At a Glance

• Primary Benchmark: Russell 1000® Value Index.
• Universe: Large-capitalization U.S. common stocks.
• To be considered for purchase, a stock typically must fall in the bottom half or quartile of all P/E or P/B ratios in our universe depending on market conditions and also must qualify based on a multifactor algorithm.
• Our primary focus is to exploit quantitative investment opportunities identified by our proprietary multifactor model.
• All stocks are purchased on a capitalization weighted basis.
• While cash is a residual of the investment process, portfolios are managed with the goal of remaining fully invested at all times.

Objective

Investment Process Summary

Typical Investment Guidelines

Quantitative Screens

• Market capitalizations among top 1000;
• P/E ratios or P/B ratios in the bottom half or quartile, and
• High multifactor scores.

Quantitative Focus

• Balance sheet and income statement data utilized to determine efficiency of capital deployment by management;
• Earnings quality analysis aimed at discerning between inorganic and organic growth;
• Quantitative measure of investor sentiment;
• Profitability analysis;
• Balance sheet accrual efficiency, and
• Focus on conservative valuation practices.

Sell Discipline

• P/E or P/B ratio exceeds our upper valuation threshold;
• Multifactor score reaches our sell target, or
• Market capitalization falls below our minimum large cap definition.

Representative Portfolio Characteristics (as of 6/30/2008)*

Top Ten Holdings (as of 6/30/2008)*

* Supplemental Information. Data as of 6/30/2008. R1000V = Russell 1000 Value Index.

Please refer to our GIPS compliant presentation, which includes performance footnotes, fee schedules, index descriptions and disclosures. The data represent the aggregate characteristics of all securities held in the representative portfolio, an actual commission account not subject to taxation. Data is obtained from FactSet and Russell. It should not be assumed that investments in any top ten holdings listed were or will prove to be profitable. Top ten holdings may no longer be held in client portfolios. The holdings of any particular account may vary based on any investment restrictions applicable to the account. This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. In accordance with Rule 206(4)-1 under the Investment Advisors Act of 1940, upon request, we will furnish you with a list of all recommendations made by Brandywine within the immediately preceding twelve months. There is no guarantee that holding securities with relatively high (or low) price-to-earnings, price-to-book, or price-to-cash flow will cause the portfolio to outperform its benchmark or index.

The Russell 1000^® Value Index is a trademark of the Frank Russell Company.

Russel™ is a trademark of the Frank Russell Company.

Representative Sector Weights (as of 6/30/2008)*

* Supplemental Information. Data as of 6/30/2008. R1000V = Russell 1000 Value Index.

The data represent the aggregate characteristics of all securities held in the representative portfolio, an actual commission account not subject to taxation. Data is obtained from FactSet and Russell. Sector weights are included for informational purposes only and should not be perceived as investment recommendations. It should not be assumed that investments in any sectors listed were or will prove to be profitable. The sector weights of any particular account may vary based on any investment restrictions applicable to the account.

The Russell 1000^® Value Index is a trademark of the Frank Russell Company.

Russel™ is a trademark of the Frank Russell Company.

Quarterly Portfolio Manager Commentary (as of 6/30/2008)

You should not assume that investments or strategies discussed in this commentary were or will be profitable, or that the investment decisions Brandywine Global makes in the future will be profitable or equal to the investment performance discussed in this commentary. The data and information presented in a Brandywine Global commentary is believed to be accurate and reliable as of the date recorded. Brandywine Global will not undertake to update the data and information presented at a later date. This commentary may not reflect the current views of the featured speaker and may not reflect current or sudden market activity.

Annualized Composite Returns (as of 6/30/2008)

Calendar Year Composite Returns (as of 6/30/2008)

Data as of 6/30/2008. R1000V = Russell 1000 Value Index, S&P 500 = S&P 500 Index.

Organization: Brandywine Global Investment Management, LLC (the "Firm") is a wholly owned, independently operated, subsidiary of Legg Mason, Inc. The Firm has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). For the periods July 1, 2000 through June 30, 2006, the Firm has been verified by Kreischer Miller. A verification includes assessing whether the Firm (1) complied with the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) designed its processes and procedures to calculate and present performance results in compliance with the GIPS standards. Kreischer Miller has also performed an examination of the composite performance presentation from the composite Inception Date through June 30, 2006. A composite examination includes testing a specific composite in order to assess whether that composite's performance presentation is presented, in all material respects, in conformity with the GIPS standards. Copies of the verification reports are available upon request. Disclosed total firm assets represent the total market value of all discretionary and nondiscretionary, fee-paying and non-fee-paying assets under the Firm's management. Composite Description: Dynamic Large Cap Value Equity Composite (the "Composite") Inception date: January 1, 2007. Composite creation date: January 1, 2007. The Composite includes a discretionary account invested in a portfolio of large cap U.S. companies with market capitalization greater than the 1001th largest domestic companies at purchase. The strategy employs a pure quantitative strategy. Securities are screened from the universe of U.S. companies based on their trailing P/E, P/B (companies must fall in the value segment of the universe using P/E, P/B). The combined quantitative multi factor selection process results in holdings of 100 - 250 company's stocks. Sector weights are a result of bottom-up stock selection and may deviate from the weightings in the benchmark index. A non-fee paying account is the sole account in the composite. The Composite returns are benchmarked to the Standard & Poor's 500® and Russell 1000® Value indexes, which are capitalization-weighted. The Russell 1000 Value Index measures companies from the Russell 3000 Index that exhibit lower price to book and price to earnings ratios and lower forecasted growth values. Performance Calculation Preliminary data, if so noted, reflects unreconciled data for the most recent reporting period. Portfolios are valued daily on a trade date basis and include dividends and interest as well as all realized and unrealized capital gains and losses. Return calculations at the portfolio level are time-weighted to account for periodic contributions and withdrawals. Performance results are calculated on a before tax, total return basis. Prior to July 1, 2007, portfolios were included in the Composite beginning with the first full quarter of performance through the last full quarter of performance. After July 1, 2007, portfolios are included in the Composite beginning with the first full month of performance through the last full month of performance. The Composite returns consist of size-weighted portfolio returns using beginning of period values to weight the portfolio returns. Monthly linking of interim performance results is used to calculate quarterly and annual returns. Composite's valuations and returns are computed in U.S. Dollars ("USD"). The results are presented in USD or in other currencies (to accommodate overseas investors), the latter by converting monthly USD returns into other currency returns using the appropriate currency exchange rate returns. Gross returns reflect the deduction of trading expenses. Net of fee returns reflect the deduction of trading expenses and the highest investment management fees charged within the composite membership as stated in the fee schedule below. Composite dispersion is calculated using the asset-weighted standard deviation method for all portfolios that were in the Composite for the entire year. Composite dispersion is not presented for periods with five or fewer portfolios. The number of accounts and market values are as of the end of the period. Past performance is no guarantee of future results. A complete list describing the Firm's composites as well as any additional information regarding the Firm's policies for calculating and reporting performance results is available upon request. Fee Schedule Institutional Client Separate Account Management Fee Schedule (minimum initial investment: $1 million): 0.650% on the first $10 million; 0.450% on the next $40 million; 0.400% on the next $50 million; 0.300% on the next $100 million, and 0.250% on any portion of assets in excess of $200 million. Institutional Client Commingled Account Management Investment Trust Fee Schedule: 0.750% flat fee on all assets. Additional information on the Firm's fee schedule can be found in Form ADV Part II which is available upon request.

Portfolio Team

Henry F. Otto
Managing Director & Portfolio Manager

Henry is the founder and co-lead portfolio manager of the Diversified Value Equity strategies. Prior to joining Brandywine Global in 1988, he was with Dimensional Fund Advisors, Inc., where he managed and traded small cap portfolios and developed computer systems to structure portfolios and analyze performance (1984-1987), and the Chicago Board of Trade as a financial economist developing financial-based futures and options (1982-1984). He earned both an M.B.A. in Finance and Economics and a B.A. in Economics from the University of Chicago. Henry is a member of the firm's Executive Board.

Steven M. Tonkovich
Managing Director & Portfolio Manager

Steve is co-lead portfolio manager of the Diversified Value Equity strategies. He plays an integral role in the team's continual refinement of the Diversified Value Equity investment process and the firm's ongoing research into value investing. Prior to joining the firm in 1989, he was with the Wharton School of the University of Pennsylvania as a research analyst in the Finance Department (1987-1989); Booz Allen Hamilton, Inc. as a research assistant (summer of 1988), and the Moore School of Electrical Engineering of the University of Pennsylvania as a research assistant (1986-1987). Steve earned a B.S.E in Finance and Regional Science from the Wharton School. He is a member of the firm's Executive Board.

Michelle K. Fields, CFA
Portfolio Manager

Michelle is a portfolio manager and securities analyst on the Diversified Value Equity team. She contributes to the quantitative and fundamental analysis of securities for the Diversified Value Equity portfolios by consistently applying Brandywine Global's disciplined exclusionary process and is the lead portfolio manager for the Diversified Mid Cap Value strategy. Michelle joined the firm in 1995. She is a CFA charterholder and earned an M.B.A. in Finance and a B.S. in Finance from the University of Delaware, graduating cum laude.

Michael J. Fleisher
Portfolio Manager

Mike is a portfolio manager on the Diversified Value Equity team with lead oversight of the Dynamic Large Cap Value Equity strategy and shared oversight of the Diversified Large Cap Value Extended Equity - 130/30 strategy. In addition, Mike oversees the quantitative development and analysis function for Brandywine Global's Diversified Value Equity strategies and contributes to the firm's ongoing research into value investing. Before joining the firm in 1997, Mike was a senior fund accountant for Merrill Lynch (1995-1997), and a mutual fund analyst for SEI Corporation (1993-1995). Mike earned a B.S. in Accounting from the University of Delaware.

Joseph J. Kirby
Portfolio Manager

Joe is a portfolio manager and securities analyst on the Diversified Value Equity team. He contributes to the quantitative and fundamental analysis of securities for the Diversified Value Equity portfolios by consistently applying Brandywine Global's disciplined exclusionary process and has lead oversight of the Diversified Large Cap Value strategy and shared oversight of the Diversified Large Cap Value Extended Equity - 130/30 strategy. He has been a member of the Diversified Value Equity team since joining Brandywine Global in 1995. Previously he was with CoreStates Financial Corporation as an auditor (1992-1994). Joe earned a B.S. in Finance from DeSales University.

David Clipper
Research Analyst

Dave is a securities analyst on the Diversified Value Equity team, providing quantitative and fundamental analysis and support for Diversified Small, Select, Mid and Large Cap Value portfolios. He joined Brandywine Global as a product specialist in 2004 and has been a member of the Diversified Value Equity team since the first quarter of 2006. Prior to joining Brandywine Global, Dave was a trader for Orion Financial (2003-2004) and had spent 13 years in the field of psychology before making the career shift toward finance. He earned an M.B.A. in Finance from the University of Pittsburgh, holds a Master's degree from the University of California at Berkeley, and a B.A. from Penn State University.

Daniel R. Elliott
Quantitative Analyst

Dan provides quantitative development and analysis for Brandywine Global's Diversified Value Equity strategies. Before joining the firm in 2006, Dan was a business analyst for Planalytics (2004-2006) where he developed quantitative models and backtesting programs for purchasing natural gas contracts. Prior to that he served as an investment systems analyst for Evergreen Asset Management (2002-2004) and as a technical analyst for Marvin and Palmer Global Equity Management (1999-2002). Dan earned an MBA from Widener University and a B.A. in Economics from Bethany College.

David A. Tattersall
Equity Head Trader

Dave is the head trader for Brandywine Global's equity portfolios. Prior to being appointed to this position in March 2007, he served as lead equity trader for the firm's Diversified Value Equity portfolios in addition to providing support to the Absolute Value Equity portfolio teams. Dave's previous experience with the firm includes serving as joint trader for the International Value Equity portfolios, primary trader for the Wealth Management Group channel, and backup trader for Absolute Value Equity and Large Cap Value Equity portfolios. He joined the firm in 2000, bringing with him 15 years of industry experience. Previously, Dave was with OTA Limited Partnership, a full-service institutional broker/dealer, as a financial analyst/trader (1989-2000); First Federal Savings Bank as a senior accountant (1987-1989), and Beneficial Mortgage Corporation as the loan accounting manager (1985-1987). Dave earned a B.A. in Accounting from Pennsylvania State University.