Western Asset Core Plus Bond Fund Class R · NASDAQ:WAPRX
Western Asset Core Plus Bond Fund Class R — Western Asset — Earnings Presentation (June 2025)
16 slides from Western Asset Core Plus Bond Fund Class R's earnings presentation, Jun 26, 2025
Slide 1: 3Q25 Market Outlook
June 26, 2025 3Q25 Market Outlook Michael Buchanan, CFA Catherine Matthews Chief Investment Officer Global Product Specialist Western Asset 1
Slide 2: Global Macro Outlook
Global Macro Outlook Growth - Slowing ● Global outlook clouded by tariffs and geopolitical uncertainty ● US growth downshifting, recession odds lower Labor Markets ● Downside risks to labor markets Inflation - Stable ● Global disinflation trend near central banks’ targets ● Tariffs could impact US g
Slide 3: Global Economic Projections
Global Economic Projections Global Growth Converging GDP Contribution to US Real GDP (% change)* 6 10 5.0 8 5 6 4.0 4.0 4 4 Percent Percent 3 2.8 2 0 2 1.8 1.7 -2 1.2 0.9 0.8 1 -4 -6 0 Mar 23 Mar 24 Mar 25 Mar 21 Mar 22 Sep 23 Sep 24 Dec 20 Jun 21 Sep 21 Dec 21 Jun 22 Sep 22 Dec 22 Dec 23 Jun 24 Dec
Slide 4: US Labor Market
US Labor Market Private Sector Job Growth Has Been Strong with Limited Gains in Health Care, Leisure and Hospitality Sectors Change in Total Nonfarm Employment 500 400 Seasonally Adjusted (thousands) 300 200 157 135 100 0 -100 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May J
Slide 5: Global Inflation
Global Inflation Global Disinflation Trend Near Central Banks’ Targets Global Inflation¹ 8% 7% 6% 5% Year-over-Year 4% 3% 2% 1% 0% -1% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Headline Core Core Goods Services The above reflects current opinions of Western Asset, which are subject to change
Slide 6: US Inflation
US Inflation Core CPI Nears Fed’s Target Zone Core CPI Measures (6m, SAAR) 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2017 2018 2019 2020 2021 2022 2023 2024 2025 Core CPI Core Goods Rent of Shelter Core Service Ex. Rent of Shelter The above reflects current opinions of Western Asset, wh
Slide 7: Yield Curves
Yield Curves US Term Premium Still Low by Historical Standards. All Major Curves Steeper YTD. US Term Premium Year-to-Date 30yr-5yr Spreads 4% 2.5 3% Japan 2.0 2% 1.5 UK 1% 1.0 US 0% Germany 0.5 -1% -2% 0.0 2000 2005 2010 2015 2020 2025 Jan 25 Feb 25 Mar 25 Apr 25 May 25 Jun 25 Source: Bloomberg. As
Slide 8: Spread Sector Outlook
Spread Sector Outlook 80 70 151 93 82 234 295 253 634 314 274 668 456 386 631 125 AAA 91 227 338 BBB 255 602 169 88 210 102 AAA 67 170 658 BBB 363 1194 87 66 166 85 71 97 150 119 284 118 107 252 The above reflects current opinions of Western Asset, which are subject to change with market conditions.
Slide 9: Growth and the Impact on Corporate Bonds
Growth and the Impact on Corporate Bonds ● Positive growth supportive of IG corporate bonds ● Defaults Have Been Higher When GDP is <2% Average Quarterly IG Excess Return (1948-2024) US HY Default Rate vs GDP Growth 0.6% 16 0.4% 14 0.2% 12 0.0% 10 Percent -0.2% 8 -0.4% 6 -0.6% 4 -0.8% 2 0 -1.0% Mar
Slide 10: European Banks
European Banks Balance Sheets Continue to Be a Source of Strength ● A decade of balance sheet repair provides a solid foundation for our constructive fundamental sector view Non-Performing Loan Ratio (%) Loan/Deposit Ratio (%) 8 130 7 125 6 120 Percent Percent 5 4 115 3 110 2 105 1 0 100 Q215 Q218 Q
Slide 11: US Bank Loans
US Bank Loans Positioned for Further Spread Compression B/BB Spread Ratio Spread Difference First Lien Loans - Issuer Matched Secured Bonds 1.70 200 Bank Loans 1.65 150 1.60 100 1.55 50 High Yield 0 1.50 1.45 -50 1.40 -100 Dec 23 Mar 24 Jun 24 Sep 24 Dec 24 Mar 25 2014 2015 2016 2017 2018 2019 2020
Slide 12: US Mortgage & Consumer Credit
US Mortgage & Consumer Credit Offer Attractive Relative Value ● Mortgage and Consumer Credit has lagged the broader recovery in Corporate Credit and are wide from historical perspective Bloomberg Bloomberg JP Morgan BAML RMBS Non-Agency US IG Bloomberg Non-Agency Legacy Below CMBS BBB BAML ABS AA- C
Slide 13: Key Takeaways
Key Takeaways Global Macro ● Global outlook clouded by tariffs and geopolitical uncertainty ● Global disinflation trend near central banks’ targets ● Policy rates to be cut further, except in Japan ● Concerns over fiscal sustainability Fixed Income Implications ● Most government yield curves to stee
Slide 14: Questions & Answers
Questions & Answers Q +A Western Asset 14
Slide 15: Western Asset
WESTERN ASSET A Franklin Templeton Company
Slide 16: Risk Disclosure
Risk Disclosure © Western Asset Management Company, LLC 2025. The information contained in these materials (“the materials”) is intended for the exclusive use of the designated recipient (“the recipient”). This information is proprietary and confidential and may contain commercially sensitive inform