Legg Mason Global Asset Management Trust N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22338

Legg Mason Global Asset Management Trust

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49^th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-877-721-1926

Date of fiscal year end: October 31

Date of reporting period: October 31, 2016

ITEM 1. REPORT TO STOCKHOLDERS

The Annual Report to Stockholders is filed herewith.

Annual Report October 31, 2016

LEGG MASON BW

GLOBAL HIGH

YIELD FUND

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

What’s inside
Letter from the president	II
Investment commentary	III
Fund overview	1
Fund at a glance	8
Fund expenses	9
Fund performance	11
Schedule of investments	14
Statement of assets and liabilities	20
Statement of operations	22
Statements of changes in net assets	23
Financial highlights	24
Notes to financial statements	29
Report of independent registered public accounting firm	48
Additional information	49
Important tax information	55

Fund objective

The Fund’s primary objective is to provide a high level of current income. Long-term capital appreciation is its secondary objective.

Letter from the president

Dear Shareholder,

We are pleased to provide the annual report of Legg Mason BW Global High Yield Fund for the twelve-month reporting period ended October 31, 2016. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions affected Fund 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:

• Fund prices and performance,

• Market insights and commentaries from our portfolio managers, and

• A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

November 30, 2016

II Legg Mason BW Global High Yield Fund

Investment commentary

Economic review

The pace of U.S. economic activity fluctuated during the twelve months ended October 31, 2016 (the “reporting period”). Looking back, the U.S. Department of Commerce reported that fourth quarter 2015 U.S. gross domestic product (“GDP”)ⁱ growth was 0.9%. First and second quarter 2016 GDP growth was 0.8% and 1.4%, respectively. The U.S. Department of Commerce’s second reading for third quarter 2016 GDP growth — released after the reporting period ended — was 3.2%. The improvement in GDP growth in the third quarter 2016 reflected an increase in private inventory investment, an acceleration in exports, an upturn in federal government spending and smaller decreases in state and local government spending.

While there was a pocket of weakness in May 2016, job growth in the U.S. was solid overall and a tailwind for the economy during the reporting period. When the period ended on October 31, 2016, the unemployment rate was 4.9%, as reported by the U.S. Department of Labor. The percentage of longer-term unemployed modestly declined over the period. In October 2016, 25.2% of Americans looking for a job had been out of work for more than six months, versus 25.7% when the period began.

Turning to the global economy, in its October 2016 World Economic Outlook Update, the International Monetary Fund (“IMF”)ⁱⁱ said, “The forces shaping the global outlook — both those operating over the short term and those operating over the long term — point to subdued growth for 2016 and a gradual recovery thereafter, as well as to downside risks.” From a regional perspective, the IMF currently estimates 2016 growth in the Eurozone will be 1.7%, versus 2.0% in 2015. Japan’s economy is expected to expand 0.5% in 2016, the same as in 2015. Elsewhere, the IMF projects that overall growth in emerging market countries will tick up to 4.2% in 2016, versus 4.0% in 2015.

After an extended period of maintaining the federal funds rateⁱⁱⁱ at a historically low range between zero and 0.25%, the Federal Reserve Board (the “Fed”)^iv increased the rate at its meeting on December 16, 2015. This marked the first rate hike since 2006. In particular, the U.S. central bank raised the federal funds rate to a range between 0.25% and 0.50%. At its meeting that concluded on November 2, 2016 (after the reporting period ended), as well as during the prior meetings of the year, the Fed kept rates on hold. In the Fed’s statement after the November meeting it said, “The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

Given the economic challenges in the Eurozone, the European Central Bank (“ECB”)^v took a number of actions to stimulate growth and ward off deflation. In January 2015, before the reporting period began, the ECB announced that, beginning in March 2015, it would start a €60 billion-per-month bond buying program that was expected to run until September 2016. In December 2015, the ECB extended its monthly bond buying program until at least March 2017.

Legg Mason BW Global High Yield Fund III

Investment commentary (cont’d)

Finally, in March 2016 the ECB announced that it would increase its bond purchasing program to €80 billion-per-month. It also lowered its deposit rate to -0.4% and its main interest rate to 0%. Looking at other developed countries, in the aftermath of the June 2016 U.K. referendum to leave the European Union (“Brexit”), the Bank of England (“BoE”)^vi lowered rates in October 2016 from 0.50% to 0.25% — an all-time low. After holding rates steady at 0.10% for more than five years, in January 2016 the Bank of Japan^vii announced that it lowered the rate on current accounts that commercial banks hold with it to -0.10%. Elsewhere, the People’s Bank of China^viii kept rates steady at 4.35%.

As always, thank you for your confidence in our stewardship of your assets.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

November 30, 2016

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. Forecasts and predictions are inherently limited and should not be relied upon as an indication of actual or future performance.

ⁱ  Gross domestic product (“GDP”) is the market value of all final goods and services produced within a country in a given period of time.

ⁱⁱ  The International Monetary Fund (“IMF”) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

ⁱⁱⁱ  The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.

^iv  The Federal Reserve Board (the “Fed”) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.

^v  The European Central Bank (“ECB”) is responsible for the monetary system of the European Union and the euro currency.

^vi  The Bank of England (“BoE”), formally the Governor and Company of the BoE, is the central bank of the United Kingdom. The BoE’s purpose is to maintain monetary and financial stability.

^vii  The Bank of Japan is the central bank of Japan. The bank is responsible for issuing and handling currency and treasury securities, implementing monetary policy, maintaining the stability of the Japanese financial system and the yen currency.

^viii  The People’s Bank of China (“PBoC”) is the central bank of the People’s Republic of China with the power to carry out monetary policy and regulate financial institutions in mainland China.

IV Legg Mason BW Global High Yield Fund

Fund overview

Q. What is the Fund’s investment strategy?

A. The Fund’s primary objective is to provide a high level of current income. Long-term capital appreciation is its secondary objective. Under normal market conditions, the Fund will invest at least 80% of its total assets in high yield securities. High yield bonds are those rated below investment grade (that is, securities rated below Baa/BBB assigned by at least one Nationally Recognized Statistical Rating Organization (“NRSRO”) that provide such a rating) or unrated securities that we determined to be of comparable credit quality; they are commonly known as “junk bonds.” The Fund’s high yield securities may include distressed and defaulted securities. As a global fund, the Fund can seek investment opportunities anywhere in the world, and under normal market conditions, the Fund will be invested in at least three countries, which may include the United States. The Fund can invest without limit in foreign securities in any country, including countries with developing or emerging markets. The Fund’s investments may be denominated in foreign currency or U.S. dollar-denominated.

Under normal market conditions, the investment universe primarily consists of high yield debt of corporate or sovereign issuers; issuers may be any size and located anywhere in the world. We may also consider investment in other instruments including: bank loans, defaulted bonds, defaulted bank loans, debtor-in possession loans (“DIP loans”), investment grade corporate bonds, U.S. Treasuries and agencies, zero coupon bonds, securities representing securitized assets, currencies, preferred stock, convertible bonds, and other fixed income securities.

The Fund may enter into various derivative transactions including, but not limited to, forwards, futures, swaps and credit default swaps (index and single name). Derivatives may be used by the Fund as a hedging technique in an attempt to manage risk; as a substitute for buying or selling securities; to provide additional exposure to investment types or market factors; to change the characteristics of the Fund’s portfolio; in an attempt to enhance returns; and to manage cash. These instruments are taken into account when determining compliance with the Fund’s 80% policy.

The Fund may invest in currency forwards in order to hedge its currency exposure in bond positions or to gain currency exposure. These investments may be significant at times. Although we have the flexibility to make use of currency forwards, we may choose not to for a variety of reasons, even under very volatile market conditions. The Fund may invest in securities of any maturity. The weighted average effective duration of the Fund’s portfolio, including derivatives, is expected to range from 0 to 7 years.

The Fund’s investment style is disciplined, active, value-driven, and strategic. The investment strategy combines top-down analysis of macro-economic conditions with bottom-up fundamental analysis in an effort to determine where the most attractive valuations exist during the business cycle — while considering credit quality, sector allocation and security selection. We use the strategy to identify and invest in foreign or U.S. bonds which we believe have attractive “real” and “risk” adjusted yields. We rotate portfolio positions mindful of credit quality, sector allocation and security selection given the state of the economy, and endeavor to control risk by purchasing securities we believe to be undervalued. We consider secular trends, political and

Legg Mason BW Global High Yield Fund 2016 Annual Report 1

Fund overview (cont’d)

monetary conditions and business cycle risks when making investment decisions. We also take into account the relative risk and return characteristics of prospective investments when determining how to achieve desired exposures.

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

A. Exogenous geopolitical and global macroeconomic factors drove credit market performance during the twelve-month reporting period ended October 31, 2016, rather than a singular credit event. Investor uncertainty played a significant role throughout the period. Toward the end of 2015, questions surrounding China’s economic viability weighed on market conditions — the aftershocks of fragile Chinese growth continued to resurface in early 2016, and negatively impacted commodity-exporting emerging markets. The perfect storm of deteriorating economic conditions materialized in China — the precipitous drop in Chinese equities, overheated real estate and credit markets, ineffective fiscal policy, and a slowdown in the Industrials sector; these domestic issues had far-reaching consequences that reverberated throughout global capital markets. Equities, credit markets, and emerging market assets bore the brunt of this era of uncertainty. We had expected the global economy to reflate in 2015 and instead, the combination of a strong dollar and weak Chinese growth created a global disinflationary environment at a time when many developed market central banks already could not reach their respective inflation targets. Commodity prices fell sharply alongside the drop in Chinese demand for raw materials. The U.S. dollar continued its bull run as investors piled into “safe-haven” assets and shed risk assets such as equities and emerging market assets.

Despite a volatile January 2016, the first two quarters of 2016 were relatively placid from a volatility perspective as the Federal Reserve ( the “Fed”)ⁱ, the European Central Bank (“ECB”)ⁱⁱ and the People’s Bank of China (“PBoC”)ⁱⁱⁱ met before the G20^iv summit in Shanghai to coordinate a policy response to the appreciating U.S. dollar. As the dollar stabilized, risk assets globally responded positively for most of the first and second quarters of 2016. However, June 23, 2016, became a watershed moment as the U.K. populace voted to exit the European Union, colloquially known as “Brexit.” The referendum results sent the British pound sterling to multi-decade lows while ultra-high quality yields plummeted — longer-term German Bund and Japanese Government Bond (“JGB”) yields fell into negative territory. These wild swings in investor sentiment ultimately drove safe-haven valuations higher.

On the other hand, risk assets sold off sharply in the days and weeks immediately following the referendum. Despite the late June sell-off, the Brazilian real and Indonesian rupiah managed to hold onto their gains against the dollar for the period. These currencies appreciated during the first half of the year given stabilizing commodity prices and the general risk-on environment. The Brazilian real gained more than 21% versus the dollar during the reporting period — no other currency within our universe appreciated to this extent. Some developed market currencies also rose against the U.S. dollar, including the Australian and New Zealand dollars. The dollar temporarily rose against the majors^v heading into the Fed’s

2 Legg Mason BW Global High Yield Fund 2016 Annual Report

September 2016 meeting, over speculation whether the central bank would raise the federal funds rate^vi for the first time in 2016. Since the Fed did not tighten in September, investors will instead look to its December 2016 meeting, particularly if the monthly U.S. jobs reports remain strong. However, market volatility leading up to the U.S. election and the uncertainty overhang of the vote could give the Fed pause for tightening.

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

A. Our investment theme remained focused on the relatively stronger U.S. economic recovery, and in Europe to a lesser extent. Therefore, the Fund’s largest position was in the U.S. dollar and assets denominated in that currency. We also looked to select emerging market countries that offered a mix of attractive bonds and currency valuations. We were particularly interested in Latin America. Our broader fixed-income strategy in 2016 shifted around the theme of “something is stirring” in the global economy; our country allocations reflected this outlook. We were generally constructive on European growth prospects and therefore maintained long exposure to the euro to capture any positive effects from the ECB’s reflation efforts; however, we began to partially hedge any euro exposure by mid-2016. We believed the euro may come under additional pressure and continually evaluate our exposure to this currency. The Fund sold out of some euro- and sterling-denominated corporate credit positions given low nominal yields, weakness in regional banks, and continental political risk. We fully hedged exposure to the British pound at the beginning of the reporting period, and gradually transitioned this allocation to a long position after the June referendum. We believe the pound’s massive sell-off in June 2016 created an additional investment opportunity for us. The pound sterling hit a 30-year low following the referendum, while the British economy remained largely intact, and the Bank of England (“BoE”)^vii resumed easing a couple months later. As a result, we believe the sterling is now attractively valued. We think the weakened currency will help make British exports more competitive, and in turn, help gross domestic product (“GDP”)^viii growth. Economic indicators following the Brexit vote betrayed the notion that the U.K. economy would enter a recession.

Looking to the emerging world, the Brazilian real and the country’s government bonds rallied after hitting all-time lows in 2015. Brazilian assets exemplify our idea that emerging market currencies could strengthen against the U.S. dollar, and that countries with improving fundamentals would attract fixed income investors. Brazil managed to move beyond a budget impasse and political scandal; these problems were only compounded by commodity price volatility last year. We also used weakness in the currency and bonds to add to our Brazil positions. The Fund maintained partially hedged exposure to the Indonesian rupiah, unhedged exposure to the Mexican peso, and initiated an unhedged position in the Argentine peso toward the end of the reporting period. We held the Colombian peso for a brief period and eventually sold out of that position to initiate the exposure to Argentina. Our outlook on Colombia changed as the peace deal between the rebels and the government appeared to hit an impasse. The Fund also maintained partially hedged exposure to the New Zealand and Australian dollars, and gradually transitioned out of both positions as well. Developed market duration^ix served

Legg Mason BW Global High Yield Fund 2016 Annual Report 3

Fund overview (cont’d)

as an effective hedge through the aftermath of the “Brexit” vote; however, as inflation expectations increased through the quarter, developed-market interest-rate valuations became stretched. As a result, we reduced exposure to developed market duration. We will continue to monitor financial market risks and uncertainties arising from a volatile global political backdrop. We believe that the recent steepening of developed-market yield curves^x resulting from monetary policymaking may present an attractive opportunity to re-establish “safe-haven” duration hedges in the fourth quarter of 2016. We continually maintained an overarching position of U.S. Treasury futures to balance the long emerging market exposure within the Fund, as the aforementioned deflationary pressures affected risk assets.

Performance review

For the twelve months ended October 31, 2016, Class IS shares of Legg Mason BW Global High Yield Fund returned 8.66%. The Fund’s unmanaged benchmark the Bloomberg Barclays Global High Yield Index^xi returned 9.83% for the same period. The Lipper High Yield Funds Category Average¹ returned 7.01% over the same time frame.

Performance Snapshot as of October 31, 2016 (unaudited)
(excluding sales charges)	6 months			12 months
Legg Mason BW Global High Yield Fund:
Class A		4.59	%		8.35	%
Class C		4.24	%		7.47	%
Class FI		4.86	%		8.51	%
Class I		4.90	%		8.74	%
Class IS		4.80	%		8.66	%
Bloomberg Barclays Global High Yield Index		5.97	%		9.83	%
Lipper High Yield Funds Category Average1		6.11	%		7.01	%

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, investment returns and yields 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.

¹  Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the period ended October 31, 2016, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 692 funds for the six-month period and among the 660 funds for the twelve-month period in the Fund’s Lipper category, and excluding sales charges, if any.

4 Legg Mason BW Global High Yield Fund 2016 Annual Report

The 30-Day SEC Yield for the period ended October 31, 2016 for Class A, Class C, Class FI, Class I and Class IS shares was 4.47%, 3.96%, 4.45%, 4.96% and 5.07%, respectively. Absent fee waivers and/or expense reimbursements, the 30-Day SEC Yields for Class C, Class FI, Class I and Class IS shares would have been 3.59%, 4.00%, 4.30% and 4.63%, respectively. The 30-Day SEC Yield is subject to change and is based on the yield to maturity of the Fund’s investments over a 30-day period and not on the dividends paid by the Fund, which may differ.

This Fund is the successor to an institutional account (the “Predecessor”). On November 30, 2012, the Predecessor transferred its assets to the Fund in exchange for the Fund’s Class IS shares.

Total Annual Operating Expenses (unaudited)

As of the Fund’s current prospectus dated March 1, 2016, the gross total annual fund operating expense ratio for Class A, Class C, Class FI, Class I and Class IS shares was 1.80%, 2.69%, 1.87%, 1.38% and 1.28%, 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 commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets will not exceed 1.15% for Class A shares, 1.90% for Class C shares, 1.15% for Class FI shares, 0.85% for Class I shares and 0.75% for Class IS shares. In addition, the ratio of total annual fund operating expenses for Class IS shares will not exceed the ratio of total annual fund operating expenses for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

The manager is permitted to recapture amounts waived and/or reimbursed to a class within three years after the fiscal year in which the manager earned the fee or incurred the expense if the class’ total annual 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 operating expenses exceeding the expense cap or any other lower limit then in effect.

Q. What were the leading contributors to performance?

A. Selections within corporate credit contributed to performance during the period, particularly allocations within the Energy sector. Energy bonds rallied during the reporting period as crude oil prices stabilized and the industry gained clarity on global supply dynamics. Credit selections within the Telecommunications sector also contributed to performance. Currency exposure was beneficial to performance, particularly positions in the Brazilian real and British pound.

The Fund’s derivatives exposures contributed to absolute performance during the period under review. Realized gains from European and U.S. credit default swaps, and U.S. Treasury and Australian government bond futures all provided a significant benefit to performance. A position in energy U.S. exchange-traded funds also contributed to performance.

Legg Mason BW Global High Yield Fund 2016 Annual Report 5

Fund overview (cont’d)

Q. What were the leading detractors from performance?

A. Long exposure to the Mexican peso was also a detractor to relative performance. We also saw signs of improving economic conditions in Mexico, such as the liberalization of its state-controlled oil industry, stabilization of crude oil prices, and the correlation with U.S. economic growth. Despite these positive factors, the Mexican economy’s failure to launch remained an outlier to our emerging market growth thesis. Unhedged exposure to the Mexican peso was a significant detractor to performance. We believe the peso’s weakness can be attributed to short selling and its use by investors to hedge Latin American exposures. The rise in protectionism, the future of multilateral trade agreements, and a general slowdown in global trade have also had deleterious effects on the peso.

Credit selection also detracted from performance, including selections in sterling-denominated corporate bonds and residential mortgage-backed securities in the U.S. and Europe.

Thank you for your investment in Legg Mason BW Global High Yield Fund. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.

Sincerely,

Gary P. Herbert, CFA

Portfolio Manager

Brandywine Global Investment Management, LLC

Brian L. Kloss, JD, CPA

Portfolio Manager

Brandywine Global Investment Management, LLC

Regina Borromeo

Portfolio Manager

Brandywine Global Investment Management, LLC

November 20, 2016

RISKS: Fixed income securities involve interest rate, credit, inflation, and reinvestment risks. As interest rates rise, the value of fixed income securities falls. High-yield bonds, known as “junk bonds”, possess greater price volatility, illiquidity, and possibility of default. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses, and have a potentially large impact on fund performance. As a non-diversified fund, the Fund is permitted to invest a higher percentage of its assets in any one issuer than a diversified fund, which may magnify the Fund’s losses from events affecting a particular issuer. Because the Fund may focus a significant portion of its investments in a single country or currency, it will be more susceptible to factors adversely affecting such currency or issuers within that country than would a more diversified portfolio of securities. Please see the Fund’s prospectus for a more complete discussion of these and other risks, and the Fund’s investment strategies.

6 Legg Mason BW Global High Yield Fund 2016 Annual Report

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.

ⁱ  The Federal Reserve Board (the “Fed”) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.

ⁱⁱ  The European Central Bank (“ECB”) is responsible for the monetary system of the European Union and the euro currency.

ⁱⁱⁱ  The People’s Bank of China (“PBoC”) is the central bank of the People’s Republic of China with the power to carry out monetary policy and regulate financial institutions in mainland China.

^iv  The Group of Twenty (“G-20”) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy.

^v  The majors refers to a basket of currencies, including the euro, yen, Swiss franc, and sterling.

^vi  The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.

^vii  The Bank of England (“BoE”), formally the Governor and Company of the Bank of England, is the central bank of the United Kingdom. The Bank of England’s purpose is to maintain monetary and financial stability.

^viii  Gross domestic product (“GDP”) is the market value of all final goods and services produced within a country in a given period of time.

^ix  Duration is the measure of the price sensitivity of a fixed-income security to an interest rate change of 100 basis points. Calculation is based on the weighted average of the present values for all cash flows.

^x  The yield curve is the graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities.

^xi  The Bloomberg Barclays Global High Yield Index provides a broad-based measure of the global high-yield fixed-income markets, representing the union of the U.S. High-Yield, Pan-European High-Yield, U.S. Emerging Markets High-Yield, CMBS High-Yield and Pan European Emerging Markets High-Yield Indices.

Legg Mason BW Global High Yield Fund 2016 Annual Report 7

Fund at a glance^†(unaudited)

Investment breakdown (%) as a percent of total investments

† The bar graph above represents the composition of the Fund’s investments as of October 31, 2016 and October 31, 2015 and does not include derivatives, such as swap contracts and forward foreign currency contracts. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.

‡ Effective August 31, 2016, the Financials sector was redefined to exclude real estate and a Real Estate sector was created.

8 Legg Mason BW Global High Yield Fund 2016 Annual Report

Fund 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 May 1, 2016 and held for the six months ended October 31, 2016.

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.

Based on actual total return1													Based on hypothetical total return1
	Actual Total Return Without Sales Charge2			Beginning Account Value		Ending Account Value		Annualized Expense Ratio			Expenses Paid During the Period3			Hypothetical Annualized Total Return			Beginning Account Value		Ending Account Value		Annualized Expense Ratio			Expenses Paid During the Period3
Class A		4.59	%	$	1,000.00	$	1,045.90		1.15	%	$	5.91	Class A		5.00	%	$	1,000.00	$	1,019.36		1.15	%	$	5.84
Class C		4.24			1,000.00		1,042.40		1.79			9.19	Class C		5.00			1,000.00		1,016.14		1.79			9.07
Class FI		4.86			1,000.00		1,048.60		1.01			5.20	Class FI		5.00			1,000.00		1,020.06		1.01			5.13
Class I		4.90			1,000.00		1,049.00		0.78			4.02	Class I		5.00			1,000.00		1,021.22		0.78			3.96
Class IS		4.80			1,000.00		1,048.00		0.75			3.86	Class IS		5.00			1,000.00		1,021.37		0.75			3.81

Legg Mason BW Global High Yield Fund 2016 Annual Report 9

Fund expenses (unaudited) (cont’d)

¹  For the six months ended October 31, 2016.

²  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charge (“CDSC”) with respect to Class C shares. Total return is not annualized, as it may not be representative of the total return for the year. 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. Past performance is no guarantee of future results.

³  Expenses (net of compensating balance arrangements, fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), then divided by 366.

10 Legg Mason BW Global High Yield Fund 2016 Annual Report

Fund performance (unaudited)

The Legg Mason BW Global High Yield Fund (the “Fund”) is the successor to an institutional account (the “Predecessor”). The performance in the accompanying table and line graph for Class IS shares includes performance of the Predecessor. The Predecessor’s inception date was December 28, 2009. On November 30, 2012, the Predecessor transferred its assets to the Fund in exchange for the Fund’s Class IS shares. The investment policies, objectives, guidelines and restrictions of the Fund are in all material respects equivalent to those of the Predecessor. In addition, the Predecessor’s portfolio managers are the current portfolio managers of the Fund. As a mutual fund registered under the Investment Company Act of 1940, the Fund is subject to certain restrictions under the 1940 Act and the Internal Revenue Code to which the Predecessor was not subject. Had the Predecessor been registered under the 1940 Act and been subject to the provisions of the 1940 Act and the Code, its investment performance may have been adversely affected. The performance information reflects the gross expenses of the Predecessor adjusted to reflect the higher fees and expenses of Class IS of the Fund. The performance is shown net of annual management fees and other expenses, which reflects the application of the Class IS expense limitation agreement. If the expense limitation agreement were not applicable, expenses would be higher and performance lower.

The Predecessor did not have distribution policies. The Predecessor was an unregistered separately managed account, did not qualify as a regulated investment company for federal income tax purposes and did not pay dividends or distributions.

Average annual total returns
Without sales charges1	Class A			Class C			Class FI			Class I			Class IS
Twelve Months Ended 10/31/16		8.35	%		7.47	%		8.51	%		8.74	%		8.66	%
Five Years Ended 10/31/16		N/A			N/A			N/A			N/A			6.11
Inception* through 10/31/16		1.79			1.02			1.83			2.13			7.78
With sales charges2	Class A			Class C			Class FI			Class I			Class IS
Twelve Months Ended 10/31/16		3.75	%		6.47	%		8.51	%		8.74	%		8.66	%
Five Years Ended 10/31/16		N/A			N/A			N/A			N/A			6.11
Inception* through 10/31/16		0.17			1.02			1.83			2.13			7.78

Cumulative total returns
Without sales charges1
Class A (Inception date of 2/18/14 through 10/31/16)	4.91	%
Class C (Inception date of 2/18/14 through 10/31/16)	2.78
Class FI (Inception date of 2/18/14 through 10/31/16)	5.04
Class I (Inception date of 2/18/14 through 10/31/16)	5.85
Class IS (Inception date of 12/28/09 through 10/31/16)	67.04

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

Legg Mason BW Global High Yield Fund 2016 Annual Report 11

Fund performance (unaudited) (cont’d)

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.

¹  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charge (“CDSC”) with respect to Class C shares.

²  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. In addition, Class A shares reflect the deduction of the maximum initial sales charge of 4.25% and Class C shares reflect the deduction of a 1.00% CDSC, which applies if shares are redeemed within one year from purchase payment.

* Inception dates for Class A, C, FI, I and IS shares are February 18, 2014, February 18, 2014, February 18, 2014, February 18, 2014 and December 28, 2009, respectively.

12 Legg Mason BW Global High Yield Fund 2016 Annual Report

Historical performance

Value of $1,000,000 invested in

Class IS Shares of Legg Mason BW Global High Yield Fund vs. Bloomberg Barclays Global High Yield Index† — December 28, 2009 - October 2016

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.

† Hypothetical illustration of $1,000,000 invested in Class IS shares of Legg Mason BW Global High Yield Fund on December 28, 2009 (inception date of Predecessor), assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value through October 31, 2016. The hypothetical illustration also assumes a $1,000,000 investment, as applicable, in the Bloomberg Barclays Global High Yield Index. The Bloomberg Barclays Global High Yield Index provides a broad-based measure of the global high-yield fixed-income markets. The Index is unmanaged and is not subject to the same management and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. The performance of the Fund’s other classes may be greater or less than Class IS shares’ performance indicated on this chart, depending on whether greater or lesser sales charges and fees were incurred by shareholders investing in the other classes.

Legg Mason BW Global High Yield Fund 2016 Annual Report 13

Schedule of investments

October 31, 2016

Legg Mason BW Global High Yield Fund

Security	Rate			Maturity Date		Face Amount†			Value
Corporate Bonds & Notes — 83.3%
Consumer Discretionary — 13.6%
Auto Components — 0.4%
Adient Global Holdings Ltd., Senior Notes		3.500	%		8/15/24		155,000	EUR	$	169,068	(a)
Automobiles — 2.2%
Fiat Chrysler Automobiles NV, Senior Notes		5.250	%		4/15/23		885,000			902,700
Diversified Consumer Services — 1.0%
StoneMor Partners LP/Cornerstone Family Services of WV, Senior Notes		7.875	%		6/1/21		420,000			410,550
Hotels, Restaurants & Leisure — 2.5%
International Game Technology PLC, Senior Secured Notes		6.500	%		2/15/25		500,000			541,150	(a)
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp., Senior Secured Notes		6.125	%		8/15/21		500,000			516,250	(a)
Total Hotels, Restaurants & Leisure										1,057,400
Media — 7.5%
AMC Entertainment Holdings Inc., Senior Subordinated Notes		6.375	%		11/15/24		165,000	GBP		202,970	(b)
Clear Channel Worldwide Holdings Inc., Senior Notes		6.500	%		11/15/22		365,000			366,825
CSC Holdings LLC, Senior Bonds		5.250	%		6/1/24		385,000			359,975
DISH DBS Corp., Senior Notes		5.000	%		3/15/23		805,000			792,925
SFR Group SA, Senior Secured Bonds		6.000	%		5/15/22		400,000			410,128	(a)
Sirius XM Radio Inc., Senior Notes		6.000	%		7/15/24		410,000			435,112	(a)
Virgin Media Secured Finance PLC, Senior Secured Notes		5.500	%		1/15/25		427,500	GBP		532,679	(a)
Total Media										3,100,614
Total Consumer Discretionary										5,640,332
Consumer Staples — 6.3%
Food Products — 5.0%
Agrokor DD, Senior Notes		8.875	%		2/1/20		260,000			269,100	(a)
Boparan Finance PLC, Senior Notes		5.250	%		7/15/19		255,000	GBP		304,810	(a)
Boparan Finance PLC, Senior Secured Notes		5.500	%		7/15/21		280,000	GBP		312,732	(b)
JBS Investment GmbH, Senior Notes		7.250	%		4/3/24		410,000			414,100	(a)
JBS Investments GmbH, Senior Notes		7.250	%		4/3/24		200,000			202,000	(b)
Marfrig Holding Europe BV, Senior Notes		8.000	%		6/8/23		270,000			278,775	(a)
Marfrig Overseas Ltd., Senior Notes		9.500	%		5/4/20		300,000			310,560	(b)
Total Food Products										2,092,077
Tobacco — 1.3%
Vector Group Ltd., Senior Subordinated Secured Notes		7.750	%		2/15/21		505,000			528,988
Total Consumer Staples										2,621,065

See Notes to Financial Statements.

14 Legg Mason BW Global High Yield Fund 2016 Annual Report

Legg Mason BW Global High Yield Fund

Security	Rate			Maturity Date		Face Amount†			Value
Energy — 11.1%
Energy Equipment & Services — 2.2%
Rowan Cos. Inc., Senior Notes		4.750	%		1/15/24		600,000		$	504,000
Transocean Inc., Senior Notes		8.125	%		12/15/21		420,000			405,384
Total Energy Equipment & Services										909,384
Oil, Gas & Consumable Fuels — 8.9%
Antero Resources Corp., Senior Notes		5.375	%		11/1/21		395,000			400,925
California Resources Corp., Secured Notes		8.000	%		12/15/22		505,000			340,875	(a)
Chesapeake Energy Corp., Secured Notes		8.000	%		12/15/22		695,000			704,991	(a)
Murphy Oil Corp., Senior Notes		6.875	%		8/15/24		300,000			316,487
Petrobras Global Finance BV, Senior Notes		5.750	%		1/20/20		170,000			175,440
Petrobras Global Finance BV, Senior Notes		5.375	%		1/27/21		155,000			153,481
Petrobras Global Finance BV, Senior Notes		8.750	%		5/23/26		1,085,000			1,222,252
Petrobras Global Finance BV, Senior Notes		6.875	%		1/20/40		150,000			134,250
Petroleos Mexicanos, Senior Notes		5.500	%		6/27/44		255,000			219,657
Total Oil, Gas & Consumable Fuels										3,668,358
Total Energy										4,577,742
Financials — 2.8%
Banks — 2.1%
Banco do Brasil SA, Junior Subordinated Notes		9.000	%		6/18/24		515,000			476,890	(a)(c)(d)
CIT Group Inc., Senior Notes		5.000	%		8/1/23		385,000			410,064
Total Banks										886,954
Diversified Financial Services — 0.7%
CPUK Finance Ltd., Secured Notes		7.000	%		8/28/20		215,000	GBP		277,873	(a)
Total Financials										1,164,827
Health Care — 12.2%
Health Care Providers & Services — 8.3%
DaVita Inc., Senior Notes		5.750	%		8/15/22		650,000			666,263
DaVita Inc., Senior Notes		5.000	%		5/1/25		385,000			371,525
HCA Inc., Senior Secured Notes		5.000	%		3/15/24		815,000			848,822
HealthSouth Corp., Senior Notes		5.750	%		11/1/24		800,000			825,000
Tenet Healthcare Corp., Senior Secured Notes		4.750	%		6/1/20		675,000			690,188
Total Health Care Providers & Services										3,401,798
Pharmaceuticals — 3.9%
Capsugel SA, Senior Notes		7.000	%		5/15/19		209,000			209,000	(a)(e)
Valeant Pharmaceuticals International Inc., Senior Notes		6.750	%		8/15/18		700,000			683,200	(a)
Valeant Pharmaceuticals International Inc., Senior Notes		6.375	%		10/15/20		425,000			366,562	(a)
Valeant Pharmaceuticals International Inc., Senior Notes		6.125	%		4/15/25		460,000			363,400	(a)
Total Pharmaceuticals										1,622,162
Total Health Care										5,023,960

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 15

Schedule of investments (cont’d)

October 31, 2016

Legg Mason BW Global High Yield Fund

Security	Rate			Maturity Date		Face Amount†			Value
Industrials — 1.4%
Trading Companies & Distributors — 1.4%
Fly Leasing Ltd., Senior Notes		6.750	%		12/15/20		560,000		$	583,800
Information Technology — 3.2%
Electronic Equipment, Instruments & Components — 0.4%
Anixter Inc., Senior Notes		5.125	%		10/1/21		140,000			146,160
Internet Software & Services — 1.8%
Inception Merger Sub Inc./Rackspace Hosting Inc., Senior Notes		8.625	%		11/15/24		750,000			750,000	(a)
Technology Hardware, Storage & Peripherals — 1.0%
Diamond 1 Finance Corp./Diamond 2 Finance Corp., Senior Secured Notes		6.020	%		6/15/26		370,000			403,320	(a)
Total Information Technology										1,299,480
Materials — 9.3%
Chemicals — 3.7%
Hexion Inc., Senior Secured Notes		6.625	%		4/15/20		1,385,000			1,211,875
W.R. Grace & Co., Senior Notes		5.125	%		10/1/21		300,000			319,500	(a)
Total Chemicals										1,531,375
Containers & Packaging — 3.7%
Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., Senior Secured Notes		4.250	%		1/15/22		210,000	EUR		237,443	(a)
Coveris Holdings SA, Senior Notes		7.875	%		11/1/19		290,000			299,425	(a)
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA, Senior Secured Notes		5.125	%		7/15/23		540,000			554,343	(a)
Sealed Air Corp., Senior Notes		5.125	%		12/1/24		420,000			444,150	(a)
Total Containers & Packaging										1,535,361
Metals & Mining — 1.9%
Allegheny Technologies Inc., Senior Notes		7.875	%		8/15/23		830,000			792,650
Total Materials										3,859,386
Real Estate — 1.9%
Equity Real Estate Investment Trusts (REITs) — 1.9%
Equinix Inc., Senior Notes		5.375	%		4/1/23		435,000			454,031
Iron Mountain Inc., Senior Notes		6.000	%		8/15/23		305,000			324,063
Total Real Estate										778,094
Telecommunication Services — 14.6%
Diversified Telecommunication Services — 8.1%
Digicel Group Ltd., Senior Notes		8.250	%		9/30/20		915,000			809,775	(a)
Frontier Communications Corp., Senior Notes		8.875	%		9/15/20		370,000			393,125
Hughes Satellite Systems Corp., Senior Notes		6.625	%		8/1/26		90,000			89,100	(a)
SBA Communications Corp., Senior Notes		4.875	%		7/15/22		435,000			443,700

See Notes to Financial Statements.

16 Legg Mason BW Global High Yield Fund 2016 Annual Report

Legg Mason BW Global High Yield Fund

Security	Rate			Maturity Date		Face Amount†			Value
Diversified Telecommunication Services — continued
Telecom Italia Capital SA, Senior Notes		6.375	%		11/15/33		875,000		$	896,437
Unitymedia GmbH, Senior Notes		3.750	%		1/15/27		100,000	EUR		104,166	(a)
Wind Acquisition Finance SA, Senior Bonds		7.375	%		4/23/21		600,000			616,500	(a)
Total Diversified Telecommunication Services										3,352,803
Wireless Telecommunication Services — 6.5%
Altice Financing SA, Senior Secured Notes		5.250	%		2/15/23		300,000	EUR		343,733	(a)
Matterhorn Telecom SA, Senior Secured Bonds		3.875	%		5/1/22		155,000	EUR		170,789	(a)
Sprint Corp., Senior Notes		7.250	%		9/15/21		900,000			921,375
Sprint Corp., Senior Notes		7.125	%		6/15/24		405,000			380,700
T-Mobile USA Inc., Senior Notes		6.500	%		1/15/24		815,000			872,050
Total Wireless Telecommunication Services										2,688,647
Total Telecommunication Services										6,041,450
Utilities — 6.9%
Electric Utilities — 1.5%
Viridian Group FundCo II Ltd., Senior Secured Notes		7.500	%		3/1/20		540,000	EUR		628,352	(a)
Gas Utilities — 2.0%
AmeriGas Partners LP/AmeriGas Finance Corp., Senior Notes		5.625	%		5/20/24		535,000			560,413
AmeriGas Partners LP/AmeriGas Finance Corp., Senior Notes		5.875	%		8/20/26		235,000			246,750
Total Gas Utilities										807,163
Independent Power and Renewable Electricity Producers — 2.4%
Dynegy Inc., Senior Notes		7.375	%		11/1/22		290,000			279,669
NRG Energy Inc., Senior Notes		6.625	%		1/15/27		770,000			721,151	(a)
Total Independent Power and Renewable Electricity Producers										1,000,820
Water Utilities — 1.0%
Anglian Water (Osprey) Financing PLC, Senior Secured Notes		5.000	%		4/30/23		310,000	GBP		397,305	(b)
Total Utilities										2,833,640
Total Corporate Bonds & Notes (Cost — $34,827,195)										34,423,776
Senior Loans — 3.2%
Energy — 1.0%
Oil, Gas & Consumable Fuels — 1.0%
Chesapeake Energy Corp., Term Loan		8.500	%		8/23/21		400,000			426,400	(f)(g)
Health Care — 1.3%
Pharmaceuticals — 1.3%
Capsugel Holdings U.S. Inc., USD Term Loan B		4.000	%		7/31/21		538,713			540,252	(f)(g)
Information Technology — 0.9%
IT Services — 0.9%
First Data Corp., 2016 USD Term Loan		—			3/24/21		375,000			376,953	(h)
Total Senior Loans (Cost — $1,321,753)										1,343,605

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 17

Schedule of investments (cont’d)

October 31, 2016

Legg Mason BW Global High Yield Fund

Security	Rate			Maturity Date		Face Amount†			Value
Sovereign Bonds — 6.2%
Argentina — 2.7%
Republic of Argentina, Bonds		18.200	%		10/3/21		9,935,000	ARS	$	698,941
Republic of Argentina, Senior Notes		6.875	%		4/22/21		190,000			205,580	(a)
Republic of Argentina, Senior Notes		7.500	%		4/22/26		190,000			207,575	(a)
Total Argentina										1,112,096
Brazil — 2.9%
Federative Republic of Brazil, Notes		10.000	%		1/1/27		4,195,000	BRL		1,212,024
Indonesia — 0.6%
Republic of Indonesia, Senior Bonds		8.375	%		9/15/26		3,000,000,000	IDR		244,624
Total Sovereign Bonds (Cost — $2,487,190)										2,568,744
Total Investments before Short-Term Investments (Cost — $38,636,138)										38,336,125
						Shares
Short-Term Investments — 9.0%
State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost — $3,696,541)		0.251	%				3,696,541			3,696,541
Total Investments — 101.7% (Cost — $42,332,679#)										42,032,666
Liabilities in Excess of Other Assets — (1.7)%										(687,748	)
Total Net Assets — 100.0%									$	41,344,918

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

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

^(b)  Security is 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 Trustees, unless otherwise noted.

^(c)  Variable rate security. Interest rate disclosed is as of the most recent information available.

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

^(e)  Payment-in-kind security for which the issuer has the option at each interest payment date of making interest payments in cash or additional debt securities.

^(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 October 31, 2016. The interest rate for fully unfunded term loans is to be determined.

# Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Financial Statements.

18 Legg Mason BW Global High Yield Fund 2016 Annual Report

Legg Mason BW Global High Yield Fund

Abbreviations used in this schedule:
ARS	— Argentine Peso
BRL	— Brazilian Real
EUR	— Euro
GBP	— British Pound
IDR	— Indonesian Rupiah

Summary of Investments by Country* (unaudited)
United States	56.0	%
Brazil	10.9
United Kingdom	8.0
Italy	3.6
Argentina	2.6
Ireland	2.0
Luxembourg	1.9
Jamaica	1.9
New Zealand	1.3
France	1.0
Croatia	0.6
Indonesia	0.6
Mexico	0.5
Germany	0.3
Short-Term Investments	8.8
	100.0	%

* As a percentage of total investments. Please note that the Fund holdings are as of October 31, 2016 and are subject to change.

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 19

Statement of assets and liabilities

October 31, 2016

Assets:
Investments, at value (Cost — $42,332,679)	$	42,032,666
Foreign currency, at value (Cost — $9,479)		9,493
Interest receivable		629,916
Deposits with brokers for centrally cleared swap contracts		311,726
Unrealized appreciation on forward foreign currency contracts		225,531
Receivable from broker — variation margin on centrally cleared swaps		173,802
Receivable for Fund shares sold		55,601
Receivable for securities sold		2,193
Prepaid expenses		31,942
Total Assets		43,472,870
Liabilities:
Payable for securities purchased		1,964,788
Unrealized depreciation on forward foreign currency contracts		61,381
Payable for Fund shares repurchased		15,813
Investment management fee payable		6,897
Service and/or distribution fees payable		431
Trustees’ fees payable		13
Accrued expenses		78,629
Total Liabilities		2,127,952
Total Net Assets	$	41,344,918
Net Assets:
Par value (Note 7)	$	47
Paid-in capital in excess of par value		42,787,468
Overdistributed net investment income		(31,677)
Accumulated net realized loss on investments, futures contracts, written options, swap contracts and foreign currency transactions		(1,225,933)
Net unrealized depreciation on investments, swap contracts and foreign currencies		(184,987)
Total Net Assets	$	41,344,918

See Notes to Financial Statements.

20 Legg Mason BW Global High Yield Fund 2016 Annual Report

Net Assets:
Class A	$459,535
Class C	$395,052
Class FI	$100,256
Class I	$2,804,469
Class IS	$37,585,606
Shares Outstanding:
Class A	52,198
Class C	44,928
Class FI	11,381
Class I	318,795
Class IS	4,273,781
Net Asset Value:
Class A (and redemption price)	$8.80
Class C*	$8.79
Class FI (and redemption price)	$8.81
Class I (and redemption price)	$8.80
Class IS (and redemption price)	$8.79
Maximum Public Offering Price Per Share:
Class A (based on maximum initial sales charge of 4.25%)	$9.19

* Redemption price per share is NAV of Class C shares reduced by a 1.00% CDSC, if shares are redeemed within one year from purchase payment (See Note 2).

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 21

Statement of operations

For the Year Ended October 31, 2016

Investment Income:
Interest	$	1,702,358
Dividends		2,925
Less: Foreign taxes withheld		(2,025)
Total Investment Income		1,703,258
Expenses:
Investment management fee (Note 2)		209,600
Registration fees		74,401
Audit and tax fees		46,310
Legal fees		29,875
Fund accounting fees		21,557
Shareholder reports		18,556
Custody fees		18,362
Transfer agent fees (Note 5)		3,682
Trustees’ fees		3,401
Service and/or distribution fees (Notes 2 and 5)		2,609
Insurance		1,132
Fees recaptured by investment manager (Note 2)		913
Commitment fees (Note 8)		912
Miscellaneous expenses		8,301
Total Expenses		439,611
Less: Fee waivers and/or expense reimbursements (Notes 2 and 5)		(194,086)
Net Expenses		245,525
Net Investment Income		1,457,733
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options, Swap Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
Net Realized Gain (Loss) From:
Investment transactions		(2,146,631)
Futures contracts		182,833
Written options		(39,754)
Swap contracts		442,122
Foreign currency transactions		286,313
Net Realized Loss		(1,275,117)
Change in Net Unrealized Appreciation (Depreciation) From:
Investments		2,529,283
Swap contracts		(11,874)
Foreign currencies		32,905
Change in Net Unrealized Appreciation (Depreciation)		2,550,314
Net Gain on Investments, Futures Contracts, Written Options, Swap Contracts and Foreign Currency Transactions		1,275,197
Increase in Net Assets From Operations	$	2,732,930

See Notes to Financial Statements.

22 Legg Mason BW Global High Yield Fund 2016 Annual Report

Statements of changes in net assets

For the Years Ended October 31,	2016		2015
Operations:
Net investment income	$	1,457,733	$	1,430,431
Net realized loss		(1,275,117)		(763,218)
Change in net unrealized appreciation (depreciation)		2,550,314		(1,948,857)
Increase (Decrease) in Net Assets From Operations		2,732,930		(1,281,644)
Distributions to Shareholders From (Notes 1 and 6):
Net investment income		(689,786)		(1,438,547)
Net realized gains		—		(951,609)
Return of capital		(763,209)		(341,025)
Decrease in Net Assets From Distributions to Shareholders		(1,452,995)		(2,731,181)
Fund Share Transactions (Note 7):
Net proceeds from sale of shares		14,492,496		6,175,101
Reinvestment of distributions		1,451,151		2,728,867
Cost of shares repurchased		(4,578,205)		(4,554,650)
Increase in Net Assets From Fund Share Transactions		11,365,442		4,349,318
Increase in Net Assets		12,645,377		336,493
Net Assets:
Beginning of year		28,699,541		28,363,048
End of year*	$	41,344,918	$	28,699,541
*Includes overdistributed net investment income of:		$(31,677)		$(35,420)

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 23

Financial highlights

For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
Class A Shares1	2016			2015			20142
Net asset value, beginning of year		$8.46			$9.69			$9.93
Income (loss) from operations:
Net investment income		0.36			0.40			0.34
Net realized and unrealized gain (loss)		0.33	��		(0.79)			(0.23)
Total income (loss) from operations		0.69			(0.39)			0.11
Less distributions from:
Net investment income		(0.17)			(0.42)			(0.35)
Net realized gains		—			(0.32)			—
Return of capital		(0.18)			(0.10)			—
Total distributions		(0.35)			(0.84)			(0.35)
Net asset value, end of year		$8.80			$8.46			$9.69
Total return3		8.35	%		(4.16)	%		1.03	%
Net assets, end of year (000s)		$460			$1,956			$1,501
Ratios to average net assets:
Gross expenses		2.32	%4		1.79	%		2.33	%5
Net expenses6,7		1.15	4		1.15			1.15	5
Net investment income		4.23			4.49			4.93	5
Portfolio turnover rate		96	%		54	%		105	%8

¹  Per share amounts have been calculated using the average shares method.

²  For the period February 18, 2014 (inception date) to October 31, 2014.

³  Performance figures, exclusive of sales charges, 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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴  Reflects recapture of expenses waived/reimbursed from prior fiscal years.

⁵  Annualized.

⁶  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class A shares did not exceed 1.15%. This expense limitation arrangement cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

⁷  Reflects fee waivers and/or expense reimbursements.

⁸  For the year ended October 31, 2014.

See Notes to Financial Statements.

24 Legg Mason BW Global High Yield Fund 2016 Annual Report

For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
Class C Shares1	2016			2015			20142
Net asset value, beginning of year		$8.46			$9.69			$9.93
Income (loss) from operations:
Net investment income		0.30			0.34			0.30
Net realized and unrealized gain (loss)		0.32			(0.80)			(0.24)
Total income (loss) from operations		0.62			(0.46)			0.06
Less distributions from:
Net investment income		(0.14)			(0.37)			(0.30)
Net realized gains		—			(0.32)			—
Return of capital		(0.15)			(0.08)			—
Total distributions		(0.29)			(0.77)			(0.30)
Net asset value, end of year		$8.79			$8.46			$9.69
Total return3		7.47	%		(4.88)	%		0.53	%
Net assets, end of year (000s)		$395			$15			$16
Ratios to average net assets:
Gross expenses		2.40	%		2.68	%		3.07	%4
Net expenses5,6		1.80			1.90			1.90	4
Net investment income		3.52			3.78			4.29	4
Portfolio turnover rate		96	%		54	%		105	%7

¹  Per share amounts have been calculated using the average shares method.

²  For the period February 18, 2014 (inception date) to October 31, 2014.

³  Performance figures, exclusive of CDSC, 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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴  Annualized.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class C shares did not exceed 1.90%. This expense limitation arrangement cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

⁶  Reflects fee waivers and/or expense reimbursements.

⁷  For the year ended October 31, 2014.

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 25

Financial highlights (cont’d)

For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
Class FI Shares1	2016			2015			20142
Net asset value, beginning of year		$8.46			$9.69			$9.93
Income (loss) from operations:
Net investment income		0.40			0.40			0.35
Net realized and unrealized gain (loss)		0.30			(0.79)			(0.25)
Total income (loss) from operations		0.70			(0.39)			0.10
Less distributions from:
Net investment income		(0.17)			(0.42)			(0.34)
Net realized gains		—			(0.32)			—
Return of capital		(0.18)			(0.10)			—
Total distributions		(0.35)			(0.84)			(0.34)
Net asset value, end of year		$8.81			$8.46			$9.69
Total return3		8.51	%		(4.17)	%		1.01	%
Net assets, end of year (000s)		$100			$10			$10
Ratios to average net assets:
Gross expenses		1.62	%		1.86	%		2.34	%4
Net expenses5,6		1.02			1.15			1.15	4
Net investment income		4.41			4.52			4.95	4
Portfolio turnover rate		96	%		54	%		105	%7

¹  Per share amounts have been calculated using the average shares method.

²  For the period February 18, 2014 (inception date) to October 31, 2014.

³  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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴  Annualized.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class FI shares did not exceed 1.15%. This expense limitation arrangement cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

⁶  Reflects fee waivers and/or expense reimbursements.

⁷  For the year ended October 31, 2014.

See Notes to Financial Statements.

26 Legg Mason BW Global High Yield Fund 2016 Annual Report

For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
Class I Shares1	2016			2015			20142
Net asset value, beginning of year		$8.46			$9.69			$9.93
Income (loss) from operations:
Net investment income		0.38			0.43			0.37
Net realized and unrealized gain (loss)		0.34			(0.79)			(0.24)
Total income (loss) from operations		0.72			(0.36)			0.13
Less distributions from:
Net investment income		(0.19)			(0.45)			(0.37)
Net realized gains		—			(0.32)			—
Return of capital		(0.19)			(0.10)			—
Total distributions		(0.38)			(0.87)			(0.37)
Net asset value, end of year		$8.80			$8.46			$9.69
Total return3		8.74	%		(3.85)	%		1.24	%
Net assets, end of year (000s)		$2,804			$233			$182
Ratios to average net assets:
Gross expenses		1.41	%		1.37	%		1.99	%4
Net expenses5,6		0.78			0.82			0.85	4
Net investment income		4.49			4.80			5.27	4
Portfolio turnover rate		96	%		54	%		105	%7

¹  Per share amounts have been calculated using the average shares method.

²  For the period February 18, 2014 (inception date) to October 31, 2014.

³  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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴  Annualized.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class I shares did not exceed 0.85%. This expense limitation arrangement cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

⁶  Reflects fee waivers and/or expense reimbursements.

⁷  For the year ended October 31, 2014.

See Notes to Financial Statements.

Legg Mason BW Global High Yield Fund 2016 Annual Report 27

Financial highlights (cont’d)

For a share of each class of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
Class IS Shares1	2016			2015			2014			20132
Net asset value, beginning of year		$8.46			$9.69			$10.21			$10.00
Income (loss) from operations:
Net investment income		0.39			0.44			0.55			0.57
Net realized and unrealized gain (loss)		0.32			(0.79)			(0.14)			0.21
Total income (loss) from operations		0.71			(0.35)			0.41			0.78
Less distributions from:
Net investment income		(0.19)			(0.45)			(0.55)			(0.57)
Net realized gains		—			(0.32)			(0.38)			—
Return of capital		(0.19)			(0.11)			—			—
Total distributions		(0.38)			(0.88)			(0.93)			(0.57)
Net asset value, end of year		$8.79			$8.46			$9.69			$10.21
Total return3		8.66	%		(3.78)	%		4.05	%		8.04	%
Net assets, end of year (000s)		$37,586			$26,485			$26,654			$25,943
Ratios to average net assets:
Gross expenses		1.35	%		1.27	%		1.78	%		2.24	%4
Net expenses5,6		0.75			0.75			0.75			0.75	4
Net investment income		4.53			4.91			5.55			6.20	4
Portfolio turnover rate		96	%		54	%		105	%		147	%

¹  Per share amounts have been calculated using the average shares method.

²  For the period November 30, 2012 (inception date) to October 31, 2013.

³  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. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴  Annualized.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class IS shares did not exceed 0.75%. In addition, the ratio of total annual fund operating expenses for Class IS shares did not exceed the ratio of total annual fund operating expenses for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

⁶  Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

28 Legg Mason BW Global High Yield Fund 2016 Annual Report

Notes to financial statements

1. Organization and significant accounting policies

Legg Mason BW Global High Yield Fund (the “Fund”) is a separate non-diversified investment series of Legg Mason Global Asset Management 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”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.

(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. 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 investment’s fair value. 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 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 Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies

Legg Mason BW Global High Yield Fund 2016 Annual Report 29

Notes to financial statements (cont’d)

adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s 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 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 Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.

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

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

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

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

• Level 3 — significant unobservable inputs (including the 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.

30 Legg Mason BW Global High Yield Fund 2016 Annual Report

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		—	$	34,423,776		—	$	34,423,776
Senior loans		—		1,343,605		—		1,343,605
Sovereign bonds		—		2,568,744		—		2,568,744
Total long-term investments		—	$	38,336,125		—	$	38,336,125
Short-term investments†	$	3,696,541		—		—		3,696,541
Total investments	$	3,696,541	$	38,336,125		—	$	42,032,666
Other financial instruments:
Forward foreign currency contracts		—	$	225,531		—	$	225,531
Total	$	3,696,541	$	38,561,656		—	$	42,258,197
LIABILITIES
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other financial instruments:
Forward foreign currency contracts		—	$	61,381		—	$	61,381
Centrally cleared credit default swaps on credit indices — sell protection		—		48,985		—		48,985
Total		—	$	110,366		—	$	110,366

† See Schedule of Investments for additional detailed categorizations.

(b) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents with a broker in an amount equal to a certain percentage of the contract amount. This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. The daily changes in contract value are recorded as unrealized gains or losses in the Statement of Operations and the Fund recognizes a realized gain or loss when the contract is closed.

Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

Legg Mason BW Global High Yield Fund 2016 Annual Report 31

Notes to financial statements (cont’d)

(c) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge exposure of bond positions or in an attempt to increase the Fund’s return. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.

Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(d) Written options. When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the premium received is recorded as a realized gain. When a written call option is exercised, the difference between the premium received plus the option exercise price and the Fund’s basis in the underlying security (in the case of a covered written call option), or the cost to purchase the underlying security (in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss. When a written put option is exercised, the amount of the premium received is subtracted from the cost of the security purchased by the Fund from the exercise of the written put option to form the Fund’s basis in the underlying security purchased. The writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in a realized gain or loss to the Fund.

The risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. The risk in writing an uncovered call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(e) Swap agreements. The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes. The use of swaps involves risks that are different from those associated with other portfolio transactions. Swap agreements are privately negotiated in the over-the-counter market and may be entered into as a bilateral contract (“OTC Swaps”) or centrally cleared (“Centrally Cleared Swaps”). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.

32 Legg Mason BW Global High Yield Fund 2016 Annual Report

In a Centrally Cleared Swap, immediately following execution of the swap, the swap agreement is submitted to a clearinghouse or central counterparty (the “CCP”) and the CCP becomes the ultimate counterparty of the swap agreement. The Fund is required to interface with the CCP through a broker, acting in an agency capacity. All payments are settled with the CCP through the broker. Upon entering into a Centrally Cleared Swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities.

Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of Centrally Cleared Swaps, if any, is recorded as a receivable or payable for variation margin on the Statement of Assets and Liabilities. Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Fund’s custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments and restricted cash, if any, is identified on the Statement of Assets and Liabilities. Risks may exceed amounts recorded in the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts’ terms, and the possible lack of liquidity with respect to the swap agreements.

OTC swap payments received or made at the beginning of the measurement period are reflected as a premium or deposit, respectively, on the Statement of Assets and Liabilities. These upfront payments are amortized over the life of the swap and are recognized as realized gain or loss in the Statement of Operations. Net periodic payments received or paid by the Fund are recognized as a realized gain or loss in the Statement of Operations.

The Fund’s maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of October 31, 2016, the total notional value of all credit default swaps to sell protection was $5,952,000. This amount would be offset by the value of the swap’s reference entity, upfront premiums received on the swap and any amounts received from the settlement of a credit default swap where the Fund bought protection for the same referenced security/entity.

For average notional amounts of swaps held during the year ended October 31, 2016, see Note 4.

Credit default swaps

The Fund enters into credit default swap (“CDS”) contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically corporate or sovereign issuers, on a specified obligation, or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index. The Fund may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk where the Fund has exposure to an issuer) or to take an active long or short position with respect to

Legg Mason BW Global High Yield Fund 2016 Annual Report 33

Notes to financial statements (cont’d)

the likelihood of a particular issuer’s default. As a seller of protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap provided that there is no credit event. If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the maximum potential amount of future payments (undiscounted) that the Fund could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. These amounts of potential payments will be partially offset by any recovery of values from the respective referenced obligations. As a seller of protection, the Fund effectively adds leverage to its portfolio because, in addition to its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied spreads are the theoretical prices a lender receives for credit default protection. When spreads rise, market perceived credit risk rises and when spreads fall, market perceived credit risk falls. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and decreasing market values, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. Credit spreads utilized in determining the period end market value of credit default swap agreements on corporate or sovereign issues are disclosed in the Notes to Financial Statements and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values, particularly in relation to the notional amount of the contract as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.

The Fund’s maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty). As the protection seller, the Fund’s maximum risk is the notional amount of the contract. Credit default swaps are considered to have credit risk-related contingent features since they require payment by the protection seller to the protection buyer upon the occurrence of a defined credit event.

Entering into a CDS agreement involves, to varying degrees, elements of credit, market and documentation risk in excess of the related amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates.

(f) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon

34 Legg Mason BW Global High Yield Fund 2016 Annual Report

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.

The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.

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.

(g) Loan participations. The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Fund’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of off-set against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.

The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower. In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any off-set between the lender and the borrower.

(h) Unfunded loan commitments. The Fund may enter into certain credit agreements where all or a portion of which may be unfunded. The Fund is obligated to fund these commitments at the borrower’s discretion. The commitments are disclosed in the accompanying Schedule of Investments. At October 31, 2016, the Fund had sufficient cash and/or securities to cover these commitments.

(i) Credit and market risk. Investments in securities that are collateralized by real estate mortgages are subject to certain credit and liquidity risks. When market conditions

Legg Mason BW Global High Yield Fund 2016 Annual Report 35

Notes to financial statements (cont’d)

result in an increase in default rates of the underlying mortgages and the foreclosure values of underlying real estate properties are materially below the outstanding amount of these underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be doubtful. Such market conditions may significantly impair the value and liquidity of these investments and may result in a lack of correlation between their credit ratings and values.

The Fund invests in high-yield and emerging market instruments that are subject to certain credit and market risks. The yields of high-yield and emerging market debt obligations reflect, among other things, perceived credit and market risks. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading. The consequences of political, social, economic or diplomatic changes may have disruptive effects on the market prices of investments held by the Fund. The Fund’s investments in non-U.S. dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange rate fluctuations.

(j) Foreign investment risks. The Fund’s 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.

(k) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s subadviser attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or

36 Legg Mason BW Global High Yield Fund 2016 Annual Report

NAV over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.

Absent an event of default by the counterparty or a termination of the agreement, the terms of the master agreements do not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.

As of October 31, 2016, the Fund held forward foreign currency contracts with credit related contingent features which had a liability position of $61,381. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties.

(l) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.

(m) Distributions to shareholders. Distributions from net investment income of the Fund are declared each business day to shareholders of record and are paid monthly. Distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(n) Share class accounting. Investment income, common expenses and realized/unrealized gains (losses) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that share class.

(o) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

Legg Mason BW Global High Yield Fund 2016 Annual Report 37

Notes to financial statements (cont’d)

(p) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of October 31, 2016, no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

(q) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During the current year, the following reclassifications have been made:

	Overdistributed Net Investment Income		Accumulated Net Realized Loss
(a)	$	(764,204)	$	764,204

^(a)  Reclassifications are due to foreign currency transactions treated as ordinary income for tax purposes and book/tax differences in the treatment of swap contracts.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Fund’s investment manager and Brandywine Global Investment Management, LLC (“Brandywine Global”) is the Fund’s subadviser. LMPFA and Brandywine Global are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

Under the investment management agreement, the Fund pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.65% of the Fund’s average daily net assets.

LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund. For its services, LMPFA pays Brandywine Global 90% of the net management fee it receives from the Fund.

As a result of expense limitation arrangements between the Fund and LMPFA, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, dividend expense on short sales, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class A, Class C, Class FI, Class I and Class IS shares did not exceed 1.15%, 1.90%, 1.15%, 0.85% and 0.75%, respectively. In addition, the ratio of

38 Legg Mason BW Global High Yield Fund 2016 Annual Report

total annual fund operating expenses for Class IS shares did not exceed the ratio of total annual fund operating expenses for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2018 without the Board of Trustees’ consent.

During the year ended October 31, 2016, fees waived and/or expenses reimbursed amounted to $194,086.

LMPFA is permitted to recapture amounts waived and/or reimbursed to a class within three years after the fiscal year in which LMPFA earned the fee or incurred the expense if the class’ total annual 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 LMPFA recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual operating expenses exceeding the expense cap or any other lower limit then in effect.

Pursuant to these arrangements, at October 31, 2016, the Fund had remaining fee waivers and/or expense reimbursements subject to recapture by LMPFA and respective dates of expiration as follows:

	Class A		Class C		Class Fl		Class I		Class IS
Expires October 31, 2017	$	6,976	$	92	$	84	$	819	$	280,263
Expires October 31, 2018		11,462		119		72		1,433		142,572
Expires October 31, 2019		3,196		1,051		410		10,670		178,759
Total fee waivers/expense reimbursements subject to recapture	$	21,634	$	1,262	$	566	$	12,922	$	601,594

For the year ended October 31, 2016, LMPFA recaptured $913 for Class A shares.

Legg Mason Investor Services, LLC (‘‘LMIS’’), a wholly-owned broker-dealer subsidiary of Legg Mason, serves as the Fund’s sole and exclusive distributor.

There is a maximum initial sales charge of 4.25% for Class A shares. There is a contingent deferred sales charge (“CDSC”) of 1.00% on Class C shares, which applies if redemption occurs within 12 months from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within 18 months from purchase payment. This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of other shares of funds sold by LMIS, equal or exceed $1,000,000 in the aggregate. These purchases do not incur an initial sales charge.

For the year ended October 31, 2016, LMIS and its affiliates did not receive any sales charges on sales of the Fund’s Class A shares. In addition, for the year ended October 31, 2016, there were no CDSCs paid to LMIS and its affiliates.

Under a Deferred Compensation Plan (the “Plan”), Trustees may have elected to defer receipt of all or a specified portion of their compensation. A participating Trustee selected one or more funds managed by affiliates of Legg Mason in which his or her deferred trustee’s fees were deemed to be invested. Deferred amounts remain in the Fund until distributed in accordance with the Plan. In May 2015, the Board of Trustees approved an

Legg Mason BW Global High Yield Fund 2016 Annual Report 39

Notes to financial statements (cont’d)

amendment to the Plan so that effective January 1, 2016, no compensation earned after that date may be deferred under the Plan.

All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the Trust.

3. Investments

During the year ended October 31, 2016, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:

Purchases	$	39,747,198
Sales		28,570,100

At October 31, 2016, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

Gross unrealized appreciation	$	761,307
Gross unrealized depreciation		(1,061,320)
Net unrealized depreciation	$	(300,013)

During the year ended October 31, 2016, written option transactions for the Fund were as follows:

	Number of Contracts		Premiums
Written options, outstanding as of October 31, 2015		—		—
Options written		848	$	79,100
Options closed		(426)		(61,369)
Options exercised		—		—
Options expired		(422)		(17,731)
Written options, outstanding as of October 31, 2016		—		—

At October 31, 2016, the Fund had the following open forward foreign currency contracts:

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
BRL	1,290,000	USD	380,419	HSBC Bank USA, N.A.		11/8/16	$	23,066
BRL	3,815,000	USD	1,140,201	HSBC Bank USA, N.A.		11/8/16		53,051
BRL	6,610,000	USD	2,013,218	HSBC Bank USA, N.A.		11/8/16		54,253
BRL	465,000	USD	147,502	HSBC Bank USA, N.A.		11/8/16		(2,060)
USD	898,021	BRL	2,950,000	HSBC Bank USA, N.A.		11/8/16		(24,678)
USD	172,618	EUR	155,000	Barclays Bank PLC		11/10/16		2,414
USD	966,466	EUR	870,000	Citibank N.A.		11/10/16		11,123
EUR	155,000	USD	174,169	Goldman Sachs Group Inc.		11/10/16		(3,964)
EUR	30,000	USD	33,501	Goldman Sachs Group Inc.		11/10/16		(558)
EUR	1,400,000	USD	1,564,182	Morgan Stanley & Co. Inc.		11/10/16		(26,849)
EUR	235,000	USD	255,556	Morgan Stanley & Co. Inc.		11/10/16		2,496
EUR	130,000	USD	141,372	Morgan Stanley & Co. Inc.		11/10/16		1,381

40 Legg Mason BW Global High Yield Fund 2016 Annual Report

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	819,038	EUR	725,000	Morgan Stanley & Co. Inc.		11/10/16	$	22,920
AUD	380,000	USD	289,441	Barclays Bank PLC		11/18/16		(499)
USD	290,447	AUD	380,000	Morgan Stanley & Co. Inc.		11/18/16		1,505
USD	1,569,888	GBP	1,240,000	Barclays Bank PLC		12/9/16		50,914
USD	133,805	GBP	110,000	HSBC Bank USA, N.A.		12/9/16		(943)
USD	200,813	GBP	165,000	HSBC Bank USA, N.A.		12/9/16		(1,308)
USD	26,908	GBP	20,000	Morgan Stanley & Co. Inc.		12/9/16		2,408
USD	177,411	GBP	145,000	UBS AG		12/9/16		(211)
USD	241,783	IDR	3,200,000,000	HSBC Bank USA, N.A.		1/27/17		(311)
Total							$	164,150

Abbreviations used in this table:
AUD	— Australian Dollar
BRL	— Brazilian Real
EUR	— Euro
GBP	— British Pound
IDR	— Indonesian Rupiah
USD	— United States Dollar

At October 31, 2016, the Fund had the following open swap contracts:

CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — SELL PROTECTION1
Central Counterparty (Reference Entity)	Notional Amount2		Termination Date		Periodic Payments Received by the Fund†	Market Value3		Upfront Premiums Paid (Received)		Unrealized Depreciation
InterContinental Exchange (Markit CDX.NA.HY.27 Index)	$	5,952,000		12/20/21	5.000% quarterly	$	199,957	$	248,942	$	(48,985)

¹  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

²  The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

³  The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative had the notional amount of the swap agreement been closed/sold as of the period end. Decreasing market values (sell protection) or increasing market values (buy protection) when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

† Percentage shown is an annual percentage rate.

Legg Mason BW Global High Yield Fund 2016 Annual Report 41

Notes to financial statements (cont’d)

4. Derivative instruments and hedging activities

Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of Assets and Liabilities at October 31, 2016.

ASSET DERIVATIVES1
					Foreign Exchange Risk
Forward foreign currency contracts					$	225,531
LIABILITY DERIVATIVES1
	Foreign Exchange Risk		Credit Risk		Total
Centrally cleared swap contracts2		—	$	48,985	$	48,985
Forward foreign currency contracts	$	61,381		—		61,381
Total	$	61,381	$	48,985	$	110,366

¹  Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation (depreciation) and for liability derivatives is payables/net unrealized appreciation (depreciation).

²  Includes cumulative appreciation (depreciation) of centrally cleared swap contracts as reported in the footnotes. Only variation margin is reported within the receivables and/or payables on the Statement of Assets and Liabilities.

The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended October 31, 2016. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information about the change in unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.

AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
	Interest Rate Risk		Foreign Exchange Risk		Credit Risk		Equity Risk		Total
Futures contracts	$	182,833		—		—		—	$	182,833
Written options		—		—		—	$	(39,754)		(39,754)
Swap contracts		—		—	$	442,122		—		442,122
Forward foreign currency contracts1		—	$	314,552		—		—		314,552
Total	$	182,833	$	314,552	$	442,122	$	(39,754)	$	899,753

¹  Net realized gain (loss) from forward foreign currency contracts is reported in net realized gain (loss) from foreign currency transactions in the Statement of Operations.

CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
	Foreign Exchange Risk		Credit Risk		Total
Swap contracts		—	$	(11,874)	$	(11,874)
Forward foreign currency contracts1	$	28,949		—		28,949
Total	$	28,949	$	(11,874)	$	17,075

¹  The change in unrealized appreciation (depreciation) from forward foreign currency contracts is reported in the change in net unrealized appreciation (depreciation) from foreign currencies in the Statement of Operations.

42 Legg Mason BW Global High Yield Fund 2016 Annual Report

During the year ended October 31, 2016, the volume of derivative activity for the Fund was as follows:

	Average Market Value
Written options†	$	2,788
Futures contracts (to buy)†		2,686,065
Futures contracts (to sell)†		213,878
Forward foreign currency contracts (to buy)		3,634,026
Forward foreign currency contracts (to sell)		5,701,884
	Average Notional Balance
Credit default swap contracts (to buy protection)†	$	1,074,907
Credit default swap contracts (to sell protection)		4,792,398

† At October 31, 2016, there were no open positions held in this derivative.

The following table presents by financial instrument, the Fund’s derivative assets net of the related collateral received by the Fund at October 31, 2016:

	Gross Amount of Derivative Assets in the Statement of Assets and Liabilities1		Collateral Received		Net Amount
Centrally cleared swap contracts2	$	173,802		—	$	173,802
Forward foreign currency contracts		225,531		—		225,531
Total	$	399,333		—	$	399,333

The following table presents by financial instrument, the Fund’s derivative liabilities net of the related collateral pledged by the Fund at October 31, 2016:

	Gross Amount of Derivative Liabilities in the Statement  of Assets and Liabilities1		Collateral Pledged		Net Amount
Forward foreign currency contracts	$	61,381		—	$	61,381

¹  Absent an event of default or early termination, derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

²  Amount represents the current day’s variation margin as reported in the Statement of Assets and Liabilities. It differs from the cumulative appreciation (depreciation) presented in the previous table.

5. Class specific expenses, waivers and/or expense reimbursements

The Fund has adopted a Rule 12b-1 shareholder services and distribution plan and under that plan the Fund pays service and/or distribution fees with respect to its Class A, Class C and Class FI shares calculated at the annual rate of 0.25%, 1.00% and 0.25% of the average daily net assets of each class, respectively. Service and/or distribution fees are accrued daily and paid monthly.

Legg Mason BW Global High Yield Fund 2016 Annual Report 43

Notes to financial statements (cont’d)

For the year ended October 31, 2016, class specific expenses were as follows:

	Service and/or Distribution Fees		Transfer Agent Fees
Class A	$	680	$	1,066
Class C		1,758		152
Class FI		171		72
Class I		—		1,495
Class IS		—		897
Total	$	2,609	$	3,682

For the year ended October 31, 2016, waivers and/or expense reimbursements by class were as follows:

	Waivers/Expense Reimbursements
Class A	$	3,196
Class C		1,051
Class FI		410
Class I		10,670
Class IS		178,759
Total	$	194,086

6. Distributions to shareholders by class

	Year Ended October 31, 2016		Year Ended October 31, 2015
Net Investment Income:
Class A	$	7,283	$	79,007
Class C		2,443		636
Class FI		1,164		473
Class I		31,022		11,684
Class IS		647,874		1,346,747
Total	$	689,786	$	1,438,547
Net Realized Gains:
Class A		—	$	49,198
Class C		—		533
Class FI		—		339
Class I		—		6,338
Class IS		—		895,201
Total		—	$	951,609
Return of Capital:
Class A	$	4,176	$	19,700
Class C		3,655		135
Class FI		1,785		109
Class I		44,818		3,111
Class IS		708,775		317,970
Total	$	763,209	$	341,025

44 Legg Mason BW Global High Yield Fund 2016 Annual Report

7. Shares of beneficial interest

At October 31, 2016, the Fund had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share. The Fund has the ability to issue multiple classes of shares. Each class of shares represents an identical interest and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.

Transactions in shares of each class were as follows:

	Year Ended October 31, 2016				Year Ended October 31, 2015
	Shares		Amount		Shares		Amount
Class A
Shares sold		45,676	$	401,311		91,224	$	822,941
Shares issued on reinvestment		1,162		9,820		16,276		145,624
Shares repurchased		(225,815)		(1,893,727)		(31,210)		(278,568)
Net increase (decrease)		(178,977)	$	(1,482,596)		76,290	$	689,997
Class C
Shares sold		56,178	$	478,015		53	$	452
Shares issued on reinvestment		703		6,090		145		1,303
Shares repurchased		(13,740)		(115,401)		(52)		(469)
Net increase		43,141	$	368,704		146	$	1,286
Class FI
Shares sold		243,714	$	2,141,536		91	$	795
Shares issued on reinvestment		321		2,829		103		921
Shares repurchased		(233,889)		(2,074,583)		(1)		(6)
Net increase		10,146	$	69,782		193	$	1,710
Class I
Shares sold		323,443	$	2,729,576		20,231	$	183,919
Shares issued on reinvestment		8,785		75,763		2,359		21,101
Shares repurchased		(40,924)		(349,574)		(13,865)		(121,044)
Net increase		291,304	$	2,455,765		8,725	$	83,976
Class IS
Shares sold		1,001,203	$	8,742,058		570,049	$	5,166,994
Shares issued on reinvestment		159,205		1,356,649		285,674		2,559,918
Shares repurchased		(17,006)		(144,920)		(476,797)		(4,154,563)
Net increase		1,143,402	$	9,953,787		378,926	$	3,572,349

8. Redemption facility

Effective November 24, 2015, the Fund and certain other participating funds within the Trust (the “Participating Funds”), have available an unsecured revolving credit facility (the “Redemption Facility”) from the lenders and The Bank of New York Mellon (“BNY Mellon”), as administrative agent for the lenders. The Redemption Facility is to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of shares. Under the agreement, BNY Mellon provides a 364-day revolving credit facility, in the

Legg Mason BW Global High Yield Fund 2016 Annual Report 45

Notes to financial statements (cont’d)

aggregate amount of $190 million. Unless renewed, the agreement will terminate on November 22, 2016. Any borrowings under the Redemption Facility will bear interest at current market rates as set forth in the credit agreement. The annual commitment fee to maintain the Redemption Facility is 0.10% and is incurred on the unused portion of the facility and is allocated to all Participating Funds pro rata based on net assets. For the period ended October 31, 2016, the Fund incurred a commitment fee in the amount of $912. The Fund did not utilize the Redemption Facility during the period ended October 31, 2016.

9. Income tax information and distributions to shareholders

The tax character of distributions paid during the fiscal years ended October 31, was as follows:

	2016		2015
Distributions paid from:
Ordinary income	$	689,786	$	1,848,093
Net long-term capital gains		—		542,063
Total taxable distributions	$	689,786	$	2,390,156
Tax return of capital		763,209		341,025
Total distributions paid	$	1,452,995	$	2,731,181

As of October 31, 2016, the components of accumulated earnings (losses) on a tax basis were as follows:

Deferred capital losses*	$	(1,034,601)
Other book/tax temporary differences(a)		(223,009)
Unrealized appreciation (depreciation)		(184,987)
Total accumulated earnings (losses) — net	$	(1,442,597)

* These capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on the first day of the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.

^(a)  Other book/tax temporary differences are attributable to the tax deferral of losses on straddles, the realization for tax purposes of unrealized gains (losses) on certain futures and foreign currency contracts and book/tax differences in the timing of the deductibility of various expenses.

10. Recent accounting pronouncement

In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended existing rules (together, the “final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on the Fund’s financial statements and related disclosures.

11. Change in fiscal year end

In November 2016, the Fund’s Board of Trustees approved changing the Fund’s fiscal year end from October to September.

46 Legg Mason BW Global High Yield Fund 2016 Annual Report

12. Subsequent event

Effective November 21, 2016, the Redemption Facility was renewed for a 364-day term. Under the agreement, BNY Mellon provides a 364-day revolving credit facility, in the aggregate amount of $190 million. Unless renewed, the agreement will terminate on November 20, 2017. Any borrowings under the Redemption Facility will bear interest at current market rates as set forth in the credit agreement. The annual commitment fee to maintain the Redemption Facility is 0.10% and is incurred on the unused portion of the facility and is allocated to all Participating Funds pro rata based on net assets.

Legg Mason BW Global High Yield Fund 2016 Annual Report 47

Report of independent registered public accounting firm

To the Board of Trustees of Legg Mason Global Asset Management Trust and to the Shareholders of Legg Mason BW Global High Yield Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Legg Mason BW Global High Yield Fund (one of the funds comprising Legg Mason Global Asset Management Trust, the “Fund”) as of October 31, 2016, the results of its operations, the changes in its net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

Baltimore, MD

December 19, 2016

48 Legg Mason BW Global High Yield Fund 2016 Annual Report

Additional information (unaudited)

Information about Trustees and Officers

The business and affairs of Legg Mason BW Global High Yield Fund (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is c/o Jane Trust, Legg Mason, 100 International Drive, 11^th Floor, Baltimore, Maryland 21202. Information pertaining to the Trustees and officers of the Fund is set forth below.

The Statement of Additional Information includes additional information about Trustees and is available, without charge, upon request by calling the Fund at 1-877-721-1926.

Independent Trustees†
Ruby P. Hearn
Year of birth	1940
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 2004
Principal occupation(s) during past five years	Senior Vice President Emerita of The Robert Wood Johnson Foundation (non-profit) since 2001; Member of the Institute of Medicine since 1982; formerly, Trustee of the New York Academy of Medicine (2004 to 2012); Director of the Institute for Healthcare Improvement (2002 to 2012); Senior Vice President of The Robert Wood Johnson Foundation (1996 to 2001); Fellow of The Yale Corporation (1992 to 1998)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	None
Arnold L. Lehman
Year of birth	1944
Position(s) with Trust	Trustee and Chairman
Term of office1 and length of time served2	Since 1982 and since 2015
Principal occupation(s) during past five years	Senior Advisor, Phillips Auctioneer since 2015; Trustee of American Federation of Arts since 1998; formerly, Fellow, Ford Foundation (2015 to 2016); Director of the Brooklyn Museum (1997 to 2015); Director of The Baltimore Museum of Art (1979 to 1997)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	None
Robin J.W. Masters
Year of birth	1955
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 2002
Principal occupation(s) during past five years	Retired; formerly, Chief Investment Officer of ACE Limited (insurance) (1986 to 2000)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	Director of Cheyne Capital International Limited (investment advisory firm); formerly, Director/Trustee of Legg Mason Institutional Funds plc, WA Fixed Income Funds plc and Western Asset Debt Securities Fund plc. (2007 to 2011)

Legg Mason BW Global High Yield Fund 49

Additional information (unaudited) (cont’d)

Information about Trustees and Officers

Independent Trustees† cont’d
Jill E. McGovern
Year of birth	1944
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1989
Principal occupation(s) during past five years	Senior Consultant, American Institute for Contemporary German Studies (AICGS) since 2007; formerly, Chief Executive Officer of The Marrow Foundation (non-profit) (1993 to 2007); Executive Director of the Baltimore International Festival (1991 to 1993); Senior Assistant to the President of The Johns Hopkins University (1986 to 1990)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	Director of International Biomedical Research Alliance; Director of Lois Roth Endowment
Arthur S. Mehlman
Year of birth	1942
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 2002
Principal occupation(s) during past five years	Retired. Director, The University of Maryland Foundation since 1992; Director, The League for People with Disabilities since 2003; formerly, Director, Municipal Mortgage & Equity LLC (2004 to 2011); Partner, KPMG LLP (international accounting firm) (1972 to 2002)
Number of funds in fund complex overseen by Trustee	Director/Trustee of all Legg Mason Funds consisting of 21 portfolios; Director/Trustee of the Royce Family of Funds consisting of 23 portfolios
Other board memberships held by Trustee during past five years	Director of Municipal Mortgage & Equity, LLC. (2004 to 2011)
G. Peter O’Brien
Year of birth	1945
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1999
Principal occupation(s) during past five years	Retired. Trustee Emeritus of Colgate University; Board Member, Hill House, Inc. (residential home care); Board Member, Bridges School (pre- school); formerly, Managing Director, Equity Capital Markets Group of Merrill Lynch & Co. (1971 to 1999)
Number of funds in fund complex overseen by Trustee	Director/Trustee of all Legg Mason funds consisting of 21 portfolios; Director/Trustee of the Royce Family of Funds consisting of 23 portfolios
Other board memberships held by Trustee during past five years	Director of TICC Capital Corp.

50 Legg Mason BW Global High Yield Fund

Independent Trustees† cont’d
S. Ford Rowan
Year of birth	1943
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 2002
Principal occupation(s) during past five years	Chairman, National Center for Critical Incident Analysis, since 2004; Consultant to University of Maryland University College, since 2013; formerly, Lecturer in Organizational Sciences, George Washington University (2000 to 2014); Trustee, St. John’s College (2006 to 2012); Consultant, Rowan & Blewitt Inc. (management consulting) (1984 to 2007); Lecturer in Journalism, Northwestern University (1980 to 1993); Director, Santa Fe Institute (1999 to 2008)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	None
Robert M. Tarola
Year of birth	1950
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 2004
Principal occupation(s) during past five years	Executive Vice President and Chief Financial Officer, Southcoast Health System, Inc. (healthcare provider network) since 2015; President of Right Advisory LLC (corporate finance and governance consulting) since 2008; Member, Investor Advisory Group of the Public Company Accounting Oversight Board since 2009; formerly, Senior Vice President and Chief Financial Officer of The Howard University (2009 to 2013) (higher education and health care); Senior Vice President and Chief Financial Officer of W.R. Grace & Co. (specialty chemicals) (1999 to 2008) and MedStar Health, Inc. (healthcare) (1996 to 1999); Partner, Price Waterhouse, LLP (accounting and auditing) (1984 to 1996)
Number of funds in fund complex overseen by Trustee	21
Other board memberships held by Trustee during past five years	Director of American Kidney Fund (renal disease assistance); Director of XBRL International, Inc. (global data standard setting); Director of Vista Outdoor, Inc. (sporting goods)

Legg Mason BW Global High Yield Fund 51

Additional information (unaudited) (cont’d)

Information about Trustees and Officers

Interested Trustee
Jane Trust3
Year of birth	1962
Position(s) with Trust	Trustee, President and Chief Executive Officer
Term of office1 and length of time served2	Since 2015
Principal occupation(s) during past five years	Managing Director of Legg Mason & Co., LLC (“Legg Mason & Co.”) (since 2016); Officer and/or Trustee/Director of 159 funds associated with Legg Mason Partners Fund Advisor, LLC (“LMPFA”) or its affiliates (since 2015); President and Chief Executive Officer of LMPFA (since 2015); formerly, Senior Vice President of LMPFA (2015); Director of ClearBridge, LLC (formerly, Legg Mason Capital Management, LLC) (2007 to 2014); Managing Director of Legg Mason Investment Counsel & Trust Co. (2000 to 2007)
Number of funds in fund complex overseen by Trustee	152
Other board memberships held by Trustee during past five years	None
Executive Officers
Richard F. Sennett Legg Mason 100 International Drive, 7th Floor, Baltimore, MD 21202
Year of birth	1970
Position(s) with Trust	Principal Financial Officer
Term of office1 and length of time served2	Since 2011
Principal occupation(s) during past five years	Principal Financial Officer and Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011 and since 2013); Managing Director of Legg Mason & Co. and Senior Manager of the Treasury Policy group for Legg Mason & Co.’s Global Fiduciary Platform (since 2011); formerly, Chief Accountant within the SEC’s Division of Investment Management (2007 to 2011); Assistant Chief Accountant within the SEC’s Division of Investment Management (2002 to 2007)
Robert I. Frenkel Legg Mason 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1954
Position(s) with Trust	Secretary and Chief Legal Officer
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Vice President and Deputy General Counsel of Legg Mason (since 2006); Managing Director and General Counsel of — U.S. Mutual Funds for Legg Mason & Co. (since 2006) and Legg Mason & Co. predecessors (since 1994); Secretary and Chief Legal Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)

52 Legg Mason BW Global High Yield Fund

Executive Officers cont’d
Ted P. Becker Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1951
Position(s) with Trust	Vice President and Chief Compliance Officer
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Director of Global Compliance at Legg Mason (since 2006); Chief Compliance Officer of LMPFA (since 2006); Managing Director of Compliance of Legg Mason & Co. (since 2005); Chief Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)
Christopher Berarducci Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1974
Position(s) with Trust	Treasurer
Term of office1 and length of time served2	Since 2010
Principal occupation(s) during past five years	Director of Legg Mason & Co. (since 2015); Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2010); formerly, Vice President of Legg Mason & Co. (2011 to 2015); Assistant Controller of certain mutual funds associated with Legg Mason & Co. or its affiliates (prior to 2010)
Susan Kerr Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1949
Position(s) with Trust	Chief Anti-Money Laundering Compliance Officer
Term of office1 and length of time served2	Since 2013
Principal occupation(s) during past five years	Assistant Vice President of Legg Mason & Co. and Legg Mason Investor Services, LLC (“LMIS”) (since 2010); Chief Anti-Money Laundering Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2013) and Anti-Money Laundering Compliance Officer of LMIS (since 2012); Senior Compliance Officer of LMIS (since 2011); formerly, AML Consultant, DTCC (2010); AML Consultant, Rabobank Netherlands, (2009); First Vice President, Director of Marketing & Advertising Compliance and Manager of Communications Review Group at Citigroup Inc. (1996 to 2008)

Legg Mason BW Global High Yield Fund 53

Additional information (unaudited) (cont’d)

Information about Trustees and Officers

Executive Officers cont’d
Jenna Bailey Legg Mason 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1978
Position(s) with Trust	Identity Theft Prevention Officer
Term of office1 and length of time served2	Since 2015
Principal occupation(s) during past five years	Identity Theft Prevention Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2015); Compliance Officer of Legg Mason & Co. (since 2013); Assistant Vice President of Legg Mason & Co. (since 2011); formerly, Associate Compliance Officer of Legg Mason & Co. (2011 to 2013); Risk Manager of U.S. Distribution of Legg Mason & Co. (2007 to 2011).
Jeanne M. Kelly Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1951
Position(s) with Trust	Senior Vice President
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Senior Vice President of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); Managing Director of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); formerly, Senior Vice President of LMFAM (2013 to 2015)

† Trustees who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”). Each of the Independent Trustees serves on the standing committees of the Board of Trustees, which include the Audit Committee (chair: Arthur S. Mehlman), the Nominating Committee (co-chairs: G. Peter O’Brien and Jill E. McGovern), and the Independent Trustees Committee (chair: Arnold L. Lehman).

¹  Each Trustee and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

²  Indicates the earliest year in which the Trustee became a board member for a fund in the Legg Mason fund complex or the officer took such office.

³  Ms. Trust is an “interested person” of the Fund, as defined in the 1940 Act, because of her position with LMPFA and/or certain of its affiliates.

54 Legg Mason BW Global High Yield Fund

Important tax information (unaudited)

The following information is provided with respect to the distributions paid during the taxable year ended October 31, 2016:

Record date:	Daily	Daily
Payable date:	November 2015 through December 2015	January 2016 through October 2016
Tax return of capital	—	62.16%

Please retain this information for your records.

Legg Mason BW Global High Yield Fund 55

Legg Mason BW

Global High Yield Fund

Trustees

Ruby P. Hearn

Arnold L. Lehman

Chairman

Robin J.W. Masters

Jill E. McGovern

Arthur S. Mehlman

G. Peter O’Brien

S. Ford Rowan

Robert M. Tarola

Jane Trust

Investment manager

Legg Mason Partners Fund Advisor, LLC

Subadviser

Brandywine Global Investment Management, LLC

Distributor

Legg Mason Investor Services, LLC

Custodian

State Street Bank and Trust Company

Transfer agent

BNY Mellon Investment Servicing (US) Inc.

4400 Computer Drive

Westborough, MA 01581

Independent registered public accounting firm

PricewaterhouseCoopers LLP

Baltimore, MD

Legg Mason BW Global High Yield Fund

The Fund is a separate investment series of Legg Mason Global Asset Management Trust, a Maryland statutory trust.

Legg Mason BW Global High Yield Fund

Legg Mason Funds

620 Eighth Avenue, 49^th Floor

New York, NY 10018

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q, shareholders can call the Fund at 1-877-721-1926.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio transactions are available (1) without charge, upon request, by calling the Fund at 1-877-721-1926, (2) at www.leggmason.com/mutualfunds and (3) on the SEC’s website at www.sec.gov.

This report is submitted for the general information of the shareholders of Legg Mason BW Global High Yield Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by a current prospectus.

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before you invest.

www.leggmason.com

© 2016 Legg Mason Investor Services, LLC

Member FINRA, SIPC

Legg Mason Funds Privacy and Security Notice

Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds

This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds’ distributor, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds and certain closed-end funds managed or sub-advised by Legg Mason or its affiliates. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information the Funds Collect About You

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

• Personal information included on applications or other forms;

• Account balances, transactions, and mutual fund holdings and positions;

• Online account access user IDs, passwords, security challenge question responses; and

• Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual’s total debt, payment history, etc.).

How the Funds Use Nonpublic Personal Information About You

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law. The Funds may disclose information about you to:

• Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business or comply with obligations to government regulators;

• Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform marketing services solely for the Funds;

• The Funds’ representatives such as legal counsel, accountants and auditors; and

• Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

NOT PART OF THE ANNUAL REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.

The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

Keeping You Informed of the Funds’ Privacy and Security Practices

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.

The Funds’ Security Practices

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, or if you have questions about the Funds’ privacy practices, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.leggmason.com, or contact the Fund at 1-877-721-1926.

NOT PART OF THE ANNUAL REPORT

www.leggmason.com

© 2016 Legg Mason Investor Services, LLC Member FINRA, SIPC

BWXX016048 12/16 SR16-2938

ITEM 2. CODE OF ETHICS.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the registrant has determined that Arthur S. Mehlman the Chairman of the Board’s Audit Committee and Robert M. Tarola, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N- to qualify as “audit committee financial experts,” and have designated Mr. Mehlman and Mr. Tarola CSR as the Audit Committee’s financial experts. Mr. Mehlman and Mr. Tarola are “independent” Trustees pursuant to paragraph (a) (2) of Item 3 to Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

a) Audit Fees. The aggregate fees billed in the last two fiscal years ending October 31, 2015 and October 31, 2016 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $268,854 in 2015 and $164,788 in 2016.

b) Audit-Related Fees. The aggregate fees billed in the Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in October 31, 2015 and $0 in October 31, 2016.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $56,048 in October 31, 2015 and $81,401 in October 31, 2016. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed for tax services by the service affiliates during the Reporting Periods that required pre-approval by the Audit Auditors Committee.

d) All Other Fees. The aggregate fees for other fees billed in the Reporting Periods for products and services provided by the Auditor were $3,234 in October 31, 2015 and $2,369 in October 31, 2016, other than the services reported in paragraphs (a) through (c) of this item for the Legg Mason Global Asset Management Trust.

All Other Fees. There were no other non-audit services rendered by the Auditor to Legg Mason Partners Fund Advisors, LLC (“LMPFA”), and any entity controlling, controlled by or under common control with LMPFA that provided ongoing services to Legg Mason Global Asset Management Trust requiring pre-approval by the Audit Committee in the Reporting Period.

(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c)

(7) of Rule 2-01 of Regulation S-X.

(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by LMPFA or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any Covered Service Providers if the engagement relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.

The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.

(2) For the Legg Mason Global Asset Management Trust, the percentage of fees that were approved by the audit committee, with respect to: Audit-Related Fees were 100% and 100% for October 31, 2015 and October 31, 2016; Tax Fees were 100% and 100% for October 31, 2015 and October 31, 2016; and Other Fees were 100% and 100% for October 31, 2015 and October 31, 2016.

(f) N/A

(g) Non-audit fees billed by the Auditor for services rendered to Legg Mason Global Asset Management Trust, LMPFA and any entity controlling, controlled by, or under common control with LMPFA that provides ongoing services to Legg Mason Global Asset Management Trust during the reporting period were $330,948 in October 31, 2015 and $217,714 in October 31, 2016.

(h) Yes. Legg Mason Global Asset Management Trust’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor to the Legg Mason Global Asset Management Trust or to Service Affiliates, which were required to be pre-approved, were pre-approved as required.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

a) The independent board members are acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act .The Audit Committee consists of the following Board members:

Ruby P. Hearn

Arnold L. Lehman

Robin J.W. Masters

Jill E. McGovern

Arthur S. Mehlman

G. Peter O’Brien

S. Ford Rowan

Robert M. Tarola

b) Not applicable

ITEM 6. SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s 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 registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) (1) Code of Ethics attached hereto.

Exhibit 99.CODE ETH

(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.906CERT

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, there unto duly authorized.

Legg Mason Global Asset Management Trust

By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	December 27, 2016

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/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	December 27, 2016
By:	/s/ Richard F. Sennett
	Richard F. Sennett
	Principal Financial Officer
Date:	December 27, 2016