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 811-06444

Legg Mason Partners Equity Trust

(Exact name of registrant as specified in charter)

55 Water Street, New York, NY	10041
(Address of principal executive offices)	(Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

300 First Stamford Place, 4^th Floor

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 451-2010

Date of fiscal year end: October 31

Date of reporting period: April 30, 2008

ITEM 1. REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

SEMI-ANNUAL REPORT / APRIL 30, 2008

Legg Mason Partners

Dividend Strategy Fund

Managed by CLEARBRIDGE ADVISORS

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

Fund objective

The Fund seeks capital appreciation, principally through investments in dividend-paying stocks.

What’s inside

Letter from the chairman	I
Fund at a glance	1
Fund expenses	2
Schedule of investments	4
Statement of assets and liabilities	9
Statement of operations	10
Statements of changes in net assets	11
Financial highlights	12
Notes to financial statements	17
Board approval of management and subadvisory agreements	27

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

Letter from the chairman

R. Jay Gerken, CFA

Chairman, President and Chief Executive Officer

Dear Shareholder,

The U.S. economy was lackluster at best during the six-month reporting period ended April 30, 2008. Third quarter 2007 U.S. gross domestic product (“GDP”)ⁱ growth was 4.9%, its strongest showing in four years. However, continued weakness in the housing market, an ongoing credit crunch and soaring oil and food prices then took their toll on the economy. During the fourth quarter of 2007, GDP growth was 0.6%. The U.S. Commerce Department then reported that its preliminary estimate for first quarter 2008 GDP growth was a modest 0.9%. While it was once debated whether or not the U.S. would fall into a recession, it is now looking more likely that the U.S could experience a mild recession. Even areas of the economy that had once been fairly resilient have begun to falter, including the job market. The U.S. Department of Labor reported that payroll employment declined in each of the first four months of 2008 — the longest consecutive monthly decline since early 2003.

Ongoing issues related to the housing and subprime mortgage markets and an abrupt tightening in the credit markets prompted the Federal Reserve Board (“Fed”)ⁱⁱ to take aggressive and, in some cases, unprecedented actions during the reporting period. At its meeting in September 2007, the Fed reduced the federal funds rateⁱⁱⁱ from 5.25% to 4.75%. This marked the first reduction in the federal funds rate since June 2003. The Fed reduced the federal funds rate an additional 25 basis points in October 2007. Then, over the course of the reporting period, the Fed lowered rates on five more occasions, bringing the federal funds rate to 2.00% as of April 30, 2008. In its statement accompanying the April rate cut, the Fed stated: “Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.”

In addition to lowering short-term interest rates, the Fed took several actions to improve liquidity in the credit markets. In March 2008, the Fed established a new lending program allowing certain brokerage firms, known

Legg Mason Partners Dividend Strategy Fund I

Letter from the chairman continued

as primary dealers, to also borrow from its discount window. The Fed also increased the maximum term for discount window loans from 30 to 90 days. Then, in mid-March, the Fed played a major role in facilitating the purchase of Bear Stearns by JPMorgan Chase.

The U.S. stock market generated poor results during the six-month reporting period. Stock prices fell during the first five months of the reporting period before rallying somewhat in April 2008. The market’s troubles were due, in part, to the severe credit crunch, weakening corporate profits, rising inflation and increasing fears of a recession. All told, the S&P 500 Index^iv returned -9.64% over the six-month reporting period ended April 30, 2008.

Looking at U.S. stock prices more closely, the market’s weakness was broad in scope. Mid-cap stocks outperformed their large- and small-cap counterparts on a relative basis, as the Russell Midcap^v, Russell 1000^vi and Russell 2000^vii Indexes returned -8.77%, -9.54% and -12.92%, respectively, during the six-month reporting period. From an investment style perspective, growth stocks modestly outperformed value stocks, with the Russell 3000 Growth^viii and Russell 3000 Value^ix Indexes returning -9.68% and -9.97%, respectively.

Performance review

For the six months ended April 30, 2008, Class A shares of Legg Mason Partners Dividend Strategy Fund, excluding sales charges, returned -6.70%. The Fund’s unmanaged benchmark, the S&P 500 Index, returned -9.64% for the same period. The Lipper Equity Income Funds Category Average¹ returned -8.82% over the same time frame.

¹ Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the six-month period ended April 30, 2008, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 288 funds in the Fund’s Lipper category, and excluding sales charges.

II Legg Mason Partners Dividend Strategy Fund

PERFORMANCE SNAPSHOT as of April 30, 2008 (excluding sales charges) (unaudited)
	6 MONTHS
Dividend Strategy Fund — Class A Shares	-6.70%
S&P 500 Index	-9.64%
Lipper Equity Income Funds Category Average1	-8.82%

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/individualinvestors.

Excluding sales charges, Class 1 shares² returned -6.54%, Class B shares returned -7.04% and Class C shares returned -6.95% over the six months ended April 30, 2008. All share class returns assume the reinvestment of all distributions, including returns of capital, if any, at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply when shares are purchased or the deduction of taxes that a shareholder would pay on Fund distributions.

Performance figures reflect expense reimbursements and/or fee waivers, without which the performance would have been lower.

Performance of Class I shares is not shown because this share class commenced operations on March 5, 2008.

TOTAL ANNUAL OPERATING EXPENSES (unaudited)

As of the Fund’s most current prospectus dated February 20, 2008, the gross total operating expenses for Class 1, Class A, Class B, Class C and Class I shares were 0.85%, 1.34%, 2.13%, 1.66% and 0.63%, respectively.

As a result of an expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets will not exceed 1.25% for Class A shares and 2.00% for Class B shares.

As a result of an expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of Class 1 shares will not exceed the total net annual operating expenses of Class A shares less the 12b-1 differential of 0.25%.

These expense limitations may be reduced or terminated at any time.

Information about your fund

As you may be aware, several issues in the mutual fund industry have come under the scrutiny of federal and state regulators. Affiliates of the Fund’s manager have, in recent years, received requests for information from various government regulators regarding market timing, late trading, fees, and other mutual fund issues in connection with various investigations. The regulators appear to be examining, among other things, the Fund’s response to market timing and shareholder exchange activity, including compliance with prospectus disclosure related to these subjects. The Fund is not in a position to predict the outcome of these requests and investigations.

¹ Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the six-month period ended April 30, 2008, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 288 funds in the Fund’s Lipper category, and excluding sales charges.

² Effective July 27, 2007, Class 1 shares were closed to all new purchases and incoming exchanges. Investors owning Class 1 shares on that date are permitted to continue to maintain their then-current Class 1 shares but are no longer permitted to add to their Class 1 share positions (excluding reinvestment of dividends and distributions).

Legg Mason Partners Dividend Strategy Fund III

Letter from the chairman continued

Important information with regard to recent regulatory developments that may affect the Fund is contained in the Notes to Financial Statements included in this report.

As always, thank you for your confidence in our stewardship of your assets. We look forward to helping you meet your financial goals.

Sincerely,

R. Jay Gerken, CFA

Chairman, President and Chief Executive Officer

May 30, 2008

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

RISKS: The Fund may invest in small- and mid-cap companies that may involve a higher degree of risk and volatility than investments in large-cap companies. The Fund is subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. The Fund may engage in active and frequent trading, resulting in high portfolio turnover. This may lead to the distribution of higher capital gains to shareholders, increasing their tax liability. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Please see the Fund’s prospectus for more information on these and other risks.

All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

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

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

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

^iv The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

^v The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 25% of the total market capitalization of the Russell 1000 Index.

^vi The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the U.S. equity market.

^vii The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.

^viii The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. (A price-to-book ratio is the price of a stock compared to the difference between a company’s assets and liabilities.)

^ix The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values.

IV Legg Mason Partners Dividend Strategy Fund

Fund at a glance (unaudited)

INVESTMENT BREAKDOWN (%) As a percent of total investments — April 30, 2008

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 1

Fund expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on November 1, 2007 and held for the six months ended April 30, 2008.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

BASED ON ACTUAL TOTAL RETURN1
	ACTUAL TOTAL RETURN WITHOUT SALES CHARGES2		BEGINNING ACCOUNT VALUE		ENDING ACCOUNT VALUE		ANNUALIZED EXPENSE RATIO		EXPENSES PAID DURING THE PERIOD3
Class 1	(6.54	)%	$	1,000.00	$	934.60	0.86	%	$	4.14
Class A	(6.70	)		1,000.00		933.00	1.25			6.01
Class B	(7.04	)		1,000.00		929.60	2.00			9.60
Class C	(6.95	)		1,000.00		930.50	1.67			8.02
Class I4	3.31			1,000.00		1,033.10	1.21			1.88

¹ For the six months ended April 30, 2008, unless otherwise noted.

² Assumes reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable initial sales charge with respect to Class A shares or the applicable contingent deferred sales charges (“CDSC”) with respect to Class B and C shares. Total return is not annualized, as it may not be representative of the total return for the year. Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower.

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

⁴ For the period March 5, 2008 (inception date) to April 30, 2008.

2 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

BASED ON HYPOTHETICAL TOTAL RETURN1
	HYPOTHETICAL ANNUALIZED TOTAL RETURN		BEGINNING ACCOUNT VALUE		ENDING ACCOUNT VALUE		ANNUALIZED EXPENSE RATIO		EXPENSES PAID DURING THE PERIOD2
Class 1	5.00	%	$	1,000.00	$	1,020.59	0.86	%	$	4.32
Class A	5.00			1,000.00		1,018.65	1.25			6.27
Class B	5.00			1,000.00		1,014.92	2.00			10.02
Class C	5.00			1,000.00		1,016.56	1.67			8.37
Class I3	5.00			1,000.00		1,005.80	1.21			1.86

¹ For the six months ended April 30, 2008, unless otherwise noted.

² Expenses (net of fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 366.

³ For the period March 5, 2008 (inception date) to April 30, 2008.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 3

Schedule of investments (unaudited)

April 30, 2008

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND
SHARES	SECURITY	VALUE
COMMON STOCKS — 93.8%
CONSUMER DISCRETIONARY — 4.7%
	Hotels, Restaurants & Leisure — 1.2%
500,000	McDonald’s Corp.	$	29,790,000
	Household Durables — 0.4%
503,800	Leggett & Platt Inc.		8,363,080
	Media — 1.0%
249,850	Cinemark Holdings Inc.		3,700,279
200,000	Comcast Corp., Class A Shares		4,110,000
477,800	News Corp., Class B Shares		8,839,300
400,000	Regal Entertainment Group, Class A Shares		7,584,000
	Total Media		24,233,579
	Specialty Retail — 2.1%
1,410,300	Gap Inc.		26,259,786
693,350	Home Depot Inc.		19,968,480
176,630	Williams-Sonoma Inc.		4,663,032
	Total Specialty Retail		50,891,298
	TOTAL CONSUMER DISCRETIONARY		113,277,957
CONSUMER STAPLES — 13.4%
	Beverages — 1.8%
450,000	Coca-Cola Co.		26,491,500
250,000	PepsiCo Inc.		17,132,500
	Total Beverages		43,624,000
	Food & Staples Retailing — 3.1%
1,273,900	Wal-Mart Stores Inc.		73,860,722
	Food Products — 5.1%
175,725	Cadbury Schweppes PLC, ADR		8,100,922
300,000	General Mills Inc.		18,120,000
200,000	H.J. Heinz Co.		9,406,000
1,404,617	Kraft Foods Inc., Class A Shares		44,428,036
225,000	Unilever NV		7,546,500
1,044,040	Unilever PLC, ADR		35,069,304
	Total Food Products		122,670,762
	Household Products — 3.4%
844,813	Kimberly-Clark Corp.		54,059,584
400,000	Procter & Gamble Co.		26,820,000
	Total Household Products		80,879,584
	TOTAL CONSUMER STAPLES		321,035,068
ENERGY — 10.8%
	Energy Equipment & Services — 0.5%
31,000	Diamond Offshore Drilling Inc.		3,887,710

See Notes to Financial Statements.

4 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND
SHARES	SECURITY	VALUE
	Energy Equipment & Services — 0.5% continued
50,500	Schlumberger Ltd.	$	5,077,775
33,700	Weatherford International Ltd.*		2,718,579
	Total Energy Equipment & Services		11,684,064
	Oil, Gas & Consumable Fuels — 10.3%
685,600	BP PLC, ADR		49,904,824
869,969	Chevron Corp.		83,647,519
1,031,419	Exxon Mobil Corp.		95,994,166
195,000	Newfield Exploration Co.*		11,848,200
51,815	SandRidge Energy Inc.*		2,341,002
200,000	Spectra Energy Corp.		4,940,000
	Total Oil, Gas & Consumable Fuels		248,675,711
	TOTAL ENERGY		260,359,775
FINANCIALS — 15.5%
	Capital Markets — 1.5%
372,730	Bank of New York Mellon Corp.		16,224,937
375,000	Merrill Lynch & Co. Inc.		18,686,250
	Total Capital Markets		34,911,187
	Commercial Banks — 1.3%
745,300	Wachovia Corp.		21,725,495
350,000	Wells Fargo & Co.		10,412,500
	Total Commercial Banks		32,137,995
	Consumer Finance — 0.3%
125,000	American Express Co.		6,002,500
	Diversified Financial Services — 4.7%
1,070,021	Bank of America Corp.		40,168,588
1,526,557	JPMorgan Chase & Co.		72,740,441
	Total Diversified Financial Services		112,909,029
	Insurance — 3.6%
120,000	American International Group Inc.		5,544,000
851,804	Chubb Corp.		45,120,058
278,400	Hartford Financial Services Group Inc.		19,841,568
325,000	Travelers Cos. Inc.		16,380,000
	Total Insurance		86,885,626
	Real Estate Investment Trusts (REITs) — 3.3%
3,356,690	Annaly Capital Management Inc.		56,258,124
560,970	Chimera Investment Corp.		7,780,654
204,400	LaSalle Hotel Properties		6,555,108
1,232,000	MFA Mortgage Investments Inc.		8,611,680
	Total Real Estate Investment Trusts (REITs)		79,205,566

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 5

Schedule of investments (unaudited)continued

April 30, 2008

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND
SHARES	SECURITY	VALUE
	Thrifts & Mortgage Finance — 0.8%
300,000	Freddie Mac	$	7,473,000
650,000	Hudson City Bancorp Inc.		12,434,500
	Total Thrifts & Mortgage Finance		19,907,500
	TOTAL FINANCIALS		371,959,403
HEALTH CARE — 12.6%
	Health Care Equipment & Supplies — 1.8%
625,002	Baxter International Inc.		38,950,125
125,000	Medtronic Inc.		6,085,000
	Total Health Care Equipment & Supplies		45,035,125
	Pharmaceuticals — 10.8%
1,060,599	Abbott Laboratories		55,946,598
150,000	Bristol-Myers Squibb Co.		3,295,500
450,680	Eli Lilly & Co.		21,695,735
1,119,247	Johnson & Johnson		75,090,281
518,856	Merck & Co. Inc.		19,737,282
514,500	Novartis AG, ADR		25,894,785
850,000	Pfizer Inc.		17,093,500
905,875	Wyeth		40,284,261
	Total Pharmaceuticals		259,037,942
	TOTAL HEALTH CARE		304,073,067
INDUSTRIALS — 14.5%
	Aerospace & Defense — 3.3%
891,852	Honeywell International Inc.		52,976,009
400,000	Raytheon Co.		25,588,000
	Total Aerospace & Defense		78,564,009
	Air Freight & Logistics — 1.0%
325,200	United Parcel Service Inc., Class B Shares		23,547,732
	Commercial Services & Supplies — 1.3%
50,000	Pitney Bowes Inc.		1,805,500
850,000	Waste Management Inc.		30,685,000
	Total Commercial Services & Supplies		32,490,500
	Electrical Equipment — 2.6%
903,754	Emerson Electric Co.		47,230,184
337,400	Hubbell Inc., Class B Shares		15,091,902
	Total Electrical Equipment		62,322,086
	Industrial Conglomerates — 5.8%
200,000	3M Co.		15,380,000
2,449,066	General Electric Co.		80,084,458
175,000	Tyco International Ltd.		8,188,250
500,000	United Technologies Corp.		36,235,000
	Total Industrial Conglomerates		139,887,708

See Notes to Financial Statements.

6 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND
SHARES	SECURITY	VALUE
	Machinery — 0.5%
254,000	Dover Corp.	$	12,565,380
	TOTAL INDUSTRIALS		349,377,415
INFORMATION TECHNOLOGY — 10.7%
	Communications Equipment — 0.9%
743,600	Motorola Inc.		7,406,256
175,000	Nokia Oyj, ADR		5,262,250
200,000	QUALCOMM Inc.		8,638,000
	Total Communications Equipment		21,306,506
	Computers & Peripherals — 1.5%
300,000	International Business Machines Corp.		36,210,000
	Electronic Equipment & Instruments — 0.3%
175,000	Tyco Electronics Ltd.		6,546,750
	IT Services — 1.2%
650,000	Automatic Data Processing Inc.		28,730,000
	Semiconductors & Semiconductor Equipment — 4.0%
1,000,000	Intel Corp.		22,260,000
907,500	Linear Technology Corp.		31,726,200
158,600	Microchip Technology Inc.		5,828,550
2,834,131	Taiwan Semiconductor Manufacturing Co., Ltd., ADR		31,855,633
193,200	Texas Instruments Inc.		5,633,712
	Total Semiconductors & Semiconductor Equipment		97,304,095
	Software — 2.8%
2,325,135	Microsoft Corp.		66,312,850
	TOTAL INFORMATION TECHNOLOGY		256,410,201
MATERIALS — 4.8%
	Chemicals — 3.0%
150,000	Cytec Industries Inc.		8,851,500
982,390	E.I. du Pont de Nemours & Co.		48,048,695
226,240	PPG Industries Inc.		13,884,349
	Total Chemicals		70,784,544
	Metals & Mining — 0.7%
300,000	Alcoa Inc.		10,434,000
52,000	Freeport-McMoRan Copper & Gold Inc., Class B Shares		5,915,000
	Total Metals & Mining		16,349,000
	Paper & Forest Products — 1.1%
427,521	Weyerhaeuser Co.		27,310,041
	TOTAL MATERIALS		114,443,585
TELECOMMUNICATION SERVICES — 5.6%
	Diversified Telecommunication Services — 3.8%
515,000	AT&T Inc.		19,935,650

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 7

Schedule of investments (unaudited)continued

April 30, 2008

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND
SHARES		SECURITY	VALUE
		Diversified Telecommunication Services — 3.8% continued
	150,000	Embarq Corp.	$	6,235,500
	1,488,189	Verizon Communications Inc.		57,265,513
	575,000	Windstream Corp.		6,750,500
		Total Diversified Telecommunication Services		90,187,163
		Wireless Telecommunication Services — 1.8%
	1,384,308	Vodafone Group PLC, ADR		43,827,191
		TOTAL TELECOMMUNICATION SERVICES		134,014,354
	UTILITIES — 1.2%
		Electric Utilities — 0.5%
	180,000	FPL Group Inc.		11,932,200
		Multi-Utilities — 0.7%
	550,000	NiSource Inc.		9,845,000
	75,000	PG&E Corp.		3,000,000
	55,000	Sempra Energy		3,116,850
		Total Multi-Utilities		15,961,850
		TOTAL UTILITIES		27,894,050
		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS (Cost — $1,812,617,160)		2,252,844,875
FACE AMOUNT
	SHORT-TERM INVESTMENTS — 6.2%
		Repurchase Agreements — 6.2%
$	70,042,000	Interest in $1,193,117,000 joint tri-party repurchase agreement dated 4/30/08 with Greenwich Capital Markets Inc., 1.950% due 5/1/08; Proceeds at maturity — $70,045,794; (Fully collateralized by various U.S. government agency obligations, 2.510% to 7.250% due 11/13/08 to 9/16/13; Market value — $71,443,064)		70,042,000
	79,018,000	Interest in $368,176,000 joint tri-party repurchase agreement dated 4/30/08 with Merrill Lynch, Pierce, Fenner & Smith Inc., 1.900% due 5/1/08; Proceeds at maturity — $79,022,170; (Fully collateralized by various U.S. government agency obligations, 0.000% due 5/28/08 to 12/31/08; Market value — $80,599,220)		79,018,000
		TOTAL SHORT-TERM INVESTMENTS (Cost — $149,060,000)		149,060,000
		TOTAL INVESTMENTS — 100.0% (Cost — $1,961,677,160#)		2,401,904,875
		Other Assets in Excess of Liabilities — 0.0%		886,676
		TOTAL NET ASSETS — 100.0%	$	2,402,791,551

* Non-income producing security.

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

Abbreviation used in this schedule:

ADR— American Depositary Receipt

See Notes to Financial Statements.

8 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

Statement of assets and liabilities (unaudited)

April 30, 2008

ASSETS:
Investments, at value (Cost — $1,961,677,160)	$	2,401,904,875
Foreign currency, at value (Cost — $36)		35
Cash		887
Dividends and interest receivable		2,605,686
Receivable for securities sold		2,582,516
Receivable for Fund shares sold		193,416
Prepaid expenses		41,819
Total Assets		2,407,329,234
LIABILITIES:
Transfer agent fees payable		1,841,201
Payable for Fund shares repurchased		1,179,758
Investment management fee payable		1,067,339
Distribution fees payable		245,655
Trustees’ fees payable		76,755
Accrued expenses		126,975
Total Liabilities		4,537,683
TOTAL NET ASSETS	$	2,402,791,551
NET ASSETS:
Par value (Note 6)	$	1,388
Paid-in capital in excess of par value		1,888,183,742
Undistributed net investment income		1,497,201
Accumulated net realized gain on investments		72,881,506
Net unrealized appreciation on investments and foreign currencies		440,227,714
TOTAL NET ASSETS	$	2,402,791,551
Shares Outstanding:
Class 1		100,689,846
Class A		26,301,279
Class B		11,146,079
Class C		614,971
Class I		60
Net Asset Value:
Class 1 (and redemption price)		$17.54
Class A (and redemption price)		$17.06
Class B1		$15.96
Class C1		$17.03
Class I (and redemption price)		$17.03
Maximum Public Offering Price Per Share:
Class A (based on maximum initial sales charge of 5.75%)		$18.10

¹ Redemption price per share is NAV of Class B and C shares reduced by a 5.00% and 1.00% CDSC, respectively, if shares are redeemed within one year from purchase payment (See Note 2).

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 9

Statement of operations (unaudited)

For the Six Months Ended April 30, 2008

INVESTMENT INCOME:
Dividends	$	36,454,161
Interest		1,159,818
Less: Foreign taxes withheld		(93,287	)
Total Investment Income		37,520,692
EXPENSES:
Investment management fee (Note 2)		7,497,842
Transfer agent fees (Note 4)		4,117,712
Distribution fees (Notes 2 and 4)		1,558,490
Shareholder reports (Note 4)		92,682
Trustees’ fees		60,225
Registration fees		41,759
Legal fees		31,735
Custody fees		19,354
Insurance		19,203
Audit and tax		17,583
Miscellaneous expenses		8,650
Total Expenses		13,465,235
Less: Fee waivers and/or expense reimbursements (Note 2)		(888,364	)
Fees paid indirectly (Note 1)		(14	)
Net Expenses		12,576,857
NET INVESTMENT INCOME	$	24,943,835
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3):
Net Realized Gain From Investment Transactions	$	73,455,607
Change in Net Unrealized Appreciation/Depreciation From:
Investments		(278,793,537	)
Foreign currencies		(1	)
Change in Net Unrealized Appreciation/Depreciation		(278,793,538	)
Net Loss on Investments and Foreign Currency Transactions		(205,337,931	)
DECREASE IN NET ASSETS FROM OPERATIONS	$	(180,394,096	)

See Notes to Financial Statements.

10 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

Statements of changes in net assets

FOR THE SIX MONTHS ENDED APRIL 30, 2008 (unaudited) AND THE YEAR ENDED OCTOBER 31, 2007	2008			2007
OPERATIONS:
Net investment income	$	24,943,835		$	49,074,604
Net realized gain		73,455,607			101,021,304
Change in net unrealized appreciation/depreciation		(278,793,538	)		178,458,520
Increase (Decrease) in Net Assets From Operations		(180,394,096	)		328,554,428
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
Net investment income		(24,621,538	)		(49,838,214	)
Net realized gains		(100,578,970	)		(94,689,893	)
Decrease in Net Assets From Distributions to Shareholders		(125,200,508	)		(144,528,107	)
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares		65,722,169			147,806,168
Reinvestment of distributions		124,999,788			144,289,404
Cost of shares repurchased		(201,649,523	)		(444,767,488	)
Decrease in Net Assets From Fund Share Transactions		(10,927,566	)		(152,671,916	)
INCREASE (DECREASE) IN NET ASSETS		(316,522,170	)		31,354,405
NET ASSETS:
Beginning of period		2,719,313,721			2,687,959,316
End of period*	$	2,402,791,551		$	2,719,313,721
* Includes undistributed net investment income of:		$1,497,201			$1,174,904

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 11

Financial highlights

FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH YEAR ENDED OCTOBER 31, UNLESS OTHERWISE NOTED:
CLASS 1 SHARES1	20082			2007			2006			2005			2004			2003
NET ASSET VALUE, BEGINNING OF PERIOD	$	19.71		$	18.42		$	16.90		$	16.89		$	16.36		$	14.10
INCOME (LOSS) FROM OPERATIONS:
Net investment income		0.19			0.37			0.34			0.34			0.06			0.06
Net realized and unrealized gain (loss)		(1.44	)		1.94			2.37			0.02			0.50			2.20
Total income (loss) from operations		(1.25	)		2.31			2.71			0.36			0.56			2.26
LESS DISTRIBUTIONS FROM:
Net investment income		(0.19	)		(0.37	)		(0.35	)		(0.35	)		(0.03	)		—
Net realized gains		(0.73	)		(0.65	)		(0.84	)		—			—			—
Total distributions		(0.92	)		(1.02	)		(1.19	)		(0.35	)		(0.03	)		—
NET ASSET VALUE, END OF PERIOD	$	17.54		$	19.71		$	18.42		$	16.90		$	16.89		$	16.36
Total return3		(6.54	)%		13.05	%		16.92	%		2.12	%		3.41	%		16.03	%
NET ASSETS, END OF PERIOD (MILLIONS)	$	1,766		$	2,025		$	2,032		$	2,036		$	2,288		$	2,435
RATIOS TO AVERAGE NET ASSETS:
Gross expenses		0.86	%4		0.86	%5		0.88	%		0.94	%		0.90	%		1.00	%
Net expenses		0.86	4,6,7		0.86	5,6,8		0.85	8		0.94			0.90	8		1.00
Net investment income		2.19	4		1.96			2.00			1.99			0.36			0.39
PORTFOLIO TURNOVER RATE		12	%		19	%		21	%		135	%		35	%		69	%

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

² For the six months ended April 30, 2008 (unaudited).

³ Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴ Annualized.

⁵ Included in the expense ratios are certain non-recurring restructuring (and reorganization, if applicable) fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would both have been 0.85%.

⁶ As a result of an expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of Class 1 shares will not exceed the total net annual operating expenses of Class A shares less the 12b-1 differential of 0.25%.

⁷ The impact to the expense ratio was less than 0.01% as a result of fees paid indirectly.

⁸ Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

12 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH YEAR ENDED OCTOBER 31, UNLESS OTHERWISE NOTED:
CLASS A SHARES1	20082			2007			2006			2005			2004			2003
NET ASSET VALUE, BEGINNING OF PERIOD	$	19.19		$	17.97		$	16.52		$	16.47		$	16.03		$	13.93
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss)		0.15			0.29			0.27			0.28			(0.05	)		(0.06	)
Net realized and unrealized gain (loss)		(1.40	)		1.89			2.32			0.02			0.49			2.16
Total income (loss) from operations		(1.25	)		2.18			2.59			0.30			0.44			2.10
LESS DISTRIBUTIONS FROM:
Net investment income		(0.15	)		(0.31	)		(0.30	)		(0.25	)		—			—
Net realized gains		(0.73	)		(0.65	)		(0.84	)		—			—			—
Total distributions		(0.88	)		(0.96	)		(1.14	)		(0.25	)		—			—
NET ASSET VALUE, END OF PERIOD		$17.06			$19.19			$17.97			$16.52			$16.47			$16.03
Total return3		(6.70	)%		12.58	%		16.50	%		1.82	%		2.74	%		15.08	%
NET ASSETS, END OF PERIOD (MILLIONS)		$449			$461			$395			$378			$404			$414
RATIOS TO AVERAGE NET ASSETS:
Gross expenses		1.58	%4		1.36	%5		1.43	%		1.59	%		1.59	%		1.80	%
Net expenses		1.25	4,6,7,8		1.20	5,6,7		1.24	6,7		1.25	6,7		1.58	7		1.80
Net investment income (loss)		1.79	4		1.59			1.62			1.67			(0.33	)		(0.42	)
PORTFOLIO TURNOVER RATE		12	%		19	%		21	%		135	%		35	%		69	%

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

² For the six months ended April 30, 2008 (unaudited).

³ Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴ Annualized.

⁵ Included in the expense ratios are certain non-recurring restructuring (and reorganization, if applicable) fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 1.34% and 1.19%, respectively.

⁶ As a result of a voluntary expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of Class A shares will not exceed 1.25%.

⁷ Reflects fee waivers and/or expense reimbursements.

⁸ The impact to the expense ratio was less than 0.01% as a result of fees paid indirectly.

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 13

Financial highlights continued

FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH YEAR ENDED OCTOBER 31, UNLESS OTHERWISE NOTED:
CLASS B SHARES1	20082			2007			2006			2005			2004			2003
NET ASSET VALUE, BEGINNING OF PERIOD	$	18.01		$	16.92		$	15.62		$	15.55		$	15.26		$	13.38
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss)		0.09			0.15			0.14			0.15			(0.18	)		(0.18	)
Net realized and unrealized gain (loss)		(1.32	)		1.77			2.18			0.02			0.47			2.06
Total income (loss) from operations		(1.23	)		1.92			2.32			0.17			0.29			1.88
LESS DISTRIBUTIONS FROM:
Net investment income		(0.09	)		(0.18	)		(0.18	)		(0.10	)		—			—
Net realized gains		(0.73	)		(0.65	)		(0.84	)		—			—			—
Total distributions		(0.82	)		(0.83	)		(1.02	)		(0.10	)		—			—
NET ASSET VALUE, END OF PERIOD	$	15.96		$	18.01		$	16.92		$	15.62		$	15.55		$	15.26
Total return3		(7.04	)%		11.76	%		15.61	%		1.09	%		1.90	%		14.05	%
NET ASSETS, END OF PERIOD (MILLIONS)		$178			$221			$250			$264			$292			$305
RATIOS TO AVERAGE NET ASSETS:
Gross expenses		2.17	%4		2.14	%5		2.23	%		2.38	%		2.42	%		2.66	%
Net expenses		2.00	4,6,7,8		1.96	5,6,7		1.96	6,7		2.00	6,7		2.42	7		2.66
Net investment income (loss)		1.07	4		0.87			0.90			0.93			(1.16	)		(1.27	)
PORTFOLIO TURNOVER RATE		12	%		19	%		21	%		135	%		35	%		69	%

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

² For the six months ended April 30, 2008 (unaudited).

³ Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴ Annualized.

⁵ Included in the expense ratios are certain non-recurring restructuring (and reorganization, if applicable) fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 2.13% and 1.94%, respectively.

⁶ As a result of a voluntary expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of Class B shares will not exceed 2.00%.

⁷ Reflects fee waivers and/or expense reimbursements.

⁸ The impact to the expense ratio was less than 0.01% as a result of fees paid indirectly.

See Notes to Financial Statements.

14 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH YEAR ENDED OCTOBER 31, UNLESS OTHERWISE NOTED:
CLASS C SHARES1	20082			2007			2006			2005			2004			2003
NET ASSET VALUE, BEGINNING OF PERIOD	$	19.17		$	17.95		$	16.48		$	16.39		$	15.98		$	13.87
INCOME (LOSS) FROM OPERATIONS:
Net investment income (loss)		0.12			0.21			0.20			0.18			(0.08	)		(0.04	)
Net realized and unrealized gain (loss)		(1.41	)		1.88			2.30			0.04			0.49			2.15
Total income (loss) from operations		(1.29	)		2.09			2.50			0.22			0.41			2.11
LESS DISTRIBUTIONS FROM:
Net investment income		(0.12	)		(0.22	)		(0.19	)		(0.13	)		—			—
Net realized gains		(0.73	)		(0.65	)		(0.84	)		—			—			—
Total distributions		(0.85	)		(0.87	)		(1.03	)		(0.13	)		—			—
NET ASSET VALUE, END OF PERIOD	$	17.03		$	19.17		$	17.95		$	16.48		$	16.39		$	15.98
Total return3		(6.95	)%		12.07	%		15.94	%		1.32	%		2.57	%		15.21	%
NET ASSETS, END OF PERIOD (MILLIONS)		$10			$12			$11			$12			$5			$6
RATIOS TO AVERAGE NET ASSETS:
Gross expenses		1.67	%4		1.68	%5		1.73	%		1.75	%		1.77	%		1.67	%
Net expenses		1.67	4,6		1.67	5,7		1.69	7		1.75			1.77	7		1.67
Net investment income (loss)		1.39	4		1.13			1.18			1.05			(0.51	)		(0.29	)
PORTFOLIO TURNOVER RATE		12	%		19	%		21	%		135	%		35	%		69	%

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

² For the six months ended April 30, 2008 (unaudited).

³ Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴ Annualized.

⁵ Included in the expense ratios are certain non-recurring restructuring (and reorganization, if applicable) fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would both have been 1.66%.

⁶ The impact to the expense ratio was less than 0.01% as a result of fees paid indirectly.

⁷ Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 15

Financial highlights continued

FOR A SHARE OF EACH CLASS OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH YEAR ENDED OCTOBER 31, UNLESS OTHERWISE NOTED:
CLASS I SHARES1	20082
NET ASSET VALUE, BEGINNING OF PERIOD	$	16.59
INCOME (LOSS) FROM OPERATIONS:
Net investment income		0.01
Net realized and unrealized gain		0.54
Total income from operations		0.55
LESS DISTRIBUTIONS FROM:
Net investment income		(0.11	)
Total distributions		(0.11	)
NET ASSET VALUE, END OF PERIOD	$	17.03
Total return3		3.31	%
NET ASSETS, END OF PERIOD (000s)		$1
RATIOS TO AVERAGE NET ASSETS:
Gross expenses4		1.21	%
Net expenses4,5		1.21
Net investment income4		0.96
PORTFOLIO TURNOVER RATE		12	%

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

² For the period March 5, 2008 (inception date) to April 30, 2008.

³ Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁴ Annualized.

⁵ The impact to the expense ratio was less than 0.01% as a result of fees paid indirectly.

See Notes to Financial Statements.

16 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

The Legg Mason Partners Dividend Strategy Fund (the “Fund”) is a separate diversified investment series of the Legg Mason Partners Equity Trust (the “Trust”). The Trust, a Maryland business trust, is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”), as an open-end management investment company.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.

(a) Investment valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. Debt securities are valued at the mean between the last quoted bid and asked prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When prices are not readily available, or are determined not to reflect fair value, 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 may value these securities at fair value as determined in accordance with the procedures approved by the Fund’s Board of Trustees. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates fair value.

(b) Repurchase agreements. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults, and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

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

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 17

Notes to financial statements (unaudited)continued

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

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

(d) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practical 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 on an expected interest payment, the Fund’s policy is to generally halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default.

(e) REIT distributions. The character of distributions received from Real Estate Investment Trusts (“REITs”) held by the Fund is generally comprised of net investment income, capital gains, and return of capital. It is the policy of the Fund to estimate the character of distributions received from underlying REITs based on historical data provided by the REITs. After each calendar year end, REITs report the actual tax character of these distributions. Differences between the estimated and actual amounts reported by the REITs are reflected in the Fund’s records in the year in which they are reported by the REITs.

(f) Distributions to shareholders. Distributions from net investment income for the Fund, if any, are declared and paid on a quarterly basis. Distributions of net realized gains, if any, are declared at least annually. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(g) Class accounting. Investment income, common expenses and realized/unrealized gain (loss) on investments are allocated to the various

18 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that class.

(h) Fees paid indirectly. The Fund’s custody fees are reduced according to a fee arrangement, which provides for a reduction based on the level of cash deposited with the custodian by the Fund. The amount is shown as a reduction of expenses on the Statement of Operations.

(i) 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, as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute substantially all of its taxable income and net realized gains, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Fund’s financial statements.

Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years and has concluded that as of April 30, 2008, no provision for income tax would be required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

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

(j) Reclassification. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.

2. Investment management agreement and other transactions with affiliates

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

Under the investment management agreement, the Fund pays an investment management fee, calculated daily and paid monthly, at an annual rate of the Fund’s average daily net assets in accordance with the following breakpoint schedule:

AVERAGE DAILY NET ASSETS	ANNUAL RATE
First $1 billion	0.65	%
Next $1 billion	0.60
Next $1 billion	0.55
Next $1 billion	0.50
Over $4 billion	0.45

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 19

Notes to financial statements (unaudited)continued

LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund, except for the management of cash and short-term instruments. For its services, LMPFA pays ClearBridge 70% of the net management fee it receives from the Fund.

During the six months ended April 30, 2008, the Fund was reimbursed for expenses in the amount of $888,364.

During the six months ended April 30, 2008, the Fund’s Class A and B shares had voluntary expense limitations in place of 1.25% and 2.00%, respectively. As a result of an expense limitation, the ratio of expenses, other than interest, brokerage, taxes and extraordinary expenses, to average net assets of Class 1 shares will not exceed the total net annual operating expenses of Class A shares less the 12b-1 differential of 0.25%.

Effective January 1, 2008, the manager is permitted to recapture amounts previously voluntarily forgone or reimbursed by the manager to the Fund during the same fiscal year if the Fund’s total annual operating expenses have fallen to a level below the voluntary fee waiver/reimbursement (“expense cap”) shown in the fee table of the Fund’s prospectus. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the Fund’s total annual operating expenses exceeding the expense cap.

Effective December 1, 2007 Legg Mason Investor Services, LLC (“LMIS”), a wholly-owned broker-dealer subsidiary of Legg Mason, serves as the Fund’s sole and exclusive distributor. Prior to December 1, 2007, Citigroup Global Markets Inc. (“CGM”) and LMIS served as co-distributors of the Fund.

There is a maximum initial sales charge of 5.75% for A shares. There is a contingent deferred sales charge (“CDSC”) of 5.00% on Class B shares, which applies if redemption occurs within one year from purchase payment. This CDSC declines thereafter by 1.00% per year until no CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of Class A shares, equal or exceed $1,000,000 in the aggregate. These purchases do not incur an initial sales charge.

20 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

For the six months ended April 30, 2008, LMIS and its affiliates received sales charges of approximately $206,000 on sales of the Fund’s Class A shares. In addition, for the six months ended April 30, 2008, CDSCs paid to LMIS and its affiliates were approximately:

	CLASS B		CLASS C
CDSCs	$	7,000	$	0	*

* Amount represents less than $1,000.

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

3. Investments

During the six months ended April 30, 2008, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:

Purchases	$	300,415,512
Sales		512,706,423

At April 30, 2008, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation	$	516,516,029
Gross unrealized depreciation		(76,288,314	)
Net unrealized appreciation	$	440,227,715

4. Class specific expenses

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

For the six months ended April 30, 2008, class specific expenses were as follows:

	DISTRIBUTION FEES		TRANSFER AGENT FEES			SHAREHOLDER REPORTS EXPENSES
Class 1		—	$	2,097,715		$	52,821
Class A	$	543,587		1,508,615			24,560
Class B		961,291		509,295			15,097
Class C		53,612		2,087			204
Class I†		—		0	*		0	*
Total	$	1,558,490	$	4,117,712		$	92,682

† For the period March 5, 2008 (inception date) to April 30, 2008.

* Amount represents less than $1.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 21

Notes to financial statements (unaudited)continued

5. Distributions to shareholders by class

	SIX MONTHS ENDED APRIL 30, 2008		YEAR ENDED OCTOBER 31, 2007
Net Investment Income
Class 1	$	19,481,055	$	40,145,520
Class A		3,955,326		7,110,159
Class B		1,111,101		2,441,239
Class C		74,053		141,296
Class I†		3		—
Total	$	24,621,538	$	49,838,214
Net Realized Gains
Class 1	$	73,774,675	$	70,638,972
Class A		17,624,390		14,181,902
Class B		8,734,181		9,455,944
Class C		445,724		413,075
Class I†		—		—
Total	$	100,578,970	$	94,689,893

† For the period March 5, 2008 (inception date) to April 30, 2008.

6. Shares of beneficial interest

At April 30, 2008, the Fund had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share. The Fund has the ability to issue multiple classes of shares. Each share of a class represents an identical interest and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.

Transactions in shares of each class were as follows:

	SIX MONTHS ENDED APRIL 30, 2008					YEAR ENDED OCTOBER 31, 2007
	SHARES		AMOUNT			SHARES		AMOUNT
Class 1
Shares sold	—			—		2,085,892		$	39,188,799
Shares issued on reinvestment	5,052,115		$	93,264,188		6,053,358			110,785,318
Shares repurchased	(7,102,839	)		(125,941,471	)	(15,691,012	)		(296,499,467	)
Net decrease	(2,050,724	)	$	(32,677,283	)	(7,551,762	)	$	(146,525,350	)
Class A
Shares sold	3,304,113		$	56,648,952		4,663,881		$	85,813,093
Shares issued on reinvestment	1,194,163			21,459,294		1,188,822			21,178,790
Shares repurchased	(2,242,537	)		(38,606,772	)	(3,769,140	)		(69,342,727	)
Net increase	2,255,739		$	39,501,474		2,083,563		$	37,649,156

22 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

	SIX MONTHS ENDED APRIL 30, 2008					YEAR ENDED OCTOBER 31, 2007
	SHARES		AMOUNT			SHARES		AMOUNT
Class B
Shares sold	523,666		$	8,433,466		1,192,259		$	20,548,198
Shares issued on reinvestment	581,320			9,812,478		711,225			11,829,163
Shares repurchased	(2,234,404	)		(35,856,549	)	(4,423,478	)		(76,399,960	)
Net decrease	(1,129,418	)	$	(17,610,605	)	(2,519,994	)	$	(44,022,599	)
Class C
Shares sold	37,313		$	638,750		123,800		$	2,256,078
Shares issued on reinvestment	25,776			463,825		28,004			496,133
Shares repurchased	(72,031	)		(1,244,731	)	(137,114	)		(2,525,334	)
Net increase (decrease)	(8,942	)	$	(142,156	)	14,690		$	226,877
Class I†
Shares sold	60		$	1,001		—			—
Shares issued on reinvestment	0	*		3		—			—
Net increase	60		$	1,004		—			—

† For the period March 5, 2008 (inception date) to April 30, 2008.

* Amount represents less than 1 share.

7. Regulatory matters

On May 31, 2005, the U.S. Securities and Exchange Commission (“SEC”) issued an order in connection with the settlement of an administrative proceeding against Smith Barney Fund Management LLC (“SBFM”), a wholly-owned subsidiary of Legg Mason and the then investment adviser or manager to the Fund, and CGM, a former distributor of the Fund, relating to the appointment of an affiliated transfer agent for the Smith Barney family of mutual funds, including the Fund (the “Affected Funds”).

The SEC order found that SBFM and CGM willfully violated Section 206(1) of the Investment Advisers Act of 1940, as amended, and the rules promulgated thereunder (the “Advisers Act”). Specifically, the order found that SBFM and CGM knowingly or recklessly failed to disclose to the boards of the Affected Funds in 1999 when proposing a new transfer agent arrangement with an affiliated transfer agent that: First Data Investors Services Group (“First Data”), the Affected Funds’ then-existing transfer agent, had offered to continue as transfer agent and do the same work for substantially less money than before; and that Citigroup Asset Management (“CAM”), the Citigroup business unit that, at the time, included the Affected Funds’ investment manager and other investment advisory companies, had entered into a side letter with First Data under which CAM agreed to recommend the appointment of First Data as subtransfer agent to the affiliated transfer agent in exchange, among other things, for a guarantee by First Data of specified amounts of asset management and investment banking fees to CAM and CGM. The order also found that SBFM and CGM willfully violated Section 206(2) of the Advisers Act

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 23

Notes to financial statements (unaudited)continued

by virtue of the omissions discussed above and other misrepresentations and omissions in the materials provided to the Affected Funds’ boards, including the failure to make clear that the affiliated transfer agent would earn a high profit for performing limited functions while First Data continued to perform almost all of the transfer agent functions, and the suggestion that the proposed arrangement was in the Affected Funds’ best interests and that no viable alternatives existed.

SBFM and CGM do not admit or deny any wrongdoing or liability. The settlement does not establish wrongdoing or liability for purposes of any other proceeding. The SEC censured SBFM and CGM and ordered them to cease and desist from violations of Sections 206(1) and 206(2) of the Advisers Act. The order required Citigroup to pay $208.1 million, including $109 million in disgorgement of profits, $19.1 million in interest, and a civil money penalty of $80 million. Approximately $24.4 million has already been paid to the Affected Funds, primarily through fee waivers. The remaining $183.7 million, including the penalty, has been paid to the U.S. Treasury and will be distributed pursuant to a plan submitted for the approval of the SEC. At this time, there is no certainty as to how the above-described proceeds of the settlement will be distributed, to whom such distributions will be made, the methodology by which such distributions will be allocated, and when such distributions will be made. The order also required that transfer agency fees received from the Affected Funds since December 1, 2004, less certain expenses, be placed in escrow and provided that a portion of such fees might be subsequently distributed in accordance with the terms of the order. On April 3, 2006, an aggregate amount of approximately $9 million held in escrow was distributed to the Affected Funds.

The order required SBFM to recommend a new transfer agent contract to the Affected Funds’ boards within 180 days of the entry of the order; if a Citigroup affiliate submitted a proposal to serve as transfer agent or sub-transfer agent, SBFM and CGM would have been required, at their expense, to engage an independent monitor to oversee a competitive bidding process. On November 21, 2005, and within the specified timeframe, the Affected Funds’ boards selected a new transfer agent for the Affected Funds. No Citigroup affiliate submitted a proposal to serve as transfer agent. Under the order, SBFM also must comply with an amended version of a vendor policy that Citigroup instituted in August 2004.

Although there can be no assurance, the manager does not believe that this matter will have a material adverse effect on the Affected Funds.

On December 1, 2005, Citigroup completed the sale of substantially all of its global asset management business, including SBFM, to Legg Mason.

24 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

8. Legal matters

Beginning in June 2004, class action lawsuits alleging violations of the federal securities laws were filed against CGM, a former distributor of the Fund and other affiliated funds (collectively, the “Funds”) and a number of its then affiliates, including SBFM and Salomon Brothers Asset Management Inc. (“SBAM”), which were then investment adviser or manager to certain of the Funds (the “Managers”), substantially all of the mutual funds then managed by the Managers (the “Defendant Funds”), and Board members of the Defendant Funds (collectively, the “Defendants”). The complaints alleged, among other things, that CGM created various undisclosed incentives for its brokers to sell Smith Barney and Salomon Brothers funds. In addition, according to the complaints, the Managers caused the Defendant Funds to pay excessive brokerage commissions to CGM for steering clients towards proprietary funds. The complaints also alleged that the Defendants breached their fiduciary duty to the Defendant Funds by improperly charging Rule 12b-1 fees and by drawing on fund assets to make undisclosed payments of soft dollars and excessive brokerage commissions. The complaints also alleged that the Defendant Funds failed to adequately disclose certain of the allegedly wrongful conduct. The complaints sought injunctive relief and compensatory and punitive damages, rescission of the Defendant Funds’ contracts with the Managers, recovery of all fees paid to the Managers pursuant to such contracts and an award of attorneys’ fees and litigation expenses.

On December 15, 2004, a consolidated amended complaint (the “Complaint”) was filed alleging substantially similar causes of action. On May 27, 2005, all of the Defendants filed motions to dismiss the Complaint. On July 26, 2006, the court issued a decision and order (1) finding that plaintiffs lacked standing to sue on behalf of the shareholders of the Funds in which none of the plaintiffs had invested and dismissing those Funds from the case (although stating that they could be brought back into the case if standing as to them could be established), and (2) other than one stayed claim, dismissing all of the causes of action against the remaining Defendants, with prejudice, except for the cause of action under Section 36(b) of the 1940 Act, which the court granted plaintiffs leave to repeal as a derivative claim.

On October 16, 2006, plaintiffs filed their Second Consolidated Amended Complaint (“Second Amended Complaint”) which alleges derivative claims on behalf of nine funds identified in the Second Amended Complaint, under Section 36(b) of the 1940 Act, against CAM, SBAM and SBFM as investment advisers to the identified funds, as well as CGM as a distributor for the identified funds (collectively, the “Second Amended Complaint Defendants”). The Fund was not identified in the Second Amended Complaint. The Second Amended Complaint alleges no claims against any of the funds or any of their Board Members. Under Section 36(b), the Second Amended Complaint alleges similar facts and seeks similar relief against the Second Amended Complaint Defendants as the Complaint.

Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report 25

Notes to financial statements (unaudited)continued

On December 3, 2007, the court granted the Defendants’ motion to dismiss, with prejudice. On January 2, 2008, the plaintiffs filed a notice of appeal to the Second Circuit Court of Appeals.

Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed in the future.

*  *  *

Beginning in August 2005, five class action lawsuits alleging violations of federal securities laws and state law were filed against CGM and SBFM, (collectively, the “Defendants”) based on the May 31, 2005 settlement order issued against the Defendants by the SEC as described in Note 7. The complaints seek injunctive relief and compensatory and punitive damages, removal of SBFM as the investment manager for the Smith Barney family of funds, rescission of the funds’ management and other contracts with SBFM, recovery of all fees paid to SBFM pursuant to such contracts, and an award of attorneys’ fees and litigation expenses. The five actions were subsequently consolidated, and a consolidated complaint was filed.

On September 26, 2007, the United States District Court for the Southern District of New York issued an order dismissing the consolidated complaint, and judgement was later entered. An appeal has been filed and is pending before the U.S. Court of Appeals for the Second Circuit.

9. Recent accounting pronouncements

On September 20, 2006, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management has determined that there is no material impact to the Fund’s valuation policies as a result of adopting FAS 157. The Fund will implement the disclosure requirements beginning with its January 31, 2009 Form N-Q.

*  *  *

In March 2008, FASB issued the Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”). FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial position, performance and cash flows. Management is currently evaluating the impact the adoption of FAS 161 will have on the Fund’s financial statements and related disclosures.

26 Legg Mason Partners Dividend Strategy Fund 2008 Semi-Annual Report

Board approval of management and subadvisory agreements (unaudited)

At a meeting of the Fund’s Board of Trustees, the Board considered the re-approval for an annual period of the Fund’s management agreement, pursuant to which Legg Mason Partners Fund Advisor, LLC (the “Manager”) provides the Fund with investment advisory and administrative services, and the Fund’s sub-advisory agreement, pursuant to which ClearBridge Advisors, LLC (the “Sub-Adviser”) provides day-to-day management of the Fund’s portfolio. (The management agreement and sub-advisory agreement are collectively referred to as the “Agreements.”) The Manager and the Sub-Adviser are wholly-owned subsidiaries of Legg Mason, Inc. The Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”)) of the Fund were assisted in their review by Fund counsel and independent legal counsel and met with independent legal counsel in executive sessions separate from representatives of the Manager and the Sub-Adviser. The Independent Trustees requested and received information from the Manager and the Sub-Adviser they deemed reasonably necessary for their review of the Agreements and the performance of the Manager and the Sub-Adviser. Included was information about the Manager, the Sub-Adviser and the Fund’s distributor (including any distributors affiliated with the Fund during the past two years), as well as the management, sub-advisory and distribution arrangements for the Fund and other funds overseen by the Board. This information was initially reviewed by a special committee of the Independent Trustees and then by the full Board.

In voting to approve the Agreements, the Independent Trustees considered whether the approval of the Agreements would be in the best interests of the Fund and its shareholders, an evaluation based on several factors including those discussed below.

Nature, extent and quality of the services provided to the fund under the management agreement and sub-advisory agreement

The Board received and considered information regarding the nature, extent and quality of services provided to the Fund by the Manager and the Sub-Adviser under the Management Agreement and Sub-Advisory Agreement, respectively, during the past two years. The Trustees also considered the Manager’s supervisory activities over the Sub-Adviser. In addition, the Independent Trustees received and considered other information regarding the administrative and other services rendered to the Fund and its shareholders by the Manager. The Board noted information received at regular meetings throughout the year related to the services rendered by the Manager in its management of the Fund’s affairs, including the management of cash and short-term instruments, and the Manager’s role in coordinating the activities of the Sub-Adviser and the Fund’s other service providers. The Board’s evaluation of the services provided by the Manager and the Sub-Adviser took into account the Board’s knowledge and familiarity gained as Board members of funds in the Legg Mason Partners fund complex, including the scope and quality of the investment management and other capabilities of the Manager

Legg Mason Partners Dividend Strategy Fund 27

Board approval of management and subadvisory agreements (unaudited) continued

and the Sub-Adviser and the quality of the Manager’s administrative and other services. The Board observed that the scope of services provided by the Manager had expanded over time as a result of regulatory and other developments, including maintaining and monitoring its own and the Fund’s expanded compliance programs. The Board also considered the Manager’s response to recent regulatory compliance issues affecting the Manager and the Legg Mason Partners fund complex. The Board reviewed information received from the Manager and the Fund’s Chief Compliance Officer regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended.

The Board reviewed the qualifications, backgrounds and responsibilities of the Fund’s senior personnel and the portfolio management team primarily responsible for the day-to-day portfolio management of the Fund. The Board considered the degree to which the Manager implemented organizational changes to improve investment results and the services provided to the Legg Mason Partners fund complex. The Board also considered, based on its knowledge of the Manager and the Manager’s affiliates, the financial resources available to the Manager’s parent organization, Legg Mason, Inc.

The Board also considered the division of responsibilities between the Manager and the Sub-Adviser and the oversight provided by the Manager. The Board also considered the Manager’s and the Sub-Adviser’s brokerage policies and practices, the standards applied in seeking best execution, the Manager’s policies and practices regarding soft dollars, and the existence of quality controls applicable to brokerage allocation procedures. In addition, management also reported to the Board on, among other things, its business plans, recent organizational changes, portfolio manager compensation plan and policy regarding portfolio managers’ ownership of fund shares.

The Board concluded that, overall, it was satisfied with the nature, extent and quality of services provided (and expected to be provided) under the respective Agreement by the Manager and the Sub-Adviser.

Fund performance

The Board received and reviewed performance information for the Fund and for all retail and institutional large-cap core funds (the “Performance Universe”) selected by Lipper, Inc. (“Lipper”), an independent provider of investment company data. The Board was provided with a description of the methodology Lipper used to determine the similarity of the Fund with the funds included in the Performance Universe. The Board members noted that they also had received and discussed with management information at periodic intervals comparing the Fund’s performance to that of its benchmark index. The information comparing the Fund’s performance to that of the Performance Universe was for the one-, three-, five- and ten-year periods ended June 30, 2007. The Fund performed below the median for the three-, five- and ten-year periods, but performed better than the median for the one-year period. The

28 Legg Mason Partners Dividend Strategy Fund

Board noted that the Fund’s one-year performance significantly improved from prior years’ performance. The Board also reviewed performance information provided by the Manager for periods ended September 2007, which showed the Fund’s performance continued to be competitive compared to the Lipper category average during the third quarter. The Board members then discussed with representatives of management, including the Chief Investment Officer for the Sub-Adviser, the portfolio management strategy of the Fund’s portfolio managers and the reasons for the Fund’s underperformance versus the Performance Universe. The Trustees noted that the portfolio managers assumed responsibility for the Fund’s investment portfolio in November 2004 and that since that time the Fund’s performance has been improving. The Trustees also noted that the Manager was committed to providing the resources necessary to assist the portfolio managers and improve Fund performance. Based on its review, the Board generally was satisfied with the Fund’s recent performance and management’s efforts to improve performance going forward. The Board determined to continue to evaluate the Fund’s performance and established a committee of Independent Trustees to review performance with the Manager and report to the full Board during periods between Board meetings.

Management fees and expense ratios

The Board reviewed and considered, the contractual management fee (the “Contractual Management Fee”) payable by the Fund to the Manager in light of the nature, extent and quality of the management and sub-advisory services provided by the Manager and the Sub-Adviser, respectively. The Board noted that the Manager, and not the Fund, pays the sub-advisory fee to the Sub-Adviser and, accordingly, that the retention of the Sub-Adviser does not increase the fees and expenses incurred by the Fund. In addition, because of the Manager’s fee waiver and/or expense reimbursement arrangement in effect for the Fund, which partially reduced the management fee paid to the Manager, the Board also reviewed and considered the actual management fee rate (after taking into account waivers and reimbursements) (“Actual Management Fee”). At the request of the Independent Trustees, the Manager agreed not to discontinue its fee waiver and/or expense reimbursement for the Fund without prior Board approval.

The Board also reviewed information regarding the fees the Manager and the Sub-Adviser charged any of their U.S. clients investing primarily in an asset class similar to that of the Fund including, where applicable, separate accounts. The Manager reviewed with the Board the significant differences in the scope of services provided to the Fund and to such other clients, noting that the Fund is provided with regulatory compliance and administrative services, office facilities and Fund officers (including the Fund’s chief financial, chief legal and chief compliance officers), and that the Manager coordinates and oversees the provision of services to the Fund by other fund service providers, including the Sub-Adviser. The Board considered the fee comparisons in light of the scope of services required to manage these different types of accounts.

Legg Mason Partners Dividend Strategy Fund 29

Board approval of management and subadvisory agreements (unaudited) continued

The Board received an analysis of complex-wide management fees provided by the Manager, which, among other things, set out a framework of fees based on asset classes. Management also discussed with the Board the Fund’s distribution arrangements, including how amounts received by the Fund’s distributors are expended, and the fees received and expenses incurred in connection with such arrangements by affiliates of the Manager.

Additionally, the Board received and considered information comparing the Fund’s Contractual Management Fee and Actual Management Fee and the Fund’s overall expense ratio with those of a group of 15 retail front-end load large-cap core funds selected by Lipper as comparable to the Fund (the “Expense Group”), and a broader group of funds selected by Lipper consisting of all retail front-end load large-cap core funds (“Expense Universe”). This information showed that, while the Fund’s Actual Management Fee was lower than the median of management fees paid by the other funds in the Expense Group and Expense Universe, its Contractual Management Fee was higher than the median of management fees paid by the other funds in the Expense Group and Expense Universe, and that the Fund’s actual total expense ratio also was higher than the median of the total expense ratios of the funds in the Expense Group and Expense Universe. The Board noted that the Fund had higher transfer agency fees than the other funds in the Expense Group and Expense Universe, which caused the Fund’s actual total expense ratio to be higher than the median of the total expense ratios of the funds in the Expense Group and Expense Universe, and that management was undertaking efforts to reduce such fees.

Manager profitability

The Board received and considered a profitability analysis of the Manager and its affiliates in providing services to the Fund. The Board also received profitability information with respect to the Legg Mason Partners fund complex as a whole. In addition, the Board received information with respect to the Manager’s allocation methodologies used in preparing this profitability data as well as a report from an outside consultant that had reviewed the Manager’s methodology. The Board also noted the profitability percentage ranges determined by appropriate court cases to be reasonable given the services rendered to investment companies. The Board determined that the Manager’s profitability was not excessive in light of the nature, extent and quality of the services provided to the Fund.

Economies of scale

The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Fund as the Fund’s assets grow, whether the Fund has appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered whether economies of scale in the provision of services to the Fund were being passed along to the shareholders.

30 Legg Mason Partners Dividend Strategy Fund

The Board noted that the Manager instituted breakpoints in the Fund’s Contractual Management Fee, reflecting the potential for reducing the Contractual Management Fee as the Fund’s assets grow. The Board noted that the Fund’s assets exceeded the specified asset level at which one or more breakpoints to its Contractual Management Fee are triggered. Accordingly, the Fund and its shareholders realized economies of scale because the total expense ratio of the Fund was lower than it would have been if no breakpoints were in place. The Board also considered whether the breakpoint fee structure was a reasonable means of sharing any economies of scale, taking into consideration other efficiencies that might accrue as the Fund’s assets increase. The Board also noted that as the Fund’s assets have increased over time, the Fund and its shareholders have realized economies of scale as certain expenses, such as fixed fund fees, became a smaller percentage of overall assets. The Board noted that it appeared that the benefits of any economies of scale also have been appropriately shared with shareholders through increased investment in fund management and administration resources.

Taking all of the above into consideration, the Board determined that the management fee was reasonable in light of the comparative performance and expense information and the nature, extent and quality of the services provided to the Fund under the Agreements.

Other benefits to the manager

The Board considered other benefits received by the Manager and its affiliates, including the Sub-Adviser, as a result of the Manager’s relationship with the Fund, including the opportunity to offer additional products and services to Fund shareholders.

In light of the costs of providing investment management and other services to the Fund and the Manager’s ongoing commitment to the Fund, the profits and other ancillary benefits that the Manager and its affiliates received were considered reasonable.

Based on their discussions and considerations, including those described above, the Trustees approved the Management Agreement and the Sub-Advisory Agreement to continue for another year.

No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the Management Agreement and the Sub-Advisory Agreement.

Legg Mason Partners Dividend Strategy Fund 31

Legg Mason Partners Dividend Strategy Fund

Trustees   Paul R. Ades Andrew L. Breech Dwight B. Crane Robert M. Frayn, Jr. R. Jay Gerken, CFA
Chairman Frank G. Hubbard Howard J. Johnson David E. Maryatt Jerome H. Miller Ken Miller John J. Murphy Thomas F. Schlafly Jerry A. Viscione   Investment manager   Legg Mason Partners Fund Advisor, LLC   Subadviser   ClearBridge Advisors, LLC Distributor   Legg Mason Investor Services, LLC   Custodian   State Street Bank and Trust Company   Transfer agent   PFPC Inc. 4400 Computer Drive Westborough, Massachusetts 01581   Independent registered public accounting firm   KPMG LLP 345 Park Avenue New York, New York 10154

Legg Mason Partners Dividend Strategy Fund

The Fund is a separate investment series of the Legg Mason Partners Equity Trust, a Maryland business trust.

LEGG MASON PARTNERS DIVIDEND STRATEGY FUND

Legg Mason Partners Funds

55 Water Street

New York, New York 10041

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q from the Fund, shareholders can call Legg Mason Partners Shareholder Services at 1-800-451-2010.

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 1-800-451-2010, (2) on the Fund’s website at www.leggmason.com/individualinvestors and (3) on the SEC’s website at www.sec.gov.

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

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

www.leggmason.com/individualinvestors

^© 2008 Legg Mason Investor Services, LLC

Member FINRA, SIPC

BUILT TO WIN^SM

At Legg Mason, we’ve assembled a collection of experienced investment management firms and empowered each of them with the tools, the resources and, most importantly, the independence to pursue the strategies they know best.

• Each was purposefully chosen for their commitment to investment excellence.

• Each is focused on specific investment styles and asset classes.

• Each exhibits thought leadership in their chosen area of focus.

Together, we’ve built a powerful portfolio of solutions for financial advisors and their clients. And it has made us a world leader in money management.*

* Ranked ninth-largest investment manager in 2007, based on 12/31/06 assets under management, according to Pensions & Investments, May 2007.

www.leggmason.com/individualinvestors

©2008 Legg Mason Investor Services, LLC Member FINRA, SIPC

FD02328 6/08 SR08-584

NOT PART OF THE SEMI-ANNUAL REPORT

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTING 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. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

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

Not applicable.

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

Not applicable.

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

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) (1) Not applicable.

Exhibit 99.CODE ETH

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

Exhibit 99.CERT

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

Exhibit 99.906CERT

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.

Legg Mason Partners Equity Trust

By:	/s/ R. Jay Gerken
	(R. Jay Gerken) Chief Executive Officer of
	Legg Mason Partners Equity Trust
Date:	June 26, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ R. Jay Gerken
	(R. Jay Gerken)
	Chief Executive Officer of
	Legg Mason Partners Equity Trust
Date:	June 26, 2008

By:	/s/ Kaprel Ozsolak
	(Kaprel Ozsolak)
	Chief Financial Officer of
	Legg Mason Partners Equity Trust
Date:	June 26, 2008