Form N-CSRS - Certified Shareholder Report, Semi-Annual
30 Julho 2024 - 12:19PM
Edgar (US Regulatory)
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
811-21477
Western Asset Inflation-Linked Opportunities
& Income Fund
(Exact name of registrant as specified in charter)
620 Eighth Avenue, 47th Floor, New York,
NY 10018
(Address of principal executive offices) (Zip code)
Marc A. De Oliveira.
Franklin Templeton
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant’s telephone number, including area code:
1-888-777-0102
Date of fiscal year end: November 30
Date of reporting period: May 31, 2024
| ITEM 1. |
REPORT TO STOCKHOLDERS. |
| |
The Semi-Annual Report to Stockholders is filed herewith. |
Semi-Annual Report
May 31, 2024
WESTERN ASSET
INFLATION-LINKED OPPORTUNITIES & INCOME FUND (WIW)
Managed Distribution Policy: The Fund’s Board of Trustees (the “Board”) has authorized a managed distribution plan pursuant to which the Fund makes monthly distributions
to shareholders at a fixed rate of $0.0605 per common share, which rate may be adjusted
from time to time by the Fund’s Board (the “Plan”). The Plan is intended to provide shareholders with a constant, but not guaranteed, fixed minimum rate of distribution each month.
The Fund is managed with a goal of generating as much of the distribution as possible
from net ordinary income and short-term capital gains that is consistent with the Fund’s investment strategy and risk profile. To the extent that sufficient distributable income is not
available on a monthly basis, the Fund will distribute long-term capital gains and/or return
of capital in order to maintain its managed distribution rate. A return of capital may occur,
for example, when some or all of the money that was invested in the Fund is paid back
to shareholders. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. Even though the Fund may realize current year capital gains, such gains may be offset, in whole
or in part, by the Fund’s capital loss carryovers from prior years.
The Board may amend the terms of the Plan or terminate the Plan at any time without
prior notice to the Fund’s shareholders, however, at this time there are no reasonably foreseeable circumstances that might cause the termination of the Plan. The amendment or termination
of the Plan could have an adverse effect on the market price of the Fund’s common shares. The Plan is subject to the periodic review by the Board to determine if an adjustment
should be made.
Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Fund’s Plan. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will describe
how to
report the Fund’s distributions for federal income tax purposes.
Fund objectives
The Fund’s primary investment objective is to provide current income. Capital appreciation, when consistent with current income, is a secondary investment objective.
Under normal market conditions and at the time of purchase, the Fund will invest at
least 80% of its total managed assets in inflation-linked securities. The Fund may invest
up to 100% of its total managed assets in non-U.S. dollar investments. The Fund may also
invest up to 40% of its total managed assets in below investment grade securities.
Letter from the president
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Asset Inflation-Linked Opportunities & Income Fund
Letter from the president
Dear Shareholder,
We are pleased to provide the semi-annual report of Western Asset Inflation-Linked
Opportunities & Income Fund for the six-month reporting period ended May 31, 2024.
Please read on for Fund performance information during the Fund’s reporting period.
Special shareholder notices
Effective March 1, 2024, the portfolio management team responsible for the day-to-day
oversight of the Fund became as follows: Michael Buchanan, Ken Leech, John Bellows,
Chia-Liang (CL) Lian and Frederick Marki.
Effective May 1, 2024, the portfolio management team responsible for the day-to-day
oversight of the Fund became as follows: Michael Buchanan, Ken Leech, Chia-Liang (CL)
Lian and Frederick Marki.
Effective June 3, 2024, Chia-Liang (CL) Lian no longer serves as a member of the Fund’s portfolio management team.
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.franklintempleton.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.
Western Asset Inflation-Linked Opportunities & Income Fund
Letter from the president (cont’d)
We look forward to helping you meet your financial goals.
Jane Trust, CFA
President and Chief Executive Officer
Western Asset Inflation-Linked Opportunities & Income Fund
(This page intentionally left blank.)
For the six months ended May 31, 2024, Western Asset Inflation-Linked Opportunities
& Income Fund returned 3.70% based on its net asset value (NAV)i and 5.28% based on its New York Stock Exchange (NYSE) market price per share. The Fund’s unmanaged benchmarks, the Bloomberg U.S. Government Inflation-Linked 1-10 Year Indexii and the Bloomberg U.S. Government Inflation-Linked All Maturities Indexiii, returned 2.73% and 2.64%, respectively, for the same period. The Bloomberg World Government Inflation-Linked
All Maturities Indexiv and the Fund’s Custom Benchmarkv returned 2.08% and 2.89%, respectively, over the same time frame.
The Fund has adopted a managed distribution policy. Pursuant to this policy, the Fund
intends to make regular monthly distributions to common shareholders at a fixed rate
per common share, which rate may be adjusted from time to time by the Fund’s Board of Trustees. This policy has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. The Fund’s investment adviser believes the policy helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV.
During the six-month period, the Fund made distributions to shareholders totaling
$0.36 per share. As of May 31, 2024, the Fund estimates that all of the distributions were sourced
from net investment income.* The performance table shows the Fund’s six-month total return based on its NAV and market price as of May 31, 2024. Past performance is no guarantee of future results.
Performance Snapshot as of May 31, 2024 (unaudited)
|
|
|
|
|
|
|
|
|
|
All figures represent past performance and are not a guarantee of future results.
Performance figures for periods shorter than one year represent cumulative figures and are not
annualized.
** Total returns are based on changes in NAV or market price, respectively. Returns
reflect the deduction of all Fund expenses, including management fees, operating expenses, and
other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that
investors may pay on distributions or the sale of shares.
† Total return assumes the reinvestment of all distributions, including returns of capital, if any, at NAV.
‡ Total return assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.
*
These estimates are not for tax purposes. The Fund will issue a Form 1099 with final
composition of the distributions for tax purposes after year end. A return of capital is not taxable
and results in a reduction in the tax basis of a shareholder’s investment. For more information about a distribution’s composition, please refer to the Fund’s distribution press release or, if applicable, the Section 19 notice located in the press release section of our website, www.franklintempleton.com.
Western Asset Inflation-Linked Opportunities & Income Fund
Performance review (cont’d)
Looking for additional information?
The Fund is traded under the symbol “WIW” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the
symbol “XWIWX” on most financial websites. Barron’s and The Wall Street Journal’s Monday edition both carry closed-end fund tables that provide additional information.
In addition, the Fund issues a quarterly press release that can be found on most major
financial websites as well as www.franklintempleton.com.
In a continuing effort to provide information concerning the Fund, shareholders may
call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern
Time, for the Fund’s current NAV, market price and other information.
Thank you for your investment in the Western Asset Inflation-Linked Opportunities
& Income 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,
Jane Trust, CFA
President and Chief Executive Officer
RISKS: The Fund is a diversified closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not
intended to be a complete investment program and, due to the uncertainty inherent in all investments,
there can be no assurance that the Fund will achieve its investment objectives. The Fund’s common shares are traded on the NYSE. Similar to stocks, the Fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment.
Shares of closed-end funds often trade at a discount to their net asset value. Diversification
does not assure against market loss. Bonds are subject to a variety of risks, including
interest rate, credit and inflation risks. As interest rates rise, bond prices fall, reducing
the value of a fixed income investment’s price. The Fund is subject to the additional risks associated with inflation protected securities, including liquidity risk, prepayment risk, extension
risk and deflation risk. Investments in foreign companies, including emerging markets, involve
risks beyond those inherent solely in domestic investments. Leverage may cause a fund to
be more volatile than if the fund had not been leveraged, which may increase the risk of investment
loss. Derivatives, such as options, futures, forwards and swaps, can be illiquid, create
counterparty risk, may disproportionately increase losses, and may have a potentially large impact
on Fund performance. To the extent that the Fund invests in asset-backed, mortgage-backed
or mortgage-related securities, its exposure to prepayment and extension risks may be greater than if
it
Western Asset Inflation-Linked Opportunities & Income Fund
invested in other fixed income securities. International investments are subject to
currency fluctuations as well as social, economic and political risks. These risks are magnified
in emerging markets. Emerging market countries tend to have economic, political and legal
systems that are less developed and are less stable than those of more developed countries.
An investment in the Fund is subject to the following additional risks. Lower grade
securities, or equivalent unrated securities, which are commonly known as “junk bonds,” typically entail greater potential price volatility and may be less liquid than higher-rated securities.
The Fund may have to apply a greater degree of judgment in establishing a price for lower grade
securities for purposes of valuing fund shares. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and weaken the capacity
of such securities to make principal and interest payments than is the case for higher grade
securities. Lower grade securities are regarded as having predominantly speculative characteristics
with respect to the issuer’s capacity to pay interest and repay principal. These securities may also be more susceptible to real or perceived adverse economic and competitive industry conditions
than higher rated securities. Lower grade and unrated securities are generally issued by
less creditworthy issuers that may have a larger amount of outstanding debt relative to
their assets than issuers of higher-grade securities. In the event of an issuer’s bankruptcy, claims of other creditors may have priority over the claims of lower grade security holders, leaving
few or no assets available to repay lower grade security holders. The Fund may incur expenses
to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting
issuer. Lower grade securities frequently have redemption features that permit an
issuer to repurchase the security from the Fund before it matures. If the issuer redeems lower
grade securities, the Fund may have to invest the proceeds in securities with lower yields
and may lose income. Lower grade and unrated securities involve the risk that the Fund’s investment adviser may not accurately evaluate the security’s comparative rating. Analysis of the creditworthiness of issuers of lower grade and unrated securities may be more complex than for issuers
of higher-quality securities. To the extent that the Fund holds lower grade and/or unrated securities,
the Fund’s success in achieving its investment objectives may depend more heavily on the Fund’s investment adviser’s credit analysis than if the Fund held exclusively higher-quality and rated securities. If changes in the currency exchange rates do not occur as anticipated,
the Fund may lose money on currency transactions. The Fund’s ability to use currency transactions successfully depends on a number of factors, including the currency transactions being available
at prices that are not too costly, the availability of liquid markets and the ability of the
Fund to accurately predict the direction of changes in currency exchange rates. Currency exchange rates
may be volatile. Currency transactions are subject to counterparty risk, which is the risk
that the other party in the transaction will not fulfill its contractual obligation. The Fund may
gain exposure to the commodities markets by investing a portion of its assets in a wholly-owned subsidiary,
Western Asset Inflation-Linked Opportunities & Income Fund CFC (the “Subsidiary”), organized under the laws of the Cayman Islands. The Fund and the Subsidiary are deemed “commodity pools” and the investment adviser is considered a “commodity pool operator” with respect to the Fund under the Commodity Exchange Act. The investment adviser, directly or through
its affiliates, is therefore subject to dual regulation by the Securities and Exchange
Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC”).
Western Asset Inflation-Linked Opportunities & Income Fund
Performance review (cont’d)
The regulatory requirements governing the use of commodity futures (which include
futures on broad-based securities indexes, interest rate futures and currency futures), options
on commodity futures, certain swaps or certain other investments could change at any
time. Investments by the Fund in commodity-linked derivatives may subject the Fund to greater
volatility than investments in traditional securities. The value of commodity-linked
derivatives may be affected by changes in overall market movements, commodity index volatility,
prolonged or intense speculation by investors, changes in interest rates or factors affecting
a particular industry or commodity, such as drought, floods, other weather phenomena, livestock
disease, embargoes, tariffs and international economic, political and regulatory developments.
By investing in the Subsidiary, the Fund is indirectly exposed to the risks associated
with the Subsidiary’s investments. The investments held by the Subsidiary are generally similar to those that are permitted to be held by the Fund and are subject to the same risks that apply
to similar investments if held directly by the Fund. The Subsidiary is not registered as an investment
company and is not subject to all of the investor protections of the Investment Company
Act of 1940 (the “1940 Act”). Changes in the laws of the United States and/or the Cayman Islands could adversely affect the Fund. For example, the Cayman Islands does not currently
impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or
withholding tax on the Subsidiary. If Cayman Islands law changes such that the Subsidiary must pay Cayman
Islands taxes, shareholders would likely suffer decreased investment returns. The Fund’s exposure to commodities markets, including through the Subsidiary, may be limited by its intention
to qualify as a regulated investment company for U.S. federal income tax purposes and may interfere
with its ability to qualify as such. The market values of securities or other assets will
fluctuate, sometimes sharply and unpredictably, due to changes in general market conditions,
overall economic trends or events, governmental actions or intervention, actions taken by
the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes
or other factors, political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the global
and domestic effects of a pandemic, and other factors that may or may not be related to the issuer
of the security or other asset. The Fund may also invest in money market funds, including
funds affiliated with the Fund’s investment adviser.
This material is not intended as a recommendation or as investment advice of any kind,
including in connection with rollovers, transfers, and distributions. Such material is not provided
in a fiduciary capacity, may not be relied upon for or in connection with the making of investment
decisions, and does not constitute a solicitation of an offer to buy or sell securities. All content
has been provided for informational or educational purposes only and is not intended to be and should
not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or
legal professional regarding your specific situation.
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.
Western Asset Inflation-Linked Opportunities & Income Fund
i
Net asset value (NAV) is calculated by subtracting total liabilities, including liabilities
associated with financial leverage (if any), from the closing value of all securities held by the Fund (plus
all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The
NAV fluctuates with changes in the market prices of securities in which the Fund has invested. However, the price
at which an investor may buy or sell shares of the Fund is the Fund’s market price as determined by supply of and demand for the Fund’s shares.
ii
The Bloomberg U.S. Government Inflation-Linked 1-10 Year Index measures the performance
of the intermediate U.S. Treasury Inflation–Protected Securities (TIPS) market.
iii
The Bloomberg U.S. Government Inflation-Linked All Maturities Index measures the performance
of the U.S. TIPS market. The index includes TIPS with one or more years remaining maturity with total
outstanding issue size of $500 million or more.
iv
The Bloomberg World Government Inflation-Linked All Maturities Index measures the
performance of the major government inflation-linked bond markets.
v
The Custom Benchmark is comprised of 90% Bloomberg U.S. Government Inflation-Linked
All Maturities Index, 5% Bloomberg U.S. Credit Index and 5% JPMorgan Emerging Markets Bond Index Plus (“EMBI+”). The Bloomberg U.S. Credit Index is an index composed of corporate and non-corporate debt issues that
are investment grade (rated Baa3/BBB- or higher). The EMBI+ is a total return index that tracks the traded market
for U.S. dollar-denominated Brady and other similar sovereign restructured bonds traded in the emerging markets.
Important data provider notices and terms available at www.franklintempletondatasources.com.
Western Asset Inflation-Linked Opportunities & Income Fund
(This page intentionally left blank.)
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 May 31, 2024 and November 30, 2023 and does not include derivatives, such as futures contracts, forward
foreign currency contracts and swap contracts. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
U.S. Treasury Inflation Protected Securities — 128.7%
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Bonds, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
U.S. Treasury Notes, Inflation Indexed
|
|
|
|
|
|
|
Total U.S. Treasury Inflation Protected Securities (Cost — $844,791,782)
|
|
Corporate Bonds & Notes — 10.3%
|
Communication Services — 0.0%††
|
Wireless Telecommunication Services — 0.0%††
|
T-Mobile USA Inc., Senior Notes
|
|
|
|
|
|
|
Consumer Discretionary — 0.6%
|
Hotels, Restaurants & Leisure — 0.6%
|
Sands China Ltd., Senior Notes
|
|
|
|
|
Sands China Ltd., Senior Notes
|
|
|
|
|
Sands China Ltd., Senior Notes
|
|
|
|
|
Sands China Ltd., Senior Notes
|
|
|
|
|
|
|
Total Consumer Discretionary
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
|
|
Energy Equipment & Services — 0.0%††
|
Halliburton Co., Senior Notes
|
|
|
|
|
Oil, Gas & Consumable Fuels — 5.4%
|
Apache Corp., Senior Notes
|
|
|
|
|
Apache Corp., Senior Notes
|
|
|
|
|
BP Capital Markets America Inc., Senior Notes
|
|
|
|
|
Chevron USA Inc., Senior Notes
|
|
|
|
|
Columbia Pipelines Holding Co. LLC, Senior
Notes
|
|
|
|
|
Continental Resources Inc., Senior Notes
|
|
|
|
|
Energy Transfer LP, Senior Notes
|
|
|
|
|
Enterprise Products Operating LLC, Senior
Notes
|
|
|
|
|
EOG Resources Inc., Senior Notes
|
|
|
|
|
EOG Resources Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
Exxon Mobil Corp., Senior Notes
|
|
|
|
|
Exxon Mobil Corp., Senior Notes
|
|
|
|
|
Occidental Petroleum Corp., Senior Notes
|
|
|
|
|
Occidental Petroleum Corp., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
Petrobras Global Finance BV, Senior Notes
|
|
|
|
|
QazaqGaz NC JSC, Senior Notes
|
|
|
|
|
Targa Resources Corp., Senior Notes
|
|
|
|
|
Williams Cos. Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
|
|
|
|
Wells Fargo & Co., Senior Notes (5.013% to
4/4/50 then 3 mo. Term SOFR + 4.502%)
|
|
|
|
|
Financial Services — 0.3%
|
ILFC E-Capital Trust II, Ltd. GTD (3 mo. Term
SOFR + 2.062%)
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited) (cont’d)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bausch Health Americas Inc., Senior Notes
|
|
|
|
|
Bausch Health Americas Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense — 0.5%
|
General Dynamics Corp., Senior Notes
|
|
|
|
|
General Dynamics Corp., Senior Notes
|
|
|
|
|
|
|
|
|
|
Information Technology — 0.0%††
|
Semiconductors & Semiconductor Equipment — 0.0%††
|
Broadcom Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
|
Alcoa Nederland Holding BV, Senior Notes
|
|
|
|
|
Anglo American Capital PLC, Senior Notes
|
|
|
|
|
Antofagasta PLC, Senior Notes
|
|
|
|
|
Barrick North America Finance LLC, Senior
Notes
|
|
|
|
|
BHP Billiton Finance USA Ltd., Senior Notes
|
|
|
|
|
Glencore Finance Canada Ltd., Senior Notes
|
|
|
|
|
Glencore Funding LLC, Senior Notes
|
|
|
|
|
Glencore Funding LLC, Senior Notes
|
|
|
|
|
Southern Copper Corp., Senior Notes
|
|
|
|
|
Yamana Gold Inc., Senior Notes
|
|
|
|
|
|
|
|
|
|
Total Corporate Bonds & Notes (Cost — $70,159,249)
|
|
Collateralized Mortgage Obligations(g) — 8.6%
|
Angel Oak Mortgage Trust, 2023-1 A1
|
|
|
|
|
Banc of America Funding Trust, 2015-R2 4A2
(1 mo. Term SOFR + 0.279%)
|
|
|
|
|
Banc of America Funding Trust, 2015-R2 5A2
|
|
|
|
|
BDS, 2021-FL8 A (1 mo. Term SOFR + 1.034%)
|
|
|
|
|
Benchmark Mortgage Trust, 2021-B29 XA, IO
|
|
|
|
|
BHMS, 2018-ATLS D (1 mo. Term SOFR +
2.547%)
|
|
|
|
|
BX Commercial Mortgage Trust, 2021-VOLT A
(1 mo. Term SOFR + 0.814%)
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
Collateralized Mortgage Obligations(g) — continued
|
BX Commercial Mortgage Trust, 2021-XL2 D (1
mo. Term SOFR + 1.511%)
|
|
|
|
|
BX Commercial Mortgage Trust, 2022-LP2 G (1
mo. Term SOFR + 4.106%)
|
|
|
|
|
BX Commercial Mortgage Trust, 2023-VLT2 A
(1 mo. Term SOFR + 2.281%)
|
|
|
|
|
BX Trust, 2021-ARIA D (1 mo. Term SOFR +
2.010%)
|
|
|
|
|
|
|
|
|
|
|
BXMT Ltd., 2020-FL2 A (1 mo. Term SOFR +
1.014%)
|
|
|
|
|
Citigroup Commercial Mortgage Trust, 2023-
SMRT A
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2021-DNA1 B1 (30 Day Average SOFR
+ 2.650%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2022-DNA5 M1B (30 Day Average
SOFR + 4.500%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2023-DNA1 M1A (30 Day Average
SOFR + 2.100%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2023-DNA2 M1A (30 Day Average
SOFR + 2.100%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2024-DNA1 M2 (30 Day Average SOFR
+ 1.950%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
REMIC, Structured Agency Credit Risk Debt
Notes, 2024-DNA2 A1 (30 Day Average SOFR
+ 1.250%)
|
|
|
|
|
Federal Home Loan Mortgage Corp. (FHLMC)
Seasoned Credit Risk Transfer Trust, 2017-2
M1
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited) (cont’d)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
Collateralized Mortgage Obligations(g) — continued
|
Federal National Mortgage Association
(FNMA) — CAS, 2019-R05 1B1 (30 Day
Average SOFR + 4.214%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2020-R01 1B1 (30 Day
Average SOFR + 3.364%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2023-R02 1B1 (30 Day
Average SOFR + 5.550%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2023-R05 1M2 (30 Day
Average SOFR + 3.100%)
|
|
|
|
|
Federal National Mortgage Association
(FNMA) — CAS, 2024-R02 1M2 (30 Day
Average SOFR + 1.800%)
|
|
|
|
|
GS Mortgage Securities Trust, 2020-GC45 A5
|
|
|
|
|
Hawaii Hotel Trust, 2019-MAUI F (1 mo. Term
SOFR + 2.797%)
|
|
|
|
|
JPMorgan Chase Commercial Mortgage
Securities Trust, 2020-NNN GFX
|
|
|
|
|
JPMorgan Chase Commercial Mortgage
Securities Trust, 2020-NNN XHFL, IO
|
|
|
|
|
Lehman Mortgage Trust, 2006-5 2A2, IO
(-1.000 x 1 mo. Term SOFR + 7.036%)
|
|
|
|
|
MF1 LLC, 2022-FL9 A (1 mo. Term SOFR +
2.150%)
|
|
|
|
|
MHC Commercial Mortgage Trust, 2021-MHC
A (1 mo. Term SOFR + 0.915%)
|
|
|
|
|
MSC Trust, 2021-ILP A (1 mo. Term SOFR +
0.892%)
|
|
|
|
|
Morgan Stanley Mortgage Loan Trust, 2007-
11AR 2A3
|
|
|
|
|
MRCD Mortgage Trust, 2019-PARK A
|
|
|
|
|
MSWF Commercial Mortgage Trust, 2023-1
A4
|
|
|
|
|
|
|
|
|
|
|
PFP Ltd., 2021-8 A (1 mo. Term SOFR +
1.114%)
|
|
|
|
|
PRKCM Trust, 2023-AFC1 A1
|
|
|
|
|
PRKCM Trust, 2024-HOME1 A1
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
Collateralized Mortgage Obligations(g) — continued
|
SMRT, 2022-MINI A (1 mo. Term SOFR +
1.000%)
|
|
|
|
|
SREIT Trust, 2021-MFP A (1 mo. Term SOFR +
0.845%)
|
|
|
|
|
SREIT Trust, 2021-PALM B (1 mo. Term SOFR +
0.924%)
|
|
|
|
|
UBS Commercial Mortgage Trust, 2017-C7 A3
|
|
|
|
|
WaMu Mortgage Pass-Through Certificates
Trust, 2006-AR3 A1B (Federal Reserve U.S. 12
mo. Cumulative Avg 1 Year CMT + 1.000%)
|
|
|
|
|
Wells Fargo Commercial Mortgage Trust,
2021-C59 XA, IO
|
|
|
|
|
|
|
Total Collateralized Mortgage Obligations (Cost — $55,568,119)
|
|
Non-U.S. Treasury Inflation Protected Securities — 4.9%
|
|
|
Brazil Notas do Tesouro Nacional Serie B,
Notes
|
|
|
|
|
Brazil Notas do Tesouro Nacional Serie B,
Notes
|
|
|
|
|
Brazil Notas do Tesouro Nacional Serie B,
Notes
|
|
|
|
|
|
|
|
|
|
United Kingdom Inflation-Linked Gilt, Bonds
|
|
|
|
|
|
|
Uruguay Government International Bond,
Senior Notes
|
|
|
|
|
Uruguay Government International Bond,
Senior Notes
|
|
|
|
|
|
|
|
|
|
Total Non-U.S. Treasury Inflation Protected Securities (Cost — $36,426,971)
|
|
|
|
|
|
Brazil Notas do Tesouro Nacional Serie F,
Notes
|
|
|
|
|
|
|
Bonos de la Tesoreria de la Republica en
pesos, Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited) (cont’d)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
(Percentages shown based on Fund net assets)
|
|
|
|
|
|
|
|
|
|
|
Mexican Bonos, Senior Notes
|
|
|
|
|
Mexico Government International Bond,
Senior Notes
|
|
|
|
|
|
|
|
|
|
Nigeria Government International Bond,
Senior Notes
|
|
|
|
|
|
|
Inter-American Development Bank, Senior
Notes
|
|
|
|
|
|
|
Total Sovereign Bonds (Cost — $26,254,730)
|
|
Asset-Backed Securities — 0.6%
|
Bear Stearns Asset Backed Securities Trust,
2007-SD2 2A1 (1 mo. Term SOFR + 0.914%)
|
|
|
|
|
BRSP Ltd., 2021-FL1 A (1 mo. Term SOFR +
1.264%)
|
|
|
|
|
Greystone CRE Notes Ltd., 2021-FL3 A (1 mo.
Term SOFR + 1.134%)
|
|
|
|
|
Origen Manufactured Housing Contract Trust,
2007-B A1 (1 mo. USD LIBOR + 1.200%)
|
|
|
|
|
|
|
Total Asset-Backed Securities (Cost — $3,308,800)
|
|
Total Investments before Short-Term Investments (Cost — $1,036,509,651)
|
|
|
|
|
|
|
|
|
Short-Term Investments — 2.0%
|
Western Asset Premier Institutional
Government Reserves, Premium Shares
(Cost — $12,007,227)
|
|
|
|
|
Total Investments — 158.7% (Cost — $1,048,516,878)
|
|
Liabilities in Excess of Other Assets — (58.7)%
|
|
Total Net Assets — 100.0%
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Western Asset Inflation-Linked Opportunities & Income Fund
|
|
Face amount denominated in U.S. dollars, unless otherwise noted.
|
|
|
Represents less than 0.1%.
|
|
|
All or a portion of this security is held by the counterparty as collateral for open
reverse repurchase agreements.
|
|
|
All or a portion of this security is held at the broker as collateral for open futures
contracts.
|
|
|
All or a portion of this security is held at the broker as collateral for open centrally
cleared swap contracts.
|
|
|
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.
|
|
|
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.
|
|
|
Variable rate security. Interest rate disclosed is as of the most recent information
available. Certain variable rate
securities are not based on a published reference rate and spread but are determined
by the issuer or agent and
are based on current market conditions. These securities do not indicate a reference
rate and spread in their
description above.
|
|
|
Collateralized mortgage obligations are secured by an underlying pool of mortgages
or mortgage pass-through
certificates that are structured to direct payments on underlying collateral to different
series or classes of the
obligations. The interest rate may change positively or inversely in relation to one
or more interest rates, financial
indices or other financial indicators and may be subject to an upper and/or lower
limit.
|
|
|
Rate shown is one-day yield as of the end of the reporting period.
|
|
|
In this instance, as defined in the Investment Company Act of 1940, an “Affiliated Company” represents Fund
ownership of at least 5% of the outstanding voting securities of an issuer, or a company
which is under common
ownership or control with the Fund. At May 31, 2024, the total market value of investments
in Affiliated
Companies was $12,007,227 and the cost was $12,007,227 (Note 7).
|
Abbreviation(s) used in this schedule:
|
|
|
|
|
|
|
|
Connecticut Avenue Securities
|
|
|
|
|
|
|
|
Constant Maturity Treasury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
London Interbank Offered Rate
|
|
|
|
|
|
|
|
Real Estate Mortgage Investment Conduit
|
|
|
|
Secured Overnight Financing Rate
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited) (cont’d)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
At May 31, 2024, the Fund had the following open reverse repurchase agreements:
|
|
|
|
|
Face Amount
of Reverse
Repurchase
Agreements
|
Asset Class
of Collateral*
|
|
Morgan Stanley &
Co. Inc.
|
|
|
|
|
U.S. Treasury Inflation Protected
Securities
Cash
|
|
Morgan Stanley &
Co. Inc.
|
|
|
|
|
U.S. Treasury Inflation Protected
Securities
Cash
|
|
Morgan Stanley &
Co. Inc.
|
|
|
|
|
U.S. Treasury Inflation Protected
Securities
Cash
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the Consolidated Schedule of Investments for positions held at the counterparty
as collateral for reverse
repurchase agreements.
|
|
|
Including accrued interest.
|
At May 31, 2024, the Fund had the following open futures contracts:
|
|
|
|
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury 10-Year Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Long-Term
Bonds
|
|
|
|
|
|
U.S. Treasury Ultra Long-
Term Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized appreciation on open futures contracts
|
|
At May 31, 2024, the Fund had the following open forward foreign currency contracts:
|
|
|
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Western Asset Inflation-Linked Opportunities & Income Fund
|
|
|
|
|
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Inc.
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Inc.
|
|
|
Net unrealized depreciation on open forward foreign currency contracts
|
|
Abbreviation(s) used in this table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At May 31, 2024, the Fund had the following open swap contracts:
CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — SELL PROTECTION1
|
|
|
|
|
Periodic
Payments
Received by
|
|
Upfront
Premiums
Paid
(Received)
|
|
Markit CDX.NA.HY.42
Index
|
|
|
|
|
|
|
Markit CDX.NA.IG.42 Index
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated schedule of investments (unaudited) (cont’d)
May 31, 2024
Western Asset Inflation-Linked Opportunities & Income Fund
|
|
|
|
|
|
Periodic
Payments
Made by
|
Periodic
Payments
Received by
|
|
Upfront
Premiums
Paid
(Received)
|
|
|
|
|
|
Daily SOFR
Compound +
1.100%
quarterly
|
|
|
|
|
|
|
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.
|
|
|
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.
|
|
|
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 loss (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.
|
|
|
Periodic payments made/received by the Fund are based on the total return of the referenced
entity.
|
|
|
Custom emerging markets debt basket is comprised of 31 bonds in the Sovereign Frontier
sector.
|
Reference rate(s) and their value(s) as of period end used in this table:
Abbreviation(s) used in this table:
|
|
|
|
Western Asset Management Emerging Markets Frontier Custom Basket
|
|
|
|
Secured Overnight Financing Rate
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated statement of assets and liabilities (unaudited)
May 31, 2024
|
|
|
Investments in unaffiliated securities, at value (Cost — $1,036,509,651)
|
|
Investments in affiliated securities, at value (Cost — $12,007,227)
|
|
Foreign currency, at value (Cost — $2,470,429)
|
|
Receivable for securities sold
|
|
Deposits with brokers for open reverse repurchase agreements
|
|
Deposits with brokers for centrally cleared swap contracts
|
|
|
|
|
Deposits with brokers for open futures contracts
|
|
Unrealized appreciation on forward foreign currency contracts
|
|
Deposits with brokers for OTC derivatives
|
|
Receivable from brokers — net variation margin on centrally cleared swap contracts
|
|
Dividends receivable from affiliated investments
|
|
Foreign currency collateral for open futures contracts, at value (Cost — $769)
|
|
|
|
|
|
|
|
|
|
|
Payable for open reverse repurchase agreements (Note 3)
|
|
|
|
|
Unrealized depreciation on forward foreign currency contracts
|
|
Payable to brokers — net variation margin on open futures contracts
|
|
Investment management fee payable
|
|
OTC swaps, at value (premiums received — $0)
|
|
Administration fee payable
|
|
Payable for open OTC swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, no par value, unlimited number of shares authorized, 61,184,134 shares
issued and outstanding
|
|
Total distributable earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated statement of operations (unaudited)
For the Six Months Ended May 31, 2024
|
|
|
|
|
|
Dividends from affiliated investments
|
|
|
|
|
|
|
|
Interest expense (Note 3)
|
|
Investment management fee (Note 2)
|
|
Administration fees (Note 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock exchange listing fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Swap Contracts,
Forward
Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
|
Net Realized Gain (Loss) From:
|
|
Investment transactions in unaffiliated securities
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
Foreign currency transactions
|
|
|
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
Investments in unaffiliated securities
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
Net Gain on Investments, Futures Contracts, Swap Contracts, Forward Foreign
Currency Contracts and Foreign Currency Transactions
|
|
Increase in Net Assets From Operations
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated statements of changes in net assets
For the Six Months Ended May 31, 2024 (unaudited)
and the Year Ended November 30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
Increase in Net Assets From Operations
|
|
|
Distributions to Shareholders From (Note 1):
|
|
|
Total distributable earnings
|
|
|
Decrease in Net Assets From Distributions to Shareholders
|
|
|
Increase (Decrease) in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated statement of cash flows (unaudited)
For the Six Months Ended May 31, 2024
Increase (Decrease) in Cash:
|
|
Cash Flows from Operating Activities:
|
|
Net increase in net assets resulting from operations
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net
cash
provided (used) by operating activities:
|
|
Purchases of portfolio securities
|
|
Sales of portfolio securities
|
|
Net purchases, sales and maturities of short-term investments
|
|
|
|
|
Net amortization of premium (accretion of discount)
|
|
Securities litigation proceeds
|
|
Increase in receivable for securities sold
|
|
Increase in interest receivable
|
|
Increase in receivable from brokers — net variation margin on centrally cleared swap
contracts
|
|
Increase in prepaid expenses
|
|
Decrease in dividends receivable from affiliated investments
|
|
Increase in investment management fee payable
|
|
Decrease in Trustees’ fees payable
|
|
Increase in administration fee payable
|
|
Increase in interest expense payable
|
|
Decrease in accrued expenses
|
|
Decrease in payable to brokers — net variation margin on futures contracts
|
|
Increase in payable for open OTC swap contracts
|
|
Net realized loss on investments
|
|
Change in net unrealized appreciation (depreciation) of investments, OTC swap contracts
and forward foreign currency contracts
|
|
Net Cash Provided in Operating Activities*
|
|
Cash Flows from Financing Activities:
|
|
Distributions paid on common stock
|
|
Decrease in payable for open reverse repurchase agreements
|
|
Net Cash Used by Financing Activities
|
|
Net Increase in Cash and Restricted Cash
|
|
Cash and restricted cash at beginning of period
|
|
Cash and restricted cash at end of period
|
|
|
|
Included in operating expenses is $5,648,406 paid for interest on borrowings.
|
The following table provides a reconciliation of cash (including foreign currency)
and restricted cash reported within the Consolidated Statement of Assets and Liabilities that sums to the total
of such amounts shown on the
Consolidated Statement of Cash Flows.
|
|
|
|
|
|
|
|
|
Total cash and restricted cash shown in the Consolidated Statement of Cash Flows
|
|
Restricted cash consists of cash that has been segregated to cover the Fund’s collateral or margin obligations under derivative contracts and for reverse repurchase agreements. It is separately
reported on the Consolidated Statement of Assets and Liabilities as Deposits with brokers.
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Consolidated financial highlights
For a share of common stock outstanding throughout each year ended November 30,
unless otherwise noted:
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
|
|
|
|
Market price, end of period
|
|
|
|
|
|
|
Total return, based on NAV4,5
|
|
|
|
|
|
|
Total return, based on Market Price6
|
|
|
|
|
|
|
Net assets, end of period (millions)
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts have been calculated using the average shares method.
|
|
|
For the six months ended May 31, 2024 (unaudited).
|
|
|
The actual source of the Fund’s current fiscal year distributions may be from net investment income, realized
capital gains, return of capital or a combination thereof. Shareholders will be informed
of the tax characteristics of
the distributions after the close of the fiscal 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.
Total returns for periods of less
than one year are not annualized.
|
|
|
The total return calculation assumes that distributions are reinvested at NAV. Past
performance is no guarantee of
future results. Total returns for periods of less than one year are not annualized.
|
|
|
The total return calculation assumes that distributions are reinvested in accordance with the Fund’s dividend
reinvestment plan. Past performance is no guarantee of future results. Total returns
for periods of less than one
year are not annualized.
|
|
|
|
|
|
The investment adviser has agreed to waive the Fund’s management fee to an extent sufficient to offset the net
management fee payable in connection with any investment in an affiliated money market
fund.
|
|
|
Reflects fee waivers and/or expense reimbursements.
|
See Notes to Consolidated Financial Statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited)
1. Organization and significant accounting policies
Western Asset Inflation-Linked Opportunities & Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as a diversified, closed-end management investment company. The Fund commenced operations on
February 25, 2004.
The Fund’s primary investment objective is to provide current income for its shareholders. Capital appreciation, when consistent with current income, is a secondary investment
objective. Under normal market conditions and at the time of purchase, the Fund will
invest at least 80% of its total managed assets in inflation-linked securities. The Fund
may invest up to 100% of its total managed assets in non-U.S. dollar investments. The Fund may
also invest up to 40% of its total managed assets in below investment grade securities.
If a security is rated by multiple nationally recognized statistical rating organizations
(“NRSROs”) and receives different ratings, the Fund will treat the security as being rated in the highest rating category received from an NRSRO.
The Fund may gain exposure to the commodities markets by investing a portion of its
assets in a wholly-owned subsidiary, Western Asset Inflation-Linked Opportunities & Income
Fund CFC (the “Subsidiary”), organized under the laws of the Cayman Islands. Among other investments, the Subsidiary may invest in commodity-linked instruments. The Fund may
invest up to 25% of its total assets in the Subsidiary; although 10% of total managed
assets may be utilized for commodity-related strategies. These financial statements
are consolidated financial statements of the Fund and the Subsidiary. All interfund transactions
have been eliminated in consolidation.
The Fund follows the accounting and reporting guidance in Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (“ASC 946”). The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted
accounting principles (“GAAP”), including, but not limited to, ASC 946. 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 typically use inputs that
are observable such as issuer details, interest rates, yield curves, prepayment speeds,
credit
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
risks/spreads, default rates and quoted prices for similar securities. Investments
in open-end funds are valued at the closing net asset value per share of each fund on the day
of valuation. Futures contracts are valued daily at the settlement price established
by the board of trade or exchange on which they are traded. Equity securities for which market
quotations are available are valued at the last reported sales price or official closing
price on the primary market or exchange on which they trade. When the Fund holds securities
or other assets that are denominated in a foreign currency, the Fund will normally use
the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party
pricing services are unable to supply prices for a portfolio investment, or if the prices
supplied are deemed by the adviser to be unreliable, the market price may be determined by the
adviser 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.
Pursuant to policies adopted by the Board of Trustees, the Fund’s adviser has been designated as the valuation designee and is responsible for the oversight of the daily
valuation process. The Fund’s adviser is assisted by the Global Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Fund’s adviser and 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.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
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 — unadjusted 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.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:
|
|
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
|
|
|
|
|
U.S. Treasury Inflation
Protected Securities
|
|
|
|
|
|
|
|
|
|
|
Collateralized Mortgage
Obligations
|
|
|
|
|
Non-U.S. Treasury Inflation
Protected Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Long-Term Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Instruments:
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency
Contracts††
|
|
|
|
|
Centrally Cleared Credit
Default Swaps on Credit
Indices — Sell Protection††
|
|
|
|
|
Total Other Financial
Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Other Financial Instruments:
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency
Contracts††
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Consolidated Schedule of Investments for additional detailed categorizations.
|
|
|
Reflects the unrealized appreciation (depreciation) of the instruments.
|
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
(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 securities
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 appreciation or depreciation in the Consolidated
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.
(c) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar
denominated securities or to facilitate settlement of a foreign currency denominated
portfolio transaction. 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.
Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency.
Forward foreign currency contracts involve elements of market risk in excess of the
amounts reflected on the Consolidated 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) 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, including
to increase the Fund’s return. 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
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
cleared (“Centrally Cleared Swaps”). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.
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 net receivable or payable for variation margin on the Consolidated
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 Consolidated Schedule of Investments and restricted cash, if any, is identified on
the Consolidated Statement of Assets and Liabilities. Risks may exceed amounts recorded
in the Consolidated 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 Consolidated 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 Consolidated Statement of Operations. Net
periodic payments received or paid by the Fund are recognized as a realized gain or
loss in the Consolidated 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 May 31, 2024, the total notional
value of all credit default swaps to sell protection was $147,088,000. 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 six months ended May 31, 2024, see Note 4.
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
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
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 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 CDS 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 CDS agreements on corporate or sovereign issues are disclosed
in the Consolidated Schedule of Investments 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 CDS 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. CDS 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.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
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 Consolidated
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.
The Fund enters into total return swaps for investment purposes. Total return swaps
are agreements to exchange the return generated by one instrument for the return generated
by another instrument. For example, the agreement to pay a predetermined or fixed interest
rate in exchange for a market-linked return based on a notional amount. To the extent
the total return of a referenced index or instrument exceeds the offsetting interest obligation,
the Fund will receive a payment from the counterparty. To the extent it is less, the
Fund will make a payment to the counterparty.
(e) Stripped securities. The Fund may invest in ‘‘Stripped Securities,’’ a term used collectively for components, or strips, of fixed income securities. Stripped Securities
can be principal only securities (“PO”), which are debt obligations that have been stripped of unmatured interest coupons, or interest only securities (“IO”), which are unmatured interest coupons that have been stripped from debt obligations. The market value of Stripped
Securities will fluctuate in response to changes in economic conditions, rates of
pre-payment, interest rates and the market’s perception of the securities. However, fluctuations in response to interest rates may be greater in Stripped Securities than for debt
obligations of comparable maturities that pay interest currently. The amount of fluctuation may
increase with a longer period of maturity.
The yield to maturity on IO’s is sensitive to the rate of principal repayments (including prepayments) on the related underlying debt obligation and principal payments may
have a material effect on yield to maturity. If the underlying debt obligation experiences
greater than anticipated prepayments of principal, the Fund may not fully recoup its initial
investment in IO’s.
(f) Reverse repurchase agreements. The Fund may enter into reverse repurchase agreements. Under the terms of a typical reverse repurchase agreement, a fund sells
a security subject to an obligation to repurchase the security from the buyer at an
agreed upon time and price. In the event the buyer of securities under a reverse repurchase
agreement files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds of the agreement may be restricted pending a determination by the counterparty, or its trustee
or receiver, whether to enforce the Fund’s obligation to repurchase the securities. In entering into reverse repurchase agreements, the Fund will pledge cash, U.S. government securities
or other liquid debt obligations at least equal in value to its obligations with respect
to reverse repurchase agreements or will take other actions permitted by law to cover
its
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
obligations. If the market value of the collateral declines during the period, the
Fund may be required to post additional collateral to cover its obligation. Cash collateral that
has been pledged to cover obligations of the Fund under reverse repurchase agreements, if any,
will be reported separately in the Consolidated Statement of Assets and Liabilities. Securities
pledged as collateral are noted in the Consolidated Schedule of Investments. Interest
payments made on reverse repurchase agreements are recognized as a component of “Interest expense” on the Consolidated Statement of Operations. In periods of increased demand for the security, the Fund may receive a fee for use of the security by the
counterparty, which may result in interest income to the Fund.
(g) Inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value or interest rate is periodically adjusted according to the rate of
inflation. As the index measuring inflation changes, the principal value or interest rate of inflation-indexed bonds will be adjusted accordingly. Inflation adjustments to the principal amount
of inflation-indexed bonds are reflected as an increase or decrease to investment income
on the Consolidated Statement of Operations. Repayment of the original bond principal
upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal
value of the bond repaid at maturity may be less than the original principal.
(h) Cash flow information. The Fund invests in securities and distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are reported in the
Consolidated Statements of Changes in Net Assets and additional information on cash
receipts and cash payments is presented in the Consolidated Statement of Cash Flows.
(i) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon
prevailing exchange rates on the date of valuation. Purchases and sales of investment
securities and income and expense items denominated in foreign currencies are translated
into U.S. dollar amounts based upon prevailing exchange rates on the respective dates
of such transactions.
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
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
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.
(j) Credit and market risk. 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.
Investments in securities that are collateralized by real estate mortgages are subject
to certain credit and liquidity risks. When market conditions 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.
(k) 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 may 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.
(l) 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
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
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 investment adviser 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 investment adviser. In addition, declines in the values
of underlying collateral received may expose the Fund to increased risk of loss.
With exchange traded and centrally cleared derivatives, there is less counterparty
risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments,
guarantees against a possible default. The clearinghouse stands between the buyer
and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse.
While offset rights may exist under applicable law, the Fund does not have a contractual
right of offset against a clearing broker or clearinghouse in the event of a default
of the clearing broker or clearinghouse.
The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement, with certain of its derivative counterparties that govern over-the-counter
(“OTC”) derivatives and provide for general obligations, representations, agreements, collateral posting terms, netting provisions in the event 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 net asset value per share 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.
Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset
with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. However, absent an
event of default by the counterparty or a termination of the agreement, the terms of the
ISDA Master Agreements do not result in an offset of reported amounts of financial assets
and financial liabilities in the Consolidated 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.
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 OTC 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 Consolidated Statement of Assets and Liabilities. Securities
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
pledged as collateral, if any, for the same purpose are noted in the Consolidated
Schedule of Investments.
As of May 31, 2024, the Fund held forward foreign currency contracts and OTC total
return swaps with credit related contingent features which had a liability position of $830,144.
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. As of May
31, 2024, the Fund had posted with its counterparties cash and/or securities as collateral to
cover the net liability of these derivatives amounting to $260,000 which could be used to reduce
the required payment.
At May 31, 2024, the Fund held non-cash collateral from Goldman Sachs Group Inc. in
the amount of $60,072. This amount could be used to reduce the Fund’s exposure to the counterparty in the event of default.
(m) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind
securities) is recorded on the accrual basis. Amortization of premiums and accretion
of discounts on debt securities are recorded to interest income over the lives of the
respective securities, except for premiums on certain callable debt securities, which are amortized
to the earliest call date. Paydown gains and losses on mortgage- and asset-backed securities
are recorded as adjustments to interest income. Dividend income is recorded on the
ex-dividend date for dividends received in cash and/or securities. 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.
(n) Distributions to shareholders. Distributions from net investment income of the Fund, if any, are declared and paid on a monthly basis. Distributions of net realized gains,
if any, are declared at least annually. Pursuant to its Managed Distribution Policy, the Fund
intends to make regular monthly distributions to shareholders at a fixed rate per common share,
which rate may be adjusted from time to time by the Fund’s Board of Trustees. The actual source of the Fund’s monthly distributions may be from net investment income, realized capital gains, return of capital or a combination thereof. Under the Fund’s Managed Distribution Policy, if, for any monthly distribution, the value of the Fund’s net investment income and net realized capital gain is less than the amount of the distribution,
the difference will be distributed from the Fund’s net assets (and may constitute a “return of capital”). Shareholders will be informed of the tax characteristics of the distributions after the close of the 2024 fiscal year. The Board of Trustees may modify, terminate or
suspend the Managed Distribution Policy at any time, including when certain events would make
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
part of the return of capital taxable to shareholders. Any such modification, termination
or suspension could have an adverse effect on the market price of the Fund’s shares. 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.
(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.
(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.
However, due to the timing of when distributions are made by the Fund, the Fund may
be subject to an excise tax of 4% of the amount by which 98% of the Fund’s annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable
income and realized gains for the calendar year. During the period, the Fund paid $198,433
of federal income taxes attributable to calendar year 2023, of which $160,683 was accrued
during the period.
Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of November 30, 2023, 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.
(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.
2. Investment management agreement and other transactions with affiliates
The Fund has entered into an Investment Management Agreement with Western Asset Management Company, LLC (“Western Asset” or the “Investment Adviser”), which provides for payment of a monthly fee computed at the annual rate of 0.35% of the Fund’s average weekly assets. “Average weekly assets” means the average weekly value of the total assets of the Fund (including any assets attributable to leverage) minus accrued liabilities
(other than liabilities representing leverage). For purposes of calculating “average weekly assets,” liabilities associated with any instrument or transactions used by the Investment Adviser to leverage the Fund’s portfolio (whether or not such instruments or transactions are treated as derivative instruments or transactions) are not considered a liability.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
During periods when the Fund is using leverage, the fee paid to the Investment Adviser
for advisory services will be higher than if the Fund did not use leverage because the
fee paid will be calculated on the basis of the Fund’s average weekly assets, which includes the assets attributable to leverage.
Western Asset Management Company Pte. Ltd. (“Western Asset Singapore”), Western Asset Management Company Limited (“Western Asset London”) and Western Asset Management Company Ltd (“Western Asset Japan” and together with Western Asset Singapore and Western Asset London, the “Non-U.S. Advisers”) are also the Fund’s investment advisers. Western Asset Singapore, Western Asset London and Western Asset
Japan provide certain advisory services to the Fund relating to currency transactions
and investment in non-U.S. denominated securities. Western Asset Singapore, Western Asset
London and Western Asset Japan do not receive any compensation from the Fund.
Franklin Templeton Fund Adviser, LLC (“FTFA” or the “Administrator”), an affiliate of the Investment Adviser, provides certain administrative, accounting, shareholder servicing
and corporate secretarial and related functions pursuant to an Administrative Services
Agreement with the Fund. The Fund pays the Administrator a monthly fee at the annual
rate of 0.05% of the Fund’s average weekly assets.
The Investment Adviser has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment
in an affiliated money market fund (the “affiliated money market fund waiver”).
During the six months ended May 31, 2024, fees waived and/or expenses reimbursed amounted to $4,772, all of which was an affiliated money market fund waiver.
Western Asset, Western Asset Singapore, Western Asset London, Western Asset Japan
and FTFA are indirect, wholly-owned subsidiaries of Franklin Resources, Inc.
During the six months ended May 31, 2024, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) and U.S. Government &
Agency Obligations were as follows:
|
|
|
U.S. Government &
Agency Obligations
|
|
|
|
|
|
|
|
|
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
At May 31, 2024, the aggregate cost of investments and the aggregate gross unrealized
appreciation and depreciation of investments for federal income tax purposes were
substantially as follows:
|
|
Cost/Premiums
Paid (Received)
|
Gross
Unrealized
Appreciation
|
Gross
Unrealized
Depreciation
|
Net
Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
|
|
|
|
|
|
|
Transactions in reverse repurchase agreements for the Fund during the six months ended May 31, 2024 were as follows:
|
|
Weighted Average
Interest Rate*
|
Maximum Amount
Outstanding
|
|
|
|
|
* Averages based on the number of days that the Fund had reverse repurchase agreements
outstanding.
|
Interest rates on reverse repurchase agreements ranged from 5.480% to 5.540% during
the six months ended May 31, 2024. Interest expense incurred on reverse repurchase agreements totaled $10,391,685.
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 Consolidated Statement of Assets and Liabilities
at May 31, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
|
|
Centrally cleared swap contracts3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
|
|
Generally, the balance sheet location for asset derivatives is receivables/net unrealized
appreciation and for
liability derivatives is payables/net unrealized depreciation.
|
|
|
Includes cumulative unrealized appreciation (depreciation) of futures contracts as
reported in the Consolidated
Schedule of Investments. Only net variation margin is reported within the receivables
and/or payables on the
Consolidated Statement of Assets and Liabilities.
|
|
|
Includes cumulative unrealized appreciation (depreciation) of centrally cleared swap
contracts as reported in the
Consolidated Schedule of Investments. Only net variation margin is reported within
the receivables and/or
payables on the Consolidated Statement of Assets and Liabilities.
|
|
|
Values include premiums paid (received) on swap contracts which are shown separately
in the Consolidated
Statement of Assets and Liabilities.
|
The following tables provide information about the effect of derivatives and hedging
activities on the Fund’s Consolidated Statement of Operations for the six months ended May 31, 2024. 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 net unrealized appreciation (depreciation)
resulting from the Fund’s derivatives and hedging activities during the period.
AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign currency
contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward foreign currency
contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
During the six months ended May 31, 2024, the volume of derivative activity for the Fund was as follows:
|
|
|
Futures contracts (to buy)
|
|
Futures contracts (to sell)
|
|
Forward foreign currency contracts (to buy)
|
|
Forward foreign currency contracts (to sell)
|
|
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
|
|
|
Credit default swap contracts (sell protection)
|
|
Total return swap contracts
|
|
The following table presents the Fund’s OTC derivative assets and liabilities by counterparty net of amounts available for offset under an ISDA Master Agreement and net of the
related collateral pledged (received) by the Fund as of May 31, 2024.
|
|
Gross Assets
Subject to
Master
|
Gross
Liabilities
Subject to
Master
Agreements
|
Net Assets
(Liabilities)
Subject to
Master
Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Absent an event of default or early termination, derivative assets and liabilities
are presented gross and not
offset in the Consolidated Statement of Assets and Liabilities.
|
|
|
Gross amounts are not offset in the Consolidated Statement of Assets and Liabilities.
|
|
|
In some instances, the actual collateral received and/or pledged may be more than
the amount shown here due
to overcollateralization.
|
|
|
Net amount may also include forward foreign currency exchange contracts that are not
required to be
collateralized.
|
|
|
Represents the net amount receivable (payable) from (to) the counterparty in the event
of default.
|
5. Distributions subsequent to May 31, 2024
The following distributions have been declared by the Fund’s Board of Trustees and are payable subsequent to the period end of this report:
6. Share repurchase program
On March 2, 2016, the Fund announced that the Fund’s Board of Trustees (the “Board”) had authorized the Fund to repurchase in the open market up to approximately 10% of the
Fund’s outstanding common shares when the Fund’s shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase the Fund’s common shares at such times and in such amounts as management reasonably believes
may enhance shareholder value. The Fund is under no obligation to purchase shares
at any
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
specific discount levels or in any specific amounts. During the six months ended May
31, 2024, and the year ended November 30, 2023, the Fund did not repurchase any shares.
7. Transactions with affiliated company
As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5%
or more of the outstanding voting securities, or a company which is under common ownership
or control with the Fund. The following company was considered an affiliated company
for all or some portion of the six months ended May 31, 2024. The following transactions were effected in such company for the six months ended May 31, 2024.
|
|
Affiliate
Value at
November 30,
2023
|
|
|
|
|
|
|
|
Western Asset
Premier
Institutional
Government
Reserves, Premium
Shares
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
|
Affiliate
Value at
May 31,
2024
|
Western Asset Premier
Institutional
Government Reserves,
Premium Shares
|
|
|
|
|
8. Deferred capital losses
As of November 30, 2023, the Fund had deferred capital losses of $136,956,247, which
have no expiration date, that will be available to offset future taxable capital gains.
9. Recent accounting pronouncement
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021 and December 2022, the FASB issued ASU No. 2021-01 and ASU No. 2022-06, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types
of contract modifications due to the planned discontinuation of the London Interbank
Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021
for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain
reference rate-related contract modifications that occur during the period March 12,
2020
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Notes to consolidated financial statements (unaudited) (cont’d)
through December 31, 2024. Management has reviewed the requirements and believes the
adoption of these ASUs will not have a material impact on the financial statements.
Western Asset Inflation-Linked Opportunities & Income Fund 2024 Semi-Annual Report
Board approval of management and
subadvisory agreements (unaudited)
The Executive and Contracts Committee of the Board of Trustees (the “Executive and Contracts Committee”) considered the Investment Management Agreement between the Fund and Western Asset Management Company, LLC (“Western Asset”) and the following subadvisory agreements with respect to the Fund (collectively, the “Agreements”) (i) a subadvisory agreement between Western Asset and Western Asset Management Company Limited (“WAML”) with respect to the Fund, (ii) a subadvisory agreement between Western Asset and Western Asset Management Company Pte. Ltd. in Singapore (“Western Singapore”) with respect to the Fund, and (iii) a subadvisory agreement between Western Asset and Western Asset Management Company Ltd in Japan (“Western Japan,” and together with Western Singapore and WAML, the “Non-U.S. Advisers,” and together with Western Asset, the “Advisers”) with respect to the Fund at a meeting held on April 30, 2024. At an in-person meeting held on May 16, 2024, the Executive and Contracts Committee reported to the full Board of Trustees their considerations and recommendation
with respect to the Agreements, and the Board of Trustees, including a majority of
the Independent Trustees, considered and approved renewal of the Agreements.
The Trustees noted that although Western Asset’s business is operated through separate legal entities, such as the Non-U.S. Advisers, senior investment personnel at Western
Asset have supervisory oversight responsibility over the investment decisions made by the
Non-U.S. Advisers. Therefore, in connection with their deliberations noted below, the Trustees
primarily focused on the information provided by Western Asset when considering the
approval of the Agreements between Western Asset and the Non-U.S. Advisers.
In arriving at their decision to approve the renewal of the Agreements, the Trustees
met with representatives of the Advisers, including relevant investment advisory personnel;
considered a variety of information prepared by the Advisers, materials provided by
Broadridge and advice and materials provided by counsel to the Independent Trustees;
reviewed performance and expense information for peer groups of comparable funds and
certain other comparable products available from Western Asset or affiliates of Western
Asset, including separate accounts managed by Western Asset; and requested and reviewed additional information as necessary. These reviews were in addition to information obtained by the Trustees at their regular quarterly meetings (and various
committee meetings) with respect to the Fund’s performance and other relevant matters, such as information on public trading in the Fund’s shares and differences between the Fund’s share price and net asset value per share, and related discussions with the Advisers’ personnel. The information received and considered by the Board both in conjunction
with the May meeting and at prior meetings was both written and oral.
As part of their review, the Trustees examined the Advisers’ ability to provide high quality investment management services to the Fund. The Trustees considered the investment
philosophy and research and decision-making processes of the Advisers; the experience
of
Western Asset Inflation-Linked Opportunities & Income Fund
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
their key advisory personnel responsible for management of the Fund; the ability of
the Advisers to attract and retain capable research and advisory personnel; the risks
to the Advisers associated with sponsoring the Fund (such as entrepreneurial, operational,
reputational, litigation and regulatory risk), as well as the Advisers’ risk management processes); the capability and integrity of the Advisers’ senior management and staff; and the level of skill required to manage the Fund. In addition, the Trustees reviewed
the quality of the Advisers’ services with respect to regulatory compliance and compliance with the investment policies of the Fund, and conditions that might affect the Advisers’ ability to provide high quality services to the Fund in the future, including their business
reputations, financial conditions and operational stabilities. Based on the foregoing, the Trustees
concluded that the Advisers’ investment process, research capabilities and philosophy were well suited to the Fund given its investment objectives and policies, and that the
Advisers would be able to meet any reasonably foreseeable obligations under the Agreements.
The Board reviewed the qualifications, backgrounds and responsibilities of the Advisers’ senior personnel and the team of investment professionals primarily responsible for
the day-to-day portfolio management of the Fund. The Board also considered, based on its
knowledge of the Advisers and their affiliates, the financial resources of Franklin
Resources, Inc., the parent organization of the Advisers. The Board recognized the
importance of having a fund manager with significant resources.
In reviewing the quality of the services provided to the Fund, the Trustees also reviewed
a comparison of the performance of the Fund to the performance of a group of closed-end
bond funds and the Bloomberg U.S. Government Inflation-Linked 1-10 Year Index (the
“Index”). The Trustees noted that the performance of the Fund exceeded the performance of its peer group average for the 1-, 5-, and 10-year periods ended December 31, 2023
and trailed the performance of its peer group average for the 3-year period ended December
31, 2023. The Board noted that the Fund’s performance exceeded the performance of the Index for the 1-year period ended December 31, 2023 and trailed the performance of the Index
for the 3-, 5- and 10-year periods ended December 31, 2023. The Trustees considered the
factors involved in the Fund’s performance relative to the performance of the Index and peer group. The Board noted the information provided by Broadridge and management regarding
the limited number of closed-end BBB-rated corporate debt Treasury Inflation-Protected
Securities (TIPS) funds available. The Board discussed the reasons for the Fund’s underperformance and the steps the Advisers were taking to improve the Fund’s performance. The Trustees concluded that the Advisers’ management of the Fund would continue to be in the best interests of the shareholders.
The Trustees also considered the management fee and total expenses payable by the
Fund. They reviewed information concerning management fees paid to investment advisers of
similarly managed funds as well as fees paid by Western Asset’s other clients, including
Western Asset Inflation-Linked Opportunities & Income Fund
separate accounts managed by Western Asset. The Trustees also noted that the Fund
does not pay any management fees directly to any of the Non-U.S. Advisers because Western
Asset pays the Non-U.S. Advisers for services provided to the Fund out of the management
fee Western Asset receives from the Fund. The Trustees noted that, when measured as
a percentage of net assets (including assets attributable to leverage) for its most
recently completed fiscal year, the Fund’s advisory fee paid to Western Asset was below the median of the advisory fees paid by funds in its peer group and that the Fund’s total expenses were above the median in its peer group. The Trustees also noted that, when measured as
a percentage of net assets (net of leverage) for its most recently completed fiscal
year, the Fund’s advisory fee paid to Western Asset was below the median of the advisory fees of the funds in its peer group and that the Fund’s total expenses were above the median of the total expenses of the funds in its peer group. The Trustees noted that Western Asset
manages one other account with a similar investment strategy to the Fund and it has
the same management fee rate as the Fund. The Trustees further noted that Western Asset
does not manage open-end funds or separate accounts with similar investment strategies
to the Fund, although they noted that the management fee paid by the Fund was higher
than the average of the fees paid by clients of Western Asset for certain other accounts
(“Other Accounts”). The Trustees noted that the administrative and operational responsibilities undertaken and associated risks incurred by Western Asset with respect
to the Fund were also relatively higher and that the Fund’s investment strategy included certain asset classes and other features not included in the Other Accounts. In light
of the forgoing, the Trustees concluded that the difference in management fees paid by the
Fund from those paid to Western Asset with respect to the Other Accounts was reasonable.
The Trustees further evaluated the benefits of the advisory relationship to the Advisers,
including, among others, the profitability of the relationship to the Advisers; the
direct and indirect benefits that the Advisers may receive from their relationships with the
Fund, including the “fallout benefits,” such as reputational value derived from serving as investment adviser to the Fund; and the affiliation between the Advisers and Franklin
Templeton Fund Adviser, LLC (formerly known as Legg Mason Partners Fund Advisor, LLC),
the Fund’s administrator, and certain other service providers for the Fund. In that connection, the Board considered that the ancillary benefits that the Advisers receive were reasonable.
The Trustees noted that Western Asset does not have soft dollar arrangements.
Finally, the Trustees considered, in light of the profitability information provided
by Western Asset, the extent to which economies of scale would be realized by the Advisers as
the assets of the Fund grow. The Trustees concluded that because the Fund is a closed-end
fund and does not make a continuous offer of its securities, the Fund’s size was relatively fixed and it would be unlikely that the Advisers would realize economies of scale from the Fund’s growth.
Western Asset Inflation-Linked Opportunities & Income Fund
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
In their deliberations with respect to these matters, the Independent Trustees were
advised by their independent counsel, who is independent, within the meaning of the Securities
and Exchange Commission rules regarding the independence of counsel, of the Advisers.
The Independent Trustees weighed the foregoing matters in light of the advice given to
them by their independent counsel as to the law applicable to the review of investment advisory
contracts. In arriving at a decision, the Trustees, including the Independent Trustees,
did not identify any single matter as all-important or controlling, and each Trustee may have
attributed different weight to the various factors in evaluating the Agreements. The
foregoing summary does not detail all the matters considered. The Trustees judged
the terms and conditions of the Agreements, including the investment advisory fees, in
light of all of the surrounding circumstances.
Based upon their review, the Trustees, including all of the Independent Trustees,
determined, in the exercise of their business judgment, that they were satisfied with
the quality of investment advisory services being provided by the Advisers; that the fees
to be paid to the Advisers under the Agreements were fair and reasonable given the scope
and quality of the services rendered by the Advisers; and that approval of the Agreements
was in the best interest of the Fund and its shareholders.
Western Asset Inflation-Linked Opportunities & Income Fund
Additional shareholder information (unaudited)
Results of annual meeting of shareholders
The Annual Meeting of Shareholders of Western Asset Inflation-Linked Opportunities
& Income Fund was held on May 22, 2024, for the purpose of considering and voting upon
the proposals presented at the Meeting. The following table provides information concerning
the matters voted upon at the Meeting:
At the Meeting, Mr. Abeles, Jr. and Mses. Dasher, DeFrantz and Trust were each duly
elected by the shareholders to serve as Class II Trustees of the Fund until the 2027
Annual Meeting of Shareholders, or until their successors have been duly elected and qualified
or until their resignation or are otherwise removed.
At May 31, 2024, in addition to Mr. Abeles, Jr. and Mses. Dasher, DeFrantz and Trust,
the other Trustees of the Fund were as follows: Susan B. Kerley, Michael Larson, Ronald
L. Olson, Avedick B. Poladian, William E. B. Siart, Jaynie Miller Studenmund and Peter
J. Taylor.
Western Asset Inflation-Linked Opportunities & Income Fund
Dividend reinvestment plan (unaudited)
The Fund and Computershare Inc. (“Agent”), as the Transfer Agent and Registrar of WIW, offer a convenient way to add shares of WIW to your account. WIW offers to all common
shareholders a Dividend Reinvestment Plan (“Plan”). Under the Plan, cash distributions (e.g., dividends and capital gains) on the common shares are automatically invested in shares
of WIW unless the shareholder elects otherwise by contacting the Agent at the address
set forth below.
As a participant in the Dividend Reinvestment Plan, you will automatically receive
your dividend or net capital gains distribution in newly issued shares of WIW, if the market
price of the shares on the date of the distribution is at or above the net asset value (NAV)
of the shares, minus estimated brokerage commissions that would be incurred upon the purchase
of common shares on the open market. The number of shares to be issued to you will
be determined by dividing the amount of the cash distribution to which you are entitled
(net of any applicable withholding taxes) by the greater of the NAV per share on such date
or 95% of the market price of a share on such date. If the market price of a share on such
distribution date is below the NAV, less estimated brokerage commissions that would
be incurred upon the purchase of common shares on the open market, the Agent will, as
agent for the participants, buy shares of WIW through a broker on the open market. All common
shares acquired on your behalf through the Plan will be automatically credited to
an account maintained on the books of the Agent.
Additional information regarding the plan
WIW will pay all costs applicable to the Plan, except for brokerage commissions for
open market purchases by the Agent under the Plan, which will be charged to participants.
All shares acquired through the Plan receive voting rights and are eligible for any share
split, share dividend, or other rights accruing to shareholders that the Board of Trustees
may declare.
You may terminate participation in the Plan at any time by giving notice to the Agent.
Such termination will be effective prior to the record date next succeeding the receipt
of such instructions or by a later date of termination specified in such instructions. Upon
termination, a participant will receive a certificate for the full shares credited
to his or her account or may request the sale of all or part of such shares. Fractional shares credited
to a terminating account will be paid for in cash at the current market price at the time
of termination.
Dividends and other distributions invested in additional shares under the Plan are
subject to income tax just as if they had been received in cash. After year end, dividends paid
on the accumulated shares will be included in the Form 1099-DIV information return to the
Internal Revenue Service and only one Form 1099-DIV will be sent to participants each year.
Inquiries regarding the Plan, as well as notices of termination, should be directed
to Computershare Inc., P.O. Box 43006 Providence, RI 02940-3078. Investor Relations telephone number 1-888-888-0151.
Western Asset Inflation-Linked Opportunities & Income Fund
(This page intentionally left blank.)
(This page intentionally left blank.)
(This page intentionally left blank.)
(This page intentionally left blank.)
(This page intentionally left blank.)
(This page intentionally left blank.)
Western Asset
Inflation-Linked Opportunities & Income Fund
Trustees
William E.B. Siart
Chairman
Jane Trust
President and Chief Executive Officer
Christopher Berarducci
Treasurer and Principal Financial
Officer
Ted P. Becker
Chief Compliance Officer
Marc A. De Oliveira
Secretary and Chief Legal Officer
Thomas C. Mandia
Senior Vice President
Jeanne M. Kelly
Senior Vice President
Western Asset Inflation-Linked Opportunities & Income Fund
620 Eighth Avenue
47th Floor
New York, NY 10018
Western Asset Management Company, LLC
Western Asset Management Company Limited
Western Asset Management Company Pte. Ltd.
Western Asset Management Company Ltd
Franklin Templeton Fund Adviser, LLC
The Bank of New York Mellon
Computershare Inc.
P.O. Box 43006
Providence, RI 02940-3078
Independent registered public accounting firm
PricewaterhouseCoopers LLP
Baltimore, MD 21202
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
New York Stock Exchange Symbol
Franklin Templeton Funds Privacy and Security Notice
Your Privacy and the Security of Your Personal Information is Very Important to Us
This Privacy and Security Notice (the “Privacy Notice”) addresses the Funds’ privacy and data protection practices with respect to nonpublic personal information the Fund receives.
The Legg Mason Funds include the Western Asset Money Market Funds (Funds) sold by the Funds’ distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end
funds. 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;
•
Bank account information, legal documents, and identity verification documentation;
and
•
Online account access user IDs, passwords, security challenge question responses.
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, 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 to 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 statistical analysis, market research and marketing services
solely for the Funds;
•
Permit access to transfer, whether in the United States or countries outside of the
United States to such Funds’ employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations
to government regulators;
•
The Funds’ representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;
•
Fiduciaries or representatives acting on your behalf, such as an IRA custodian or
trustee of a grantor trust.
NOT PART OF THE SEMI-ANNUAL REPORT
Franklin Templeton Funds Privacy and Security Notice
(cont’d)
Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf, including those outside the United States, 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, if you have questions about the Funds’ privacy practices, or our use of your nonpublic personal information, 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.franklintempleton.com, or contact the Funds at 1-877-721-1926 for the
Western Asset Money Market Funds or 1-888-777-0102 for the Legg Mason-sponsored closed-end funds. For additional information related to certain state privacy rights, please
visit https://www.franklintempleton.com/help/privacy-policy.
NOT PART OF THE SEMI-ANNUAL REPORT
Western Asset Inflation-Linked Opportunities & Income Fund
Western Asset Inflation-Linked Opportunities & Income Fund
620 Eighth Avenue
47th Floor
New York, NY 10018
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase, at market prices, its common shares.
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 as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-888-777-0102.
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 related to portfolio transactions are available (1) without charge, upon request, by calling 1-888-777-0102, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton’s website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton’s website in this report.
This report is transmitted to the shareholders of Western Asset Inflation-Linked Opportunities & Income Fund for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.
Computershare Inc.
P.O. Box 43006
Providence, RI 02940-3078
Not applicable.
| ITEM 3. |
AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
| ITEM 4. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
| ITEM 5. |
AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. |
SCHEDULE OF INVESTMENTS. |
Included herein under Item 1.
| ITEM 7. | FINANCIAL STATEMENTS AND FINANCIAL HIGLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 9. | PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 10. | REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 11. | STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
Not applicable.
| ITEM 12. |
DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. |
PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Effective June 3, 2024, the individuals
responsible for day-to-day portfolio management, development of investment strategy, oversight and coordination of the Fund are Michael
Buchanan, Ken Leech and Frederick Marki. These investment professionals, all of whom are employed by Western Asset Management Company
work together with a broader investment management team.
| ITEM 14. |
PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND
AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. |
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
Not applicable.
| ITEM 16. |
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 period covered by this report
that have materially affected, or are likely to materially affect the registrant’s
internal control over financial reporting. |
| ITEM 17. |
DISCLOSURE OF SECURITIES LENDING ACTIVITIES
FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
|
Not applicable.
| ITEM 18. |
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
|
| |
(a) (1) |
Not applicable. |
| |
Exhibit |
99.CODE ETH |
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.
Western Asset Inflation-Linked Opportunities & Income
Fund
| By: |
/s/ Jane Trust |
|
| |
Jane Trust |
|
| |
President |
|
| |
|
|
| Date: |
July 25, 2024 |
|
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 |
|
| |
President |
|
| |
|
|
| Date: |
July 25, 2024 |
|
| By: |
/s/ Christopher Berarducci |
|
| |
Christopher Berarducci |
|
| |
Principal Financial Officer |
|
| |
|
|
| Date: |
July 25, 2024 |
|
CERTIFICATIONS PURSUANT TO SECTION 302
EX-99.CERT
CERTIFICATIONS
I, Jane Trust, certify that:
| 1. | I have reviewed this report on Form N-CSR Western Asset Inflation-Linked Opportunities
& Income Fund; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations,
changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The
registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date of this report based on such evaluation;
and |
| d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officers and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
July 25, 2024 |
/s/ Jane Trust |
| |
|
Jane Trust |
| |
|
President |
CERTIFICATIONS
I, Christopher Berarducci, certify that:
| 1. | I have reviewed this report on Form N-CSR of Western
Asset Inflation-Linked Opportunities & Income Fund; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial information included in this report, and the financial statements
on which the financial information is based, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant
as of, and for, the periods presented in this report; |
| 4. | The
registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) for the registrant and have: |
| a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date of this report based on such evaluation;
and |
| | | |
| d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officers and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| | | |
| b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
July 25, 2024 |
/s/ Christopher
Berarducci |
| |
|
Christopher Berarducci |
| |
|
Principal Financial Officer |
CERTIFICATIONS PURSUANT TO SECTION 906
EX-99.906CERT
CERTIFICATION
Jane Trust, President, and Christopher Berarducci, Principal
Financial Officer of Western Asset Inflation-Linked Opportunities & Income Fund (the “Registrant”), each certify to
the best of their knowledge that:
1. The Registrant’s
periodic report on Form N-CSR for the period ended May 31, 2024 (the “Form N-CSR”) fully complies with the requirements
of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
2. The information
contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
| President |
|
Principal Financial Officer |
| Western Asset Inflation-Linked Opportunities &
Income Fund |
|
Western Asset Inflation-Linked Opportunities &
Income Fund |
| |
|
|
| /s/ Jane Trust |
|
/s/ Christopher Berarducci |
| Jane Trust |
|
Christopher Berarducci |
| Date: July 25, 2024 |
|
Date: July 25, 2024 |
This certification is being furnished to the Securities and Exchange Commission
solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.
Western Asset Inflation ... (NYSE:WIW)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
Western Asset Inflation ... (NYSE:WIW)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024
