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 811-06110

Western Asset Funds, Inc.

(Exact name of registrant as specified in charter)

100 International Drive, Baltimore, MD, 21202

(Address of principal executive offices) (Zip code)

Marc A. De Oliveira

Franklin Templeton

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 877-6LM-FUND/656-3863

Date of fiscal year end: December 31

Date of reporting period: December 31, 2023

ITEM 1. REPORT TO STOCKHOLDERS.

The Annual Report to Stockholders is filed herewith.

Annual Report December 31, 2023

WESTERN ASSET

INFLATION INDEXED PLUS BOND FUND

The Securities and Exchange Commission has adopted new regulations that will result in changes to the design and delivery of annual and semi-annual shareholder reports beginning in July 2024.

If you have previously elected to receive shareholder reports electronically, you will continue to do so and need not take any action.

Otherwise, paper copies of the Fund’s shareholder reports will be mailed to you beginning in July 2024. If you would like to receive shareholder reports and other communications from the Fund electronically instead of by mail, you may make that request at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, enrolling at franklintempleton.com.

You may access franklintempleton.com by scanning the code below.

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

What’s inside
Letter from the president	II
Fund overview	1
Fund at a glance	7
Fund expenses	8
Fund performance	10
Schedule of investments	12
Statement of assets and liabilities	16
Statement of operations	18
Statements of changes in net assets	19
Financial highlights	20
Notes to financial statements	27
Report of independent registered public accounting firm	42
Additional information	43
Important tax information	49

Fund objective

The Fund seeks to maximize total return, consistent with preservation of capital.

Letter from the president

Dear Shareholder,

We are pleased to provide the annual report of Western Asset Inflation Indexed Plus Bond Fund for the twelve-month reporting period ended December 31, 2023. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

• Fund prices and performance,

• Market insights and commentaries from our portfolio managers, and

• A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

January 31, 2024

   II  Western Asset Inflation Indexed Plus Bond Fund

Fund overview

Q. What is the Fund’s investment strategy?

A. The Fund’s investment objective is to maximize total return, consistent with preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets, including the amount of borrowing for investment purposes, if any, in inflation-indexed fixed income securities and at least 70% of its net assets in U.S. Treasury Inflation Protected Securities (“TIPS”)i. Fundamental investment techniques are used to select issues. Although the Fund may invest in securities of any maturity, the Fund will normally maintain a dollar-weighted average effective duration, as estimated by the Fund’s subadvisers, within three years of that of its benchmark, the Bloomberg U.S. Treasury: U.S. TIPSii. Effective duration seeks to measure the expected sensitivity of market price to changes in interest rates, taking into account the anticipated effects of structural complexities (for example, some bonds can be prepaid by the issuer).

The Fund may sell protection in connection with credit default swaps relating to corporate debt securities. It is currently expected that the notional amount of the credit default swaps will not exceed 40% of the Fund’s net assets, although such exposure may exceed 40% from time to time.

The Fund is expected to maintain a dollar-weighted average credit quality of at least A/A.

In addition, under normal market conditions, at the time of purchase:

• no more than 20% of the Fund’s net assets may be invested in non-U.S. dollar denominated inflation-indexed securities

• no more than 10% of the Fund’s net assets may be invested in un-hedged non-U.S. dollar denominated securities

• no more than 20% of the Fund’s net assets may be invested in a combination of securities rated below investment grade, emerging market securities and loan participations and assignments

• no more than 10% of the Fund’s net assets may be invested in securities rated below investment grade

• no more than 10% of the Fund’s net assets may be invested in emerging market securities

• no more than 10% of the Fund’s net assets may be invested in loan participations and assignments

The Fund considers a security to be rated below investment grade if it is not rated in the Baa/BBB categories or above by at least one Nationally Recognized Statistical Rating Organization (“NRSRO”) or is unrated and of comparable quality as determined by the subadvisers. Securities rated below investment grade are commonly known as “junk bonds” or “high yield securities.”

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    1 

Fund overview (cont’d)

The Fund may also enter into various exchange-traded and over-the-counter derivative transactions for both hedging and non-hedging purposes, including for purposes of enhancing returns. These derivative transactions include, but are not limited to, futures, options, swaps, foreign currency futures and forwards.

In particular, the Fund may use interest rate swaps, credit default swaps (including buying and selling credit default swaps on individual securities and/or baskets of securities), options (including options on credit default swaps) and futures contracts to a significant extent, although the amounts invested in these instruments may change from time to time. Other instruments may also be used to a significant extent from time to time.

At Western Asset Management Company, LLC (“Western Asset”), the Fund’s subadviser, we utilize a fixed income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western Asset’s senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed income portfolios will reflect a consensus of interdisciplinary views within the Western Asset organization.

Q. What were the overall market conditions during the Fund’s reporting period?

A. The U.S. fixed income market experienced periods of elevated volatility, but ultimately generated solid results in 2023. The market moved higher over the first quarter of the reporting period amid shifting expectations for Federal Reserve Board (the “Fed”) rate hikes. Turmoil in the regional banking industry also triggered a flight to quality assets. Those market gains were then erased during the second and third quarters of 2023, as persistent inflation led to expectations of a “higher for longer” interest rate environment. The market ended the year on a positive note, as the Fed indicated it would likely pivot from raising rates to cutting rates in 2024. Moderating inflation and hopes that the central bank could orchestrate a “soft landing” for the economy also supported the market.

Short-term U.S. Treasury yields declined as inflation fell and the Fed indicated the likely end of its rate hike cycle. The yield for the two-year Treasury note began the reporting period at 4.41% and ended the period at 4.23%. The low of 3.75% was on May 4, 2023, and the peak of 5.19% occurred on October 17 and 18, 2023. The yield for the ten-year Treasury note began and ended the reporting period at 3.88%. The low of 3.30% was on April 5 and 6, 2023, and the peak of 4.98% occurred on October 19, 2023.

Inflation moderated during the reporting period and moved closer to the Fed’s 2% inflation rate target. For the twelve-month reporting period ended December 31, 2023, the seasonally unadjusted rate of inflation, as measured by the Consumer Price Index for All Urban Consumers (“CPI-U”)iii, was 3.4%. The CPI-U less food and energy was 3.9% over the same time frame. TIPS, as measured by the Bloomberg U.S. Treasury: U.S. TIPS Index, returned 3.90% during the reporting period.

   2  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Q. How did we respond to these changing market conditions?

A. A number of adjustments were made to the Fund during the reporting period. We tactically added to the Fund’s overweight duration positioning by adding duration exposure at the very long end of the curve as yields rose during the second and third quarters of the reporting period. In terms of fixed income sectors, we further reduced the Fund’s exposure to TIPS to a larger underweight position versus the benchmark. In contrast, we increased the Fund’s exposures to spread sectors, including investment-grade credit and emerging markets, as well as structured products, in particular to non-agency residential and commercial mortgage-backed securities.

During the reporting period, the Fund used interest rate futures to manage its duration and yield curve exposure, which were slightly additive to results. Finally, the Fund’s use of currency forwards, to take outright currency positions as well as to hedge non-U.S. dollar currency exposure, was a slight detractor from returns.

Performance review

For the twelve months ended December 31, 2023, Class I shares of Western Asset Inflation Indexed Plus Bond Fund returned 3.29%. The Fund’s unmanaged benchmark, the Bloomberg U.S. Treasury: U.S. TIPS, returned 3.90% for the same period.

Performance Snapshot as of December 31, 2023 (unaudited)
(excluding sales charges)	6 months			12 months
Western Asset Inflation Indexed Plus Bond Fund:
Class A		1.09	%		2.90	%
Class C		0.72	%		2.14	%
Class C1		0.75	%		2.05	%
Class FI		0.97	%		2.71	%
Class R		1.04	%		2.56	%
Class I		1.23	%		3.29	%
Class IS		1.36	%		3.35	%
Bloomberg U.S. Treasury: U.S. TIPS		1.99	%		3.90	%

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, investment returns and yields 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.franklintempleton.com.

All share class returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply or the deduction of taxes that a shareholder would pay on Fund distributions. If sales charges were reflected, the performance quoted would be lower. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

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

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    3 

Fund overview (cont’d)

The 30-Day SEC Yields for the period ended December 31, 2023 for Class A, Class C, Class C1, Class FI, Class R, Class I and Class IS shares were 0.88%, 0.18%, 0.48%, 1.06%, 0.81%, 1.32% and 1.33%, respectively. Absent fee waivers and/or expense reimbursements, the 30-Day SEC Yields for Class A, Class C, Class FI, Class R, Class I and Class IS shares would have been 0.86%, 0.16%, 0.68%, 0.52%, 1.27% and 1.28%, respectively. The 30-Day SEC Yield, calculated pursuant to the standard SEC formula, is based on the Fund’s investments over an annualized trailing 30-day period, and not on the distributions paid by the Fund, which may differ. The 30-Day SEC Yield includes adjustments for inflation to both U.S. and foreign portfolio securities that are linked to inflation indices. Please note, inflation adjustments to U.S. securities often occur at different intervals than foreign securities. These adjustments can cause the SEC Yield to change substantially from month-to-month. Increases in the inflation rate may result in the Fund reporting an exceptionally high yield which may not be repeated.

Total Annual Operating Expenses (unaudited)

As of the Fund’s current prospectus dated May 1, 2023, the gross total annual fund operating expense ratios for Class A, Class C, Class C1, Class FI, Class R, Class I and Class IS shares were 0.84%, 1.54%, 2.01%, 0.82%, 1.36%, 0.56% and 0.47%, respectively.

Actual expenses may be higher. For example, expenses may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile.

As a result of expense limitation arrangements, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets will not exceed 0.90% for Class A shares, 1.65% for Class C shares, 1.40% for Class C1 shares, 0.85% for Class FI shares, and 1.15% for Class R shares. In addition, the ratio of total annual fund operating expenses for Class IS shares will not exceed the ratio of total annual fund operating expenses for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2025 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund. This management fee waiver is not subject to the recapture provision discussed below.

The manager is permitted to recapture amounts waived and/or reimbursed to a class within two years after the fiscal year in which the manger earned the fee or incurred the expense if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will the manager recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Q. What were the leading contributors to performance?

A. The largest contributor to the Fund’s relative performance during the reporting period was its underweight exposure to inflation-linked securities as breakeven inflation rates fluctuated but ultimately fell during the reporting period. Additionally, the Fund’s spread

   4  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

sector exposures, including investment-grade credit, emerging markets and structured products, also contributed to performance as credit spreads tightened.

Q. What were the leading detractors from performance?

A. The largest detractor from the Fund’s relative performance during the reporting period was its rates positioning, primarily due to yield curve positioning. Real yield curve positioning focused on an overweight to the very long end of the curve was the main detractor as the real yield curve steepened during multiple periods over the course of the reporting period. Finally, an overweight duration position modestly detracted as real yields fluctuated and rose during the first three quarters of the year.

Thank you for your investment in the Western Asset Inflation Indexed Plus Bond Fund. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.

Sincerely,

Western Asset Management Company, LLC

January 17, 2024

RISKS: Fixed income securities involve interest rate, credit, inflation and reinvestment risks. As interest rates rise, the value of fixed income securities falls, thereby reducing the value of the Fund’s share price. Derivatives, such as options, futures and swaps, can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The use of leverage may increase volatility and possibility of loss. Risks of high yield securities (commonly known as “junk” bonds) include greater price volatility, illiquidity and possibility of default. The Fund may be subject to interest rate, income and deflation risks. Changes in inflation will cause the Fund’s income to fluctuate, sometimes substantially. Periods of deflation may adversely affect the Fund’s net asset value. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Emerging market countries tend to have economic, political and legal systems that are less developed and are less stable than those of more developed countries. Asset-backed, mortgage-backed or mortgage related securities are subject to prepayment and extension risks. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to changes in general market conditions, overall economic trends or events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes or other factors, political developments, armed conflicts, economic sanctions and countermeasures in response to sanctions, major cybersecurity events, investor sentiment, the global and domestic effects of a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. Please see the Fund’s prospectus for a more complete discussion of these and other risks and the Fund’s investment strategies.

Portfolio holdings and breakdowns are as of December 31, 2023 and are subject to change and may not be representative of the portfolio managers’ current or future investments. Please refer to pages 12 through 15 for a list and percentage breakdown of the Fund’s holdings.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    5 

Fund overview (cont’d)

The mention of sector breakdowns is for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. Portfolio holdings are subject to change at any time and may not be representative of the portfolio managers’ current or future investments. The Fund’s top five sector holdings (as a percentage of net assets) as of December 31, 2023 were: U.S. treasury inflation protected securities (87.9%), corporate bonds & notes (6.2%), collateralized mortgage obligations (4.4%), sovereign bonds (0.5%) and non-U.S. treasury inflation protected securities (0.4%). The Fund’s portfolio composition is subject to change at any time.

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

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.

ⁱ  U.S. Treasury Inflation-Protected Securities (“TIPS”) are inflation-indexed securities issued by the U.S. Treasury in five-year, ten-year and thirty-year maturities. The principal is adjusted to the Consumer Price Index, the commonly used measure of inflation. The coupon rate is constant, but generates a different amount of interest when multiplied by the inflation-adjusted principal.

ⁱⁱ  The Bloomberg U.S. Treasury: U.S. TIPS represents an unmanaged market index made up of U.S. Treasury Inflation Protected Securities.

ⁱⁱⁱ  The Consumer Price Index for All Urban Consumers (“CPI-U”) is a measure of the average change in prices over time of goods and services purchased by households, which covers approximately 93% of the total population and includes, in addition to wage earners and clerical worker households, groups such as professional, managerial and technical workers, the self-employed, short-term workers, the unemployed and retirees and others not in the labor force.

   6  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Fund at a glance^† (unaudited)

Investment breakdown (%) as a percent of total investments

† The bar graph above represents the Fund’s portfolio as of December 31, 2023 and December 31, 2022, and does not include derivatives, such as futures contracts and forward foreign currency contracts. The Fund’s portfolio is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.

‡ Represents less than 0.1%.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    7 

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; service and/or distribution (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 July 1, 2023 and held for the six months ended December 31, 2023.

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”.

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 actual total return1													Based on hypothetical total return1
	Actual Total Return Without Sales Charge2			Beginning Account Value		Ending Account Value		Annualized Expense Ratio			Expenses Paid During the Period3			Hypothetical Annualized Total Return			Beginning Account Value		Ending Account Value		Annualized Expense Ratio			Expenses Paid During the Period3
Class A		1.09	%	$	1,000.00	$	1,010.90		1.04	%	$	5.27	Class A		5.00	%	$	1,000.00	$	1,019.96		1.04	%	$	5.30
Class C		0.72			1,000.00		1,007.20		1.80			9.11	Class C		5.00			1,000.00		1,016.13		1.80			9.15
Class C1		0.75			1,000.00		1,007.50		1.40			7.08	Class C1		5.00			1,000.00		1,018.15		1.40			7.12
Class FI		0.97			1,000.00		1,009.70		0.99			5.01	Class FI		5.00			1,000.00		1,020.21		0.99			5.04
Class R		1.04			1,000.00		1,010.40		1.15			5.83	Class R		5.00			1,000.00		1,019.41		1.15			5.85
Class I		1.23			1,000.00		1,012.30		0.72			3.65	Class I		5.00			1,000.00		1,021.58		0.72			3.67
Class IS		1.36			1,000.00		1,013.60		0.67			3.40	Class IS		5.00			1,000.00		1,021.83		0.67			3.41

   8  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

¹  For the six months ended December 31, 2023.

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

³  Expenses (net of compensating balance arrangements, 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 (184), then divided by 365.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    9 

Fund performance (unaudited)

Average annual total returns
Without sales charges1	Class A			Class C			Class C1			Class FI			Class R			Class I			Class IS
Twelve Months Ended 12/31/23		2.90	%		2.14	%		2.05	%		2.71	%		2.56	%		3.29	%		3.35	%
Five Years Ended 12/31/23		2.34			1.61			1.82			2.32			1.99			2.65			2.77
Ten Years Ended 12/31/23		1.43			0.72			0.94			1.41			1.08			1.73			1.86
With sales charges2	Class A			Class C			Class C1			Class FI			Class R			Class I			Class IS
Twelve Months Ended 12/31/23		-1.01	%		1.14	%		2.05	%		2.71	%		2.56	%		3.29	%		3.35	%
Five Years Ended 12/31/23		1.46			1.61			1.82			2.32			1.99			2.65			2.77
Ten Years Ended 12/31/23		0.99			0.72			0.94			1.41			1.08			1.73			1.86

Cumulative total returns
Without sales charges1
Class A (12/31/13 through 12/31/23)	15.24	%
Class C (12/31/13 through 12/31/23)	7.43
Class C1 (12/31/13 through 12/31/23)	9.81
Class FI (12/31/13 through 12/31/23)	15.07
Class R (12/31/13 through 12/31/23)	11.36
Class I (12/31/13 through 12/31/23)	18.77
Class IS (12/31/13 through 12/31/23)	20.22

All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.

¹  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charge (“CDSC”) with respect to Class C shares.

²  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. In addition, Class A shares reflect the deduction of the maximum initial sales charge of 4.25% on purchases made prior to August 15, 2022. Purchases made on or after August 15, 2022 incur a maximum initial sales charge of 3.75%. Class C shares reflect the deduction of a 1.00% CDSC, which applies if shares are redeemed within one year from purchase payment.

   10  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Historical performance

Value of $1,000,000 invested in

Class I Shares of Western Asset Inflation Indexed Plus Bond Fund vs. Bloomberg U.S. Treasury: U.S. TIPS† — December 2013 - December 2023

All figures represent past performance and are not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower.

† Hypothetical illustration of $1,000,000 invested in Class I shares of Western Asset Inflation Indexed Plus Bond Fund on December 31, 2013, assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value through December 31, 2023. The hypothetical illustration also assumes a $1,000,000 investment in the Bloomberg U.S. Treasury: U.S. TIPS. The Bloomberg U.S. Treasury: U.S. TIPS (the “Index”) represents an unmanaged market index made up of U.S. Treasury Inflation-Linked Index securities. The Index is unmanaged and not subject to the same management and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. The performance of the Fund’s other classes may be greater or less than Class I shares’ performance indicated on this chart, depending on whether greater or lesser sales charges and fees were incurred by shareholders investing in the other classes.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    11 

Schedule of investments

December 31, 2023

Western Asset Inflation Indexed Plus Bond Fund

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount†		Value
U.S. Treasury Inflation Protected Securities — 87.9%
U.S. Treasury Bonds, Inflation Indexed		2.500	%		1/15/29		2,149,545	$	2,222,912
U.S. Treasury Bonds, Inflation Indexed		3.875	%		4/15/29		5,614,650		6,191,460
U.S. Treasury Bonds, Inflation Indexed		2.125	%		2/15/40		1,067,610		1,097,471
U.S. Treasury Bonds, Inflation Indexed		0.750	%		2/15/42		4,220,991		3,424,837
U.S. Treasury Bonds, Inflation Indexed		1.375	%		2/15/44		1,056,112		944,982
U.S. Treasury Bonds, Inflation Indexed		0.750	%		2/15/45		6,402,144		5,011,297
U.S. Treasury Bonds, Inflation Indexed		0.250	%		2/15/50		4,427,864		2,890,600
U.S. Treasury Bonds, Inflation Indexed		0.125	%		2/15/52		1,657,860		1,017,889
U.S. Treasury Bonds, Inflation Indexed		1.500	%		2/15/53		724,528		657,587
U.S. Treasury Notes, Inflation Indexed		0.625	%		1/15/26		388,455		374,861
U.S. Treasury Notes, Inflation Indexed		0.125	%		4/15/26		5,983,320		5,696,195
U.S. Treasury Notes, Inflation Indexed		0.125	%		10/15/26		6,417,858		6,095,725
U.S. Treasury Notes, Inflation Indexed		0.125	%		4/15/27		5,448,450		5,121,037
U.S. Treasury Notes, Inflation Indexed		0.750	%		7/15/28		1,103,130		1,056,080
U.S. Treasury Notes, Inflation Indexed		0.875	%		1/15/29		4,630,262		4,432,911
U.S. Treasury Notes, Inflation Indexed		0.250	%		7/15/29		1,924,496		1,779,347
U.S. Treasury Notes, Inflation Indexed		0.125	%		1/15/30		4,663,776		4,229,116
U.S. Treasury Notes, Inflation Indexed		0.125	%		1/15/32		2,197,622		1,931,354
U.S. Treasury Notes, Inflation Indexed		1.125	%		1/15/33		1,446,032		1,368,966
Total U.S. Treasury Inflation Protected Securities (Cost — $62,393,649)									55,544,627
Corporate Bonds & Notes — 6.2%
Energy — 3.2%
Energy Equipment & Services — 0.0%††
Halliburton Co., Senior Notes		3.800	%		11/15/25		5,000		4,904
Oil, Gas & Consumable Fuels — 3.2%
Apache Corp., Senior Notes		4.750	%		4/15/43		150,000		118,284
BP Capital Markets America Inc., Senior Notes		3.588	%		4/14/27		410,000		397,756
Devon Energy Corp., Senior Notes		5.850	%		12/15/25		490,000		495,652
Ecopetrol SA, Senior Notes		4.625	%		11/2/31		200,000		169,880
Energy Transfer LP, Senior Notes		2.900	%		5/15/25		30,000		29,091
Exxon Mobil Corp., Senior Notes		3.043	%		3/1/26		90,000		87,450
Kinder Morgan Inc., Senior Notes		4.300	%		6/1/25		170,000		168,012
Occidental Petroleum Corp., Senior Notes		5.550	%		3/15/26		110,000		110,864
Occidental Petroleum Corp., Senior Notes		3.000	%		2/15/27		130,000		121,057
Occidental Petroleum Corp., Senior Notes		3.500	%		8/15/29		240,000		213,059
Western Midstream Operating LP, Senior Notes		3.100	%		2/1/25		120,000		116,854
Total Oil, Gas & Consumable Fuels									2,027,959
Total Energy									2,032,863

See Notes to Financial Statements.

   12  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Western Asset Inflation Indexed Plus Bond Fund

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount†		Value
Materials — 3.0%
Metals & Mining — 2.6%
Anglo American Capital PLC, Senior Notes		4.000	%		9/11/27		280,000	$	269,230	(a)
Antofagasta PLC, Senior Notes		2.375	%		10/14/30		340,000		278,619	(a)
ArcelorMittal SA, Senior Notes		7.000	%		10/15/39		140,000		151,843
Glencore Funding LLC, Senior Notes		4.000	%		3/27/27		140,000		136,050	(a)
Southern Copper Corp., Senior Notes		5.250	%		11/8/42		440,000		426,561
Vale Overseas Ltd., Senior Notes		6.250	%		8/10/26		140,000		143,559
Yamana Gold Inc., Senior Notes		4.625	%		12/15/27		230,000		222,467
Total Metals & Mining									1,628,329
Paper & Forest Products — 0.4%
Inversiones CMPC SA, Senior Notes		4.375	%		4/4/27		240,000		233,124	(b)
Total Materials									1,861,453
Total Corporate Bonds & Notes (Cost — $4,064,086)									3,894,316
Collateralized Mortgage Obligations (c) —4.4%
Benchmark Mortgage Trust, 2023-B38 A4		5.525	%		4/15/56		130,000		134,133
BLP Commercial Mortgage Trust, 2023-IND A (1 mo. Term SOFR + 1.692%)		7.054	%		3/15/40		330,000		328,592	(a)(d)
BX Commercial Mortgage Trust, 2023-VLT2 A (1 mo. Term SOFR + 2.281%)		7.643	%		6/15/40		160,000		160,478	(a)(d)
BX Trust, 2022-VAMF A (1 mo. Term SOFR + 0.850%)		6.212	%		1/15/39		190,000		186,159	(a)(d)
Citigroup Commercial Mortgage Trust, 2023-SMRT A		5.820	%		10/12/40		230,000		233,209	(a)(d)
CSMC Trust, 2019-AFC1 A3		3.877	%		7/25/49		166,287		156,254	(a)
Deephaven Residential Mortgage Trust, 2022-1 A2		2.961	%		1/25/67		210,000		167,531	(a)(d)
Ellington Financial Mortgage Trust, 2022-1 A2		3.001	%		1/25/67		120,000		84,020	(a)(d)
Federal Home Loan Mortgage Corp. (FHLMC) REMIC, Structured Agency Credit Risk Debt Notes, 2021- DNA6 M2 (30 Day Average SOFR + 1.500%)		6.837	%		10/25/41		190,000		188,564	(a)(d)
Federal Home Loan Mortgage Corp. (FHLMC) REMIC, Structured Agency Credit Risk Debt Notes, 2022- DNA2 M1A (30 Day Average SOFR + 1.300%)		6.637	%		2/25/42		109,938		109,979	(a)(d)
Federal Home Loan Mortgage Corp. (FHLMC) REMIC, Structured Agency Credit Risk Debt Notes, 2022- DNA2 M1B (30 Day Average SOFR + 2.400%)		7.737	%		2/25/42		200,000		202,729	(a)(d)
Federal Home Loan Mortgage Corp. (FHLMC) REMIC, Structured Agency Credit Risk Debt Notes, 2022- DNA3 M1A (30 Day Average SOFR + 2.000%)		7.337	%		4/25/42		136,928		138,228	(a)(d)
La Quinta Mortgage Trust, 2023-LAQ A (1 mo. Term SOFR + 2.091%)		7.453	%		3/15/36		184,816		183,766	(a)(d)
Morgan Stanley Bank of America Merrill Lynch Trust, 2016-C32 A3		3.459	%		12/15/49		189,679		181,104

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    13 

Schedule of investments (cont’d)

December 31, 2023

Western Asset Inflation Indexed Plus Bond Fund

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount†			Value
Collateralized Mortgage Obligations (c) — continued
New Residential Mortgage Loan Trust, 2019-RPL3 A1		2.750	%		7/25/59		105,056		$	99,317	(a)(d)
Residential Mortgage Loan Trust, 2020-2 A1		1.654	%		5/25/60		33,063			32,631	(a)(d)
WaMu Mortgage Pass-Through Certificates Trust, 2005-AR4 A5		3.927	%		4/25/35		186,471			178,795	(d)
Total Collateralized Mortgage Obligations (Cost — $2,850,257)										2,765,489
Sovereign Bonds — 0.5%
Peru — 0.5%
Peruvian Government International Bond, Senior Notes (Cost — $340,005)		2.783	%		1/23/31		340,000			296,929
Non-U.S. Treasury Inflation Protected Securities — 0.4%
United Kingdom — 0.4%
United Kingdom Inflation-Linked Gilt, Bonds (Cost — $267,330)		0.125	%		3/22/68		302,604	GBP		288,155
Asset-Backed Securities — 0.0%††
Bear Stearns Asset Backed Securities Trust, 2003- ABF1 A (1 mo. Term SOFR + 0.854%) (Cost — $4,402)		6.210	%		1/25/34		4,482			4,329	(d)
Total Investments — 99.4% (Cost — $69,919,729)										62,793,845
Other Assets in Excess of Liabilities — 0.6%										383,698
Total Net Assets — 100.0%									$	63,177,543

† Face amount denominated in U.S. dollars, unless otherwise noted.

†† Represents less than 0.1%.

^(a)  Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

^(b)  Security is exempt from registration under Regulation S of the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

^(c)  Collateralized mortgage obligations are secured by an underlying pool of mortgages or mortgage pass-through certificates that are structured to direct payments on underlying collateral to different series or classes of the obligations. The interest rate may change positively or inversely in relation to one or more interest rates, financial indices or other financial indicators and may be subject to an upper and/or lower limit.

^(d)  Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.

Abbreviation(s) used in this schedule:
GBP	— British Pound
REMIC	— Real Estate Mortgage Investment Conduit
SOFR	— Secured Overnight Financing Rate

See Notes to Financial Statements.

   14  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Western Asset Inflation Indexed Plus Bond Fund

At December 31, 2023, the Fund had the following open futures contracts:

	Number of Contracts		Expiration Date		Notional Amount		Market Value		Unrealized Depreciation
Contracts to Sell:
U.S. Treasury Long-Term Bonds		5		3/24	$	587,960	$	624,687	$	(36,727)

At December 31, 2023, the Fund had the following open forward foreign currency contracts:

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Depreciation
USD	2,754	EUR	2,597	BNP Paribas SA		1/19/24	$	(116)
USD	259,949	GBP	212,685	BNP Paribas SA		1/19/24		(11,183)
Net unrealized depreciation on open forward foreign currency contracts							$	(11,299)

Abbreviation(s) used in this table:
EUR	— Euro
GBP	— British Pound
USD	— United States Dollar

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    15 

Statement of assets and liabilities

December 31, 2023

Assets:
Investments, at value (Cost — $69,919,729)	$	62,793,845
Foreign currency, at value (Cost — $15,512)		15,941
Cash		270,693
Interest receivable		214,691
Deposits with brokers for open futures contracts		51,225
Receivable for Fund shares sold		7,278
Receivable from brokers — net variation margin on open futures contracts		938
Foreign currency collateral for open futures contracts, at value (Cost — $21)		21
Prepaid expenses		19,889
Total Assets		63,374,521
Liabilities:
Payable for Fund shares repurchased		75,939
Audit and tax fees payable		49,509
Fund accounting fees payable		27,346
Investment management fee payable		13,829
Unrealized depreciation on forward foreign currency contracts		11,299
Service and/or distribution fees payable		3,637
Directors’ fees payable		694
Accrued expenses		14,725
Total Liabilities		196,978
Total Net Assets	$	63,177,543
Net Assets:
Par value (Note 7)	$	6,635
Paid-in capital in excess of par value		82,526,932
Total distributable earnings (loss)		(19,356,024)
Total Net Assets	$	63,177,543

See Notes to Financial Statements.

   16  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Net Assets:
Class A	$10,283,304
Class C	$1,697,071
Class C1	$331
Class FI	$98,341
Class R	$103,716
Class I	$10,677,045
Class IS	$40,317,735
Shares Outstanding:
Class A	1,094,267
Class C	186,898
Class C1	35
Class FI	10,541
Class R	11,201
Class I	1,122,834
Class IS	4,209,392
Net Asset Value:
Class A (and redemption price)	$9.40
Class C*	$9.08
Class C1 (and redemption price)	$9.46
Class FI (and redemption price)	$9.33
Class R (and redemption price)	$9.26
Class I (and redemption price)	$9.51
Class IS (and redemption price)	$9.58
Maximum Public Offering Price Per Share:
Class A (based on maximum initial sales charge of 3.75%)	$9.77

* Redemption price per share is NAV of Class C shares reduced by a 1.00% CDSC if shares are redeemed within one year from purchase payment (Note 2).

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    17 

Statement of operations

For the Year Ended December 31, 2023

Investment Income:
Interest	$	2,801,594
Dividends from affiliated investments		7,560
Less: Foreign taxes withheld		(284)
Total Investment Income		2,808,870
Expenses:
Investment management fee (Note 2)		161,530
Registration fees		107,055
Fund accounting fees		66,053
Service and/or distribution fees (Notes 2 and 5)		57,967
Audit and tax fees		49,509
Transfer agent fees (Notes 2 and 5)		37,075
Shareholder reports		11,063
Legal fees		8,492
Directors’ fees		2,189
Commitment fees (Note 9)		723
Insurance		570
Custody fees		482
Miscellaneous expenses		11,417
Total Expenses		514,125
Less: Fee waivers and/or expense reimbursements (Notes 2 and 5)		(21,354)
Net Expenses		492,771
Net Investment Income		2,316,099
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
Net Realized Gain (Loss) From:
Investment transactions in unaffiliated securities		(6,369,949)
Futures contracts		52,506
Forward foreign currency contracts		93
Foreign currency transactions		13,250
Net Realized Loss		(6,304,100)
Change in Net Unrealized Appreciation (Depreciation) From:
Investments in unaffiliated securities		6,545,111
Futures contracts		(28,842)
Forward foreign currency contracts		(13,703)
Foreign currencies		(4,679)
Change in Net Unrealized Appreciation (Depreciation)		6,497,887
Net Gain on Investments, Futures Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions		193,787
Increase in Net Assets From Operations	$	2,509,886

See Notes to Financial Statements.

   18  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Statements of changes in net assets

 

For the Years Ended December 31,	2023		2022
Operations:
Net investment income	$	2,316,099	$	5,743,273
Net realized loss		(6,304,100)		(1,358,572)
Change in net unrealized appreciation (depreciation)		6,497,887		(18,763,874)
Increase (Decrease) in Net Assets From Operations		2,509,886		(14,379,173)
Distributions to Shareholders From (Notes 1 and 6):
Total distributable earnings		(2,030,022)		(6,250,018)
Decrease in Net Assets From Distributions to Shareholders		(2,030,022)		(6,250,018)
Fund Share Transactions (Note 7):
Net proceeds from sale of shares		11,976,089		44,319,675
Reinvestment of distributions		1,988,336		6,159,695
Cost of shares repurchased		(49,374,984)		(43,968,927)
Increase (Decrease) in Net Assets From Fund Share Transactions		(35,410,559)		6,510,443
Decrease in Net Assets		(34,930,695)		(14,118,748)
Net Assets:
Beginning of year		98,108,238		112,226,986
End of year	$	63,177,543	$	98,108,238

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    19 

Financial highlights

For a share of capital stock outstanding throughout each year ended December 31:
Class A Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.37			$11.44			$12.29			$11.34			$10.56
Income (loss) from operations:
Net investment income		0.24			0.53			0.47			0.13			0.19
Net realized and unrealized gain (loss)		0.03			(1.99)			0.06			0.95			0.80
Total income (loss) from operations		0.27			(1.46)			0.53			1.08			0.99
Less distributions from:
Net investment income		(0.24)			(0.61)			(0.59)			(0.13)			(0.21)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.24)			(0.61)			(1.38)			(0.13)			(0.21)
Net asset value, end of year		$9.40			$9.37			$11.44			$12.29			$11.34
Total return2		2.90	%		(12.88)	%		4.50	%		9.58	%		9.37	%
Net assets, end of year (000s)		$10,283			$19,810			$10,798			$8,749			$10,140
Ratios to average net assets:
Gross expenses		0.90	%		0.84	%		0.75	%		0.65	%		0.71	%
Net expenses3,4		0.88			0.82			0.75			0.65			0.71
Net investment income		2.58			5.18			3.83			1.11			1.75
Portfolio turnover rate		19	%		39	%		80	%5		23	%		60	%

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

²  Performance figures, exclusive of sales charges, may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  Reflects fee waivers and/or expense reimbursements.

⁴  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class A shares did not exceed 0.90%. This expense limitation arrangement cannot be terminated prior to December 31, 2025 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁵  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

   20  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

For a share of capital stock outstanding throughout each year ended December 31:
Class C Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.06			$11.09			$11.96			$11.05			$10.30
Income (loss) from operations:
Net investment income		0.17			0.42			0.38			0.06			0.12
Net realized and unrealized gain (loss)		0.02			(1.90)			0.05			0.90			0.77
Total income (loss) from operations		0.19			(1.48)			0.43			0.96			0.89
Less distributions from:
Net investment income		(0.17)			(0.55)			(0.51)			(0.05)			(0.14)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.17)			(0.55)			(1.30)			(0.05)			(0.14)
Net asset value, end of year		$9.08			$9.06			$11.09			$11.96			$11.05
Total return2		2.14	%		(13.48)	%		3.75	%		8.73	%		8.63	%
Net assets, end of year (000s)		$1,697			$2,296			$1,481			$1,002			$867
Ratios to average net assets:
Gross expenses		1.64	%		1.54	%		1.45	%		1.43	%		1.38	%
Net expenses3,4		1.62			1.51			1.45			1.43			1.38
Net investment income		1.91			4.25			3.23			0.48			1.12
Portfolio turnover rate		19	%		39	%		80	%5		23	%		60	%

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

²  Performance figures, exclusive of CDSC, may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  Reflects fee waivers and/or expense reimbursements.

⁴  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class C shares did not exceed 1.65%. This expense limitation arrangement cannot be terminated prior to December 31, 2025 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁵  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    21 

Financial highlights (cont’d)

For a share of capital stock outstanding throughout each year ended December 31:
Class C1 Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.29			$11.42			$12.20			$11.24			$10.41
Income (loss) from operations:
Net investment income		0.18			0.54			0.39			0.04			0.04
Net realized and unrealized gain (loss)		0.16			(2.20)			0.13			0.93			0.89
Total income (loss) from operations		0.34			(1.66)			0.52			0.97			0.93
Less distributions from:
Net investment income		(0.17)			(0.47)			(0.51)			(0.01)			(0.10)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.17)			(0.47)			(1.30)			(0.01)			(0.10)
Net asset value, end of year		$9.46			$9.29			$11.42			$12.20			$11.24
Total return2		2.05	%		(13.29)	%		4.46	%3		8.66	%		8.95	%
Net assets, end of year		$331			$316			$30,534			$27,986			$90,854
Ratios to average net assets:
Gross expenses		22.29	%		2.01	%		1.94	%		2.24	%		1.21	%
Net expenses4,5		1.40			1.40			1.40			1.40			1.21
Net investment income		1.90			5.15			3.24			0.33			0.35
Portfolio turnover rate		19	%		39	%		80	%6		23	%		60	%

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

²  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  The total return includes a payment by an affiliate to reimburse for an error. Absent this payment, total return would have been 3.82% for the year ended December 31, 2021.

⁴  Reflects fee waivers and/or expense reimbursements.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class C1 shares did not exceed 1.40%. This expense limitation arrangement cannot be terminated prior to December 31, 2025 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁶  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

   22  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

For a share of capital stock outstanding throughout each year ended December 31:
Class FI Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.30			$11.35			$12.20			$11.27			$10.49
Income (loss) from operations:
Net investment income		0.26			0.58			0.47			0.13			0.22
Net realized and unrealized gain (loss)		(0.01)	2		(2.02)			0.07			0.93			0.77
Total income (loss) from operations		0.25			(1.44)			0.54			1.06			0.99
Less distributions from:
Net investment income		(0.22)			(0.61)			(0.60)			(0.13)			(0.21)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.22)			(0.61)			(1.39)			(0.13)			(0.21)
Net asset value, end of year		$9.33			$9.30			$11.35			$12.20			$11.27
Total return3		2.71	%		(12.83)	%		4.56	%		9.42	%		9.48	%
Net assets, end of year (000s)		$98			$336			$816			$754			$483
Ratios to average net assets:
Gross expenses		0.94	%		0.82	%		0.70	%		0.73	%		0.64	%
Net expenses4,5		0.85			0.80			0.69			0.73			0.64
Net investment income		2.74			5.57			3.89			1.07			2.03
Portfolio turnover rate		19	%		39	%		80	%6		23	%		60	%

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

²  Calculation of the net gain per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized gain presented in the Statement of Operations due to the timing of the sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund.

³  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

⁴  Reflects fee waivers and/or expense reimbursements.

⁵  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of Class FI shares did not exceed 0.85%. This expense limitation arrangement cannot be terminated prior to December 31, 2025 without the Board of Trustees’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁶  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    23 

Financial highlights (cont’d)

For a share of capital stock outstanding throughout each year ended December 31:
Class R Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.23			$11.28			$12.13			$11.20			$10.43
Income (loss) from operations:
Net investment income		0.21			0.45			0.42			0.10			0.16
Net realized and unrealized gain (loss)		0.03			(1.93)			0.07			0.91			0.78
Total income (loss) from operations		0.24			(1.48)			0.49			1.01			0.94
Less distributions from:
Net investment income		(0.21)			(0.57)			(0.55)			(0.08)			(0.17)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.21)			(0.57)			(1.34)			(0.08)			(0.17)
Net asset value, end of year		$9.26			$9.23			$11.28			$12.13			$11.20
Total return2		2.56	%		(13.08)	%		4.16	%		9.06	%		8.99	%
Net assets, end of year (000s)		$104			$61			$102			$216			$458
Ratios to average net assets:
Gross expenses		1.37	%		1.36	%		1.13	%		1.06	%		1.05	%
Net expenses3,4		1.15			1.15			1.13			1.06			1.05
Net investment income		2.33			4.36			3.45			0.88			1.49
Portfolio turnover rate		19	%		39	%		80	%5		23	%		60	%

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

²  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  Reflects fee waivers and/or expense reimbursements.

⁴  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class R shares did not exceed 1.15%. This expense limitation arrangement cannot be terminated prior to December 31, 2025 without the Board of Trustees’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁵  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

   24  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

For a share of capital stock outstanding throughout each year ended December 31:
Class I Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.47			$11.55			$12.40			$11.45			$10.66
Income (loss) from operations:
Net investment income		0.28			0.60			0.54			0.18			0.24
Net realized and unrealized gain (loss)		0.03			(2.05)			0.03			0.94			0.80
Total income (loss) from operations		0.31			(1.45)			0.57			1.12			1.04
Less distributions from:
Net investment income		(0.27)			(0.63)			(0.63)			(0.17)			(0.25)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.27)			(0.63)			(1.42)			(0.17)			(0.25)
Net asset value, end of year		$9.51			$9.47			$11.55			$12.40			$11.45
Total return2		3.29	%		(12.63)	%		4.74	%		9.84	%		9.79	%
Net assets, end of year (000s)		$10,677			$16,624			$34,615			$84,063			$51,902
Ratios to average net assets:
Gross expenses		0.61	%		0.56	%		0.39	%		0.35	%		0.36	%
Net expenses3,4		0.58			0.54			0.39			0.35			0.36
Net investment income		2.97			5.66			4.34			1.51			2.17
Portfolio turnover rate		19	%		39	%		80	%5		23	%		60	%

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

²  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  Reflects fee waivers and/or expense reimbursements.

⁴  As a result of an expense limitation arrangement, prior to May 1, 2023, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class I shares did not exceed 0.50%. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

⁵  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    25 

Financial highlights (cont’d)

For a share of capital stock outstanding throughout each year ended December 31:
Class IS Shares1	2023			2022			2021			2020			2019
Net asset value, beginning of year		$9.54			$11.63			$12.46			$11.51			$10.71
Income (loss) from operations:
Net investment income		0.28			0.60			0.54			0.18			0.26
Net realized and unrealized gain (loss)		0.03			(2.05)			0.06			0.95			0.80
Total income (loss) from operations		0.31			(1.45)			0.60			1.13			1.06
Less distributions from:
Net investment income		(0.27)			(0.64)			(0.64)			(0.18)			(0.26)
Net realized gains		—			—			(0.79)			—			—
Total distributions		(0.27)			(0.64)			(1.43)			(0.18)			(0.26)
Net asset value, end of year		$9.58			$9.54			$11.63			$12.46			$11.51
Total return2		3.35	%		(12.54)	%		4.99	%		9.87	%		9.93	%
Net assets, end of year (000s)		$40,318			$58,982			$64,384			$414,300			$398,438
Ratios to average net assets:
Gross expenses		0.52	%		0.47	%		0.28	%		0.27	%		0.27	%
Net expenses3,4		0.49			0.44			0.28			0.27			0.27
Net investment income		2.96			5.68			4.37			1.49			2.31
Portfolio turnover rate		19	%		39	%		80	%5		23	%		60	%

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

²  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³  Reflects fee waivers and/or expense reimbursements.

⁴  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses for Class IS shares did not exceed the ratio of total annual fund operating expenses for Class I shares. This expense limitation arrangement cannot be terminated prior to December 31, 2024 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund. Prior to May 1, 2023, the expense limitation was 0.40%.

⁵  Excludes securities delivered as a result of a redemption in-kind.

See Notes to Financial Statements.

   26  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Notes to financial statements

1. Organization and significant accounting policies

Western Asset Inflation Indexed Plus Bond Fund (the “Fund”) is a separate diversified investment series of Western Asset Funds, Inc. (the “Corporation”). The Corporation, a Maryland Statutory Corporation, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (“ASC 946”). The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”), including, but not limited to, ASC 946. 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. Subsequent events have been evaluated through the date the financial statements were issued.

(a) Investment valuation. 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 typically 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. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. 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. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). 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 Directors.

Pursuant to policies adopted by the Board of Directors, the Fund’s manager has been designated as the valuation designee and is responsible for the oversight of the daily valuation process. The Fund’s manager is assisted by the Global Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    27 

Notes to financial statements (cont’d)

the Fund’s manager and the Board of Directors. 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 Directors, 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 Directors 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 — unadjusted 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.)

• 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.

   28  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

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

ASSETS
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Long-Term Investments†:
U.S. Treasury Inflation Protected Securities		—	$	55,544,627		—	$	55,544,627
Corporate Bonds & Notes		—		3,894,316		—		3,894,316
Collateralized Mortgage Obligations		—		2,765,489		—		2,765,489
Sovereign Bonds		—		296,929		—		296,929
Non-U.S. Treasury Inflation Protected Securities		—		288,155		—		288,155
Asset-Backed Securities		—		4,329		—		4,329
Total Investments		—	$	62,793,845		—	$	62,793,845

LIABILITIES
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments:
Futures Contracts††	$	36,727		—		—	$	36,727
Forward Foreign Currency Contracts††		—	$	11,299		—		11,299
Total	$	36,727	$	11,299		—	$	48,026

† See Schedule of Investments for additional detailed categorizations.

†† Reflects the unrealized appreciation (depreciation) of the instruments.

(b) 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. The daily changes in contract value are recorded as unrealized appreciation or depreciation in the Statement of Operations and the Fund recognizes a realized gain or loss when the contract is closed.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    29 

Notes to financial statements (cont’d)

Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. 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.

(c) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge exposure of bond positions or in an attempt to increase the Fund’s return. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.

Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(d) Inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value or interest rate is periodically adjusted according to the rate of inflation. As the index measuring inflation changes, the principal value or interest rate of inflation-indexed bonds will be adjusted accordingly. Inflation adjustments to the principal amount of inflation-indexed bonds are reflected as an increase or decrease to investment income on the Statement of Operations. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal.

(e) 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 on 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.

The Fund does not isolate that portion of the results of operations resulting from fluctuations 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

   30  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

the values of assets and liabilities, other than investments in securities, on 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.

(f) Credit and market risk. Investments in securities that are collateralized by real estate mortgages are subject to certain credit and liquidity risks. When market conditions result in an increase in default rates of the underlying mortgages and the foreclosure values of underlying real estate properties are materially below the outstanding amount of these underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be doubtful. Such market conditions may significantly impair the value and liquidity of these investments and may result in a lack of correlation between their credit ratings and values.

(g) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.

(h) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s subadviser attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

With exchange traded and centrally cleared derivatives, there is less counterparty risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default of the clearing broker or clearinghouse.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    31 

Notes to financial statements (cont’d)

The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement, with certain of its derivative counterparties that govern over-the-counter (“OTC”) derivatives and provide for general obligations, representations, agreements, collateral posting terms, netting provisions in the event of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or net asset value per share over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. However, absent an event of default by the counterparty or a termination of the agreement, the terms of the ISDA Master Agreements do not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for OTC traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.

As of December 31, 2023, the Fund held forward foreign currency contracts with credit related contingent features which had a liability position of $11,299. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivative counterparties.

(i) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities) is recorded on the accrual basis. Amortization of premiums and accretion of discounts on debt securities are recorded to interest income over the lives of the respective securities, except for premiums on certain callable debt securities, which are amortized to the earliest call date. Paydown gains and losses on mortgage- and asset-backed securities are recorded as adjustments to interest income. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.

(j) Distributions to shareholders. Distributions from net investment income of 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 to shareholders of the Fund are recorded on the

   32  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(k) Share class accounting. Investment income, common expenses and realized/ unrealized gains (losses) on investments are allocated to the various 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 share class.

(l) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

(m) 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 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of December 31, 2023, no provision for income tax is 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.

(n) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During the current year, the Fund had no reclassifications.

2. Investment management agreement and other transactions with affiliates

Franklin Templeton Fund Adviser, LLC (“FTFA”) (formerly known as Legg Mason Partners Fund Advisor, LLC (“LMPFA”) prior to November 30, 2023) is the Fund’s investment manager. Western Asset Management Company, LLC (“Western Asset”), Western Asset Management Company Limited (“Western Asset London”), Western Asset Management Company Pte. Ltd. in Singapore (“Western Asset Singapore”) and Western Asset Management Company Ltd in Japan (“Western Asset Japan”) are the Fund’s subadvisers. FTFA, Western Asset, Western Asset London, Western Asset Singapore and Western Asset Japan are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).

FTFA provides the Fund with management and administrative services for which the Fund pays a fee, calculated daily and paid monthly, at an annual rate of 0.20% of the Fund’s average daily net assets. For their services, FTFA pays Western Asset, Western Asset London, Western Asset Singapore and Western Asset Japan monthly all of the management fee that it receives from the Fund.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    33 

Notes to financial statements (cont’d)

As a result of expense limitation arrangements between the Fund and FTFA, the ratio of total annual fund operating expenses, other than interest, brokerage commissions, taxes, extraordinary expenses, deferred organizational expenses and acquired fund fees and expenses, to average net assets of Class A, Class C, Class C1, Class FI and Class R shares did not exceed 0.90%, 1.65%, 1.40%, 0.85% and 1.15%, respectively. In addition, the ratio of total annual fund operating expenses for Class IS shares did not exceed the ratio of total annual fund operating expenses for Class I shares. These expense limitation arrangements cannot be terminated prior to December 31, 2025 without the Board of Directors’ consent. In addition, the manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund (the “affiliated money market fund waiver”). The affiliated money market fund waiver is not subject to the recapture provision discussed below. Prior to May 1, 2023, the expense limitation of Class I and Class IS shares were 0.50% and 0.40%, respectively.

During the year ended December 31, 2023, fees waived and/or expenses reimbursed amounted to $21,354, which included an affiliated money market fund waiver of $140.

FTFA is permitted to recapture amounts waived and/or reimbursed to a class within two years after the fiscal year in which FTFA earned the fee or incurred the expense if the class’ total annual fund operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will FTFA recapture any amount that would result, on any particular business day of the Fund, in the class’ total annual fund operating expenses exceeding the expense cap or any other lower limit then in effect.

Pursuant to these arrangements, at December 31, 2023, the Fund had remaining fee waivers and/or expense reimbursements subject to recapture by FTFA and respective dates of expiration as follows:

	Class A		Class C		Class C1	Class FI		Class R		Class I		Class IS
Expires December 31, 2024	$	3,300	$	338	$152	$	123	$	194	$	4,307	$	15,635
Expires December 31, 2025		3,542		459	67		233		176		3,481		13,256
Total fee waivers/expense reimbursements subject to recapture	$	6,842	$	797	$219	$	356	$	370	$	7,788	$	28,891

For the year ended December 31, 2023, FTFA did not recapture any fees.

Franklin Distributors, LLC (“Franklin Distributors”) serves as the Fund’s sole and exclusive distributor. Franklin Distributors is an indirect, wholly-owned broker-dealer subsidiary of Franklin Resources. Franklin Templeton Investor Services, LLC (“Investor Services”) serves as the Fund’s shareholder servicing agent and acts as the Fund’s transfer agent and dividend-paying agent. Investor Services is an indirect, wholly-owned subsidiary of Franklin Resources. Each class of shares of the Fund pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. Investor Services charges account-based fees based on the number of individual shareholder accounts, as well as a fixed percentage fee based on the total account-based fees charged. In addition, each class

   34  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

reimburses Investor Services for out of pocket expenses incurred. For the year ended December 31, 2023, the Fund incurred transfer agent fees as reported on the Statement of Operations, of which $3,597 was earned by Investor Services.

There is a maximum initial sales charge of 3.75% for Class A shares. There is a contingent deferred sales charge (“CDSC”) of 1.00% on Class C shares, which applies if redemption occurs within 12 months from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within 18 months from purchase payment. This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of other shares of funds sold by Franklin Distributors, equal or exceed $500,000 in the aggregate. These purchases do not incur an initial sales charge.

For the year ended December 31, 2023, sales charges retained by and CDSCs paid to Franklin Distributors and its affiliates, if any, were as follows:

	Class A		Class C
Sales charges	$	166		—
CDSCs		—	$	43

All officers and one Director of the Corporation are employees of Franklin Resources or its affiliates and do not receive compensation from the Corporation.

3. Investments

During the year ended December 31, 2023, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) and U.S. Government & Agency Obligations were as follows:

	Investments		U.S. Government & Agency Obligations
Purchases	$	2,998,210	$	12,073,168
Sales		3,687,912		46,365,651

At December 31, 2023, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

	Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Depreciation
Securities	$	69,995,704	$	53,303	$	(7,255,162)	$	(7,201,859)
Futures contracts		—		—		(36,727)		(36,727)
Forward foreign currency contracts		—		—		(11,299)		(11,299)

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    35 

Notes to financial statements (cont’d)

4. Derivative instruments and hedging activities

Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of Assets and Liabilities at December 31, 2023.

LIABILITY DERIVATIVES1
	Interest Rate Risk		Foreign Exchange Risk		Total
Futures contracts2	$	36,727		—	$	36,727
Forward foreign currency contracts		—	$	11,299		11,299
Total	$	36,727	$	11,299	$	48,026

¹  Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation and for liability derivatives is payables/net unrealized depreciation.

²  Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only net variation margin is reported within the receivables and/or payables on the Statement of Assets and Liabilities.

The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended December 31, 2023. The table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information about the change in net unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.

AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
	Interest Rate Risk		Foreign Exchange Risk		Total
Futures contracts	$	52,506		—	$	52,506
Forward foreign currency contracts		—	$	93		93
Total	$	52,506	$	93	$	52,599
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
	Interest Rate Risk		Foreign Exchange Risk		Total
Futures contracts	$	(28,842)		—	$	(28,842)
Forward foreign currency contracts		—	$	(13,703)		(13,703)
Total	$	(28,842)	$	(13,703)	$	(42,545)

During the year ended December 31, 2023, the volume of derivative activity for the Fund was as follows:

	Average Market Value
Futures contracts (to buy)†	$	1,985,663
Futures contracts (to sell)		4,948,168
Forward foreign currency contracts (to buy)†		65,490
Forward foreign currency contracts (to sell)		122,086

   36  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

† At December 31, 2023, there were no open positions held in this derivative.

The following table presents the Fund’s OTC derivative assets and liabilities by counterparty net of amounts available for offset under an ISDA Master Agreement and net of the related collateral pledged (received) by the Fund as of December 31, 2023.

Counterparty	Gross Assets Subject to Master Agreements1		Gross Liabilities Subject to Master Agreements1		Net Assets (Liabilities) Subject to Master Agreements		Collateral Pledged (Received)		Net Amount2
BNP Paribas SA		—	$	(11,299)	$	(11,299)		—	$	(11,299)

¹  Absent an event of default or early termination, derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

²  Represents the net amount receivable (payable) from (to) the counterparty in the event of default.

5. Class specific expenses, waivers and/or expense reimbursements

The Fund has adopted a Rule 12b-1 shareholder services and distribution plan and under that plan the Fund pays service and/or distribution fees with respect to its Class A, Class C, Class C1, Class FI and Class R shares calculated at the annual rate of 0.25%, 1.00%, 0.75%, 0.25% and 0.50% of the average daily net assets of each class, respectively. Service and/or distribution fees are accrued daily and paid monthly.

For the year ended December 31, 2023, class specific expenses were as follows:

	Service and/or Distribution Fees		Transfer Agent Fees
Class A	$	36,649	$	19,054
Class C		20,240		2,324
Class C1		2		69
Class FI		675		467
Class R		401		264
Class I		—		12,629
Class IS		—		2,268
Total	$	57,967	$	37,075

For the year ended December 31, 2023, waivers and/or expense reimbursements by class were as follows:

	Waivers/Expense Reimbursements
Class A	$	3,568
Class C		462
Class C1		67
Class FI		234
Class R		176

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    37 

Notes to financial statements (cont’d)

	Waivers/Expense Reimbursements
Class I	$	3,506
Class IS		13,341
Total	$	21,354

6. Distributions to shareholders by class

	Year Ended December 31, 2023		Year Ended December 31, 2022
Net Investment Income:
Class A	$	360,610	$	1,079,370
Class C		38,673		99,728
Class C1		6		1,360
Class FI		5,937		34,756
Class R		1,950		4,738
Class I		402,605		1,155,219
Class IS		1,220,241		3,874,847
Total	$	2,030,022	$	6,250,018

7. Capital shares

At December 31, 2023, the Corporation had 42.7 billion shares of capital stock authorized with a par value of $0.001 per share. Transactions in shares of each class were as follows:

	Year Ended December 31, 2023				Year Ended December 31, 2022
	Shares		Amount		Shares		Amount
Class A
Shares sold		161,141	$	1,526,708		1,358,375	$	14,307,705
Shares issued on reinvestment		34,887		324,072		103,526		1,003,903
Shares repurchased		(1,216,996)		(11,383,958)		(290,919)		(2,955,015)
Net increase (decrease)		(1,020,968)	$	(9,533,178)		1,170,982	$	12,356,593
Class C
Shares sold		36,993	$	339,878		230,583	$	2,233,724
Shares issued on reinvestment		4,301		38,542		10,573		99,166
Shares repurchased		(107,815)		(979,328)		(121,262)		(1,202,209)
Net increase (decrease)		(66,521)	$	(600,908)		119,894	$	1,130,681
Class C1
Shares sold		2	$	17		318	$	3,324
Shares issued on reinvestment		1		6		139		1,360
Shares repurchased		(2)		(21)		(3,096)		(29,056)
Net increase (decrease)		1	$	2		(2,639)	$	(24,372)

   38  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

	Year Ended December 31, 2023				Year Ended December 31, 2022
	Shares		Amount		Shares		Amount
Class FI
Shares sold		986	$	9,209		1,528	$	16,428
Shares issued on reinvestment		638		5,937		3,572		34,756
Shares repurchased		(27,223)		(250,267)		(40,910)		(396,378)
Net decrease		(25,599)	$	(235,121)		(35,810)	$	(345,194)
Class R
Shares sold		6,392	$	59,595		35,475	$	382,988
Shares issued on reinvestment		180		1,635		315		3,044
Shares repurchased		(1,973)		(18,276)		(38,253)		(411,950)
Net increase (decrease)		4,599	$	42,954		(2,463)	$	(25,918)
Class I
Shares sold		173,657	$	1,634,950		860,316	$	8,960,498
Shares issued on reinvestment		42,313		397,903		114,790		1,142,619
Shares repurchased		(848,083)		(7,962,739)		(2,216,353)		(23,731,062)
Net decrease		(632,113)	$	(5,929,886)		(1,241,247)	$	(13,627,945)
Class IS
Shares sold		880,448	$	8,405,732		1,712,847	$	18,415,008
Shares issued on reinvestment		128,751		1,220,241		389,918		3,874,847
Shares repurchased		(2,983,893)		(28,780,395)		(1,455,921)		(15,243,257)
Net increase (decrease)		(1,974,694)	$	(19,154,422)		646,844	$	7,046,598

8. Transactions with affiliated company

As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control with the Fund. The following company was considered an affiliated company for all or some portion of the year ended December 31, 2023. The following transactions were effected in such company for the year ended December 31, 2023.

	Affiliate Value at December 31, 2022		Purchased				Sold
			Cost		Shares		Proceeds		Shares
Western Asset Premier Institutional Government Reserves, Premium Shares	$	515,323	$	6,652,505		6,652,505	$	7,167,828		7,167,828

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    39 

Notes to financial statements (cont’d)

(cont’d)	Realized Gain (Loss)	Dividend Income		Net Increase (Decrease) in Unrealized Appreciation (Depreciation)	Affiliate Value at December 31, 2023
Western Asset Premier Institutional Government Reserves, Premium Shares	—	$	7,560	—		—

9. Redemption facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, the “Borrowers”) managed by Franklin Resources or its affiliates, is a borrower in a joint syndicated senior unsecured credit facility totaling $2.675 billion (the “Global Credit Facility”). The Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Unless renewed, the Global Credit Facility will terminate on January 31, 2025.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in the Statement of Operations. The Fund did not utilize the Global Credit Facility during the year ended December 31, 2023.

10. Income tax information and distributions to shareholders

The tax character of distributions paid during the fiscal years ended December 31, was as follows:

	2023		2022
Distributions paid from:
Ordinary income	$	2,030,022	$	6,250,018

As of December 31, 2023, the components of distributable earnings (loss) on a tax basis were as follows:

Undistributed ordinary income — net	$	259,182
Deferred capital losses*		(12,238,751)
Other book/tax temporary differences(a)		(127,003)
Unrealized appreciation (depreciation)(b)		(7,249,452)
Total distributable earnings (loss) — net	$	(19,356,024)

   40  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

* These capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on the first day of the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.

^(a)  Other book/tax temporary differences are attributable to the tax deferral of losses on straddles, the realization for tax purposes of unrealized gains (losses) on certain futures and foreign currency contracts and book/tax differences in the timing of the deductibility of various expenses.

^(b)  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash sales.

Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report    41 

Report of independent registered public accounting firm

To the Board of Directors of Western Asset Funds, Inc. and Shareholders of Western Asset Inflation Indexed Plus Bond Fund

Opinion on the Financial Statement

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Western Asset Inflation Indexed Plus Bond Fund (one of the funds constituting Western Asset Funds, Inc., referred to hereafter as the “Fund”) as of December 31, 2023, the related statement of operations for the year ended December 31, 2023, the statement of changes in net assets for each of the two years in the period ended December 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2023 and the financial highlights for each of the five years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian and broker. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

Baltimore, Maryland

February 23, 2024

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

   42  Western Asset Inflation Indexed Plus Bond Fund 2023 Annual Report

Additional information (unaudited)

Information about Directors and Officers

The business and affairs of Western Asset Inflation Indexed Plus Bond Fund (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Directors. The business address of each Director is c/o Jane Trust, Franklin Templeton, 280 Park Avenue, 8th Floor, New York, New York 10017.

Information pertaining to the Directors and officers of the Fund is set forth below. The Statement of Additional Information includes additional information about Directors and is available, without charge, upon request by calling the Fund at 877-6LM-FUND/656-3863.

Independent Directors†
Robert Abeles, Jr.
Year of birth	1945
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2013
Principal occupation(s) during the past five years	Board Member of Excellent Education Development (since 2012); Senior Vice President Emeritus (since 2016) and formerly, Senior Vice President, Finance and Chief Financial Officer (2009 to 2016) at University of Southern California; and formerly, Board Member of Great Public Schools Now (2018 to 2022)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	None
Jane F. Dasher
Year of birth	1949
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 1999
Principal occupation(s) during the past five years	Director (since 2022) and formerly, Chief Financial Officer, Long Light Capital, LLC, formerly known as Korsant Partners, LLC (a family investment company) (since 1997)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Formerly, Director, Visual Kinematics, Inc. (2018 to 2022)
Anita L. DeFrantz
Year of birth	1952
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 1998
Principal occupation(s) during the past five years	President of Tubman Truth Corp. (since 2015); Vice President (since 2017), Member of the Executive Board (since 2013) and Member of the International Olympic Committee (since 1986); and President Emeritus (since 2015) and formerly, President (1987 to 2015) and Director (1990 to 2015) of LA84 (formerly Amateur Athletic Foundation of Los Angeles)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	None

Western Asset Inflation Indexed Plus Bond Fund    43 

Additional information (unaudited) (cont’d)

Information about Directors and Officers

Independent Directors† (cont’d)
Susan B. Kerley
Year of birth	1951
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 1992
Principal occupation(s) during the past five years	Investment Consulting Partner, Strategic Management Advisors, LLC (investment consulting) (since 1990)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Director and Trustee (since 1990) and Chairman (since 2017 and 2005 to 2012) of various series of MainStay Family of Funds (66 funds); formerly, Chairman of the Independent Directors Council (2012 to 2014); ICI Executive Committee (2011 to 2014); and Investment Company Institute (ICI) Board of Governors (2006 to 2014)
Michael Larson
Year of birth	1959
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2004
Principal occupation(s) during the past five years	Chief Investment Officer for William H. Gates III (since 1994)4
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Ecolab Inc. (since 2012); Fomento Economico Mexicano, SAB (since 2011); and Republic Services, Inc. (since 2009)
Avedick B. Poladian
Year of birth	1951
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during the past five years	Director and Advisor (since 2017) and formerly, Executive Vice President and Chief Operating Officer (2002 to 2016) of Lowe Enterprises, Inc. (privately held real estate and hospitality firm); and formerly, Partner, Arthur Andersen, LLP (1974 to 2002)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Public Storage (since 2010); Occidental Petroleum Corporation (since 2008); and formerly, California Resources Corporation (2014 to 2021)
William E.B. Siart
Year of birth	1946
Position(s) with Fund	Director and Chairman of the Board
Term of office1 and length of time served2	Since 1997
Principal occupation(s) during the past five years	Chairman of Excellent Education Development (since 2000); formerly, Chairman of Great Public Schools Now (2015 to 2020); Trustee of The Getty Trust (2005 to 2017); and Chairman of Walt Disney Concert Hall, Inc. (1998 to 2006)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Trustee, University of Southern California (since 1994); and formerly, Member of Board of United States Golf Association, Executive Committee Member (2017 to 2021)

   44  Western Asset Inflation Indexed Plus Bond Fund

Independent Directors† (cont’d)
Jaynie Miller Studenmund
Year of birth	1954
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2004
Principal occupation(s) during the past five years	Corporate Board Member and Advisor (since 2004); formerly, Chief Operating Officer of Overture Services, Inc. (publicly traded internet company that created search engine marketing) (2001 to 2004); President and Chief Operating Officer, PayMyBills (internet innovator in bill presentment/payment space) (1999 to 2001); and Executive vice president for consumer and business banking for three national financial institutions (1984 to 1997)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Director of Pacific Premier Bancorp Inc. and Pacific Premier Bank (since 2019); Director of EXL (operations management and analytics company) (since 2018); formerly, Director of LifeLock, Inc. (identity theft protection company) (2015 to 2017); Director of CoreLogic, Inc. (information, analytics and business services company) (2012 to 2021); and Director of Pinnacle Entertainment, Inc. (gaming and hospitality company) (2012 to 2018)
Peter J. Taylor
Year of birth	1958
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2019
Principal occupation(s) during the past five years	Retired; formerly, President, ECMC Foundation (nonprofit organization) (2014 to 2023); and Executive Vice President and Chief Financial Officer for University of California system (2009 to 2014)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Director of 23andMe, Inc. (genetics and health care services company) (since 2021); Director of Pacific Mutual Holding Company5 (since 2016); Ralph M. Parson Foundation (since 2015); Edison International (since 2011); formerly, Member of the Board of Trustees of California State University system (2015 to 2022); and Kaiser Family Foundation (2012 to 2022)
Interested Director
Ronald L. Olson6
Year of birth	1941
Position(s) with Fund	Director
Term of office1 and length of time served2	Since 2005
Principal occupation(s) during the past five years	Partner of Munger, Tolles & Olson LLP (a law partnership) (since 1968)
Number of funds in fund complex overseen by Director3	50
Other Directorships held by Director during the past five years	Director of Provivi, Inc. (since 2017); and Director of Berkshire Hathaway, Inc. (since 1997)

Western Asset Inflation Indexed Plus Bond Fund    45 

Additional information (unaudited) (cont’d)

Information about Directors and Officers

Interested Director and Officer
Jane Trust, CFA7
Year of birth	1962
Position(s) with Fund	Director, President and Chief Executive Officer
Term of office1 and length of time served2	Since 2015
Principal occupation(s) during the past five years	Senior Vice President, Fund Board Management, Franklin Templeton (since 2020); Officer and/or Trustee/Director of 123 funds associated with FTFA or its affiliates (since 2015); President and Chief Executive Officer of FTFA (since 2015); formerly, Senior Managing Director (2018 to 2020) and Managing Director (2016 to 2018) of Legg Mason & Co., LLC (“Legg Mason & Co.”); and Senior Vice President of FTFA (2015)
Number of funds in fund complex overseen by Director3	123
Other Directorships held by Director during the past five years	None
Additional Officers
Ted P. Becker Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth	1951
Position(s) with Fund	Chief Compliance Officer
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during the past five years	Vice President, Global Compliance of Franklin Templeton (since 2020); Chief Compliance Officer of FTFA (since 2006); Chief Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Director of Global Compliance at Legg Mason (2006 to 2020); Managing Director of Compliance of Legg Mason & Co. (2005 to 2020)
Susan Kerr Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth	1949
Position(s) with Fund	Chief Anti-Money Laundering Compliance Officer
Term of office1 and length of time served2	Since 2013
Principal occupation(s) during the past five years	Senior Compliance Analyst, Franklin Templeton (since 2020); Chief Anti-Money Laundering Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2013) and Anti-Money Laundering Compliance Officer (since 2012), Senior Compliance Officer (since 2011) and Assistant Vice President (since 2010) of Franklin Distributors, LLC; formerly, Assistant Vice President of Legg Mason & Co. (2010 to 2020)

   46  Western Asset Inflation Indexed Plus Bond Fund

Additional Officers (cont’d)
Marc A. De Oliveira Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1971
Position(s) with Fund	Secretary and Chief Legal Officer
Term of office1 and length of time served2	Since 2020
Principal occupation(s) during the past five years	Associate General Counsel of Franklin Templeton (since 2020); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Managing Director (2016 to 2020) and Associate General Counsel of Legg Mason & Co. (2005 to 2020)
Thomas C. Mandia Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1962
Position(s) with Fund	Senior Vice President
Term of office1 and length of time served2	Since 2020
Principal occupation(s) during the past five years	Senior Associate General Counsel of Franklin Templeton (since 2020); Secretary of FTFA (since 2006); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); Secretary of LM Asset Services, LLC (“LMAS”) (since 2002) and Legg Mason Fund Asset Management, Inc. (“LMFAM”) (since 2013) (formerly registered investment advisers); formerly, Managing Director and Deputy General Counsel of Legg Mason & Co. (2005 to 2020)
Christopher Berarducci Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth	1974
Position(s) with Fund	Treasurer and Principal Financial Officer
Term of office1 and length of time served2	Since 2019
Principal occupation(s) during the past five years	Vice President, Fund Administration and Reporting, Franklin Templeton (since 2020); Treasurer (since 2010) and Principal Financial Officer (since 2019) of certain funds associated with Legg Mason & Co. or its affiliates; formerly, Managing Director (2020), Director (2015 to 2020), and Vice President (2011 to 2015) of Legg Mason & Co.

Western Asset Inflation Indexed Plus Bond Fund    47 

Additional information (unaudited) (cont’d)

Information about Directors and Officers

Additional Officers (cont’d)
Jeanne M. Kelly Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth	1951
Position(s) with Fund	Senior Vice President
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during the past five years	U.S. Fund Board Team Manager, Franklin Templeton (since 2020); Senior Vice President of certain funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of FTFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); formerly, Managing Director of Legg Mason & Co. (2005 to 2020); and Senior Vice President of LMFAM (2013 to 2015)

  FTFA, referenced above, was formerly known as LMPFA prior to November 30, 2023.

† Directors who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

¹  Each Director and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

²  Indicates the earliest year in which the Director became a board member for a fund in the Legg Mason fund complex or the officer took such office.

³  Each board member also serves as a Director of Western Asset Investment Grade Income Fund Inc. and a Trustee of Western Asset Premier Bond Fund (closed-end investment companies), which are considered part of the same fund complex. Additionally, each board member serves as a Trustee of Western Asset Inflation-Linked Income Fund and Western Asset Inflation-Linked Opportunities & Income Fund, closed-end investment companies that are part of the same fund complex.

⁴  Mr. Larson is the chief investment officer for William H. Gates III and in that capacity oversees the non-Microsoft investments of Mr. Gates and all of the investments of the Bill and Melinda Gates Foundation Trust (such combined investments are referred to as the “Accounts”). Since 1997, Western Asset has provided discretionary investment advice with respect to one or more Accounts.

⁵  Western Asset and its affiliates provide investment advisory services with respect to registered investment companies sponsored by an affiliate of Pacific Mutual Holding Company (“Pacific Holdings”). Affiliates of Pacific Holdings receive compensation from FTFA or its affiliates for shareholder or distribution services provided with respect to registered investment companies for which Western Asset or its affiliates serve as investment adviser.

⁶  Mr. Olson is an “interested person” of the Fund, as defined in the 1940 Act, because his law firm has provided legal services to Western Asset.

⁷  Ms. Trust is an “interested person” of the Fund, as defined in the 1940 Act, because of her position with FTFA and/or certain of its affiliates.

   48  Western Asset Inflation Indexed Plus Bond Fund

Important tax information (unaudited)

By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.

The following tax information for the Fund is required to be furnished to shareholders with respect to income earned and distributions paid during its fiscal year.

The Fund hereby reports the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended December 31, 2023:

	Pursuant to:	Amount Reported
Qualified Net Interest Income (QII)	§871(k)(1)(C)	$2,258,937
Section 163(j) Interest Earned	§163(j)	$3,164,824
Interest Earned from Federal Obligations	Note (1)	$2,507,165

Note (1) - The law varies in each state as to whether and what percentage of dividend income attributable to Federal obligations is exempt from state income tax. Shareholders are advised to consult with their tax advisors to determine if any portion of the dividends received is exempt from state income taxes.

Western Asset Inflation Indexed Plus Bond Fund    49 

Western Asset

Inflation Indexed Plus Bond Fund

Directors

Robert Abeles, Jr.

Jane F. Dasher

Anita L. DeFrantz

Susan B. Kerley

Michael Larson

Ronald L. Olson

Avedick B. Poladian

William E.B. Siart

Chairman

Jaynie M. Studenmund

Peter J. Taylor

Jane Trust

* Formerly known as Legg Mason Partners Fund Advisor, LLC.

Investment manager

Franklin Templeton Fund Adviser, LLC*

Subadvisers

Western Asset Management Company, LLC

Western Asset Management Company Limited

Western Asset Management Company Ltd

Western Asset Management Company Pte. Ltd.

Distributor

Franklin Distributors, LLC

Custodian

The Bank of New York Mellon

Transfer agent

Franklin Templeton Investor

Services, LLC

3344 Quality Drive

Rancho Cordova, CA 95670-7313

Independent registered public accounting firm

PricewaterhouseCoopers LLP

Baltimore, MD

Western Asset Inflation Indexed Plus Bond Fund

The Fund is a separate investment series of Western Asset Funds, Inc.

Western Asset Inflation Indexed Plus Bond Fund

Legg Mason Funds

100 International Drive

Baltimore, MD 21202

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 as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 877-6LM-FUND/656-3863.

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 the Fund at 877-6LM-FUND/656-3863, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.

This report is submitted for the general information of the shareholders of Western Asset Inflation Indexed Plus Bond 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.franklintempleton.com

© 2024 Franklin Distributors, LLC, Member FINRA/SIPC. All rights reserved.

Legg Mason Funds Privacy and Security Notice

Your Privacy Is Our Priority

Franklin Templeton* is committed to safeguarding your personal information. This notice is designed to provide you with a summary of the non-public personal information Franklin Templeton may collect and maintain about current or former individual investors; our policy regarding the use of that information; and the measures we take to safeguard the information. We do not sell individual investors’ non-public personal information to anyone and only share it as described in this notice.

Information We Collect

When you invest with us, you provide us with your non-public personal information. We collect and use this information to service your accounts and respond to your requests. The non-public personal information we may collect falls into the following categories:

• Information we receive from you or your financial intermediary on applications or other forms, whether we receive the form in writing or electronically. For example, this information may include your name, address, tax identification number, birth date, investment selection, beneficiary information, and your personal bank account information and/or email address if you have provided that information.

• Information about your transactions and account history with us, or with other companies that are part of Franklin Templeton, including transactions you request on our website or in our app. This category also includes your communications to us concerning your investments.

• Information we receive from third parties (for example, to update your address if you move, obtain or verify your email address or obtain additional information to verify your identity).

• Information collected from you online, such as your IP address or device ID and data gathered from your browsing activity and location. (For example, we may use cookies to collect device and browser information so our website recognizes your online preferences and device information.) Our website contains more information about cookies and similar technologies and ways you may limit them.

• Other general information that we may obtain about you such as demographic information.

Disclosure Policy

To better service your accounts and process transactions or services you requested, we may share non-public personal information with other Franklin Templeton companies. From time to time we may also send you information about products/services offered by other Franklin Templeton companies although we will not share your non-public personal information with these companies without first offering you the opportunity to prevent that sharing.

We will only share non-public personal information with outside parties in the limited circumstances permitted by law. For example, this includes situations where we need to share information with companies who work on our behalf to service or maintain your account or

NOT PART OF THE ANNUAL REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

process transactions you requested, when the disclosure is to companies assisting us with our own marketing efforts, when the disclosure is to a party representing you, or when required by law (for example, in response to legal process). Additionally, we will ensure that any outside companies working on our behalf, or with whom we have joint marketing agreements, are under contractual obligations to protect the confidentiality of your information, and to use it only to provide the services we asked them to perform.

Confidentiality and Security

Our employees are required to follow procedures with respect to maintaining the confidentiality of our investors’ non-public personal information. Additionally, we maintain physical, electronic and procedural safeguards to protect the information. This includes performing ongoing evaluations of our systems containing investor information and making changes when appropriate.

At all times, you may view our current privacy notice on our website at franklintempleton.com or contact us for a copy at (800) 632-2301.

*For purposes of this privacy notice Franklin Templeton shall refer to the following entities:

Fiduciary Trust International of the South (FTIOS), as custodian for individual retirement plans

Franklin Advisers, Inc.

Franklin Distributors, LLC, including as program manager of the Franklin Templeton 529 College Savings Plan and the NJBEST 529 College Savings Plan

Franklin Mutual Advisers, LLC

Franklin, Templeton and Mutual Series Funds

Franklin Templeton Institutional, LLC

Franklin Templeton Investments Corp., Canada

Franklin Templeton Investments Management, Limited UK

Franklin Templeton Portfolio Advisors, Inc.

Legg Mason Funds serviced by Franklin Templeton Investor Services, LLC

Templeton Asset Management, Limited

Templeton Global Advisors, Limited

Templeton Investment Counsel, LLC

If you are a customer of other Franklin Templeton affiliates and you receive notices from them, you will need to read those notices separately.

NOT PART OF THE ANNUAL REPORT

Western Asset Management Company, LLC

Legg Mason, Inc. Subsidiaries

www.franklintempleton.com

© 2024 Franklin Distributors, LLC, Member FINRA/SIPC. All rights reserved.

WASX013142 2/24 SR24-4829

ITEM 2. CODE OF ETHICS.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Directors of the registrant has determined that Mr. Robert Abeles, Jr., possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as “audit committee financial expert,” and have designated Mr. Abeles as the Audit Committee’s financial expert. Mr. Abeles is an “independent” Director pursuant to paragraph (a) (2) of Item 3 to Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a) Audit Fees. The aggregate fees billed in the last two fiscal years ending December 31, 2022 and December 31, 2023 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $205,236 in December 31, 2022 and in $205,236 in December 31, 2023.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in December 31, 2022 and $0 in December 31, 2023.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $30,000 in December 31, 2022 and $30,000 in December 31, 2023. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed for tax services by the Auditors to service affiliates during the Reporting Periods that required pre-approval by the Audit Committee.

(d) All Other Fees. The aggregate other fees billed in the Reporting Periods for products and services provided by the Auditor were $0 in December 31, 2022 and $0 in December 31, 2023, other than the services reported in paragraphs (a) through (c) for the Item for the Western Asset Funds, Inc.

All Other Fees. There were no other non-audit services rendered by the Auditor to Franklin Templeton Fund Adviser, LLC (“FTFA”), and any entity controlling, controlled by or under common control with FTFA that provided ongoing services to Western Asset Funds, Inc. requiring pre-approval by the Audit Committee in the Reporting Period.

(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by FTFA or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s

independent auditors to the Adviser and any Covered Service Providers if the engagement relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.

The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.

(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Non-audit fees billed by the Auditor for services rendered to Western Asset Funds, Inc., FTFA and any entity controlling, controlled by, or under common control with FTFA that provides ongoing services to Western Asset Funds, Inc. during the reporting period were $350,359 in December 31, 2022 and $342,635 in December 31, 2023.

(h) Yes. Western Asset Funds, Inc.’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor to the Western Asset Funds, Inc. or to Service Affiliates, which were required to be pre-approved, were pre-approved as required.

(i) Not applicable.

(j) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

a) The independent board members are acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act. The Audit Committee consists of the following Board members:

Robert Abeles, Jr  

Jane F. Dasher

Anita L. DeFrantz

Susan B. Kerley

Michael Larson

Avedick B. Poladian

William E.B. Siart

JaynieM. Studenmund

Peter J. Taylor

b) 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 period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 13. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

(a) Not applicable.

(b) Not applicable.

ITEM 14. EXHIBITS.

(a) (1) Code of Ethics attached hereto.

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.

Western Asset Funds, Inc.

By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date: February 28, 2024

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/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date: February 28, 2024
By:	/s/ Christopher Berarducci
	Christopher Berarducci
	Principal Financial Officer
Date: February 28, 2024