N-Q 1 d754384dnq.htm QS BATTERYMARCH S&P 500 INDEX FUND <![CDATA[QS Batterymarch S&P 500 Index Fund]]>

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-06444

Legg Mason Partners Equity Trust

(Exact name of registrant as specified in charter)

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

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

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

Date of fiscal year end: September 30

Date of reporting period: June 30, 2014

 

 

 


 

ITEM 1. SCHEDULE OF INVESTMENTS


LEGG MASON PARTNERS EQUITY TRUST

QS BATTERYMARCH S&P 500 INDEX FUND

FORM N-Q

JUNE 30, 2014


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  
COMMON STOCKS - 97.8%      
CONSUMER DISCRETIONARY - 11.6%      

Auto Components - 0.4%

     

BorgWarner Inc.

     3,215       $ 209,586   

Delphi Automotive PLC

     3,900         268,086   

Goodyear Tire & Rubber Co.

     3,499         97,202   

Johnson Controls Inc.

     9,368         467,744   
     

 

 

 

Total Auto Components

        1,042,618   
     

 

 

 

Automobiles - 0.7%

     

Ford Motor Co.

     55,635         959,148   

General Motors Co.

     18,400         667,920   

Harley-Davidson Inc.

     3,105         216,884   
     

 

 

 

Total Automobiles

        1,843,952   
     

 

 

 

Distributors - 0.1%

     

Genuine Parts Co.

     2,169         190,438   
     

 

 

 

Diversified Consumer Services - 0.1%

     

Graham Holdings Co., Class B

     66         47,395   

H&R Block Inc.

     3,868         129,656   
     

 

 

 

Total Diversified Consumer Services

        177,051   
     

 

 

 

Hotels, Restaurants & Leisure - 1.7%

     

Carnival Corp.

     6,183         232,790   

Chipotle Mexican Grill Inc.

     438         259,519

Darden Restaurants Inc.

     1,851         85,646   

Marriott International Inc., Class A Shares

     3,119         199,928   

McDonald’s Corp.

     13,965         1,406,834   

Starbucks Corp.

     10,663         825,103   

Starwood Hotels & Resorts Worldwide Inc.

     2,707         218,780   

Wyndham Worldwide Corp.

     1,807         136,826   

Wynn Resorts Ltd.

     1,143         237,241   

Yum! Brands Inc.

     6,248         507,337   
     

 

 

 

Total Hotels, Restaurants & Leisure

        4,110,004   
     

 

 

 

Household Durables - 0.4%

     

D.R. Horton Inc.

     4,017         98,738   

Garmin Ltd.

     1,734         105,601   

Harman International Industries Inc.

     957         102,810   

Leggett & Platt Inc.

     1,959         67,155   

Lennar Corp., Class A Shares

     2,480         104,110   

Mohawk Industries Inc.

     862         119,249

Newell Rubbermaid Inc.

     3,935         121,946   

PulteGroup Inc.

     4,842         97,615   

Whirlpool Corp.

     1,093         152,167   
     

 

 

 

Total Household Durables

        969,391   
     

 

 

 

Internet & Catalog Retail - 1.3%

     

Amazon.com Inc.

     5,248         1,704,446

Expedia Inc.

     1,443         113,651   

Netflix Inc.

     844         371,866

Priceline Group Inc.

     735         884,205

TripAdvisor Inc.

     1,646         178,854
     

 

 

 

Total Internet & Catalog Retail

        3,253,022   
     

 

 

 

Leisure Products - 0.1%

     

Hasbro Inc.

     1,644         87,214   

Mattel Inc.

     4,801         187,095   
     

 

 

 

Total Leisure Products

        274,309   
     

 

 

 

Media - 3.5%

     

Cablevision Systems Corp., New York Group, Class A Shares

     3,020         53,303   

CBS Corp., Class B Shares

     6,885         427,834   

Comcast Corp., Class A Shares

     36,770         1,973,814   

 

See Notes to Schedule of Investments.

 

1


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Media - 3.5% (continued)

     

DIRECTV

     6,684       $ 568,207

Discovery Communications Inc., Class A Shares

     3,090         229,525

Gannett Co. Inc.

     3,207         100,411   

Interpublic Group of Cos. Inc.

     5,982         116,709   

News Corp., Class A Shares

     7,025         126,029

Omnicom Group Inc.

     3,642         259,383   

Scripps Networks Interactive, Class A Shares

     1,553         126,010   

Time Warner Cable Inc.

     3,884         572,113   

Time Warner Inc.

     12,593         884,658   

Twenty-First Century Fox Inc.

     27,368         961,985   

Viacom Inc., Class B Shares

     5,657         490,632   

Walt Disney Co.

     22,986         1,970,820   
     

 

 

 

Total Media

        8,861,433   
     

 

 

 

Multiline Retail - 0.6%

     

Dollar General Corp.

     4,156         238,388

Dollar Tree Inc.

     2,935         159,840

Family Dollar Stores Inc.

     1,348         89,157   

Kohl’s Corp.

     2,839         149,558   

Macy’s Inc.

     5,198         301,588   

Nordstrom Inc.

     2,019         137,151   

Target Corp.

     8,916         516,682   
     

 

 

 

Total Multiline Retail

        1,592,364   
     

 

 

 

Specialty Retail - 1.9%

     

AutoNation Inc.

     890         53,115

AutoZone Inc.

     476         255,250

Bed Bath & Beyond Inc.

     3,004         172,370

Best Buy Co. Inc.

     3,856         119,575   

CarMax Inc.

     3,149         163,779

GameStop Corp., Class A Shares

     1,634         66,128   

Gap Inc.

     3,737         155,347   

Home Depot Inc.

     18,566         1,503,103   

L Brands Inc.

     3,440         201,790   

Lowe’s Cos. Inc.

     13,354         640,858   

O’Reilly Automotive Inc.

     1,501         226,051

PetSmart Inc.

     1,464         87,547   

Ross Stores Inc.

     3,032         200,506   

Staples Inc.

     9,180         99,511   

Tiffany & Co.

     1,554         155,789   

TJX Cos. Inc.

     10,033         533,254   

Tractor Supply Co.

     1,969         118,928   

Urban Outfitters Inc.

     1,538         52,077
     

 

 

 

Total Specialty Retail

        4,804,978   
     

 

 

 

Textiles, Apparel & Luxury Goods - 0.8%

     

Coach Inc.

     3,915         133,854   

Fossil Group Inc.

     679         70,969

Michael Kors Holdings Ltd.

     2,500         221,625

NIKE Inc., Class B Shares

     10,493         813,732   

PVH Corp.

     1,151         134,207   

Ralph Lauren Corp.

     834         134,015   

Under Armour Inc., Class A Shares

     1,900         113,031

V.F. Corp.

     4,970         313,110   
     

 

 

 

Total Textiles, Apparel & Luxury Goods

        1,934,543   
     

 

 

 

TOTAL CONSUMER DISCRETIONARY

        29,054,103   
     

 

 

 
CONSUMER STAPLES - 9.3%      

Beverages - 2.1%

     

Brown-Forman Corp., Class B Shares

     2,287         215,367   

Coca-Cola Co.

     53,452         2,264,227   

Coca-Cola Enterprises Inc.

     3,352         160,159   

Constellation Brands Inc., Class A Shares

     2,360         207,987

Dr. Pepper Snapple Group Inc.

     2,747         160,919   

 

See Notes to Schedule of Investments.

 

2


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Beverages - 2.1% (continued)

     

Molson Coors Brewing Co., Class B Shares

     2,234       $ 165,673   

Monster Beverage Corp.

     1,900         134,957

PepsiCo Inc.

     21,477         1,918,755   
     

 

 

 

Total Beverages

        5,228,044   
     

 

 

 

Food & Staples Retailing - 2.2%

     

Costco Wholesale Corp.

     6,203         714,337   

CVS Caremark Corp.

     15,981         1,204,488   

Kroger Co.

     7,286         360,147   

Safeway Inc.

     3,249         111,571   

Sysco Corp.

     8,252         309,037   

Wal-Mart Stores Inc.

     21,923         1,645,760   

Walgreen Co.

     12,332         914,171   

Whole Foods Market Inc.

     5,276         203,812   
     

 

 

 

Total Food & Staples Retailing

        5,463,323   
     

 

 

 

Food Products - 1.6%

     

Archer-Daniels-Midland Co.

     9,288         409,694   

Campbell Soup Co.

     2,523         115,579   

ConAgra Foods Inc.

     5,930         176,002   

General Mills Inc.

     8,811         462,930   

Hershey Co.

     2,116         206,035   

Hormel Foods Corp.

     1,899         93,716   

J.M. Smucker Co.

     1,463         155,912   

Kellogg Co.

     3,623         238,031   

Keurig Green Mountain Inc.

     1,822         227,039   

Kraft Foods Group Inc.

     8,351         500,642   

McCormick & Co. Inc., Non Voting Shares

     1,850         132,441   

Mead Johnson Nutrition Co., Class A Shares

     2,761         257,242   

Mondelez International Inc., Class A Shares

     22,655         852,055   

Tyson Foods Inc., Class A Shares

     3,792         142,352   
     

 

 

 

Total Food Products

        3,969,670   
     

 

 

 

Household Products - 1.8%

     

Clorox Co.

     1,833         167,536   

Colgate-Palmolive Co.

     12,315         839,637   

Kimberly-Clark Corp.

     5,353         595,361   

Procter & Gamble Co.

     38,250         3,006,067   
     

 

 

 

Total Household Products

        4,608,601   
     

 

 

 

Personal Products - 0.1%

     

Avon Products Inc.

     6,122         89,442   

Estee Lauder Cos. Inc., Class A Shares

     3,606         267,782   
     

 

 

 

Total Personal Products

        357,224   
     

 

 

 

Tobacco - 1.5%

     

Altria Group Inc.

     28,113         1,179,059   

Lorillard Inc.

     5,101         311,008   

Philip Morris International Inc.

     22,362         1,885,340   

Reynolds American Inc.

     4,393         265,118   
     

 

 

 

Total Tobacco

        3,640,525   
     

 

 

 

TOTAL CONSUMER STAPLES

        23,267,387   
     

 

 

 
ENERGY - 10.6%      

Energy Equipment & Services - 2.1%

     

Baker Hughes Inc.

     6,167         459,133   

Cameron International Corp.

     3,058         207,057

Diamond Offshore Drilling Inc.

     981         48,687   

Ensco PLC, Class A Shares

     3,300         183,381   

FMC Technologies Inc.

     3,330         203,363

Halliburton Co.

     11,504         816,899   

Helmerich & Payne Inc.

     1,517         176,139   

Nabors Industries Ltd.

     3,681         108,111   

National-Oilwell Varco Inc.

     6,045         497,806   

Noble Corp. PLC

     3,585         120,312   

 

See Notes to Schedule of Investments.

 

3


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Energy Equipment & Services - 2.1% (continued)

     

Rowan Cos. PLC, Class A Shares

     1,753       $ 55,973   

Schlumberger Ltd.

     18,443         2,175,352   

Transocean Ltd.

     4,788         215,604   
     

 

 

 

Total Energy Equipment & Services

        5,267,817   
     

 

 

 

Oil, Gas & Consumable Fuels - 8.5%

  

Anadarko Petroleum Corp.

     7,106         777,894   

Apache Corp.

     5,268         530,066   

Cabot Oil & Gas Corp.

     5,957         203,372   

Chesapeake Energy Corp.

     7,142         221,973   

Chevron Corp.

     26,433         3,450,828   

Cimarex Energy Co.

     1,200         172,152   

ConocoPhillips

     17,296         1,482,786   

CONSOL Energy Inc.

     3,233         148,944   

Denbury Resources Inc.

     5,022         92,706   

Devon Energy Corp.

     5,403         428,998   

EOG Resources Inc.

     7,706         900,523   

EQT Corp.

     2,129         227,590   

Exxon Mobil Corp.

     60,060         6,046,841   

Hess Corp.

     3,855         381,221   

Kinder Morgan Inc.

     9,457         342,911   

Marathon Oil Corp.

     8,832         352,573   

Marathon Petroleum Corp.

     4,184         326,645   

Murphy Oil Corp.

     2,429         161,480   

Newfield Exploration Co.

     1,923         84,997

Noble Energy Inc.

     5,078         393,342   

Occidental Petroleum Corp.

     11,211         1,150,585   

ONEOK Inc.

     2,931         199,542   

Peabody Energy Corp.

     3,827         62,571   

Phillips 66

     8,248         663,387   

Pioneer Natural Resources Co.

     2,016         463,297   

QEP Resources Inc.

     2,436         84,042   

Range Resources Corp.

     2,309         200,768   

Southwestern Energy Co.

     4,979         226,495

Spectra Energy Corp.

     9,454         401,606   

Tesoro Corp.

     1,859         109,068   

Valero Energy Corp.

     7,512         376,351   

Williams Cos. Inc.

     9,655         562,018   
     

 

 

 

Total Oil, Gas & Consumable Fuels

        21,227,572   
     

 

 

 

TOTAL ENERGY

  

     26,495,389   
     

 

 

 
FINANCIALS - 15.8%      

Banks - 5.8%

  

Bank of America Corp.

     149,085         2,291,436   

BB&T Corp.

     10,029         395,443   

Citigroup Inc.

     42,836         2,017,576   

Comerica Inc.

     2,568         128,811   

Fifth Third Bancorp

     12,011         256,435   

Huntington Bancshares Inc.

     11,725         111,856   

JPMorgan Chase & Co.

     53,421         3,078,118   

KeyCorp

     12,547         179,799   

M&T Bank Corp.

     1,849         229,368   

PNC Financial Services Group Inc.

     7,534         670,903   

Regions Financial Corp.

     20,025         212,665   

SunTrust Banks Inc.

     7,543         302,173   

U.S. Bancorp

     25,711         1,113,801   

Wells Fargo & Co.

     67,548         3,550,323   

Zions Bancorporation

     2,608         76,858   
     

 

 

 

Total Banks

        14,615,565   
     

 

 

 

Capital Markets - 2.1%

  

Affiliated Managers Group Inc.

     800         164,320

Ameriprise Financial Inc.

     2,692         323,040   

Bank of New York Mellon Corp.

     16,012         600,130   

 

See Notes to Schedule of Investments.

 

4


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Capital Markets - 2.1% (continued)

  

BlackRock Inc.

     1,772       $ 566,331   

Charles Schwab Corp.

     16,487         443,995   

E*TRADE Financial Corp.

     4,052         86,145

Franklin Resources Inc.

     5,695         329,399   

Goldman Sachs Group Inc.

     5,940         994,594   

Invesco Ltd.

     6,174         233,068   

Legg Mason Inc.

     1,478         75,836 (a) 

Morgan Stanley

     19,788         639,746   

Northern Trust Corp.

     3,147         202,069   

State Street Corp.

     6,089         409,546   

T. Rowe Price Group Inc.

     3,697         312,064   
     

 

 

 

Total Capital Markets

        5,380,283   
     

 

 

 

Consumer Finance - 1.0%

     

American Express Co.

     12,892         1,223,064   

Capital One Financial Corp.

     8,080         667,408   

Discover Financial Services

     6,666         413,159   

Navient Corp.

     6,048         107,110   
     

 

 

 

Total Consumer Finance

        2,410,741   
     

 

 

 

Diversified Financial Services - 1.9%

     

Berkshire Hathaway Inc., Class B Shares

     25,395         3,213,991

CME Group Inc.

     4,452         315,870   

Intercontinental Exchange Inc.

     1,621         306,207   

Leucadia National Corp.

     4,418         115,840   

McGraw Hill Financial Inc.

     3,779         313,770   

Moody’s Corp.

     2,653         232,562   

Nasdaq OMX Group Inc.

     1,649         63,684   

Principal Financial Group Inc.

     3,877         195,711   
     

 

 

 

Total Diversified Financial Services

        4,757,635   
     

 

 

 

Insurance - 2.7%

     

ACE Ltd.

     4,750         492,575   

AFLAC Inc.

     6,431         400,330   

Allstate Corp.

     6,307         370,347   

American International Group Inc.

     19,754         1,078,173   

Aon PLC

     4,228         380,901   

Assurant Inc.

     1,010         66,206   

Chubb Corp.

     3,465         319,369   

Cincinnati Financial Corp.

     2,076         99,731   

Genworth Financial Inc., Class A Shares

     6,988         121,591

Hartford Financial Services Group Inc.

     6,296         225,460   

Lincoln National Corp.

     3,720         191,357   

Loews Corp.

     4,318         190,035   

Marsh & McLennan Cos. Inc.

     7,736         400,880   

MetLife Inc.

     15,849         880,570   

Progressive Corp.

     7,726         195,931   

Prudential Financial Inc.

     6,531         579,757   

Torchmark Corp.

     1,249         102,318   

Travelers Cos. Inc.

     4,949         465,552   

Unum Group

     3,660         127,222   

XL Group PLC

     3,895         127,483   
     

 

 

 

Total Insurance

        6,815,788   
     

 

 

 

Real Estate Investment Trusts (REITs) - 2.1%

     

American Tower Corp.

     5,573         501,458   

Apartment Investment and Management Co., Class A Shares

     2,061         66,508   

AvalonBay Communities Inc.

     1,716         243,998   

Boston Properties Inc.

     2,159         255,151   

Crown Castle International Corp.

     4,712         349,913   

Equity Residential

     4,737         298,431   

Essex Property Trust Inc.

     892         164,940   

General Growth Properties Inc.

     7,300         171,988   

HCP Inc.

     6,449         266,860   

Health Care REIT Inc.

     4,091         256,383   

 

See Notes to Schedule of Investments.

 

5


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Real Estate Investment Trusts (REITs) - 2.1% (continued)

     

Host Hotels & Resorts Inc.

     10,675       $ 234,957   

Kimco Realty Corp.

     5,780         132,824   

Macerich Co.

     1,983         132,365   

Plum Creek Timber Co. Inc.

     2,499         112,705   

Prologis Inc.

     7,048         289,602   

Public Storage Inc.

     2,039         349,383   

Simon Property Group Inc.

     4,433         737,119   

Ventas Inc.

     4,151         266,079   

Vornado Realty Trust

     2,457         262,236   

Weyerhaeuser Co.

     8,247         272,893   
     

 

 

 

Total Real Estate Investment Trusts (REITs)

        5,365,793   
     

 

 

 

Real Estate Management & Development - 0.1%

  

CBRE Group Inc., Class A Shares

     3,934         126,045
     

 

 

 

Thrifts & Mortgage Finance - 0.1%

  

Hudson City Bancorp Inc.

     6,709         65,950   

People’s United Financial Inc.

     4,395         66,672   
     

 

 

 

Total Thrifts & Mortgage Finance

        132,622   
     

 

 

 

TOTAL FINANCIALS

  

     39,604,472   
     

 

 

 
HEALTH CARE - 13.0%      

Biotechnology - 2.5%

  

Alexion Pharmaceuticals Inc.

     2,790         435,938

Amgen Inc.

     10,650         1,260,640   

Biogen Idec Inc.

     3,335         1,051,559

Celgene Corp.

     11,456         983,841

Gilead Sciences Inc.

     21,700         1,799,147

Regeneron Pharmaceuticals Inc.

     1,111         313,824

Vertex Pharmaceuticals Inc.

     3,326         314,906
     

 

 

 

Total Biotechnology

        6,159,855   
     

 

 

 

Health Care Equipment & Supplies - 2.1%

  

Abbott Laboratories

     20,168         824,871   

Baxter International Inc.

     7,662         553,963   

Becton, Dickinson & Co.

     2,723         322,131   

Boston Scientific Corp.

     18,681         238,556

C.R. Bard Inc.

     1,095         156,596   

CareFusion Corp.

     2,859         126,797

Covidien PLC

     6,400         577,152   

DENTSPLY International Inc.

     2,000         94,700   

Edwards Lifesciences Corp.

     1,513         129,876

Hospira Inc.

     2,348         120,617

Intuitive Surgical Inc.

     538         221,548

Medtronic Inc.

     14,118         900,164   

St. Jude Medical Inc.

     4,003         277,208   

Stryker Corp.

     4,158         350,603   

Varian Medical Systems Inc.

     1,461         121,467

Zimmer Holdings Inc.

     2,389         248,121   
     

 

 

 

Total Health Care Equipment & Supplies

        5,264,370   
     

 

 

 

Health Care Providers & Services - 2.0%

  

Aetna Inc.

     5,117         414,886   

AmerisourceBergen Corp.

     3,233         234,910   

Cardinal Health Inc.

     4,837         331,625   

CIGNA Corp.

     3,860         355,004   

DaVita HealthCare Partners Inc.

     2,497         180,583

Express Scripts Holding Co.

     10,947         758,955

Humana Inc.

     2,173         277,536   

Laboratory Corporation of America Holdings

     1,203         123,187

McKesson Corp.

     3,247         604,624   

Patterson Cos. Inc.

     1,158         45,753   

Quest Diagnostics Inc.

     2,036         119,493   

Tenet Healthcare Corp.

     1,368         64,214

UnitedHealth Group Inc.

     13,255         1,083,596   

 

See Notes to Schedule of Investments.

 

6


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

SECURITY

   SHARES      VALUE  

Health Care Providers & Services - 2.0% (continued)

  

WellPoint Inc.

     3,985       $ 428,826   
     

 

 

 

Total Health Care Providers & Services

        5,023,192   
     

 

 

 

Health Care Technology - 0.1%

  

Cerner Corp.

     4,173         215,243
     

 

 

 

Life Sciences Tools & Services - 0.4%

  

Agilent Technologies Inc.

     4,704         270,198   

PerkinElmer Inc.

     1,592         74,569   

Thermo Fisher Scientific Inc.

     5,527         652,186   

Waters Corp.

     1,201         125,432
     

 

 

 

Total Life Sciences Tools & Services

        1,122,385   
     

 

 

 

Pharmaceuticals - 5.9%

  

AbbVie Inc.

     22,343         1,261,039   

Actavis PLC

     2,390         533,090

Allergan Inc.

     4,210         712,416   

Bristol-Myers Squibb Co.

     23,192         1,125,044   

Eli Lilly & Co.

     13,900         864,163   

Forest Laboratories Inc.

     3,364         333,036

Johnson & Johnson

     39,907         4,175,070   

Merck & Co. Inc.

     40,984         2,370,925   

Mylan Inc.

     5,247         270,535

Perrigo Co. PLC

     1,887         275,049   

Pfizer Inc.

     90,044         2,672,506   

Zoetis Inc.

     7,000         225,890   
     

 

 

 

Total Pharmaceuticals

        14,818,763   
     

 

 

 

TOTAL HEALTH CARE

  

     32,603,808   
     

 

 

 
INDUSTRIALS - 10.2%      

Aerospace & Defense - 2.0%

  

Boeing Co.

     9,148         1,163,900   

General Dynamics Corp.

     4,587         534,615   

Honeywell International Inc.

     11,062         1,028,213   

L-3 Communications Holdings Inc.

     1,211         146,228   

Lockheed Martin Corp.

     3,809         612,221   

Northrop Grumman Corp.

     3,058         365,828   

Precision Castparts Corp.

     2,049         517,168   

Raytheon Co.

     4,437         409,313   

Rockwell Collins Inc.

     1,907         149,013   
     

 

 

 

Total Aerospace & Defense

        4,926,499   
     

 

 

 

Air Freight & Logistics - 0.7%

  

C.H. Robinson Worldwide Inc.

     2,094         133,576   

Expeditors International of Washington Inc.

     2,859         126,253   

FedEx Corp.

     3,741         566,313   

Ryder System Inc.

     753         66,332   

United Parcel Service Inc., Class B Shares

     9,425         967,571   
     

 

 

 

Total Air Freight & Logistics

        1,860,045   
     

 

 

 

Airlines - 0.3%

  

Delta Air Lines Inc.

     11,982         463,943   

Southwest Airlines Co.

     9,903         265,995   
     

 

 

 

Total Airlines

        729,938   
     

 

 

 

Building Products - 0.1%

  

Allegion PLC

     1,271         72,040   

Masco Corp.

     5,028         111,622   
     

 

 

 

Total Building Products

        183,662   
     

 

 

 

Commercial Services & Supplies - 0.5%

  

ADT Corp.

     2,547         88,992   

Cintas Corp.

     1,421         90,290   

Iron Mountain Inc.

     2,405         85,257   

Pitney Bowes Inc.

     2,857         78,910   

 

See Notes to Schedule of Investments.

 

7


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Commercial Services & Supplies - 0.5% (continued)

  

Republic Services Inc.

     3,815       $ 144,856   

Stericycle Inc.

     1,201         142,223

Tyco International Ltd.

     6,493         296,081   

Waste Management Inc.

     6,155         275,313   
     

 

 

 

Total Commercial Services & Supplies

        1,201,922   
     

 

 

 

Construction & Engineering - 0.1%

     

Fluor Corp.

     2,262         173,948   

Jacobs Engineering Group Inc.

     1,861         99,154

Quanta Services Inc.

     3,071         106,195
     

 

 

 

Total Construction & Engineering

        379,297   
     

 

 

 

Electrical Equipment - 0.7%

     

AMETEK Inc.

     3,457         180,732   

Eaton Corp. PLC

     6,705         517,492   

Emerson Electric Co.

     9,917         658,092   

Rockwell Automation Inc.

     1,958         245,063   

Roper Industries Inc.

     1,404         204,998   
     

 

 

 

Total Electrical Equipment

        1,806,377   
     

 

 

 

Industrial Conglomerates - 2.6%

     

3M Co.

     8,881         1,272,115   

General Electric Co.

     138,637         3,643,380   

Textron Inc.

     3,985         152,586   

United Technologies Corp.

     11,878         1,371,315   
     

 

 

 

Total Industrial Conglomerates

        6,439,396   
     

 

 

 

Machinery - 1.9%

     

Caterpillar Inc.

     8,498         923,478   

Cummins Inc.

     2,450         378,011   

Danaher Corp.

     8,474         667,158   

Deere & Co.

     5,216         472,309   

Dover Corp.

     2,399         218,189   

Flowserve Corp.

     1,941         144,313   

Illinois Tool Works Inc.

     4,714         412,758   

Ingersoll-Rand PLC

     3,648         228,036   

Joy Global Inc.

     1,428         87,936   

PACCAR Inc.

     4,998         314,024   

Pall Corp.

     1,549         132,269   

Parker Hannifin Corp.

     2,104         264,536   

Pentair PLC

     2,785         200,854   

Snap-on Inc.

     819         97,068   

Stanley Black & Decker Inc.

     2,195         192,765   

Xylem Inc.

     2,564         100,201   
     

 

 

 

Total Machinery

        4,833,905   
     

 

 

 

Professional Services - 0.2%

     

Dun & Bradstreet Corp.

     531         58,516   

Equifax Inc.

     1,721         124,841   

Nielsen NV

     4,000         193,640   

Robert Half International Inc.

     1,940         92,616   
     

 

 

 

Total Professional Services

        469,613   
     

 

 

 

Road & Rail - 0.9%

     

CSX Corp.

     14,214         437,933   

Kansas City Southern

     1,555         167,178   

Norfolk Southern Corp.

     4,369         450,138   

Union Pacific Corp.

     12,840         1,280,790   
     

 

 

 

Total Road & Rail

        2,336,039   
     

 

 

 

Trading Companies & Distributors - 0.2%

     

Fastenal Co.

     3,852         190,636   

W. W. Grainger Inc.

     864         219,689   
     

 

 

 

Total Trading Companies & Distributors

        410,325   
     

 

 

 

TOTAL INDUSTRIALS

  

     25,577,018   
     

 

 

 

 

See Notes to Schedule of Investments.

 

8


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  
INFORMATION TECHNOLOGY - 18.4%      

Communications Equipment - 1.7%

  

Cisco Systems Inc.

     72,669       $ 1,805,825   

F5 Networks Inc.

     1,064         118,572

Harris Corp.

     1,507         114,155   

Juniper Networks Inc.

     7,069         173,473

Motorola Solutions Inc.

     3,157         210,162   

QUALCOMM Inc.

     23,456         1,857,715   
     

 

 

 

Total Communications Equipment

        4,279,902   
     

 

 

 

Electronic Equipment, Instruments & Components - 0.4%

  

Amphenol Corp., Class A Shares

     2,231         214,935   

Corning Inc.

     17,238         378,374   

FLIR Systems Inc.

     1,988         69,043   

Jabil Circuit Inc.

     2,647         55,322   

TE Connectivity Ltd.

     5,800         358,672   
     

 

 

 

Total Electronic Equipment, Instruments & Components

        1,076,346   
     

 

 

 

Internet Software & Services - 3.1%

  

Akamai Technologies Inc.

     2,518         153,749

eBay Inc.

     16,438         822,886

Facebook Inc., Class A Shares

     24,100         1,621,689

Google Inc., Class A Shares

     3,982         2,328,156

Google Inc., Class C Shares

     3,982         2,290,765

VeriSign Inc.

     1,772         86,491

Yahoo! Inc.

     13,243         465,227
     

 

 

 

Total Internet Software & Services

        7,768,963   
     

 

 

 

IT Services - 2.3%

  

Accenture PLC, Class A Shares

     8,986         726,428   

Alliance Data Systems Corp.

     750         210,937

Automatic Data Processing Inc.

     6,797         538,866   

Cognizant Technology Solutions Corp., Class A Shares

     8,569         419,110

Computer Sciences Corp.

     2,055         129,876   

Fidelity National Information Services Inc.

     4,100         224,434   

Fiserv Inc.

     3,590         216,549

MasterCard Inc., Class A Shares

     14,395         1,057,601   

Paychex Inc.

     4,572         190,012   

Teradata Corp.

     2,328         93,586

Total System Services Inc.

     2,332         73,248   

Visa Inc., Class A Shares

     7,151         1,506,787   

Western Union Co.

     7,730         134,038   

Xerox Corp.

     15,713         195,470   
     

 

 

 

Total IT Services

        5,716,942   
     

 

 

 

Semiconductors & Semiconductor Equipment - 2.3%

  

Altera Corp.

     4,480         155,725   

Analog Devices Inc.

     4,409         238,395   

Applied Materials Inc.

     17,085         385,267   

Avago Technologies Ltd.

     3,500         252,245   

Broadcom Corp., Class A Shares

     7,787         289,053   

First Solar Inc.

     994         70,634

Intel Corp.

     70,140         2,167,326   

KLA-Tencor Corp.

     2,350         170,704   

Lam Research Corp.

     2,290         154,758   

Linear Technology Corp.

     3,328         156,649   

Microchip Technology Inc.

     2,809         137,107   

Micron Technology Inc.

     14,966         493,130

NVIDIA Corp.

     7,819         144,964   

Texas Instruments Inc.

     15,295         730,948   

Xilinx Inc.

     3,765         178,122   
     

 

 

 

Total Semiconductors & Semiconductor Equipment

        5,725,027   
     

 

 

 

 

See Notes to Schedule of Investments.

 

9


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Software - 3.4%

     

Adobe Systems Inc.

     6,553       $ 474,175

Autodesk Inc.

     3,205         180,698

CA Inc.

     4,548         130,710   

Citrix Systems Inc.

     2,093         130,917

Electronic Arts Inc.

     4,338         155,604

Intuit Inc.

     3,997         321,878   

Microsoft Corp.

     105,259         4,389,300   

Oracle Corp.

     48,052         1,947,548   

Red Hat Inc.

     2,674         147,792

Salesforce.com Inc.

     7,918         459,878

Symantec Corp.

     9,756         223,412   
     

 

 

 

Total Software

        8,561,912   
     

 

 

 

Technology Hardware, Storage & Peripherals - 5.2%

     

Apple Inc.

     84,581         7,860,112   

EMC Corp.

     28,575         752,666   

Hewlett-Packard Co.

     26,735         900,435   

International Business Machines Corp.

     13,209         2,394,395   

NetApp Inc.

     4,673         170,658   

SanDisk Corp.

     3,181         332,192   

Seagate Technology PLC

     4,638         263,531   

Western Digital Corp.

     2,967         273,854   
     

 

 

 

Total Technology Hardware, Storage & Peripherals

        12,947,843   
     

 

 

 

TOTAL INFORMATION TECHNOLOGY

        46,076,935   
     

 

 

 
MATERIALS - 3.4%      

Chemicals - 2.5%

     

Air Products & Chemicals Inc.

     2,986         384,059   

Airgas Inc.

     939         102,267   

CF Industries Holdings Inc.

     582         139,988   

Dow Chemical Co.

     17,152         882,642   

E.I. du Pont de Nemours & Co.

     13,078         855,824   

Eastman Chemical Co.

     2,151         187,890   

Ecolab Inc.

     3,818         425,096   

FMC Corp.

     1,875         133,481   

International Flavors & Fragrances Inc.

     1,147         119,609   

LyondellBasell Industries NV, Class A Shares

     6,100         595,665   

Monsanto Co.

     7,405         923,700   

Mosaic Co.

     3,883         192,014   

PPG Industries Inc.

     1,954         410,633   

Praxair Inc.

     4,147         550,888   

Sherwin-Williams Co.

     1,202         248,706   

Sigma-Aldrich Corp.

     1,685         170,994   
     

 

 

 

Total Chemicals

        6,323,456   
     

 

 

 

Construction Materials - 0.1%

     

Vulcan Materials Co.

     1,842         117,428   
     

 

 

 

Containers & Packaging - 0.2%

     

Avery Dennison Corp.

     1,354         69,393   

Ball Corp.

     1,983         124,295   

Bemis Co. Inc.

     1,434         58,306   

MeadWestvaco Corp.

     2,462         108,968   

Owens-Illinois Inc.

     2,324         80,503

Sealed Air Corp.

     2,768         94,583   
     

 

 

 

Total Containers & Packaging

        536,048   
     

 

 

 

Metals & Mining - 0.5%

     

Alcoa Inc.

     15,203         226,373   

Allegheny Technologies Inc.

     1,522         68,642   

Freeport-McMoRan Copper & Gold Inc.

     14,649         534,688   

 

See Notes to Schedule of Investments.

 

10


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

 

SECURITY

   SHARES      VALUE  

Metals & Mining - 0.5% (continued)

     

Newmont Mining Corp.

     7,024       $ 178,690   

Nucor Corp.

     4,491         221,182   

United States Steel Corp.

     2,041         53,148   
     

 

 

 

Total Metals & Mining

        1,282,723   
     

 

 

 

Paper & Forest Products - 0.1%

  

International Paper Co.

     6,190         312,409   
     

 

 

 

TOTAL MATERIALS

  

     8,572,064   
     

 

 

 
TELECOMMUNICATION SERVICES - 2.4%      

Diversified Telecommunication Services - 2.4%

  

AT&T Inc.

     73,453         2,597,298   

CenturyLink Inc.

     8,153         295,138   

Frontier Communications Corp.

     14,096         82,321   

Verizon Communications Inc.

     58,419         2,858,442   

Windstream Holdings Inc.

     8,407         83,734   
     

 

 

 

TOTAL TELECOMMUNICATION SERVICES

  

     5,916,933   
     

 

 

 
UTILITIES - 3.1%      

Electric Utilities - 1.7%

  

American Electric Power Co. Inc.

     6,881         383,753   

Duke Energy Corp.

     9,966         739,378   

Edison International

     4,596         267,074   

Entergy Corp.

     2,519         206,785   

Exelon Corp.

     12,096         441,262   

FirstEnergy Corp.

     5,907         205,091   

NextEra Energy Inc.

     6,150         630,252   

Northeast Utilities

     4,450         210,351   

Pepco Holdings Inc.

     3,534         97,114   

Pinnacle West Capital Corp.

     1,555         89,941   

PPL Corp.

     8,898         316,146   

Southern Co.

     12,526         568,430   
     

 

 

 

Total Electric Utilities

        4,155,577   
     

 

 

 

Gas Utilities - 0.0%

  

AGL Resources Inc.

     1,763         97,018   
     

 

 

 

Independent Power and Renewable Electricity Producers - 0.1%

  

AES Corp.

     9,293         144,506   

NRG Energy Inc.

     4,588         170,674   
     

 

 

 

Total Independent Power and Renewable Electricity Producers

        315,180   
     

 

 

 

Multi-Utilities - 1.3%

  

Ameren Corp.

     3,423         139,932   

CenterPoint Energy Inc.

     6,050         154,517   

CMS Energy Corp.

     3,763         117,217   

Consolidated Edison Inc.

     4,132         238,582   

Dominion Resources Inc.

     8,203         586,678   

DTE Energy Co.

     2,499         194,597   

Integrys Energy Group Inc.

     1,153         82,013   

NiSource Inc.

     4,429         174,237   

PG&E Corp.

     6,456         310,017   

Public Service Enterprise Group Inc.

     7,140         291,241   

SCANA Corp.

     1,991         107,136   

Sempra Energy

     3,206         335,700   

TECO Energy Inc.

     2,891         53,426   

Wisconsin Energy Corp.

     3,188         149,581   

Xcel Energy Inc.

     7,030         226,577   
     

 

 

 

Total Multi-Utilities

        3,161,451   
     

 

 

 

TOTAL UTILITIES

  

     7,729,226   
     

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS

(Cost - $140,191,877)

      $ 244,897,335   
     

 

 

 

 

See Notes to Schedule of Investments.

 

11


QS BATTERYMARCH S&P 500 INDEX FUND

 

Schedule of investments (unaudited) (cont’d)    June 30, 2014

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  
SHORT-TERM INVESTMENTS - 2.0%           

Repurchase Agreements - 2.0%

          

Interest in $2,100,000,000 joint tri-party repurchase agreement dated 6/30/14 with RBS Securities Inc.; Proceeds at maturity - $4,602,948; (Fully collateralized by various U.S. government obligations, 0.125% to 2.625% due 7/15/14 to 2/15/42; Market value - $4,695,008)

     0.050     7/1/14       $ 4,602,942         4,602,942   

Interest in $243,197,000 joint tri-party repurchase agreement dated 6/30/14 with Deutsche Bank Securities Inc.; Proceeds at maturity - $533,059; (Fully collateralized by various U.S. government obligations, 0.000% due 8/15/17 to 11/15/42; Market Value - $549,050)

     0.050     7/1/14         533,058         533,058   
          

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost - $5,136,000)

             5,136,000   
          

 

 

 

TOTAL INVESTMENTS - 99.8%

(Cost - $145,327,877#)

             250,033,335   

Other Assets in Excess of Liabilities - 0.2%

             447,032   
          

 

 

 

TOTAL NET ASSETS - 100.0%

           $ 250,480,367   
          

 

 

 

 

* Non-income producing security.

 

(a) Investment in affiliate. This security is a component of the S&P 500 Index in which the Fund invests.

 

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

 

See Notes to Schedule of Investments.

 

12


Notes to Schedule of Investments (unaudited)

 

1. Organization and significant accounting policies

QS Batterymarch S&P 500 Index Fund (formerly Legg Mason Batterymarch S&P 500 Index Fund) (the “Fund”) is a separate diversified investment series of Legg Mason Partners Equity Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

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

(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. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Trustees.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

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

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

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

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

 

   

Level 1 – quoted prices in active markets for identical investments

 

   

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

 

13


Notes to Schedule of Investments (unaudited) (continued)

 

   

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.

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

 

ASSETS

 

DESCRIPTION

   QUOTED PRICES
(LEVEL 1)
     OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2)
     SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)
     TOTAL  

Common stocks†

   $ 244,897,335         —           —         $ 244,897,335   

Short-term investments†

     —         $ 5,136,000         —           5,136,000   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total investments

   $ 244,897,335       $ 5,136,000         —         $ 250,033,335   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other financial instruments:

           

Futures contracts

   $ 42,116         —           —         $ 42,116   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 244,939,451       $ 5,136,000         —         $ 250,075,451   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

See Schedule of Investments for additional detailed categorizations.

(b) Repurchase agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, 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 maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights 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) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents with a broker in an amount equal to a certain percentage of the contract amount. This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded.

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

(d) Security transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At June 30, 2014, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

 

Gross unrealized appreciation

   $ 115,529,367   

Gross unrealized depreciation

     (10,823,909
  

 

 

 

Net unrealized appreciation

   $ 104,705,458   
  

 

 

 

 

14


Notes to Schedule of Investments (unaudited) (continued)

 

At June 30, 2014, the Fund had the following open futures contracts:

 

     Number of
Contracts
     Expiration
Date
     Basis
Value
     Market
Value
     Unrealized
Appreciation
 
Contracts to Buy:               

E-mini S&P 500 Index

     55         9/14       $ 5,326,984       $ 5,369,100       $ 42,116   

3. Derivative instruments and hedging activities

GAAP requires enhanced disclosure about an entity’s derivative and hedging activities.

The following is a summary of the Fund’s derivative instruments categorized by risk exposure at June 30, 2014.

 

     Futures Contracts  

Primary Underlying Risk

   Unrealized
Appreciation
 

Equity Risk

   $ 42,116   

During the period ended June 30, 2014, the volume of derivative activity for the Fund was as follows:

 

     Average Market Value  

Futures contracts (to buy)

   $ 536,910   

4. Transactions with affiliated companies

The Fund invests in securities that are components of the S&P 500 Index. Legg Mason Inc. is a component of the S&P 500 Index and is considered to be affiliated with the Fund. Investments in Legg Mason Inc. were made in accordance to its proportional weighting in the S&P 500 Index. The following transactions were effected in shares of Legg Mason Inc. for the period ended June 30, 2014:

 

     Affiliate
Value at
     Purchased      Sold      Dividend      Affiliate
Value at
     Realized  

Company

   9/30/13      Cost      Shares/Par      Cost      Shares/Par      Income      6/30/14      Loss  

Legg Mason Inc.

   $ 55,477         —           —         $ 22,723         181       $ 862       $ 75,836       $ (15,054

 

15


 

ITEM 2. 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 quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.


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, thereunto duly authorized.

Legg Mason Partners Equity Trust

 

By   /S/    KENNETH D. FULLER        
  Kenneth D. Fuller
  Chief Executive Officer

Date:

 

August 21, 2014

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/    KENNETH D. FULLER        
  Kenneth D. Fuller
  Chief Executive Officer

Date:

 

August 21, 2014

By   /S/    RICHARD F. SENNETT        
  Richard F. Sennett
  Principal Financial Officer

Date:

 

August 21, 2014