With a volatile stock market and rising interest rates, current market conditions make diversifying retirement savings even more important than normal. Cash kept in banks combined with investments in broad-based mutual funds can provide this diversification for retirement savers.

Legg Mason Inc. (NYSE: LM) is a global asset management firm with over $670 billion of assets under management (AUM) as of March 31 2016. Legg Mason and its affiliate companies offer a broad selection of mutual funds that can accommodate all levels of risk tolerance and desire for returns.

Two funds are very suitable for diversifying an entire portfolio, and two additional funds work well to diversify the growth portion of a portfolio while providing higher returns. The returns for the four funds are calculated using net asset value (NAV) of Class A shares, even though four of these funds usually have a sales load. It is possible to reduce or eliminate the sales charge by making a larger investment across the Legg Mason family of funds. Some brokers, such as Fidelity Investments, waive the sales load for their customers and charge no transaction fees.

ClearBridge Large Cap Growth Fund (SBLGX)

The ClearBridge Large Cap Growth Fund seeks capital appreciation through investing in well-run large-cap companies with above-average prospects for earnings growth and share price appreciation. While most of these stocks are within the S&P 500 Index, the fund's managers invested in about 50 companies that they believe can outperform the market. They have been doing a good job at meeting their objectives; this four-star Morningstar-rated fund has had annualized total returns of 20.09% over three years and 16.51% over five years.

Legg Mason Opportunity Trust (LMOPX)

This high-risk, high-return fund is not appropriate for conservative investors. It is suitable for part of the assets of investors who are looking for greater returns and have 10 or more years before retirement. The legendary Bill Miller is one of the managers of the Legg Mason Opportunity Trust.

The fund seeks long-term capital growth. Fund managers are not constrained by investment style, asset class or type of financial instrument. They may also leverage up to 10% of the fund's net assets. This high-risk, high-return approach has yielded annualized total returns of 29.67% over three years and 14.49% over five years. The fund's 10-year annualized total return is 4.16%, which is less than the S&P 500 Index Fund's annualized total return of 6.91%.

QS Legg Mason Conservative Growth Fund (SBBAX)

The QS Legg Mason Conservative Growth Fund does not directly invest in common stocks or bonds; instead, it is a fund of funds. The Conservative Growth Fund invests money in various other mutual funds managed by Legg Mason and its affiliates. It balances the fund's assets between investments in equity funds and investments in fixed-income funds with at least 35% in either asset class but no more than 65%. The funds hold primarily U.S. securities with some international exposure.

This fund-of-funds approach, with assets spread across over 15 individual investment funds, provides investors with widespread diversity; their investment gives them small pieces of over 1,000 different securities. Investors also receive a reasonable return for a balanced fund. The fund has had annualized total returns of 6.7% over three years, 7.12% over five years and 5.12% over 10 years.

QS Batterymarch S&P 500 Index Fund (SBSPX)

The QS Batterymarch S&P 500 Index Fund's objective is to track the growth and returns of the Standard and Poor’s (S&P) 500 Index. It accomplishes this by purchasing all 500 stocks that make up the index in direct relation to their capital weighting within the index. Investing in an S&P 500 Index fund provides investors with fractional ownership in the 500 largest publicly traded U.S. corporations.

An additional advantage to an index fund is that it is passively managed, so it has lower fees than actively managed mutual funds and often provides a better return. The fund has had annualized total returns of 15.41% over three years and 13.75% over five years.

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