43,008		43,044	(b)
Monroe Capital BSL CLO Ltd., 2015-1A BR (3 mo. USD LIBOR + 1.750%)		2.108	%		5/22/27		100,000		97,821	(b)(c)
Navient Student Loan Trust, 2015-1 A2 (1 mo. USD LIBOR + 0.600%)		0.785	%		4/25/40		110,874		106,445	(b)
New Century Home Equity Loan Trust, 2004-3 M1 (1 mo. USD LIBOR + 0.930%)		1.115	%		11/25/34		541,605		515,824	(b)
NovaStar Mortgage Funding Trust, 2004-1 M3 (1 mo. USD LIBOR + 0.825%)		1.010	%		6/25/34		413,190		406,717	(b)
Octagon Investment Partners 45 Ltd., 2019-1A A (3 mo. USD LIBOR + 1.330%)		2.549	%		10/15/32		250,000		247,038	(b)(c)
OneMain Financial Issuance Trust, 2016-3A A		3.830	%		6/18/31		925,000		942,647	(c)
Option One Mortgage Loan Trust, 2005-3 M4 (1 mo. USD LIBOR + 0.930%)		1.115	%		8/25/35		520,000		379,933	(b)
Origen Manufactured Housing Contract Trust, 2007-A A2		2.704	%		4/15/37		244,681		213,167	(b)
RAAC Trust, 2006-RP3 A (1 mo. USD LIBOR + 0.270%)		0.455	%		5/25/36		252,086		248,655	(b)(c)
RAMP Trust, 2003-RS7 MII1 (1 mo. USD LIBOR + 1.125%)		1.310	%		8/25/33		16,211		15,831	(b)
RAMP Trust, 2006-NC3 M1 (1 mo. USD LIBOR + 0.340%)		0.525	%		3/25/36		800,000		739,909	(b)
RASC Trust, 2005-KS12 M4 (1 mo. USD LIBOR + 0.640%)		0.825	%		1/25/36		460,000		364,733	(b)
RASC Trust, 2006-KS2 M3 (1 mo. USD LIBOR + 0.410%)		0.595	%		3/25/36		1,260,000		1,084,335	(b)
Recette CLO Ltd., 2015-1A AR (3 mo. USD LIBOR + 0.920%)		2.055	%		10/20/27		167,706		165,856	(b)(c)

See Notes to Schedule of Investments.

  16     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Asset-Backed Securities - continued
Renaissance Home Equity Loan Trust, 2003-2 A (1 mo. USD LIBOR + 0.880%)		1.065	%		8/25/33		51,624	$	48,331	(b)
SACO I Trust, 2006-3 A3 (1 mo. USD LIBOR + 0.460%)		0.645	%		4/25/36		62,888		62,185	(b)
SACO I Trust, 2006-4 A1 (1 mo. USD LIBOR + 0.340%)		0.525	%		3/25/36		53,559		53,317	(b)
Seneca Park CLO Ltd., 2014-1A AR (3 mo. USD LIBOR + 1.120%)		2.255	%		7/17/26		32,532		32,493	(b)(c)
SLM Private Credit Student Loan Trust, 2007-A A4A (3 mo. USD LIBOR + 0.240%)		0.553	%		12/16/41		452,515		429,169	(b)
SLM Student Loan Trust, 2006-10 A6 (3 mo. USD LIBOR + 0.150%)		1.141	%		3/25/44		960,000		897,487	(b)
SMB Private Education Loan Trust, 2016-C A2A		2.340	%		9/15/34		490,294		498,459	(c)
Structured Asset Investment Loan Trust, 2004-9 M4 (1 mo. USD LIBOR + 1.950%)		2.135	%		10/25/34		117,619		110,876	(b)
Structured Asset Securities Corp. Mortgage Loan Trust, 2006-GEL4 M1 (1 mo. USD LIBOR + 0.570%)		0.755	%		10/25/36		804,356		777,516	(b)(c)
Sudbury Mill CLO Ltd., 2013-1A A1R (3 mo. USD LIBOR + 1.150%)		2.285	%		1/17/26		209,435		208,784	(b)(c)
Terwin Mortgage Trust, 2004-5HE M1 (1 mo. USD LIBOR + 0.885%)		1.070	%		6/25/35		394,642		379,906	(b)
THL Credit Wind River CLO Ltd., 2016-1A BR (3 mo. USD LIBOR + 1.650%)		2.869	%		7/15/28		250,000		245,183	(b)(c)
Tralee CLO III Ltd., 2014-3A AR (3 mo. USD LIBOR + 1.030%)		2.165	%		10/20/27		204,555		202,526	(b)(c)
Tryon Park CLO Ltd., 2013-1A A1SR (3 mo. USD LIBOR + 0.890%)		2.109	%		4/15/29		500,000		492,134	(b)(c)
Venture XXVIII CLO Ltd., 2017-28A A2 (3 mo. USD LIBOR + 1.110%)		2.245	%		7/20/30		300,000		292,717	(b)(c)
ZAIS CLO 13 Ltd., 2019-13A A1A (3 mo. USD LIBOR + 1.490%)		2.709	%		7/15/32		250,000		243,604	(b)(c)
Total Asset-Backed Securities (Cost - $20,174,392)									19,943,172
Senior Loans - 4.8%
Communication Services - 1.6%
Diversified Telecommunication Services - 0.3%
Virgin Media Bristol LLC, Term Loan Facility N (1 mo. USD LIBOR + 2.500%)		2.685	%		1/31/28		257,809		247,368	(b)(f)(g)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       17

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Media - 1.3%
Charter Communications Operating LLC, Term Loan B1 (1 mo. USD LIBOR + 1.750%)		1.930	%		4/30/25		119,388	$	115,524	(b)(f)(g)
Nexstar Broadcasting Inc., Term Loan B4 (1 mo. USD LIBOR + 2.750%)		2.923	%		9/18/26		115,564		110,219	(b)(f)(g)
Terrier Media Buyer Inc., Term Loan (1 mo. USD LIBOR + 4.250%)		4.428	%		12/17/26		109,450		104,799	(b)(f)(g)
Univision Communications Inc., 2020 Replacement New First Lien Term Loan (1 mo. USD LIBOR + 3.750%)		4.750	%		3/16/26		674,122		626,372	(b)(f)(g)
Total Media									956,914
Total Communication Services									1,204,282
Consumer Discretionary - 0.6%
Hotels, Restaurants & Leisure - 0.3%
Hilton Worldwide Finance LLC, Refinance Term Loan B2 (1 mo. USD LIBOR + 1.750%)		1.935	%		6/22/26		120,000		112,500	(b)(f)(g)
Scientific Games International Inc., Initial Term Loan B5		2.928-3.612	%		8/14/24		119,389		105,839	(b)(f)(g)
Total Hotels, Restaurants & Leisure									218,339
Specialty Retail - 0.3%
Michaels Stores Inc., 2018 New Replacement Term Loan B		3.500-3.568	%		1/30/23		232,506		213,711	(b)(f)(g)
Total Consumer Discretionary									432,050
Financials - 0.7%
Capital Markets - 0.3%
First Eagle Holdings Inc., 2018 Refinancing Term Loan B (3 mo. USD LIBOR + 2.500%)		2.808	%		2/1/27		119,400		115,271	(b)(f)(g)
Focus Financial Partners LLC, Term Loan B3 (1 mo. USD LIBOR + 2.000%)		2.178	%		7/3/24		119,391		114,615	(b)(f)(g)
Total Capital Markets									229,886
Diversified Financial Services - 0.3%
RPI 2019 Intermediate Finance Trust, Term Loan B1 (1 mo. USD LIBOR + 1.750%)		1.928	%		2/5/27		109,450		107,238	(b)(f)(g)
Trans Union LLC, Term Loan B5 (1 mo. USD LIBOR + 1.750%)		1.928	%		11/16/26		119,382		114,930	(b)(f)(g)
Total Diversified Financial Services									222,168
Insurance - 0.1%
Asurion LLC, New Term Loan B7 (1 mo. USD LIBOR + 3.000%)		3.178	%		11/3/24		119,391		115,623	(b)(f)(g)
Total Financials									567,677

See Notes to Schedule of Investments.

  18     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Health Care - 0.8%
Health Care Providers & Services - 0.6%
Elanco Animal Health Inc., Term Loan B		—			2/4/27		140,000	$	134,050	(h)
Grifols Worldwide Operations USA Inc., Term Loan B (1 week USD LIBOR + 2.000%)		2.109	%		11/15/27		119,400		115,304	(b)(f)(g)
LifePoint Health Inc., First Lien Term Loan B (1 mo. USD LIBOR + 3.750%)		3.928	%		11/17/25		120,000		112,425	(b)(f)(g)
Sotera Health Holdings LLC, First Lien Initial Term Loan (1 mo. USD LIBOR + 4.500%)		5.500	%		12/11/26		119,700		117,343	(b)(f)(g)
Total Health Care Providers & Services									479,122
Health Care Technology - 0.2%
Change Healthcare Holdings LLC, Closing Date Term Loan (3 mo. USD LIBOR + 2.500%)		3.500	%		3/1/24		119,686		115,247	(b)(f)(g)
Total Health Care									594,369
Industrials - 0.9%
Airlines - 0.4%
American Airlines Inc., 2017 Replacement Term Loan B (1 mo. USD LIBOR + 2.000%)		2.185	%		12/14/23		272,193		222,032	(b)(f)(g)
American Airlines Inc., 2017 Term Loan B (1 mo. USD LIBOR + 2.000%)		2.184	%		4/28/23		118,763		96,622	(b)(f)(g)
Total Airlines									318,654
Commercial Services & Supplies - 0.2%
APi Group DE Inc., Initial Term Loan (1 mo. USD LIBOR + 2.500%)		2.678	%		10/1/26		119,400		115,893	(b)(f)(g)
Electrical Equipment - 0.1%
Brookfield WEC Holdings Inc., Refinancing Term Loan (1 mo. USD LIBOR + 3.000%)		3.750	%		8/1/25		119,394		115,663	(b)(f)(g)
Road & Rail - 0.2%
Genesee & Wyoming Inc., Initial Term Loan (3 mo. USD LIBOR + 2.000%)		2.308	%		12/30/26		119,700		115,720	(b)(f)(g)
Total Industrials									665,930
Information Technology - 0.1%
Software - 0.1%
DCert Buyer Inc., First Lien Initial Term Loan (1 mo. USD LIBOR + 4.000%)		4.178	%		10/16/26		119,700		116,234	(b)(f)(g)

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       19

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†			VALUE
Materials - 0.1%
Containers & Packaging - 0.1%
Reynolds Consumer Products LLC, Initial Term Loan (1 mo. USD LIBOR + 1.750%)		1.928	%		2/4/27		119,700		$	115,436	(b)(f)(g)
Total Senior Loans (Cost - $3,932,707)										3,695,978
Sovereign Bonds - 3.7%
Brazil - 0.8%
Brazil Notas do Tesouro Nacional Serie F, Notes		10.000	%		1/1/21		1,885,000	BRL		359,838
Brazil Notas do Tesouro Nacional Serie F, Notes		10.000	%		1/1/23		1,233,000	BRL		257,686
Brazil Notas do Tesouro Nacional Serie F, Notes		10.000	%		1/1/27		108,000	BRL		23,597
Total Brazil										641,121
Mexico - 1.4%
Mexican Bonos, Senior Notes		8.500	%		5/31/29		13,670,000	MXN		704,581
Mexico Government International Bond, Senior Notes		6.750	%		9/27/34		85,000			111,972	(a)
Mexico Government International Bond, Senior Notes		5.550	%		1/21/45		210,000			248,264	(a)
Total Mexico										1,064,817
Qatar - 0.3%
Qatar Government International Bond, Senior Notes		3.875	%		4/23/23		200,000			214,978	(i)
Russia - 0.6%
Russian Foreign Bond - Eurobond, Senior Notes		12.750	%		6/24/28		254,000			437,674	(i)
United Arab Emirates - 0.6%
Abu Dhabi Government International Bond, Senior Notes		2.500	%		10/11/22		270,000			279,415	(c)
Abu Dhabi Government International Bond, Senior Notes		2.125	%		9/30/24		210,000			217,098	(c)
Total United Arab Emirates										496,513
Total Sovereign Bonds (Cost - $3,045,622)										2,855,103
Mortgage-Backed Securities - 2.7%
FHLMC - 0.1%
Federal Home Loan Mortgage Corp. (FHLMC)		4.000	%		5/1/49		53,244			56,427	(a)
FNMA - 1.0%
Federal National Mortgage Association (FNMA)		4.500	%		8/1/48		256,190			275,231	(a)

See Notes to Schedule of Investments.

  20     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
FNMA - continued
Federal National Mortgage Association (FNMA)		3.500	%		4/1/49		150,158	$	158,131	(a)
Federal National Mortgage Association (FNMA)		3.000	%		11/1/49- 1/1/50		281,788		297,159	(a)
Total FNMA									730,521
GNMA - 1.6%
Government National Mortgage Association (GNMA)		6.500	%		8/15/34		67,049		78,517	(a)
Government National Mortgage Association (GNMA) II		5.000	%		1/20/49		41,901		45,579
Government National Mortgage Association (GNMA) II (1 mo. USD LIBOR + 1.158%)		2.123	%		7/20/60		68,218		69,613	(a)(b)
Government National Mortgage Association (GNMA) II (UST Yield Curve CMT 1 year + 1.086%)		1.261	%		8/20/58		78,351		79,142	(a)(b)
Government National Mortgage Association (GNMA) II (UST Yield Curve CMT 1 year + 1.224%)		1.398	%		7/20/60		78,835		79,995	(a)(b)
Government National Mortgage Association (GNMA) II (UST Yield Curve CMT 1 year + 1.374%)		1.543	%		12/20/59		87,122		88,583	(a)(b)
Government National Mortgage Association (GNMA) II (UST Yield Curve CMT 1 year + 1.410%)		1.580	%		12/20/59		391,620		398,310	(a)(b)
Government National Mortgage Association (GNMA) II (UST Yield Curve CMT 1 year + 1.440%)		1.610	%		10/20/59- 1/20/60		393,181		400,659	(a)(b)
Total GNMA									1,240,398
Total Mortgage-Backed Securities (Cost - $1,997,908)									2,027,346
						Shares
Preferred Stocks - 1.7%
Financials - 1.7%
Capital Markets - 1.7%
State Street Corp. (5.900% to 3/15/24 then 3 mo. USD LIBOR + 3.108%) (Cost - $1,275,960)		5.900	%				49,000		1,285,270	(b)
Total Investments before Short-Term Investments (Cost - $94,544,691)									94,952,035

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       21

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

SECURITY	RATE			SHARES		VALUE
Short-Term Investments - 0.6%
Dreyfus Government Cash Management, Institutional Shares (Cost - $454,217)		0.085	%		454,217	$	454,217
Total Investments - 124.6% (Cost - $94,998,908)							95,406,252
Liabilities in Excess of Other Assets - (24.6)%							(18,806,640	)
Total Net Assets - 100.0%						$	76,599,612

† Face amount denominated in U.S. dollars, unless otherwise noted.

†† Represents less than 0.1%.

(a) All or a portion of this security is held by the counterparty as collateral for open reverse repurchase agreements.

(b) Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.

(c) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

(d) Security has no maturity date. The date shown represents the next call date.

(e) Collateralized mortgage obligations are secured by an underlying pool of mortgages or mortgage pass-through certificates that are structured to direct payments on underlying collateral to different series or classes of the obligations. The interest rate may change positively or inversely in relation to one or more interest rates, financial indices or other financial indicators and may be subject to an upper and/or lower limit.

(f) Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to multiple contracts under the same loan.

(g) Senior loans may be considered restricted in that the Fund ordinarily is contractually obligated to receive approval from the agent bank and/or borrower prior to the disposition of a senior loan.

(h) All or a portion of this loan is unfunded as of June 30, 2020. The interest rate for fully unfunded term loans is to be determined.

(i) Security is exempt from registration under Regulation S of the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

See Notes to Schedule of Investments.

  22     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

Abbreviation(s) used in this schedule:

BRL	— Brazilian Real
CAS	— Connecticut Avenue Securities
CLO	— Collateralized Loan Obligation
CMT	— Constant Maturity Treasury
IO	— Interest Only
LIBOR	— London Interbank Offered Rate
MXN	— Mexican Peso
REMIC	— Real Estate Mortgage Investment Conduit
Re-REMIC	— Resecuritization of Real Estate Mortgage Investment Conduit
SOFR	— Secured Overnight Financing Rate
STRIPS	— Separate Trading of Registered Interest and Principal Securities
USD	— United States Dollar
UST	— United States Treasury

At June 30, 2020, the Fund had the following open reverse repurchase agreements:

COUNTERPARTY	RATE			EFFECTIVE DATE		MATURITY DATE		FACE AMOUNT OF REVERSE REPURCHASE AGREEMENTS		ASSET CLASS OF COLLATERAL*	COLLATERAL VALUE
Bank of America N.A.		0.380	%		6/22/2020		7/21/2020	$	970,000	Mortgage-Backed Securities	$	1,037,160
Bank of America N.A.		0.380	%		6/4/2020		7/2/2020		1,023,000	Collateralized Mortgage Obligations		1,154,881
Bank of America N.A.		0.400	%		6/19/2020		7/20/2020		786,000	Collateralized Mortgage Obligations		929,084
Bank of America N.A.		0.450	%		6/5/2020		9/4/2020		600,000	Collateralized Mortgage Obligations Mortgage- Backed Securities		612,809 79,142
Barclays Bank PLC		2.600	%		6/14/2018		TBD**		265,819	Sovereign Bonds		360,236
RBC Capital Markets		0.330	%		5/22/2020		8/21/2020		854,000	Mortgage-Backed Securities		865,464
RBC Capital Markets		0.850	%		6/2/2020		8/27/2020		3,147,637	Corporate Bonds & Notes		3,316,524
RBC Capital Markets		0.850	%		5/29/2020		8/27/2020		11,762,855	Corporate Bonds & Notes		12,446,321
								$	19,409,311		$	20,801,621

* Refer to the Schedule of Investments for positions held at the counterparty as collateral for reverse repurchase agreements.

** TBD — To Be Determined; These reverse repurchase agreements have no maturity dates because they are renewed daily and can be terminated by either the Fund or the counterparty in accordance with the terms of the agreements. The rates for these agreements are variable. The rate disclosed is the rate as of June 30, 2020.

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       23

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

At June 30, 2020, the Fund had the following open futures contracts:

	Number of Contracts		Expiration Date		Notional Amount		Market Value		Unrealized Appreciation (Depreciation)
Contracts to Buy:
90-Day Eurodollar		17		12/20	$	4,165,027	$	4,237,675	$	72,648
U.S. Treasury 5-Year Notes		17		9/20		2,132,283		2,137,617		5,334
U.S. Treasury 10-Year Notes		151		9/20		20,942,281		21,014,954		72,673
										150,655
Contracts to Sell:
30-Day Federal Funds		8		6/21		3,335,252		3,333,934		1,318
90-Day Eurodollar		122		3/21		30,399,756		30,439,000		(39,244	)
U.S. Treasury 2-Year Notes		33		9/20		7,287,271		7,287,328		(57	)
U.S. Treasury Long-Term Bonds		17		9/20		3,030,860		3,035,562		(4,702	)
										(42,685	)
Net unrealized appreciation on open futures contracts									$	107,970

At June 30, 2020, the Fund had the following open forward foreign currency contracts:

Currency Purchased		Currency Sold			Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
CAD	820,000		USD	587,780	BNP Paribas SA		7/16/20	$	16,256
USD	131,491		CAD	180,000	BNP Paribas SA		7/16/20		(1,103	)
USD	372,556		CAD	510,000	BNP Paribas SA		7/16/20		(3,124	)
USD	86,134		GBP	69,377	Citibank N.A.		7/16/20		160
MXN	14,070,000		USD	571,568	Goldman Sachs Group Inc.		7/16/20		39,261
USD	23,083		BRL	122,330	Goldman Sachs Group Inc.		7/16/20		606
CAD	30,000		USD	21,281	Morgan Stanley & Co. Inc.		7/16/20		818
CAD	261,353		USD	185,393	Morgan Stanley & Co. Inc.		7/16/20		7,127
CAD	180,000		USD	131,510	BNP Paribas SA		10/16/20		1,105
CAD	510,000		USD	372,613	BNP Paribas SA		10/16/20		3,132
Total								$	64,238

Abbreviation(s) used in this table:

BRL	— Brazilian Real
CAD	— Canadian Dollar
GBP	— British Pound
MXN	— Mexican Peso
USD	— United States Dollar

See Notes to Schedule of Investments.

  24     Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report

WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

Schedule of investments (unaudited) (cont’d) June 30, 2020

At June 30, 2020, the Fund had the following open swap contracts:

CENTRALLY CLEARED INTEREST RATE SWAPS
	NOTIONAL AMOUNT		TERMINATION DATE		PAYMENTS MADE BY THE FUND†		PAYMENTS RECEIVED BY THE FUND†		UPFRONT PREMIUMS PAID (RECEIVED)			UNREALIZED DEPRECIATION
	$	2,500,000		6/28/23		1.238% semi-annually		3-Month LIBOR quarterly	$	(2,348	)	$	(72,852	)
		3,860,000		7/9/23		2.902% semi-annually		3-Month LIBOR quarterly		(20,893	)		(289,841	)
		1,869,000		6/30/26		1.550% semi-annually		3-Month LIBOR quarterly		5,905			(135,342	)
		19,100,000		7/5/28		3.000% semi-annually		3-Month LIBOR quarterly		(108,943	)		(3,644,793	)
Total	$	27,329,000							$	(126,279	)	$	(4,142,828	)

† Percentage shown is an annual percentage rate.

Abbreviation(s) used in this table:

LIBOR — London Interbank Offered Rate

This Schedule of Investments is unaudited and is intended to provide information about the Fund’s investments as of the date of the schedule. Other information regarding the Fund is available in the Fund’s most recent annual or semi-annual shareholder report.

See Notes to Schedule of Investments.

Western Asset Variable Rate Strategic Fund Inc. 2020 Quarterly Report       25

Notes to Schedule of Investments (unaudited)

1. Organization and significant accounting policies

Western Asset Variable Rate Strategic Fund Inc. (the “Fund”) was incorporated in Maryland on August 3, 2004 and is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Board of Directors authorized 100 million shares of $0.001 par value common stock. The Fund’s investment objective is to maintain a high level of current income. The Fund invests primarily in variable rate instruments of U.S. and non-U.S. issuers, including U.S. and non-U.S. investment grade and high-yield debt, senior loans, emerging market debt and derivatives related to these securities. On October 31, 2019 and April 1, 2020, the Board of Directors of the Fund approved amendments to the Fund’s bylaws. The amended and restated bylaws were subsequently filed on Form 8-K and are available on the Securities and Exchange Commission’s website at www.sec.gov.

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. 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. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. 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. 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 Fund’s Board of Directors.

The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for investments

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Notes to Schedule of Investments (unaudited) (cont’d)

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 issuer’s 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 Directors, 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 Directors quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s 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.

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Notes to Schedule of Investments (unaudited) (cont’d)

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:

ASSETS
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Long-Term Investments†:
Corporate Bonds & Notes		—	$	33,773,753		—	$	33,773,753
Collateralized Mortgage Obligations		—		31,371,413		—		31,371,413
Asset-Backed Securities		—		19,943,172		—		19,943,172
Senior Loans		—		3,695,978		—		3,695,978
Sovereign Bonds		—		2,855,103		—		2,855,103
Mortgage-Backed Securities		—		2,027,346		—		2,027,346
Preferred Stocks	$	1,285,270		—		—		1,285,270
Total Long-Term Investments		1,285,270		93,666,765		—		94,952,035
Short-Term Investments†		454,217		—		—		454,217
Total Investments	$	1,739,487	$	93,666,765		—	$	95,406,252
Other Financial Instruments:
Futures Contracts	$	151,973		—		—	$	151,973
Forward Foreign Currency Contracts		—	$	68,465		—		68,465
Total Other Financial Instruments	$	151,973	$	68,465		—	$	220,438
Total	$	1,891,460	$	93,735,230		—	$	95,626,690
LIABILITIES
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Other Financial Instruments:
Futures Contracts	$	44,003		—		—	$	44,003
Forward Foreign Currency Contracts		—	$	4,227		—		4,227
Centrally Cleared Interest Rate Swaps		—		4,142,828		—		4,142,828
Total	$	44,003	$	4,147,055		—	$	4,191,058

† See Schedule of Investments for additional detailed categorizations.

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