WESTERN ASSET INFLATION INDEXED PLUS BOND FUND

Schedule of investments (unaudited) March 31, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
U.S. TREASURY INFLATION PROTECTED SECURITIES - 91.3%
U.S. Treasury Bonds, Inflation Indexed		2.000	%		1/15/26		59,788,500	$	66,513,517
U.S. Treasury Bonds, Inflation Indexed		2.375	%		1/15/27		12,792,100		14,825,112
U.S. Treasury Bonds, Inflation Indexed		2.500	%		1/15/29		12,015,400		14,735,244
U.S. Treasury Bonds, Inflation Indexed		3.875	%		4/15/29		25,107,680		33,827,162
U.S. Treasury Bonds, Inflation Indexed		2.125	%		2/15/40		3,699,974		5,171,060
U.S. Treasury Bonds, Inflation Indexed		2.125	%		2/15/41		28,118,860		39,168,135
U.S. Treasury Bonds, Inflation Indexed		0.750	%		2/15/42		4,304,058		4,822,696
U.S. Treasury Bonds, Inflation Indexed		1.375	%		2/15/44		56,451,390		72,395,959
U.S. Treasury Bonds, Inflation Indexed		0.750	%		2/15/45		4,382,000		5,012,774
U.S. Treasury Bonds, Inflation Indexed		0.250	%		2/15/50		3,311,253		3,415,983
U.S. Treasury Notes, Inflation Indexed		0.125	%		4/15/22		109,470,432		107,973,392
U.S. Treasury Notes, Inflation Indexed		0.125	%		1/15/23		17,211,348		17,005,051
U.S. Treasury Notes, Inflation Indexed		0.625	%		4/15/23		5,192,850		5,231,066
U.S. Treasury Notes, Inflation Indexed		0.125	%		1/15/30		5,013,350		5,163,007
TOTAL U.S. TREASURY INFLATION PROTECTED SECURITIES (Cost - $370,471,855)									395,260,158
CORPORATE BONDS & NOTES - 5.2%
ENERGY - 2.9%
Energy Equipment & Services - 0.0%
Halliburton Co., Senior Notes		3.800	%		11/15/25		31,000		29,316
Oil, Gas & Consumable Fuels - 2.9%
Apache Corp., Senior Notes		2.625	%		1/15/23		288,000		200,938
Apache Corp., Senior Notes		5.100	%		9/1/40		300,000		132,963
Apache Corp., Senior Notes		4.750	%		4/15/43		2,020,000		897,147
BP Capital Markets America Inc., Senior Notes		3.588	%		4/14/27		2,100,000		2,092,906
Devon Energy Corp., Senior Notes		5.850	%		12/15/25		2,500,000		1,979,386
Energy Transfer Operating LP, Senior Notes		2.900	%		5/15/25		440,000		369,192
Enterprise Products Operating LLC, Senior Notes		3.125	%		7/31/29		1,390,000		1,286,192
Enterprise Products Operating LLC, Senior Notes		2.800	%		1/31/30		760,000		687,331
Exxon Mobil Corp., Senior Notes		3.043	%		3/1/26		500,000		529,691
Kinder Morgan Inc., Senior Notes		4.300	%		6/1/25		880,000		899,580
Noble Energy Inc., Senior Notes		3.900	%		11/15/24		500,000		413,150
Occidental Petroleum Corp., Senior Notes		5.550	%		3/15/26		390,000		206,633
Occidental Petroleum Corp., Senior Notes		3.000	%		2/15/27		1,000,000		464,540
Occidental Petroleum Corp., Senior Notes		3.500	%		8/15/29		830,000		393,007
Targa Resources Partners LP/Targa Resources Partners Finance Corp., Senior Notes		5.375	%		2/1/27		800,000		662,840

See Notes to Schedule of Investments.

Western Asset Inflation Indexed Plus Bond Fund 2020 Quarterly Report       1

WESTERN ASSET INFLATION INDEXED PLUS BOND FUND

Schedule of investments (unaudited) (cont’d) March 31, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†			VALUE
Oil, Gas & Consumable Fuels - (continued)
Transcontinental Gas Pipe Line Co. LLC, Senior Notes		7.850	%		2/1/26		880,000		$	1,003,750
Western Midstream Operating LP, Senior Notes		3.100	%		2/1/25		600,000			306,763
Total Oil, Gas & Consumable Fuels										12,526,009
TOTAL ENERGY										12,555,325
MATERIALS - 2.3%
Metals & Mining - 2.1%
Alcoa Nederland Holding BV, Senior Notes		6.125	%		5/15/28		890,000			814,840	(a)
Anglo American Capital PLC, Senior Notes		4.000	%		9/11/27		980,000			927,438	(a)
ArcelorMittal SA, Senior Notes		6.125	%		6/1/25		430,000			426,404
ArcelorMittal SA, Senior Notes		7.000	%		10/15/39		580,000			591,882
Glencore Funding LLC, Senior Notes		4.125	%		3/12/24		440,000			405,197	(a)
Glencore Funding LLC, Senior Notes		4.000	%		3/27/27		500,000			456,814	(a)
Glencore Funding LLC, Senior Notes		3.875	%		10/27/27		980,000			899,521	(a)
Southern Copper Corp., Senior Notes		5.250	%		11/8/42		2,380,000			2,432,799
Teck Resources Ltd., Senior Notes		3.750	%		2/1/23		430,000			405,632
Vale Overseas Ltd., Senior Notes		6.250	%		8/10/26		790,000			857,600
Yamana Gold Inc., Senior Notes		4.625	%		12/15/27		820,000			823,511
Total Metals & Mining										9,041,638
Paper & Forest Products - 0.2%
Inversiones CMPC SA, Senior Notes		4.375	%		4/4/27		850,000			799,895	(b)
TOTAL MATERIALS										9,841,533
TOTAL CORPORATE BONDS & NOTES (Cost - $26,780,550)										22,396,858
SOVEREIGN BONDS - 1.5%
Brazil - 0.1%
Brazil Notas do Tesouro Nacional Serie F, Notes		10.000	%		1/1/23		1,120,000	BRL		239,846
Indonesia - 0.5%
Indonesia Government International Bond, Senior Notes		3.500	%		1/11/28		210,000			208,076
Indonesia Government International Bond, Senior Notes		4.750	%		2/11/29		1,900,000			2,066,688
Total Indonesia										2,274,764
Kuwait - 0.3%
Kuwait International Government Bond, Senior Notes		3.500	%		3/20/27		1,240,000			1,292,461	(b)
Panama - 0.3%
Panama Government International Bond, Senior Notes		3.160	%		1/23/30		1,400,000			1,406,314

See Notes to Schedule of Investments.

  2     Western Asset Inflation Indexed Plus Bond Fund 2020 Quarterly Report

WESTERN ASSET INFLATION INDEXED PLUS BOND FUND

Schedule of investments (unaudited) (cont’d) March 31, 2020

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†			VALUE
United Arab Emirates - 0.3%
Abu Dhabi Government International Bond, Senior Notes		2.500	%		9/30/29		1,200,000		$	1,170,537	(a)
TOTAL SOVEREIGN BONDS (Cost - $6,646,840)										6,383,922
NON-U.S. TREASURY INFLATION PROTECTED SECURITIES - 0.8%
Brazil - 0.8%
Brazil Notas do Tesouro Nacional Serie B, Notes (Cost - $4,683,777)		6.000	%		8/15/30		16,392,583	BRL		3,695,025
ASSET-BACKED SECURITIES - 0.0%
Bear Stearns Asset Backed Securities Trust, 2003- ABF1, A (1 mo. USD LIBOR + 0.740%) (Cost - $20,302)		1.687	%		1/25/34		20,922			17,260	(c)
TOTAL INVESTMENTS - 98.8% (Cost - $408,603,324)										427,753,223
Other Assets in Excess of Liabilities - 1.2%										5,036,094
TOTAL NET ASSETS - 100.0%									$	432,789,317

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

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

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

(c) 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.

Abbreviations used in this schedule:

BRL	— Brazilian Real
LIBOR	— London Interbank Offered Rate
USD	— United States Dollar

At March 31, 2020, the Fund had the following open futures contracts:

	Number of Contracts		Expiration Date		Notional Amount		Market Value		Unrealized Appreciation (Depreciation)
Contracts to Buy:
U.S. Treasury 10-Year Notes		297		6/20	$	40,374,700	$	41,190,187	$	815,487
Contracts to Sell:
U.S. Treasury Long-Term Bonds		274		6/20		45,175,919		49,063,125		(3,887,206	)
U.S. Treasury Ultra Long- Term Bonds		60		6/20		12,416,049		13,312,500		(896,451	)
										(4,783,657	)
Net unrealized depreciation on open futures contracts									$	(3,968,170	)

See Notes to Schedule of Investments.

Western Asset Inflation Indexed Plus Bond Fund 2020 Quarterly Report       3

WESTERN ASSET INFLATION INDEXED PLUS BOND FUND

Schedule of investments (unaudited) (cont’d) March 31, 2020

At March 31, 2020, the Fund had the following open forward foreign currency contracts:

Currency Purchased		Currency Sold			Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	390,858		EUR	350,000	BNP Paribas SA		4/17/20	$	4,592
EUR	200,000		USD	222,904	Citibank N.A.		4/17/20		(2,181	)
Total								$	2,411

Abbreviations used in this table:

EUR	— Euro
USD	— United States Dollar

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

See Notes to Schedule of Investments.

  4     Western Asset Inflation Indexed Plus Bond Fund 2020 Quarterly Report

Notes to Schedule of Investments (unaudited)

1. Organization and significant accounting policies

Western Asset Inflation Indexed Plus Bond Fund (the “Fund”) is a separate diversified investment series of Western Asset Funds, Inc. (the “Corporation”). The Corporation, a Maryland Statutory Corporation, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors.

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

5

Notes to Schedule of Investments (unaudited) (continued)

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Directors quarterly.

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

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

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

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

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

6

Notes to Schedule of Investments (unaudited) (continued)

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

ASSETS
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Long-Term Investments†:
U.S. Treasury Inflation Protected Securities		—	$	395,260,158		—	$	395,260,158
Corporate Bonds & Notes		—		22,396,858		—		22,396,858
Sovereign Bonds		—		6,383,922		—		6,383,922
Non-U.S. Treasury Inflation Protected Securities		—		3,695,025		—		3,695,025
Asset-Backed Securities		—		17,260		—		17,260
Total Investments		—	$	427,753,223		—	$	427,753,223
Other Financial Instruments:
Futures Contracts	$	815,487		—		—	$	815,487
Forward Foreign Currency Contracts		—	$	4,592		—		4,592
Total Other Financial Instruments	$	815,487	$	4,592		—	$	820,079
Total	$	815,487	$	427,757,815		—	$	428,573,302
LIABILITIES
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Other Financial Instruments:
Futures Contracts	$	4,783,657		—		—	$	4,783,657
Forward Foreign Currency Contracts		—	$	2,181		—		2,181
Total	$	4,783,657	$	2,181		—	$	4,785,838

† See Schedule of Investments for additional detailed categorizations.

7

Notes to Schedule of Investments (unaudited) (continued)

2. 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. Based on the Fund’s relative ownership, the following company was considered an affiliated company for all or some portion of the period ended March 31, 2020. The following transactions were effected in shares of such company for the period ended March 31, 2020.

	Affiliate Value at December 31, 2019		Purchased				Sold
			Cost		Shares		Cost		Shares
Western Asset Premier Institutional Government Reserves, Premium Shares	$	2,602,433	$	33,827,250		33,827,250	$	36,429,683		36,429,683

(cont’d)	Realized Gain (Loss)		Interest Income		Net Increase (Decrease) in Unrealized Appreciation (Depreciation)		Affiliate Value at March 31, 2020
Western Asset Premier Institutional Government Reserves, Premium Shares		—	$	9,333		—		—

8