# EDGAR Filing Document

**Accession Number:** 0001819559
**File Stem:** 0001133228-25-008947
**Filing Date:** 2025-8
**Character Count:** 334572
**Document Hash:** fc4de4a947d65e30d8d6153967fe1127
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001133228-25-008947.hdr.sgml**: 20250826

**ACCESSION NUMBER**: 0001133228-25-008947

**CONFORMED SUBMISSION TYPE**: N-CSRS

**PUBLIC DOCUMENT COUNT**: 9

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250826

**DATE AS OF CHANGE**: 20250826

**EFFECTIVENESS DATE**: 20250826

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Western Asset Diversified Income Fund (WDI)
- **CENTRAL INDEX KEY:** 0001819559

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSRS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23598
- **FILM NUMBER:** 251257714

**BUSINESS ADDRESS:**
- **STREET 1:** FRANKLIN TEMPLETON C/O MITCHELL O'BRIEN
- **STREET 2:** 280 PARK AVENUE, 8TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 12128056026

**MAIL ADDRESS:**
- **STREET 1:** FRANKLIN TEMPLETON C/O MITCHELL O'BRIEN
- **STREET 2:** 280 PARK AVENUE, 8TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Western Asset Diversified Income Fund
- **DATE OF NAME CHANGE:** 20200729

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-CSR**

CERTIFIED SHAREHOLDER REPORT OF REGISTERED<br> MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number **811-23598**

**Western Asset Diversified Income Fund**

(Exact name of registrant as specified in charter)

**One Madison Avenue, 17<sup>th</sup> Floor, New York, NY 10010**

(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: **1-888-777-0102**

Date of fiscal year end: **December 31**

Date of reporting period: **June 30, 2025**

ITEM 1. REPORT TO STOCKHOLDERS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Report to Shareholders is filed herewith

![](img701751c51.gif)

Semi-Annual Report June 30, 2025

WESTERN ASSET <br>DIVERSIFIED INCOME <br>FUND (WDI)

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![](imgbc6f729b2.gif)

![](img1e8ba0f13.gif)

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**Fund objectives**

The Fund's primary investment objective is to seek high current income. As a secondary investment objective, the Fund will seek capital appreciation. <br>The Fund seeks to achieve its investment objectives by investing, under normal market conditions, across fixed income sectors and securities in seeking to deliver a well-diversified portfolio. It is anticipated that the Fund will dissolve on or about June 24, 2033, unless an Eligible Tender Offer is conducted and certain other conditions are satisfied, as described in this report.

**What's inside**

---

| | |
|:---|:---|
| [Letter from the president](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_LFTP-TOC-LetterfromthePres-3864_1) | III |
| [Performance review](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_IC-TOC-Performancereview-3864_1) | IV |
| [Fund at a glance](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_FAAG-TOC-Fundataglance-3864_1) | 1 |
| [Schedule of investments](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_SOI-Header-SOI-3864_1) | 2 |
| [Statement of assets and liabilities](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_SAL-Header-SAL-3864_1) | 36 |
| [Statement of operations](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_SOP-Header-SOP-3864_1) | 37 |
| [Statements of changes in net assets](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_SOC-Header-SOC-3864_1) | 38 |
| [Statement of cash flows](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_SOCF-Header-StatementofCashFlows-3864_1) | 39 |
| [Financial highlights](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_FH-Header-Financialhighlights-3864_1) | 41 |
| [Notes to financial statements](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_NTF-Header-Notestofinancialstatements-3864_1) | 43 |
| [Board approval of management and subadvisory](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_newBAMSA-TOC-NewMgmtandsubadvisoryagreements-3864_1) [agreements](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_newBAMSA-TOC-NewMgmtandsubadvisoryagreements-3864_1) | 69 |
| [Additional shareholder](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_ASI-Header-Additionalshareholderinformation-3864_1) [information](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_ASI-Header-Additionalshareholderinformation-3864_1) | 76 |
| [Dividend reinvestment plan](#xx_f2577155-8c59-4ddd-8c23-38d0fefe3861_DRP-Header-Dividendreinvestmentplan-3864_1) | 77 |

---

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II

Western Asset Diversified Income Fund

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![](img0d79ca484.gif)

Letter from the president

**Dear Shareholder,**

We are pleased to provide the semi-annual report of Western Asset Diversified Income Fund for the six-month reporting period ended June 30, 2025. Please read on for Fund performance information during the Fund's reporting period.

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,

![](img50c1a5035.jpg)

Jane Trust, CFA <br>President and Chief Executive Officer

July 31, 2025

Western Asset Diversified Income Fund

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III

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Performance review

For the six months ended June 30, 2025, Western Asset Diversified Income Fund returned 4.33% based on its net asset value (NAV)<sup>i</sup> and 10.62% based on its New York Stock Exchange (NYSE) market price per share. The Fund's unmanaged benchmark, the Bloomberg U.S. Corporate High Yield — 2% Issuer Cap Index (USD)<sup>ii</sup>, returned 4.57% for the same period.

The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund's investment strategy and may reduce the Fund's NAV. The Fund's manager believes the practice helps maintain the Fund's competitiveness and may benefit the Fund's market price and premium/discount to the Fund's NAV.

During the six-month period, the Fund made distributions to shareholders totaling $0.89 per share. As of June 30, 2025, the Fund estimates that all of the distributions were sourced from net investment income.\* The performance table shows the Fund's six-month total return based on its NAV and market price as of June 30, 2025. **Past performance is no guarantee of future results.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Performance Snapshot** as of June 30, 2025 (unaudited) | **Performance Snapshot** as of June 30, 2025 (unaudited) |
| Price Per Share | 6-Month <br>Total Return\*\*<br>|
| $14.89 (NAV) | 4.33<br> %†<br>|
| $14.84 (Market Price) | 10.62<br> %‡<br>|

---

**All figures represent past performance and are not a guarantee of future results. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.**

**\*\* Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.**

**† Total return assumes the reinvestment of all distributions, including returns of capital, if any, at NAV.**

**‡ Total return assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund's Dividend Reinvestment Plan.**

**Looking for additional information?**

The Fund is traded under the symbol "WDI" and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the symbol "XWDIX" on most financial websites. *Barron's* and *The Wall Street Journal's* Monday edition both carry closed-end fund tables that provide additional information. In addition,

\*

These estimates are not for tax purposes. The Fund will issue a Form 1099 with final composition of the distributions for tax purposes after year-end. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder's investment. For more information about a distribution's composition, please refer to the Fund's distribution press release or, if applicable, the Section 19 notice located in the press release section of our website, www.franklintempleton.com.

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IV

Western Asset Diversified Income Fund

------

the Fund issues a quarterly press release that can be found on most major financial websites as well as www.franklintempleton.com.

In a continuing effort to provide information concerning the Fund, shareholders may call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern Time, for the Fund's current NAV, market price and other information.

Thank you for your investment in the Western Asset Diversified Income 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,

![](img50c1a5035.jpg)

Jane Trust, CFA <br>President and Chief Executive Officer

July 31, 2025

*RISKS: The Fund is a diversified limited term closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. The Fund's common shares are traded on the New York Stock Exchange. Similar to stocks, the Fund's share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. Diversification does not assure against market loss. The Fund's investments are subject to a number of risks, such as credit risk, inflation risk and interest rate risk. As interest rates rise, the value of fixed income securities falls. The Fund may invest in lower-rated high yield bonds (commonly known as "junk bonds"), which are subject to greater liquidity risk and credit risk (risk of default) than higher-rated obligations. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. The Fund may invest in securities backed by subprime mortgages which involve a higher degree of risk and chance of loss. 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. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Leverage may result in greater volatility of NAV and the market price of common shares and increases a shareholder's risk of loss. 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* 

Western Asset Diversified Income Fund

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V

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Performance review (cont'd)

*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. The Fund may also invest in money market funds, including funds affiliated with the Fund's manager and subadvisers.*

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.

<sup>i</sup>

Net asset value (NAV) is calculated by subtracting total liabilities, including liabilities associated with financial leverage (if any), from the closing value of all securities held by the Fund (plus all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The NAV fluctuates with changes in the market prices of securities in which the Fund has invested. However, the price at which an investor may buy or sell shares of the Fund is the Fund's market price as determined by supply of and demand for the Fund's shares.

<sup>ii</sup>

The Bloomberg U.S. Corporate High Yield — 2% Issuer Cap Index (USD) is an index of the 2% Issuer Cap component of the Bloomberg U.S. Corporate High Yield Index, which covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Important data provider notices and terms available at www.franklintempletondatasources.com.

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VI

Western Asset Diversified Income Fund

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Fund at a glance<sup>†</sup> (unaudited)

**Investment breakdown** (%) as a percent of total investments

![](img77c778526.jpg)

†

The bar graph above represents the composition of the Fund's investments as of June 30, 2025, and December 31, 2024, and does not include derivatives, such as written options, futures contracts, forward foreign currency contracts and swap contracts. The Fund 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 Diversified Income Fund 2025 Semi-Annual Report

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Schedule of investments (unaudited)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity <br>Date<br>| &nbsp;&nbsp; Face <br>Amount†<br>| Value |
| **Corporate Bonds & Notes — 71.0%** | **Corporate Bonds & Notes — 71.0%** | **Corporate Bonds & Notes — 71.0%** | **Corporate Bonds & Notes — 71.0%** | **Corporate Bonds & Notes — 71.0%** |
| **Communication Services — 11.2%** | **Communication Services — 11.2%** | **Communication Services — 11.2%** | **Communication Services — 11.2%** | **Communication Services — 11.2%** |
| *Diversified Telecommunication Services — 1.2%* | *Diversified Telecommunication Services — 1.2%* | *Diversified Telecommunication Services — 1.2%* | *Diversified Telecommunication Services — 1.2%* | *Diversified Telecommunication Services — 1.2%* |
| &nbsp;&nbsp;&nbsp; Altice Financing SA, Senior Secured <br> Notes | &nbsp;&nbsp; 5.750% | &nbsp;&nbsp; 8/15/29 | &nbsp;&nbsp; 4000000<br>| &nbsp;&nbsp;&nbsp; $2924782<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Altice France Holding SA, Senior Secured <br> Notes | &nbsp;&nbsp; 10.500% | &nbsp;&nbsp; 5/15/27 | &nbsp;&nbsp; 7000000<br>| &nbsp;&nbsp;&nbsp; 2,437,995<br> \*<sup>(a)(b)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Altice France SA, Senior Secured Notes | &nbsp;&nbsp; 5.125% | &nbsp;&nbsp; 7/15/29 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 827500<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Altice France SA, Senior Secured Notes | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 10/15/29 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 830000<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Hughes Satellite Systems Corp., Senior <br> Secured Notes | &nbsp;&nbsp; 5.250% | &nbsp;&nbsp; 8/1/26 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1781889<br> <sup>(c)</sup><br>|
| *Total Diversified Telecommunication Services* | *Total Diversified Telecommunication Services* | *Total Diversified Telecommunication Services* | *Total Diversified Telecommunication Services* | &nbsp;&nbsp; *8802166* |
| *Entertainment — 1.1%* | *Entertainment — 1.1%* | *Entertainment — 1.1%* | *Entertainment — 1.1%* | *Entertainment — 1.1%* |
| &nbsp;&nbsp;&nbsp; Allen Media LLC/Allen Media <br> Co-Issuer Inc., Senior Notes | &nbsp;&nbsp; 10.500% | &nbsp;&nbsp; 2/15/28 | &nbsp;&nbsp; 7160000<br>| &nbsp;&nbsp;&nbsp; 2720800<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; AMC Entertainment Holdings Inc., Senior <br> Secured Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 2/15/29 | &nbsp;&nbsp; 4780000<br>| &nbsp;&nbsp;&nbsp; 3772137<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Banijay Entertainment SAS, Senior <br> Secured Notes | &nbsp;&nbsp; 8.125% | &nbsp;&nbsp; 5/1/29 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2076612<br> <sup>(a)(c)</sup><br>|
| *Total Entertainment* | *Total Entertainment* | *Total Entertainment* | *Total Entertainment* | &nbsp;&nbsp; *8569549* |
| *Media — 7.2%* | *Media — 7.2%* | *Media — 7.2%* | *Media — 7.2%* | *Media — 7.2%* |
| &nbsp;&nbsp;&nbsp; AMC Networks Inc., Senior Notes | &nbsp;&nbsp; 4.250% | &nbsp;&nbsp; 2/15/29 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 2807227<br>|
| &nbsp;&nbsp;&nbsp; AMC Networks Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 10.250% | &nbsp;&nbsp; 1/15/29 | &nbsp;&nbsp; 3610000<br>| &nbsp;&nbsp;&nbsp; 3745375<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CCO Holdings LLC/CCO Holdings Capital <br> Corp., Senior Notes | &nbsp;&nbsp; 4.750% | &nbsp;&nbsp; 2/1/32 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4745759<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Charter Communications Operating LLC/<br> Charter Communications Operating <br> Capital Corp., Senior Secured Notes | &nbsp;&nbsp; 6.834% | &nbsp;&nbsp; 10/23/55 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 5121362<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; DirecTV Financing LLC/DirecTV Financing <br> Co-Obligor Inc., Senior Secured Notes | &nbsp;&nbsp; 10.000% | &nbsp;&nbsp; 2/15/31 | &nbsp;&nbsp; 7230000<br>| &nbsp;&nbsp;&nbsp; 7024078<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; DISH DBS Corp., Senior Secured Notes | &nbsp;&nbsp; 5.250% | &nbsp;&nbsp; 12/1/26 | &nbsp;&nbsp; 4500000<br>| &nbsp;&nbsp;&nbsp; 4092187<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; DISH Network Corp., Senior Secured <br> Notes | &nbsp;&nbsp; 11.750% | &nbsp;&nbsp; 11/15/27 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1031596<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; EchoStar Corp., Senior Secured Notes | &nbsp;&nbsp; 10.750% | &nbsp;&nbsp; 11/30/29 | &nbsp;&nbsp; 6198500<br>| &nbsp;&nbsp;&nbsp; 6389724<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; EchoStar Corp., Senior Secured Notes <br> (6.750% Cash or 6.750% PIK) | &nbsp;&nbsp; 6.750% | &nbsp;&nbsp; 11/30/30 | &nbsp;&nbsp; 3183258<br>| &nbsp;&nbsp;&nbsp; 2907478<br> <sup>(c)(d)</sup><br>|
| &nbsp;&nbsp;&nbsp; Getty Images Inc., Senior Secured Notes | &nbsp;&nbsp; 11.250% | &nbsp;&nbsp; 2/21/30 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; 2483425<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Gray Media Inc., Senior Notes | &nbsp;&nbsp; 7.000% | &nbsp;&nbsp; 5/15/27 | &nbsp;&nbsp; 4250000<br>| &nbsp;&nbsp;&nbsp; 4251561<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Grupo Televisa SAB, Senior Notes | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 5/13/45 | &nbsp;&nbsp; 1910000<br>| &nbsp;&nbsp;&nbsp; 1371714<br>|

---

See Notes to Financial Statements.

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Media — continued* | *Media — continued* | *Media — continued* | *Media — continued* | *Media — continued* |
| &nbsp;&nbsp;&nbsp; iHeartCommunications Inc., Senior <br> Secured Notes | &nbsp;&nbsp; 9.125% | &nbsp;&nbsp; 5/1/29 | &nbsp;&nbsp; 1900000<br>| &nbsp;&nbsp;&nbsp; $1567500<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; McClatchy Media Co. LLC, Senior <br> Secured Notes (11.000% Cash or <br> 12.500% PIK) | &nbsp;&nbsp; 11.000% | &nbsp;&nbsp; 12/1/31 | &nbsp;&nbsp; 7525802<br>| &nbsp;&nbsp;&nbsp; 8118458<br> <sup>(a)(c)(d)</sup><br>|
| *Total Media* | *Total Media* | *Total Media* | *Total Media* | &nbsp;&nbsp; *55657444* |
| *Wireless Telecommunication Services — 1.7%* | *Wireless Telecommunication Services — 1.7%* | *Wireless Telecommunication Services — 1.7%* | *Wireless Telecommunication Services — 1.7%* | *Wireless Telecommunication Services — 1.7%* |
| &nbsp;&nbsp;&nbsp; CSC Holdings LLC, Senior Notes | &nbsp;&nbsp; 5.375% | &nbsp;&nbsp; 2/1/28 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 916411<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CSC Holdings LLC, Senior Notes | &nbsp;&nbsp; 11.750% | &nbsp;&nbsp; 1/31/29 | &nbsp;&nbsp; 12780000<br>| &nbsp;&nbsp;&nbsp; 12163759<br> <sup>(a)(c)</sup><br>|
| *Total Wireless Telecommunication Services* | *Total Wireless Telecommunication Services* | *Total Wireless Telecommunication Services* | *Total Wireless Telecommunication Services* | &nbsp;&nbsp; *13080170* |
| **Total Communication Services** | **Total Communication Services** | **Total Communication Services** | **Total Communication Services** | &nbsp;&nbsp; **86109329** |
| **Consumer Discretionary — 14.4%** | **Consumer Discretionary — 14.4%** | **Consumer Discretionary — 14.4%** | **Consumer Discretionary — 14.4%** | **Consumer Discretionary — 14.4%** |
| *Automobile Components — 1.6%* | *Automobile Components — 1.6%* | *Automobile Components — 1.6%* | *Automobile Components — 1.6%* | *Automobile Components — 1.6%* |
| &nbsp;&nbsp;&nbsp; Carbon Revolution Ltd., Senior Secured <br> Notes (8.5000% PIK) | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 5/15/27 | &nbsp;&nbsp; 3115757<br>| &nbsp;&nbsp;&nbsp; 3057336<br> <sup>(a)(d)</sup><br>|
| &nbsp;&nbsp;&nbsp; JB Poindexter & Co. Inc., Senior Notes | &nbsp;&nbsp; 8.750% | &nbsp;&nbsp; 12/15/31 | &nbsp;&nbsp; 1625000<br>| &nbsp;&nbsp;&nbsp; 1655792<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; ZF North America Capital Inc., Senior <br> Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 4/14/28 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2007898<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; ZF North America Capital Inc., Senior <br> Notes | &nbsp;&nbsp; 6.750% | &nbsp;&nbsp; 4/23/30 | &nbsp;&nbsp; 545000<br>| &nbsp;&nbsp;&nbsp; 524055<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; ZF North America Capital Inc., Senior <br> Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 4/23/32 | &nbsp;&nbsp; 5325000<br>| &nbsp;&nbsp;&nbsp; 4925790<br> <sup>(a)(c)</sup><br>|
| *Total Automobile Components* | *Total Automobile Components* | *Total Automobile Components* | *Total Automobile Components* | &nbsp;&nbsp; *12170871* |
| *Automobiles — 2.3%* | *Automobiles — 2.3%* | *Automobiles — 2.3%* | *Automobiles — 2.3%* | *Automobiles — 2.3%* |
| &nbsp;&nbsp;&nbsp; Aston Martin Capital Holdings Ltd., <br> Senior Secured Notes | &nbsp;&nbsp; 10.000% | &nbsp;&nbsp; 3/31/29 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1895997<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ford Motor Co., Senior Notes | &nbsp;&nbsp; 6.100% | &nbsp;&nbsp; 8/19/32 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 999029<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Mclaren Finance PLC, Senior Secured <br> Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 8/1/26 | &nbsp;&nbsp; 7500000<br>| &nbsp;&nbsp;&nbsp; 7523156<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; PM General Purchaser LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 9.500% | &nbsp;&nbsp; 10/1/28 | &nbsp;&nbsp; 10640000<br>| &nbsp;&nbsp;&nbsp; 7388842<br> <sup>(a)(c)</sup><br>|
| *Total Automobiles* | *Total Automobiles* | *Total Automobiles* | *Total Automobiles* | &nbsp;&nbsp; *17807024* |
| *Broadline Retail — 0.5%* | *Broadline Retail — 0.5%* | *Broadline Retail — 0.5%* | *Broadline Retail — 0.5%* | *Broadline Retail — 0.5%* |
| &nbsp;&nbsp;&nbsp; QVC Inc., Senior Secured Notes | &nbsp;&nbsp; 4.375% | &nbsp;&nbsp; 9/1/28 | &nbsp;&nbsp; 9670000<br>| &nbsp;&nbsp;&nbsp; *3831736*<br>|
| *Hotels, Restaurants & Leisure — 3.8%* | *Hotels, Restaurants & Leisure — 3.8%* | *Hotels, Restaurants & Leisure — 3.8%* | *Hotels, Restaurants & Leisure — 3.8%* | *Hotels, Restaurants & Leisure — 3.8%* |
| &nbsp;&nbsp;&nbsp; 888 Acquisitions Ltd., Senior Secured <br> Notes | &nbsp;&nbsp; 7.558% | &nbsp;&nbsp; 7/15/27 | &nbsp;&nbsp; 2700000 <br><sup>EUR</sup><br>| &nbsp;&nbsp;&nbsp; 3208600<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Full House Resorts Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 8.250% | &nbsp;&nbsp; 2/15/28 | &nbsp;&nbsp; 10059000<br>| &nbsp;&nbsp;&nbsp; 9781062<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; NCL Corp. Ltd., Senior Secured Notes | &nbsp;&nbsp; 8.125% | &nbsp;&nbsp; 1/15/29 | &nbsp;&nbsp; 4000000<br>| &nbsp;&nbsp;&nbsp; 4219224<br> <sup>(a)(c)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Hotels, Restaurants & Leisure — continued* | *Hotels, Restaurants & Leisure — continued* | *Hotels, Restaurants & Leisure — continued* | *Hotels, Restaurants & Leisure — continued* | *Hotels, Restaurants & Leisure — continued* |
| &nbsp;&nbsp;&nbsp; Pinnacle Bidco PLC, Senior Secured <br> Notes | &nbsp;&nbsp; 10.000% | &nbsp;&nbsp; 10/11/28 | &nbsp;&nbsp; 2500000 <br><sup>GBP</sup><br>| &nbsp;&nbsp;&nbsp; $3636343<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Royal Caribbean Cruises Ltd., Senior <br> Notes | &nbsp;&nbsp; 5.625% | &nbsp;&nbsp; 9/30/31 | &nbsp;&nbsp; 720000<br>| &nbsp;&nbsp;&nbsp; 724849<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Wynn Macau Ltd., Senior Notes | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 1/15/26 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 5005303<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Wynn Macau Ltd., Senior Notes | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 10/1/27 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2994686<br> <sup>(a)</sup><br>|
| *Total Hotels, Restaurants & Leisure* | *Total Hotels, Restaurants & Leisure* | *Total Hotels, Restaurants & Leisure* | *Total Hotels, Restaurants & Leisure* | &nbsp;&nbsp; *29570067* |
| *Household Durables — 0.9%* | *Household Durables — 0.9%* | *Household Durables — 0.9%* | *Household Durables — 0.9%* | *Household Durables — 0.9%* |
| &nbsp;&nbsp;&nbsp; Newell Brands Inc., Senior Notes | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 6/1/28 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; 2631778<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Newell Brands Inc., Senior Notes | &nbsp;&nbsp; 7.000% | &nbsp;&nbsp; 4/1/46 | &nbsp;&nbsp; 4500000<br>| &nbsp;&nbsp;&nbsp; 3851193<br> <sup>(c)</sup><br>|
| *Total Household Durables* | *Total Household Durables* | *Total Household Durables* | *Total Household Durables* | &nbsp;&nbsp; *6482971* |
| *Specialty Retail — 5.1%* | *Specialty Retail — 5.1%* | *Specialty Retail — 5.1%* | *Specialty Retail — 5.1%* | *Specialty Retail — 5.1%* |
| &nbsp;&nbsp;&nbsp; Bath & Body Works Inc., Senior Notes | &nbsp;&nbsp; 6.750% | &nbsp;&nbsp; 7/1/36 | &nbsp;&nbsp; 3250000<br>| &nbsp;&nbsp;&nbsp; 3308432<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Bath & Body Works Inc., Senior Notes | &nbsp;&nbsp; 7.600% | &nbsp;&nbsp; 7/15/37 | &nbsp;&nbsp; 4275000<br>| &nbsp;&nbsp;&nbsp; 4364587<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Foot Locker Inc., Senior Notes | &nbsp;&nbsp; 4.000% | &nbsp;&nbsp; 10/1/29 | &nbsp;&nbsp; 6500000<br>| &nbsp;&nbsp;&nbsp; 6153277<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Global Auto Holdings Ltd./AAG FH UK <br> Ltd., Senior Notes | &nbsp;&nbsp; 11.500% | &nbsp;&nbsp; 8/15/29 | &nbsp;&nbsp; 8500000<br>| &nbsp;&nbsp;&nbsp; 8325613<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Michaels Cos. Inc., Senior Secured Notes | &nbsp;&nbsp; 5.250% | &nbsp;&nbsp; 5/1/28 | &nbsp;&nbsp; 8515000<br>| &nbsp;&nbsp;&nbsp; 6850333<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; PetSmart Inc./PetSmart Finance Corp., <br> Senior Notes | &nbsp;&nbsp; 7.750% | &nbsp;&nbsp; 2/15/29 | &nbsp;&nbsp; 8000000<br>| &nbsp;&nbsp;&nbsp; 7781777<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Staples Inc., Secured Notes | &nbsp;&nbsp; 12.750% | &nbsp;&nbsp; 1/15/30 | &nbsp;&nbsp; 1315228<br>| &nbsp;&nbsp;&nbsp; 876937<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Upbound Group Inc., Senior Notes | &nbsp;&nbsp; 6.375% | &nbsp;&nbsp; 2/15/29 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1980905<br> <sup>(a)(c)</sup><br>|
| *Total Specialty Retail* | *Total Specialty Retail* | *Total Specialty Retail* | *Total Specialty Retail* | &nbsp;&nbsp; *39641861* |
| *Textiles, Apparel & Luxury Goods — 0.2%* | *Textiles, Apparel & Luxury Goods — 0.2%* | *Textiles, Apparel & Luxury Goods — 0.2%* | *Textiles, Apparel & Luxury Goods — 0.2%* | *Textiles, Apparel & Luxury Goods — 0.2%* |
| &nbsp;&nbsp;&nbsp; Saks Global Enterprises LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 11.000% | &nbsp;&nbsp; 12/15/29 | &nbsp;&nbsp; 4790000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *1820200*<br> <sup>(a)</sup><br>|
| **Total Consumer Discretionary** | **Total Consumer Discretionary** | **Total Consumer Discretionary** | **Total Consumer Discretionary** | &nbsp;&nbsp; **111324730** |
| **Consumer Staples — 1.2%** | **Consumer Staples — 1.2%** | **Consumer Staples — 1.2%** | **Consumer Staples — 1.2%** | **Consumer Staples — 1.2%** |
| *Food Products — 0.9%* | *Food Products — 0.9%* | *Food Products — 0.9%* | *Food Products — 0.9%* | *Food Products — 0.9%* |
| &nbsp;&nbsp;&nbsp; TKC Holdings Inc., Senior Notes | &nbsp;&nbsp; 10.500% | &nbsp;&nbsp; 5/15/29 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3599704<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; TKC Holdings Inc., Senior Secured Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 5/15/28 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3482319<br> <sup>(a)(c)</sup><br>|
| *Total Food Products* | *Total Food Products* | *Total Food Products* | *Total Food Products* | &nbsp;&nbsp; *7082023* |
| *Tobacco — 0.3%* | *Tobacco — 0.3%* | *Tobacco — 0.3%* | *Tobacco — 0.3%* | *Tobacco — 0.3%* |
| &nbsp;&nbsp;&nbsp; Turning Point Brands Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 7.625% | &nbsp;&nbsp; 3/15/32 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *2098928*<br> <sup>(a)(c)</sup><br>|
| **Total Consumer Staples** | **Total Consumer Staples** | **Total Consumer Staples** | **Total Consumer Staples** | &nbsp;&nbsp; **9180951** |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Energy — 9.7%** | **Energy — 9.7%** | **Energy — 9.7%** | **Energy — 9.7%** | **Energy — 9.7%** |
| *Energy Equipment & Services — 0.7%* | *Energy Equipment & Services — 0.7%* | *Energy Equipment & Services — 0.7%* | *Energy Equipment & Services — 0.7%* | *Energy Equipment & Services — 0.7%* |
| &nbsp;&nbsp;&nbsp; Shelf Drilling Holdings Ltd., Senior <br> Secured Notes | &nbsp;&nbsp; 9.625% | &nbsp;&nbsp; 4/15/29 | &nbsp;&nbsp; 6600000<br>| &nbsp;&nbsp;&nbsp; $5292718<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sunnova Energy Corp., Senior Notes | &nbsp;&nbsp; 5.875% | &nbsp;&nbsp; 9/1/26 | &nbsp;&nbsp; 1500000<br>| &nbsp;&nbsp;&nbsp; 30,968<br> \*<sup>(a)(b)(c)</sup><br>|
| *Total Energy Equipment & Services* | *Total Energy Equipment & Services* | *Total Energy Equipment & Services* | *Total Energy Equipment & Services* | &nbsp;&nbsp; *5323686* |
| *Oil, Gas & Consumable Fuels — 9.0%* | *Oil, Gas & Consumable Fuels — 9.0%* | *Oil, Gas & Consumable Fuels — 9.0%* | *Oil, Gas & Consumable Fuels — 9.0%* | *Oil, Gas & Consumable Fuels — 9.0%* |
| &nbsp;&nbsp;&nbsp; Blue Racer Midstream LLC/Blue Racer <br> Finance Corp., Senior Notes | &nbsp;&nbsp; 6.625% | &nbsp;&nbsp; 7/15/26 | &nbsp;&nbsp; 362000<br>| &nbsp;&nbsp;&nbsp; 362679<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Blue Racer Midstream LLC/Blue Racer <br> Finance Corp., Senior Notes | &nbsp;&nbsp; 7.250% | &nbsp;&nbsp; 7/15/32 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1060292<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Crescent Energy Finance LLC, Senior <br> Notes | &nbsp;&nbsp; 9.250% | &nbsp;&nbsp; 2/15/28 | &nbsp;&nbsp; 3710000<br>| &nbsp;&nbsp;&nbsp; 3869660<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Crescent Energy Finance LLC, Senior <br> Notes | &nbsp;&nbsp; 7.625% | &nbsp;&nbsp; 4/1/32 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2931721<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Crescent Energy Finance LLC, Senior <br> Notes | &nbsp;&nbsp; 8.375% | &nbsp;&nbsp; 1/15/34 | &nbsp;&nbsp; 3790000<br>| &nbsp;&nbsp;&nbsp; 3794963<br> <sup>(a)(e)</sup><br>|
| &nbsp;&nbsp;&nbsp; Energy Transfer LP, Junior Subordinated <br> Notes (6.625% to 2/15/28 then 3 mo. <br> USD LIBOR + 4.155%) | &nbsp;&nbsp; 6.625% | &nbsp;&nbsp; 2/15/28 | &nbsp;&nbsp; 6645000<br>| &nbsp;&nbsp;&nbsp; 6638977<br> <sup>(c)(f)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; EQT Corp., Senior Notes | &nbsp;&nbsp; 6.500% | &nbsp;&nbsp; 7/15/48 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2923627<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; New Generation Gas Gathering LLC, <br> Senior Secured Notes (3 mo. Term SOFR <br> + 5.750%) | &nbsp;&nbsp; 10.016% | &nbsp;&nbsp; 9/30/29 | &nbsp;&nbsp; 4090811<br>| &nbsp;&nbsp;&nbsp; 4029448<br> <sup>(a)(g)(h)(i)</sup><br>|
| &nbsp;&nbsp;&nbsp; Northern Oil & Gas Inc., Senior Notes | &nbsp;&nbsp; 8.125% | &nbsp;&nbsp; 3/1/28 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1009606<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Occidental Petroleum Corp., Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 11/1/96 | &nbsp;&nbsp; 8610000<br>| &nbsp;&nbsp;&nbsp; 9306161<br>|
| &nbsp;&nbsp;&nbsp; Permian Resources Operating LLC, Senior <br> Notes | &nbsp;&nbsp; 8.000% | &nbsp;&nbsp; 4/15/27 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1023125<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Permian Resources Operating LLC, Senior <br> Notes | &nbsp;&nbsp; 9.875% | &nbsp;&nbsp; 7/15/31 | &nbsp;&nbsp; 1294000<br>| &nbsp;&nbsp;&nbsp; 1418432<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Permian Resources Operating LLC, Senior <br> Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 2/1/33 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1009925<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Plains All American Pipeline LP, Junior <br> Subordinated Notes (3 mo. Term SOFR + <br> 4.372%) | &nbsp;&nbsp; 8.698% | &nbsp;&nbsp; 7/30/25 | &nbsp;&nbsp; 7000000<br>| &nbsp;&nbsp;&nbsp; 7032298<br> <sup>(f)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Rockies Express Pipeline LLC, Senior <br> Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 7/15/38 | &nbsp;&nbsp; 9300000<br>| &nbsp;&nbsp;&nbsp; 9492064<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Venture Global LNG Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 8.375% | &nbsp;&nbsp; 6/1/31 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 5196753<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Venture Global LNG Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 9.875% | &nbsp;&nbsp; 2/1/32 | &nbsp;&nbsp; 4510000<br>| &nbsp;&nbsp;&nbsp; 4873452<br> <sup>(a)(c)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Oil, Gas & Consumable Fuels — continued* | *Oil, Gas & Consumable Fuels — continued* | *Oil, Gas & Consumable Fuels — continued* | *Oil, Gas & Consumable Fuels — continued* | *Oil, Gas & Consumable Fuels — continued* |
| &nbsp;&nbsp;&nbsp; Venture Global Plaquemines LNG LLC, <br> Senior Secured Notes | &nbsp;&nbsp; 7.750% | &nbsp;&nbsp; 5/1/35 | &nbsp;&nbsp; 2125000<br>| &nbsp;&nbsp;&nbsp; $2301995<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Venture Global Plaquemines LNG LLC, <br> Senior Secured Notes | &nbsp;&nbsp; 6.750% | &nbsp;&nbsp; 1/15/36 | &nbsp;&nbsp; 1180000<br>| &nbsp;&nbsp;&nbsp; 1180000<br> <sup>(a)(e)</sup><br>|
| *Total Oil, Gas & Consumable Fuels* | *Total Oil, Gas & Consumable Fuels* | *Total Oil, Gas & Consumable Fuels* | *Total Oil, Gas & Consumable Fuels* | &nbsp;&nbsp; *69455178* |
| **Total Energy** | **Total Energy** | **Total Energy** | **Total Energy** | &nbsp;&nbsp; **74778864** |
| **Financials — 5.7%** | **Financials — 5.7%** | **Financials — 5.7%** | **Financials — 5.7%** | **Financials — 5.7%** |
| *Capital Markets — 0.7%* | *Capital Markets — 0.7%* | *Capital Markets — 0.7%* | *Capital Markets — 0.7%* | *Capital Markets — 0.7%* |
| &nbsp;&nbsp;&nbsp; B3 SA - Brasil Bolsa Balcao, Senior <br> Notes | &nbsp;&nbsp; 4.125% | &nbsp;&nbsp; 9/20/31 | &nbsp;&nbsp; 2200000<br>| &nbsp;&nbsp;&nbsp; 2019349<br> <sup>(a)(j)</sup><br>|
| &nbsp;&nbsp;&nbsp; StoneX Group Inc., Secured Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 3/1/31 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 3146643<br> <sup>(a)(c)</sup><br>|
| *Total Capital Markets* | *Total Capital Markets* | *Total Capital Markets* | *Total Capital Markets* | &nbsp;&nbsp; *5165992* |
| *Consumer Finance — 1.3%* | *Consumer Finance — 1.3%* | *Consumer Finance — 1.3%* | *Consumer Finance — 1.3%* | *Consumer Finance — 1.3%* |
| &nbsp;&nbsp;&nbsp; Navient Corp., Senior Notes | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 3/15/29 | &nbsp;&nbsp; 10000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *9800712*<br> <sup>(c)</sup><br>|
| *Financial Services — 2.5%* | *Financial Services — 2.5%* | *Financial Services — 2.5%* | *Financial Services — 2.5%* | *Financial Services — 2.5%* |
| &nbsp;&nbsp;&nbsp; Boost Newco Borrower LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 1/15/31 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 3186675<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Burford Capital Global Finance LLC, <br> Senior Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 4/15/28 | &nbsp;&nbsp; 4000000<br>| &nbsp;&nbsp;&nbsp; 3965980<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; LD Holdings Group LLC, Senior Notes | &nbsp;&nbsp; 6.500% | &nbsp;&nbsp; 11/1/25 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4924900<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Rocket Mortgage LLC/Rocket Mortgage <br> Co-Issuer Inc., Senior Notes | &nbsp;&nbsp; 4.000% | &nbsp;&nbsp; 10/15/33 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 895358<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; VistaJet Malta Finance PLC/Vista <br> Management Holding Inc., Senior Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 5/1/27 | &nbsp;&nbsp; 6500000<br>| &nbsp;&nbsp;&nbsp; 6545292<br> <sup>(a)(c)</sup><br>|
| *Total Financial Services* | *Total Financial Services* | *Total Financial Services* | *Total Financial Services* | &nbsp;&nbsp; *19518205* |
| *Insurance — 0.3%* | *Insurance — 0.3%* | *Insurance — 0.3%* | *Insurance — 0.3%* | *Insurance — 0.3%* |
| &nbsp;&nbsp;&nbsp; APH Somerset Investor 2 LLC/APH2 <br> Somerset Investor 2 LLC/APH3 Somerset <br> Investor 2 LLC, Senior Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 11/1/29 | &nbsp;&nbsp; 2170000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *2221537*<br> <sup>(a)(c)</sup><br>|
| *Mortgage Real Estate Investment Trusts (REITs) — 0.9%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.9%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.9%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.9%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.9%* |
| &nbsp;&nbsp;&nbsp; Ladder Capital Finance Holdings LLLP/<br> Ladder Capital Finance Corp., Senior <br> Notes | &nbsp;&nbsp; 4.750% | &nbsp;&nbsp; 6/15/29 | &nbsp;&nbsp; 7000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *6820562*<br> <sup>(a)(c)</sup><br>|
| **Total Financials** | **Total Financials** | **Total Financials** | **Total Financials** | &nbsp;&nbsp; **43527008** |
| **Health Care — 6.4%** | **Health Care — 6.4%** | **Health Care — 6.4%** | **Health Care — 6.4%** | **Health Care — 6.4%** |
| *Health Care Providers & Services — 4.0%* | *Health Care Providers & Services — 4.0%* | *Health Care Providers & Services — 4.0%* | *Health Care Providers & Services — 4.0%* | *Health Care Providers & Services — 4.0%* |
| &nbsp;&nbsp;&nbsp; Akumin Inc., Senior Secured Notes | &nbsp;&nbsp; 8.000% | &nbsp;&nbsp; 8/1/28 | &nbsp;&nbsp; 6982000<br>| &nbsp;&nbsp;&nbsp; 6259024<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CHS/Community Health Systems Inc., <br> Secured Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 4/15/29 | &nbsp;&nbsp; 13930000<br>| &nbsp;&nbsp;&nbsp; 11118647<br> <sup>(a)(c)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Health Care Providers & Services — continued* | *Health Care Providers & Services — continued* | *Health Care Providers & Services — continued* | *Health Care Providers & Services — continued* | *Health Care Providers & Services — continued* |
| &nbsp;&nbsp;&nbsp; CHS/Community Health Systems Inc., <br> Senior Secured Notes | &nbsp;&nbsp; 4.750% | &nbsp;&nbsp; 2/15/31 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; $2567183<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CHS/Community Health Systems Inc., <br> Senior Secured Notes | &nbsp;&nbsp; 10.875% | &nbsp;&nbsp; 1/15/32 | &nbsp;&nbsp; 3030000<br>| &nbsp;&nbsp;&nbsp; 3215185<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; LifePoint Health Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 9.875% | &nbsp;&nbsp; 8/15/30 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 3248871<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sotera Health Holdings LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 7.375% | &nbsp;&nbsp; 6/1/31 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; 2604232<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; U.S. Renal Care Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 10.625% | &nbsp;&nbsp; 6/28/28 | &nbsp;&nbsp; 1883000<br>| &nbsp;&nbsp;&nbsp; 1612319<br> <sup>(a)</sup><br>|
| *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | &nbsp;&nbsp; *30625461* |
| *Health Care Technology — 0.2%* | *Health Care Technology — 0.2%* | *Health Care Technology — 0.2%* | *Health Care Technology — 0.2%* | *Health Care Technology — 0.2%* |
| &nbsp;&nbsp;&nbsp; Claritev Corp., Senior Secured Notes | &nbsp;&nbsp; 6.750% | &nbsp;&nbsp; 3/31/31 | &nbsp;&nbsp; 1933360<br>| &nbsp;&nbsp;&nbsp; 1363019<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; MPH Acquisition Holdings LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 5.750% | &nbsp;&nbsp; 12/31/30 | &nbsp;&nbsp; 223925<br>| &nbsp;&nbsp;&nbsp; 184646<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; MPH Acquisition Holdings LLC, Senior <br> Secured Notes (6.500% Cash and <br> 5.000% PIK) | &nbsp;&nbsp; 11.500% | &nbsp;&nbsp; 12/31/30 | &nbsp;&nbsp; 342715<br>| &nbsp;&nbsp;&nbsp; 340131<br> <sup>(a)(c)(d)</sup><br>|
| *Total Health Care Technology* | *Total Health Care Technology* | *Total Health Care Technology* | *Total Health Care Technology* | &nbsp;&nbsp; *1887796* |
| *Pharmaceuticals — 2.2%* | *Pharmaceuticals — 2.2%* | *Pharmaceuticals — 2.2%* | *Pharmaceuticals — 2.2%* | *Pharmaceuticals — 2.2%* |
| &nbsp;&nbsp;&nbsp; 1261229 BC Ltd., Senior Secured Notes | &nbsp;&nbsp; 10.000% | &nbsp;&nbsp; 4/15/32 | &nbsp;&nbsp; 2920000<br>| &nbsp;&nbsp;&nbsp; 2947711<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Bausch Health Cos. Inc., Senior Notes | &nbsp;&nbsp; 7.000% | &nbsp;&nbsp; 1/15/28 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4228925<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Bausch Health Cos. Inc., Senior Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 2/15/29 | &nbsp;&nbsp; 7616000<br>| &nbsp;&nbsp;&nbsp; 5359760<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Teva Pharmaceutical Finance Co. LLC, <br> Senior Notes | &nbsp;&nbsp; 6.150% | &nbsp;&nbsp; 2/1/36 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2057680<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Teva Pharmaceutical Finance <br> Netherlands III BV, Senior Notes | &nbsp;&nbsp; 4.100% | &nbsp;&nbsp; 10/1/46 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2160799<br>|
| *Total Pharmaceuticals* | *Total Pharmaceuticals* | *Total Pharmaceuticals* | *Total Pharmaceuticals* | &nbsp;&nbsp; *16754875* |
| **Total Health Care** | **Total Health Care** | **Total Health Care** | **Total Health Care** | &nbsp;&nbsp; **49268132** |
| **Industrials — 13.7%** | **Industrials — 13.7%** | **Industrials — 13.7%** | **Industrials — 13.7%** | **Industrials — 13.7%** |
| *Aerospace & Defense — 1.0%* | *Aerospace & Defense — 1.0%* | *Aerospace & Defense — 1.0%* | *Aerospace & Defense — 1.0%* | *Aerospace & Defense — 1.0%* |
| &nbsp;&nbsp;&nbsp; Triumph Group Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 9.000% | &nbsp;&nbsp; 3/15/28 | &nbsp;&nbsp; 7200000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *7528788*<br> <sup>(a)(c)</sup><br>|
| *Commercial Services & Supplies — 1.8%* | *Commercial Services & Supplies — 1.8%* | *Commercial Services & Supplies — 1.8%* | *Commercial Services & Supplies — 1.8%* | *Commercial Services & Supplies — 1.8%* |
| &nbsp;&nbsp;&nbsp; CoreCivic Inc., Senior Notes | &nbsp;&nbsp; 8.250% | &nbsp;&nbsp; 4/15/29 | &nbsp;&nbsp; 3359000<br>| &nbsp;&nbsp;&nbsp; 3563950<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; GEO Group Inc., Senior Notes | &nbsp;&nbsp; 10.250% | &nbsp;&nbsp; 4/15/31 | &nbsp;&nbsp; 4100000<br>| &nbsp;&nbsp;&nbsp; 4499557<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; RR Donnelley & Sons Co., Secured Notes | &nbsp;&nbsp; 10.875% | &nbsp;&nbsp; 8/1/29 | &nbsp;&nbsp; 1830000<br>| &nbsp;&nbsp;&nbsp; 1769276<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; RR Donnelley & Sons Co., Senior Secured <br> Notes | &nbsp;&nbsp; 9.500% | &nbsp;&nbsp; 8/1/29 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3502642<br> <sup>(a)(c)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Commercial Services & Supplies — continued* | *Commercial Services & Supplies — continued* | *Commercial Services & Supplies — continued* | *Commercial Services & Supplies — continued* | *Commercial Services & Supplies — continued* |
| &nbsp;&nbsp;&nbsp; Vortex Opco LLC, Senior Secured Notes | &nbsp;&nbsp; 8.000% | &nbsp;&nbsp; 4/30/30 | &nbsp;&nbsp; 4075500<br>| &nbsp;&nbsp;&nbsp; $672458<br> <sup>(a)</sup><br>|
| *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | &nbsp;&nbsp; *14007883* |
| *Construction & Engineering — 2.1%* | *Construction & Engineering — 2.1%* | *Construction & Engineering — 2.1%* | *Construction & Engineering — 2.1%* | *Construction & Engineering — 2.1%* |
| &nbsp;&nbsp;&nbsp; ATP Tower Holdings/Andean Telecom <br> Partners Chile SpA/Andean Tower <br> Partners Colombia SAS, Senior Secured <br> Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 2/3/30 | &nbsp;&nbsp; 1900000<br>| &nbsp;&nbsp;&nbsp; 1929255<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Empire Communities Corp., Senior Notes | &nbsp;&nbsp; 9.750% | &nbsp;&nbsp; 5/1/29 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 3071690<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Tutor Perini Corp., Senior Notes | &nbsp;&nbsp; 11.875% | &nbsp;&nbsp; 4/30/29 | &nbsp;&nbsp; 9921000<br>| &nbsp;&nbsp;&nbsp; 11175897<br> <sup>(a)(c)</sup><br>|
| *Total Construction & Engineering* | *Total Construction & Engineering* | *Total Construction & Engineering* | *Total Construction & Engineering* | &nbsp;&nbsp; *16176842* |
| *Ground Transportation — 0.9%* | *Ground Transportation — 0.9%* | *Ground Transportation — 0.9%* | *Ground Transportation — 0.9%* | *Ground Transportation — 0.9%* |
| &nbsp;&nbsp;&nbsp; Carriage Purchaser Inc., Senior Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 10/15/29 | &nbsp;&nbsp; 7000000<br>| &nbsp;&nbsp;&nbsp; 6225922<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; RXO Inc., Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 11/15/27 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1024428<br> <sup>(a)(c)</sup><br>|
| *Total Ground Transportation* | *Total Ground Transportation* | *Total Ground Transportation* | *Total Ground Transportation* | &nbsp;&nbsp; *7250350* |
| *Machinery — 2.5%* | *Machinery — 2.5%* | *Machinery — 2.5%* | *Machinery — 2.5%* | *Machinery — 2.5%* |
| &nbsp;&nbsp;&nbsp; Chart Industries Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 1/1/30 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 3144528<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Park-Ohio Industries Inc., Senior Notes | &nbsp;&nbsp; 6.625% | &nbsp;&nbsp; 4/15/27 | &nbsp;&nbsp; 8871000<br>| &nbsp;&nbsp;&nbsp; 8671024<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Titan International Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 7.000% | &nbsp;&nbsp; 4/30/28 | &nbsp;&nbsp; 6820000<br>| &nbsp;&nbsp;&nbsp; 6852599<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; TK Elevator US Newco Inc., Senior <br> Secured Notes | &nbsp;&nbsp; 5.250% | &nbsp;&nbsp; 7/15/27 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 999964<br> <sup>(a)(c)</sup><br>|
| *Total Machinery* | *Total Machinery* | *Total Machinery* | *Total Machinery* | &nbsp;&nbsp; *19668115* |
| *Marine Transportation — 0.7%* | *Marine Transportation — 0.7%* | *Marine Transportation — 0.7%* | *Marine Transportation — 0.7%* | *Marine Transportation — 0.7%* |
| &nbsp;&nbsp;&nbsp; Stena International SA, Senior Secured <br> Notes | &nbsp;&nbsp; 7.625% | &nbsp;&nbsp; 2/15/31 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *5138900*<br> <sup>(a)(c)</sup><br>|
| *Passenger Airlines — 2.8%* | *Passenger Airlines — 2.8%* | *Passenger Airlines — 2.8%* | *Passenger Airlines — 2.8%* | *Passenger Airlines — 2.8%* |
| &nbsp;&nbsp;&nbsp; American Airlines Inc., Senior Secured <br> Notes | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 5/15/29 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3672056<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; American Airlines Pass-Through Trust | &nbsp;&nbsp; 4.000% | &nbsp;&nbsp; 7/15/25 | &nbsp;&nbsp; 4891136<br>| &nbsp;&nbsp;&nbsp; 4886045<br>|
| &nbsp;&nbsp;&nbsp; JetBlue Airways Corp./JetBlue <br> Loyalty LP, Senior Secured Notes | &nbsp;&nbsp; 9.875% | &nbsp;&nbsp; 9/20/31 | &nbsp;&nbsp; 4250000<br>| &nbsp;&nbsp;&nbsp; 4137402<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Latam Airlines Group SA, Senior Secured <br> Notes | &nbsp;&nbsp; 7.875% | &nbsp;&nbsp; 4/15/30 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1021250<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; RJET 2023-1 A | &nbsp;&nbsp; 8.000% | &nbsp;&nbsp; 6/15/30 | &nbsp;&nbsp; 4500000<br>| &nbsp;&nbsp;&nbsp; 4644299<br> <sup>(h)(i)</sup><br>|
| &nbsp;&nbsp;&nbsp; Spirit Loyalty Cayman Ltd./Spirit IP <br> Cayman Ltd., Senior Secured Notes <br> (11.000% Cash or 4.000% PIK and <br> 8.000% Cash) | &nbsp;&nbsp; 11.000% | &nbsp;&nbsp; 3/12/30 | &nbsp;&nbsp; 4288288<br>| &nbsp;&nbsp;&nbsp; 3076847<br> <sup>(a)(d)</sup><br>|
| *Total Passenger Airlines* | *Total Passenger Airlines* | *Total Passenger Airlines* | *Total Passenger Airlines* | &nbsp;&nbsp; *21437899* |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Trading Companies & Distributors — 0.2%* | *Trading Companies & Distributors — 0.2%* | *Trading Companies & Distributors — 0.2%* | *Trading Companies & Distributors — 0.2%* | *Trading Companies & Distributors — 0.2%* |
| &nbsp;&nbsp;&nbsp; Herc Holdings Inc., Senior Notes | &nbsp;&nbsp; 7.000% | &nbsp;&nbsp; 6/15/30 | &nbsp;&nbsp; 1420000<br>| &nbsp;&nbsp;&nbsp; $1483875<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Herc Holdings Inc., Senior Notes | &nbsp;&nbsp; 7.250% | &nbsp;&nbsp; 6/15/33 | &nbsp;&nbsp; 420000<br>| &nbsp;&nbsp;&nbsp; 440350<br> <sup>(a)(c)</sup><br>|
| *Total Trading Companies & Distributors* | *Total Trading Companies & Distributors* | *Total Trading Companies & Distributors* | *Total Trading Companies & Distributors* | &nbsp;&nbsp; *1924225* |
| *Transportation Infrastructure — 1.7%* | *Transportation Infrastructure — 1.7%* | *Transportation Infrastructure — 1.7%* | *Transportation Infrastructure — 1.7%* | *Transportation Infrastructure — 1.7%* |
| &nbsp;&nbsp;&nbsp; Gatwick Airport Finance PLC, Senior <br> Secured Notes | &nbsp;&nbsp; 4.375% | &nbsp;&nbsp; 4/7/26 | &nbsp;&nbsp; 3000000 <br><sup>GBP</sup><br>| &nbsp;&nbsp;&nbsp; 4095616<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Railworks Holdings LP/Railworks <br> Rally Inc., Secured Notes | &nbsp;&nbsp; 8.250% | &nbsp;&nbsp; 11/15/28 | &nbsp;&nbsp; 8500000<br>| &nbsp;&nbsp;&nbsp; 8697753<br> <sup>(a)(c)</sup><br>|
| *Total Transportation Infrastructure* | *Total Transportation Infrastructure* | *Total Transportation Infrastructure* | *Total Transportation Infrastructure* | &nbsp;&nbsp; *12793369* |
| **Total Industrials** | **Total Industrials** | **Total Industrials** | **Total Industrials** | &nbsp;&nbsp; **105926371** |
| **Information Technology — 4.0%** | **Information Technology — 4.0%** | **Information Technology — 4.0%** | **Information Technology — 4.0%** | **Information Technology — 4.0%** |
| *Communications Equipment — 1.9%* | *Communications Equipment — 1.9%* | *Communications Equipment — 1.9%* | *Communications Equipment — 1.9%* | *Communications Equipment — 1.9%* |
| &nbsp;&nbsp;&nbsp; CommScope LLC, Senior Secured Notes | &nbsp;&nbsp; 9.500% | &nbsp;&nbsp; 12/15/31 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2095895<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CommScope Technologies LLC, Senior <br> Notes | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 3/15/27 | &nbsp;&nbsp; 7589000<br>| &nbsp;&nbsp;&nbsp; 7398169<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Connect Finco SARL/Connect US <br> Finco LLC, Senior Secured Notes | &nbsp;&nbsp; 9.000% | &nbsp;&nbsp; 9/15/29 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2012756<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Viasat Inc., Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 5/30/31 | &nbsp;&nbsp; 1875000<br>| &nbsp;&nbsp;&nbsp; 1626055<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Viasat Inc., Senior Secured Notes | &nbsp;&nbsp; 5.625% | &nbsp;&nbsp; 4/15/27 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1993426<br> <sup>(a)(c)</sup><br>|
| *Total Communications Equipment* | *Total Communications Equipment* | *Total Communications Equipment* | *Total Communications Equipment* | &nbsp;&nbsp; *15126301* |
| *IT Services — 0.4%* | *IT Services — 0.4%* | *IT Services — 0.4%* | *IT Services — 0.4%* | *IT Services — 0.4%* |
| &nbsp;&nbsp;&nbsp; CoreWeave Inc., Senior Notes | &nbsp;&nbsp; 9.250% | &nbsp;&nbsp; 6/1/30 | &nbsp;&nbsp; 700000<br>| &nbsp;&nbsp;&nbsp; 716228<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sabre GLBL Inc., Senior Secured Notes | &nbsp;&nbsp; 11.125% | &nbsp;&nbsp; 7/15/30 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2094500<br> <sup>(a)(c)</sup><br>|
| *Total IT Services* | *Total IT Services* | *Total IT Services* | *Total IT Services* | &nbsp;&nbsp; *2810728* |
| *Software — 1.4%* | *Software — 1.4%* | *Software — 1.4%* | *Software — 1.4%* | *Software — 1.4%* |
| &nbsp;&nbsp;&nbsp; Citrix Systems Inc., Senior Secured Notes | &nbsp;&nbsp; 4.500% | &nbsp;&nbsp; 12/1/27 | &nbsp;&nbsp; 8164000<br>| &nbsp;&nbsp;&nbsp; 7579499<br>|
| &nbsp;&nbsp;&nbsp; NCR Voyix Corp., Senior Notes | &nbsp;&nbsp; 5.125% | &nbsp;&nbsp; 4/15/29 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2957392<br> <sup>(a)(c)</sup><br>|
| *Total Software* | *Total Software* | *Total Software* | *Total Software* | &nbsp;&nbsp; *10536891* |
| *Technology Hardware, Storage & Peripherals — 0.3%* | *Technology Hardware, Storage & Peripherals — 0.3%* | *Technology Hardware, Storage & Peripherals — 0.3%* | *Technology Hardware, Storage & Peripherals — 0.3%* | *Technology Hardware, Storage & Peripherals — 0.3%* |
| &nbsp;&nbsp;&nbsp; CA Magnum Holdings, Senior Secured <br> Notes | &nbsp;&nbsp; 5.375% | &nbsp;&nbsp; 10/31/26 | &nbsp;&nbsp; 1500000<br>| &nbsp;&nbsp;&nbsp; 1492741<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Vericast Corp./Harland Clarke/Checks in <br> the Mail/Valassis Comm/Valassis Direct, <br> Secured Notes (5.000% Cash and <br> 10.000% PIK or 13.000% Cash) | &nbsp;&nbsp; 13.000% | &nbsp;&nbsp; 12/15/30 | &nbsp;&nbsp; 644436<br>| &nbsp;&nbsp;&nbsp; 779768<br> <sup>(a)(d)</sup><br>|
| *Total Technology Hardware, Storage & Peripherals* | *Total Technology Hardware, Storage & Peripherals* | *Total Technology Hardware, Storage & Peripherals* | *Total Technology Hardware, Storage & Peripherals* | &nbsp;&nbsp; *2272509* |
| **Total Information Technology** | **Total Information Technology** | **Total Information Technology** | **Total Information Technology** | &nbsp;&nbsp; **30746429** |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Materials — 1.6%** | **Materials — 1.6%** | **Materials — 1.6%** | **Materials — 1.6%** | **Materials — 1.6%** |
| *Construction Materials — 0.3%* | *Construction Materials — 0.3%* | *Construction Materials — 0.3%* | *Construction Materials — 0.3%* | *Construction Materials — 0.3%* |
| &nbsp;&nbsp;&nbsp; Smyrna Ready Mix Concrete LLC, Senior <br> Secured Notes | &nbsp;&nbsp; 8.875% | &nbsp;&nbsp; 11/15/31 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; $*2623067*<br> <sup>(a)(c)</sup><br>|
| *Containers & Packaging — 0.1%* | *Containers & Packaging — 0.1%* | *Containers & Packaging — 0.1%* | *Containers & Packaging — 0.1%* | *Containers & Packaging — 0.1%* |
| &nbsp;&nbsp;&nbsp; ARD Finance SA, Senior Secured Notes <br> (6.500% Cash or 7.250% PIK) | &nbsp;&nbsp; 6.500% | &nbsp;&nbsp; 6/30/27 | &nbsp;&nbsp; 1073814<br>| &nbsp;&nbsp;&nbsp; 51006<br> <sup>(a)(d)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ardagh Packaging Finance PLC/Ardagh <br> Holdings USA Inc., Senior Notes | &nbsp;&nbsp; 5.250% | &nbsp;&nbsp; 8/15/27 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 893470<br> <sup>(a)</sup><br>|
| *Total Containers & Packaging* | *Total Containers & Packaging* | *Total Containers & Packaging* | *Total Containers & Packaging* | &nbsp;&nbsp; *944476* |
| *Metals & Mining — 1.2%* | *Metals & Mining — 1.2%* | *Metals & Mining — 1.2%* | *Metals & Mining — 1.2%* | *Metals & Mining — 1.2%* |
| &nbsp;&nbsp;&nbsp; First Quantum Minerals Ltd., Secured <br> Notes | &nbsp;&nbsp; 9.375% | &nbsp;&nbsp; 3/1/29 | &nbsp;&nbsp; 2550000<br>| &nbsp;&nbsp;&nbsp; 2709622<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; First Quantum Minerals Ltd., Senior <br> Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 10/15/27 | &nbsp;&nbsp; 1602000<br>| &nbsp;&nbsp;&nbsp; 1605395<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; First Quantum Minerals Ltd., Senior <br> Notes | &nbsp;&nbsp; 8.625% | &nbsp;&nbsp; 6/1/31 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2077494<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; First Quantum Minerals Ltd., Senior <br> Notes | &nbsp;&nbsp; 8.000% | &nbsp;&nbsp; 3/1/33 | &nbsp;&nbsp; 2420000<br>| &nbsp;&nbsp;&nbsp; 2485195<br> <sup>(a)</sup><br>|
| *Total Metals & Mining* | *Total Metals & Mining* | *Total Metals & Mining* | *Total Metals & Mining* | &nbsp;&nbsp; *8877706* |
| **Total Materials** | **Total Materials** | **Total Materials** | **Total Materials** | &nbsp;&nbsp; **12445249** |
| **Real Estate — 2.1%** | **Real Estate — 2.1%** | **Real Estate — 2.1%** | **Real Estate — 2.1%** | **Real Estate — 2.1%** |
| *Diversified REITs — 1.2%* | *Diversified REITs — 1.2%* | *Diversified REITs — 1.2%* | *Diversified REITs — 1.2%* | *Diversified REITs — 1.2%* |
| &nbsp;&nbsp;&nbsp; MPT Operating Partnership LP/MPT <br> Finance Corp., Senior Notes | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 10/15/27 | &nbsp;&nbsp; 9000000<br>| &nbsp;&nbsp;&nbsp; 8320752<br> <sup>(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; MPT Operating Partnership LP/MPT <br> Finance Corp., Senior Secured Notes | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 2/15/32 | &nbsp;&nbsp; 900000<br>| &nbsp;&nbsp;&nbsp; 942625<br> <sup>(a)(c)</sup><br>|
| *Total Diversified REITs* | *Total Diversified REITs* | *Total Diversified REITs* | *Total Diversified REITs* | &nbsp;&nbsp; *9263377* |
| *Hotel & Resort REITs — 0.5%* | *Hotel & Resort REITs — 0.5%* | *Hotel & Resort REITs — 0.5%* | *Hotel & Resort REITs — 0.5%* | *Hotel & Resort REITs — 0.5%* |
| &nbsp;&nbsp;&nbsp; Service Properties Trust, Senior Secured <br> Notes | &nbsp;&nbsp; 8.625% | &nbsp;&nbsp; 11/15/31 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *3759882*<br> <sup>(a)(c)</sup><br>|
| *Real Estate Management & Development — 0.4%* | *Real Estate Management & Development — 0.4%* | *Real Estate Management & Development — 0.4%* | *Real Estate Management & Development — 0.4%* | *Real Estate Management & Development — 0.4%* |
| &nbsp;&nbsp;&nbsp; Add Hero Holdings Ltd., Senior Secured <br> Notes (7.500% Cash or 8.500% PIK) | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 9/30/29 | &nbsp;&nbsp; 534934<br>| &nbsp;&nbsp;&nbsp; 38783<br> <sup>(d)(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Add Hero Holdings Ltd., Senior Secured <br> Notes (8.000% Cash or 9.000% PIK) | &nbsp;&nbsp; 9.000% | &nbsp;&nbsp; 9/30/30 | &nbsp;&nbsp; 434618<br>| &nbsp;&nbsp;&nbsp; 8692<br> <sup>(d)(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Add Hero Holdings Ltd., Senior Secured <br> Notes (8.800% Cash or 9.800% PIK) | &nbsp;&nbsp; 9.800% | &nbsp;&nbsp; 9/30/31 | &nbsp;&nbsp; 571519<br>| &nbsp;&nbsp;&nbsp; 11431<br> <sup>(d)(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; China Aoyuan Group Ltd., Senior Notes, <br> Step bond (0.000% to 9/30/31 then <br> 1.000%) | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 3/30/2173 | &nbsp;&nbsp; 786962<br>| &nbsp;&nbsp;&nbsp; 5902<br> <sup>(f)(k)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Real Estate Management & Development — continued* | *Real Estate Management & Development — continued* | *Real Estate Management & Development — continued* | *Real Estate Management & Development — continued* | *Real Estate Management & Development — continued* |
| &nbsp;&nbsp;&nbsp; China Aoyuan Group Ltd., Senior Secured <br> Notes (5.500% PIK) | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 9/30/31 | &nbsp;&nbsp; 213421<br>| &nbsp;&nbsp;&nbsp; $3735<br> <sup>(d)(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Country Garden Holdings Co. Ltd., Senior <br> Secured Notes | —  | &nbsp;&nbsp; 1/27/24 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 275,030<br> \*<sup>(k)(l)</sup><br>|
| &nbsp;&nbsp;&nbsp; Cushman & Wakefield US Borrower LLC, <br> Senior Secured Notes | &nbsp;&nbsp; 8.875% | &nbsp;&nbsp; 9/1/31 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 1074615<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Five Point Operating Co. LP/Five Point <br> Capital Corp., Senior Notes, Step bond <br> (10.500% to 11/15/25 then 11.000%) | &nbsp;&nbsp; 10.500% | &nbsp;&nbsp; 1/15/28 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2035982<br> <sup>(a)(c)</sup><br>|
| *Total Real Estate Management & Development* | *Total Real Estate Management & Development* | *Total Real Estate Management & Development* | *Total Real Estate Management & Development* | &nbsp;&nbsp; *3454170* |
| **Total Real Estate** | **Total Real Estate** | **Total Real Estate** | **Total Real Estate** | &nbsp;&nbsp; **16477429** |
| **Utilities — 1.0%** | **Utilities — 1.0%** | **Utilities — 1.0%** | **Utilities — 1.0%** | **Utilities — 1.0%** |
| *Electric Utilities — 0.2%* | *Electric Utilities — 0.2%* | *Electric Utilities — 0.2%* | *Electric Utilities — 0.2%* | *Electric Utilities — 0.2%* |
| &nbsp;&nbsp;&nbsp; Pampa Energia SA, Senior Notes | &nbsp;&nbsp; 7.950% | &nbsp;&nbsp; 9/10/31 | &nbsp;&nbsp; 1210000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *1232032*<br> <sup>(a)</sup><br>|
| *Independent Power and Renewable Electricity Producers — 0.8%* | *Independent Power and Renewable Electricity Producers — 0.8%* | *Independent Power and Renewable Electricity Producers — 0.8%* | *Independent Power and Renewable Electricity Producers — 0.8%* | *Independent Power and Renewable Electricity Producers — 0.8%* |
| &nbsp;&nbsp;&nbsp; AES Andes SA, Senior Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 3/14/32 | &nbsp;&nbsp; 300000<br>| &nbsp;&nbsp;&nbsp; 306303<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Lightning Power LLC, Senior Secured <br> Notes | &nbsp;&nbsp; 7.250% | &nbsp;&nbsp; 8/15/32 | &nbsp;&nbsp; 1500000<br>| &nbsp;&nbsp;&nbsp; 1579651<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Saavi Energia Sarl, Senior Notes | &nbsp;&nbsp; 8.875% | &nbsp;&nbsp; 2/10/35 | &nbsp;&nbsp; 1800000<br>| &nbsp;&nbsp;&nbsp; 1880550<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; TransAlta Corp., Senior Notes | &nbsp;&nbsp; 6.500% | &nbsp;&nbsp; 3/15/40 | &nbsp;&nbsp; 2850000<br>| &nbsp;&nbsp;&nbsp; 2752319<br> <sup>(c)</sup><br>|
| *Total Independent Power and Renewable Electricity Producers* | *Total Independent Power and Renewable Electricity Producers* | *Total Independent Power and Renewable Electricity Producers* | *Total Independent Power and Renewable Electricity Producers* | &nbsp;&nbsp; *6518823* |
| **Total Utilities** | **Total Utilities** | **Total Utilities** | **Total Utilities** | &nbsp;&nbsp; **7750855** |
| **Total Corporate Bonds & Notes (Cost — $548,929,076)** | **Total Corporate Bonds & Notes (Cost — $548,929,076)** | **Total Corporate Bonds & Notes (Cost — $548,929,076)** | **Total Corporate Bonds & Notes (Cost — $548,929,076)** | &nbsp;&nbsp; **547535347** |
| **Collateralized Mortgage Obligations**<sup>(m)</sup> **— 23.8%** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— 23.8%** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— 23.8%** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— 23.8%** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— 23.8%** |
| &nbsp;&nbsp;&nbsp; Atrium Hotel Portfolio Trust, 2017-ATRM <br> E (1 mo. Term SOFR + 3.347%) | &nbsp;&nbsp; 7.659% | &nbsp;&nbsp; 12/15/36 | &nbsp;&nbsp; 2700000<br>| &nbsp;&nbsp;&nbsp; 2496149<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BANK, 2021-BN35 H | &nbsp;&nbsp; 1.767% | &nbsp;&nbsp; 6/15/64 | &nbsp;&nbsp; 9451000<br>| &nbsp;&nbsp;&nbsp; 3573541<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BANK, 2021-BN35 K | &nbsp;&nbsp; 1.767% | &nbsp;&nbsp; 6/15/64 | &nbsp;&nbsp; 21846154<br>| &nbsp;&nbsp;&nbsp; 7131323<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Benchmark Mortgage Trust, 2021-B27 F | &nbsp;&nbsp; 2.250% | &nbsp;&nbsp; 7/15/54 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 2693255<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Benchmark Mortgage Trust, 2021-B27 G | &nbsp;&nbsp; 2.250% | &nbsp;&nbsp; 7/15/54 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 2138528<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BHMS Mortgage Trust, 2018-MZB (1 mo. <br> Term SOFR + 6.934%) | &nbsp;&nbsp; 11.245% | &nbsp;&nbsp; 7/15/25 | &nbsp;&nbsp; 2674000<br>| &nbsp;&nbsp;&nbsp; 2666584<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BSREP Commercial Mortgage Trust, <br> 2021-DC HRR (1 mo. Term SOFR + <br> 5.614%) | &nbsp;&nbsp; 9.926% | &nbsp;&nbsp; 8/15/38 | &nbsp;&nbsp; 15903970<br>| &nbsp;&nbsp;&nbsp; 3643999<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BWAY Mortgage Trust, 2013-1515 F | &nbsp;&nbsp; 4.058% | &nbsp;&nbsp; 3/10/33 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1738137<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BX Commercial Mortgage Trust, 2019-<br> IMC G (1 mo. Term SOFR + 3.646%) | &nbsp;&nbsp; 7.958% | &nbsp;&nbsp; 4/15/34 | &nbsp;&nbsp; 4000000<br>| &nbsp;&nbsp;&nbsp; 3854161<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; CAFL Issuer LLC, 2024-RTL1 A2 | &nbsp;&nbsp; 8.680% | &nbsp;&nbsp; 11/28/31 | &nbsp;&nbsp; 4570000<br>| &nbsp;&nbsp;&nbsp; 4629794<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; CIM Trust, 2021-INV1 AXS, IO | &nbsp;&nbsp; 0.190% | &nbsp;&nbsp; 7/1/51 | &nbsp;&nbsp; 146306931<br>| &nbsp;&nbsp;&nbsp; 1439997<br> <sup>(a)(g)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | |
|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>|
| **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** |
| &nbsp;&nbsp;&nbsp; Citigroup Commercial Mortgage Trust, <br> 2015-GC29 D | &nbsp;&nbsp; 3.110% | &nbsp;&nbsp; 4/10/48 | &nbsp;&nbsp; 2439000<br>&nbsp;&nbsp;&nbsp; $1743397<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Citigroup Commercial Mortgage Trust, <br> 2015-P1 D | &nbsp;&nbsp; 3.225% | &nbsp;&nbsp; 9/15/48 | &nbsp;&nbsp; 1000000<br>&nbsp;&nbsp;&nbsp; 961612<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; CSMC Trust, 2021-ADV G (1 mo. Term <br> SOFR + 6.364%) | &nbsp;&nbsp; 10.676% | &nbsp;&nbsp; 7/15/38 | &nbsp;&nbsp; 7860000<br>&nbsp;&nbsp;&nbsp; 9094<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Easy Street Mortgage Loan Trust, 2025-<br> RTL1 A2 | &nbsp;&nbsp; 8.299% | &nbsp;&nbsp; 5/25/40 | &nbsp;&nbsp; 2990000<br>&nbsp;&nbsp;&nbsp; 3006674<br> <sup>(a)(c)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) Multifamily Structured Pass-<br> Through Certificates, 2021-MN2 B1 (30 <br> Day Average SOFR + 5.500%) | &nbsp;&nbsp; 9.805% | &nbsp;&nbsp; 7/25/41 | &nbsp;&nbsp; 2500000<br>&nbsp;&nbsp;&nbsp; 2526902<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2020-DNA1 B2 (30 Day <br> Average SOFR + 5.364%) | &nbsp;&nbsp; 9.670% | &nbsp;&nbsp; 1/25/50 | &nbsp;&nbsp; 2225000<br>&nbsp;&nbsp;&nbsp; 2458236<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2020-DNA6 B2 (30 Day <br> Average SOFR + 5.650%) | &nbsp;&nbsp; 9.955% | &nbsp;&nbsp; 12/25/50 | &nbsp;&nbsp; 5000000<br>&nbsp;&nbsp;&nbsp; 5719317<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2021-DNA1 B2 (30 Day <br> Average SOFR + 4.750%) | &nbsp;&nbsp; 9.055% | &nbsp;&nbsp; 1/25/51 | &nbsp;&nbsp; 6000000<br>&nbsp;&nbsp;&nbsp; 6635918<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2021-DNA2 B2 (30 Day <br> Average SOFR + 6.000%) | &nbsp;&nbsp; 10.305% | &nbsp;&nbsp; 8/25/33 | &nbsp;&nbsp; 6000000<br>&nbsp;&nbsp;&nbsp; 7311023<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2020-DNA2 B2 (30 Day <br> Average SOFR + 4.914%) | &nbsp;&nbsp; 9.220% | &nbsp;&nbsp; 2/25/50 | &nbsp;&nbsp; 7250000<br>&nbsp;&nbsp;&nbsp; 7965302<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2021-DNA3 B2 (30 Day <br> Average SOFR + 6.250%) | &nbsp;&nbsp; 10.555% | &nbsp;&nbsp; 10/25/33 | &nbsp;&nbsp; 5000000<br>&nbsp;&nbsp;&nbsp; 6187258<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2021-DNA5 B2 (30 Day <br> Average SOFR + 5.500%) | &nbsp;&nbsp; 9.805% | &nbsp;&nbsp; 1/25/34 | &nbsp;&nbsp; 6700000<br>&nbsp;&nbsp;&nbsp; 7930378<br> <sup>(a)(g)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** |
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) REMIC, Structured Agency <br> Credit Risk Trust, 2021-DNA6 B2 (30 Day <br> Average SOFR + 7.500%) | &nbsp;&nbsp; 11.805% | &nbsp;&nbsp; 10/25/41 | &nbsp;&nbsp; 6590000<br>| &nbsp;&nbsp;&nbsp; $7007279<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) Seasoned Credit Risk Transfer <br> Trust, 2018-3 BX  | &nbsp;&nbsp; 2.142% | &nbsp;&nbsp; 8/25/57 | &nbsp;&nbsp; 9380328<br>| &nbsp;&nbsp;&nbsp; 3378664<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) Seasoned Credit Risk Transfer <br> Trust, 2022-1 M | &nbsp;&nbsp; 4.500% | &nbsp;&nbsp; 11/25/61 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4456571<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) Structured Agency Credit Risk <br> Trust, 2018-HRP1 B2 (30 Day Average <br> SOFR + 11.864%) | &nbsp;&nbsp; 16.170% | &nbsp;&nbsp; 5/25/43 | &nbsp;&nbsp; 4685566<br>| &nbsp;&nbsp;&nbsp; 5673982<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Federal Home Loan Mortgage Corp. <br> (FHLMC) Structured Agency Credit Risk <br> Trust, 2019-FTR1 B2 (30 Day Average <br> SOFR + 8.464%) | &nbsp;&nbsp; 12.770% | &nbsp;&nbsp; 1/25/48 | &nbsp;&nbsp; 3460000<br>| &nbsp;&nbsp;&nbsp; 4122614<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; FREMF Mortgage Trust, 2021-F117 CS (30 <br> Day Average SOFR + 6.400%) | &nbsp;&nbsp; 10.712% | &nbsp;&nbsp; 7/25/31 | &nbsp;&nbsp; 3423590<br>| &nbsp;&nbsp;&nbsp; 3135044<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; GS Mortgage Securities Corp., 2024-70P <br> HRR | &nbsp;&nbsp; 10.333% | &nbsp;&nbsp; 3/10/41 | &nbsp;&nbsp; 17680000<br>| &nbsp;&nbsp;&nbsp; 17790098<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; GS Mortgage Securities Corp. Trust, <br> 2018-LUAU G (1 mo. Term SOFR + <br> 4.747%) | &nbsp;&nbsp; 9.059% | &nbsp;&nbsp; 11/15/32 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4963252<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; GS Mortgage Securities Trust, 2015-<br> GC30 D | &nbsp;&nbsp; 3.384% | &nbsp;&nbsp; 5/10/50 | &nbsp;&nbsp; 2720000<br>| &nbsp;&nbsp;&nbsp; 2009426<br>|
| &nbsp;&nbsp;&nbsp; JPMorgan Chase Commercial Mortgage <br> Securities Trust, 2018-WPT GFX | &nbsp;&nbsp; 5.542% | &nbsp;&nbsp; 7/5/33 | &nbsp;&nbsp; 4000000<br>| &nbsp;&nbsp;&nbsp; 1280000<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; JPMorgan Chase Commercial Mortgage <br> Securities Trust, 2021-NYMZ M (1 mo. <br> Term SOFR + 7.614%) | &nbsp;&nbsp; 11.926% | &nbsp;&nbsp; 6/15/26 | &nbsp;&nbsp; 10000000<br>| &nbsp;&nbsp;&nbsp; 2176980<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; KIND Trust, 2021-KIND F (1 mo. Term <br> SOFR + 4.064%) | &nbsp;&nbsp; 8.380% | &nbsp;&nbsp; 8/15/38 | &nbsp;&nbsp; 5951129<br>| &nbsp;&nbsp;&nbsp; 5877029<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; MIRA Trust, 2023-MILE HRR | &nbsp;&nbsp; 9.300% | &nbsp;&nbsp; 6/10/38 | &nbsp;&nbsp; 13750000<br>| &nbsp;&nbsp;&nbsp; 13889519<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Morgan Stanley Capital I Trust, 2021-L6 F | &nbsp;&nbsp; 2.250% | &nbsp;&nbsp; 6/15/54 | &nbsp;&nbsp; 7195000<br>| &nbsp;&nbsp;&nbsp; 4150572<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Multifamily CAS Trust, 2019-1 CE (30 Day <br> Average SOFR + 8.864%) | &nbsp;&nbsp; 13.170% | &nbsp;&nbsp; 10/25/49 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2033863<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Multifamily CAS Trust, 2020-1 CE (30 Day <br> Average SOFR + 7.614%) | &nbsp;&nbsp; 11.920% | &nbsp;&nbsp; 3/25/50 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; 2614198<br> <sup>(a)(g)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** | **Collateralized Mortgage Obligations**<sup>(m)</sup> **— continued** |
| &nbsp;&nbsp;&nbsp; Natixis Commercial Mortgage Securities <br> Trust, 2022-JERI G (1 mo. Term SOFR + <br> 7.608%) | &nbsp;&nbsp; 11.920% | &nbsp;&nbsp; 1/15/39 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; $2001813<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Natixis Commercial Mortgage Securities <br> Trust, 2022-RRI E (1 mo. Term SOFR + <br> 5.193%) | &nbsp;&nbsp; 9.505% | &nbsp;&nbsp; 3/15/35 | &nbsp;&nbsp; 3750000<br>| &nbsp;&nbsp;&nbsp; 3743884<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; New Residential Mortgage Loan Trust, <br> 2017-2A B5 | &nbsp;&nbsp; 5.211% | &nbsp;&nbsp; 3/25/57 | &nbsp;&nbsp; 2819937<br>| &nbsp;&nbsp;&nbsp; 2540090<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Soho Trust, 2021-SOHO D | &nbsp;&nbsp; 2.786% | &nbsp;&nbsp; 8/10/38 | &nbsp;&nbsp; 4050000<br>| &nbsp;&nbsp;&nbsp; 2512327<br> <sup>(a)(g)</sup><br>|
| **Total Collateralized Mortgage Obligations (Cost — $211,873,632)** | **Total Collateralized Mortgage Obligations (Cost — $211,873,632)** | **Total Collateralized Mortgage Obligations (Cost — $211,873,632)** | **Total Collateralized Mortgage Obligations (Cost — $211,873,632)** | &nbsp;&nbsp; **183817784** |
|  |  |  | &nbsp;&nbsp; Face <br>Amount†/ <br>Units<br>|  |
| **Asset-Backed Securities — 22.1%** | **Asset-Backed Securities — 22.1%** | **Asset-Backed Securities — 22.1%** | **Asset-Backed Securities — 22.1%** | **Asset-Backed Securities — 22.1%** |
| &nbsp;&nbsp;&nbsp; 720 East CLO Ltd., 2025-7A E (3 mo. Term <br> SOFR + 4.750%) | &nbsp;&nbsp; 9.031% | &nbsp;&nbsp; 4/20/37 | &nbsp;&nbsp; 1150000<br>| &nbsp;&nbsp;&nbsp; 1145015<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; AGL CLO Ltd., 2021-11A E (3 mo. Term <br> SOFR + 6.622%) | &nbsp;&nbsp; 10.878% | &nbsp;&nbsp; 4/15/34 | &nbsp;&nbsp; 2650000<br>| &nbsp;&nbsp;&nbsp; 2651589<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; AGL CLO Ltd., 2021-16A DR (3 mo. Term <br> SOFR + 2.400%) | &nbsp;&nbsp; 6.669% | &nbsp;&nbsp; 1/20/35 | &nbsp;&nbsp; 380000<br>| &nbsp;&nbsp;&nbsp; 379054<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; AMMC CLO Ltd., 2020-23A D2R3 (3 mo. <br> Term SOFR + 4.900%) | &nbsp;&nbsp; 9.222% | &nbsp;&nbsp; 7/17/38 | &nbsp;&nbsp; 1500000<br>| &nbsp;&nbsp;&nbsp; 1505625<br> <sup>(a)(e)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; AMMC CLO Ltd., 2021-24A ER (3 mo. <br> Term SOFR + 6.500%) | &nbsp;&nbsp; 10.769% | &nbsp;&nbsp; 1/20/35 | &nbsp;&nbsp; 1890000<br>| &nbsp;&nbsp;&nbsp; 1895316<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Apex Credit CLO Ltd., 2020-1A DRR (3 <br> mo. Term SOFR + 4.320%) | &nbsp;&nbsp; 8.589% | &nbsp;&nbsp; 4/20/35 | &nbsp;&nbsp; 2640000<br>| &nbsp;&nbsp;&nbsp; 2633437<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Apidos CLO Ltd., 2023-44A FR (3 mo. <br> Term SOFR + 7.230%) | &nbsp;&nbsp; 11.513% | &nbsp;&nbsp; 10/26/37 | &nbsp;&nbsp; 500000<br>| &nbsp;&nbsp;&nbsp; 483195<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Apidos CLO Ltd., 2023-46A SUB | &nbsp;&nbsp; 16.377% | &nbsp;&nbsp; 10/24/36 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 2841205<br> <sup>(a)(g)(n)</sup><br>|
| &nbsp;&nbsp;&nbsp; Avis Budget Rental Car Funding <br> AESOP LLC, 2023-5A D | &nbsp;&nbsp; 7.350% | &nbsp;&nbsp; 4/20/28 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 2023354<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Avis Budget Rental Car Funding <br> AESOP LLC, 2023-6A D | &nbsp;&nbsp; 7.370% | &nbsp;&nbsp; 12/20/29 | &nbsp;&nbsp; 1320000<br>| &nbsp;&nbsp;&nbsp; 1329254<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Avis Budget Rental Car Funding <br> AESOP LLC, 2024-2A D | &nbsp;&nbsp; 7.430% | &nbsp;&nbsp; 10/20/28 | &nbsp;&nbsp; 840000<br>| &nbsp;&nbsp;&nbsp; 853565<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Balboa Bay Loan Funding Ltd., 2023-1A <br> D2RR (3 mo. Term SOFR + 4.250%) | &nbsp;&nbsp; 8.575% | &nbsp;&nbsp; 4/20/36 | &nbsp;&nbsp; 2250000<br>| &nbsp;&nbsp;&nbsp; 2258437<br> <sup>(a)(e)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Balboa Bay Loan Funding Ltd., 2024-2A F <br> (3 mo. Term SOFR + 7.800%) | &nbsp;&nbsp; 12.116% | &nbsp;&nbsp; 1/20/38 | &nbsp;&nbsp; 200000<br>| &nbsp;&nbsp;&nbsp; 196874<br> <sup>(a)(c)(g)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | |
|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†/<br> Units<br>|
| **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** |
| &nbsp;&nbsp;&nbsp; Balboa Bay Loan Funding Ltd., 2020-1A <br> ERR (3 mo. Term SOFR + 7.150%) | &nbsp;&nbsp; 11.419% | &nbsp;&nbsp; 10/20/35 | &nbsp;&nbsp; 2620000<br>&nbsp;&nbsp;&nbsp; $2639550<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Balboa Bay Loan Funding Ltd., 2024-2A E <br> (3 mo. Term SOFR + 5.750%) | &nbsp;&nbsp; 10.066% | &nbsp;&nbsp; 1/20/38 | &nbsp;&nbsp; 1630000<br>&nbsp;&nbsp;&nbsp; 1651233<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BlueMountain CLO Ltd., 2020-29A ER (3 <br> mo. Term SOFR + 7.122%) | &nbsp;&nbsp; 11.403% | &nbsp;&nbsp; 7/25/34 | &nbsp;&nbsp; 7000000<br>&nbsp;&nbsp;&nbsp; 6794010<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; BlueMountain Fuji US CLO Ltd., 2017-2A <br> D (3 mo. Term SOFR + 6.412%) | &nbsp;&nbsp; 10.681% | &nbsp;&nbsp; 10/20/30 | &nbsp;&nbsp; 5350000<br>&nbsp;&nbsp;&nbsp; 5010587<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; CarVal CLO Ltd., 2024-3A E (3 mo. Term <br> SOFR + 6.350%) | &nbsp;&nbsp; 10.619% | &nbsp;&nbsp; 10/20/37 | &nbsp;&nbsp; 2070000<br>&nbsp;&nbsp;&nbsp; 2091399<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Dryden CLO Ltd., 2021-95A SUB | &nbsp;&nbsp; 25.985% | &nbsp;&nbsp; 8/20/34 | &nbsp;&nbsp; 6870000<br>&nbsp;&nbsp;&nbsp; 2935588<br> <sup>(a)(g)(n)</sup><br>|
| &nbsp;&nbsp;&nbsp; Elevation CLO Ltd., 2021-14A ER (3 mo. <br> Term SOFR + 6.450%) | &nbsp;&nbsp; 10.719% | &nbsp;&nbsp; 1/20/38 | &nbsp;&nbsp; 4400000<br>&nbsp;&nbsp;&nbsp; 4487343<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Elmwood CLO Ltd., 2019-2A SUB | &nbsp;&nbsp; 47.892% | &nbsp;&nbsp; 4/20/34 | &nbsp;&nbsp; 4600000<br>&nbsp;&nbsp;&nbsp; 2407772<br> <sup>(a)(g)(n)</sup><br>|
| &nbsp;&nbsp;&nbsp; Fortress Credit BSL Ltd., 2021-4A E (3 <br> mo. Term SOFR + 7.392%) | &nbsp;&nbsp; 11.648% | &nbsp;&nbsp; 10/15/34 | &nbsp;&nbsp; 3000000<br>&nbsp;&nbsp;&nbsp; 2919742<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; GoldenTree Loan Management US CLO <br> Ltd., 2017-1A ER3 (3 mo. Term SOFR + <br> 4.500%) | &nbsp;&nbsp; 8.769% | &nbsp;&nbsp; 4/20/34 | &nbsp;&nbsp; 1380000<br>&nbsp;&nbsp;&nbsp; 1386035<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; GoldenTree Loan Management US CLO <br> Ltd., 2019-6A ER2 (3 mo. Term SOFR + <br> 4.500%) | &nbsp;&nbsp; 8.769% | &nbsp;&nbsp; 4/20/35 | &nbsp;&nbsp; 820000<br>&nbsp;&nbsp;&nbsp; 787527<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Goldentree Loan Management US CLO <br> Ltd., 2020-8A FR (3 mo. Term SOFR + <br> 8.312%) | &nbsp;&nbsp; 12.581% | &nbsp;&nbsp; 10/20/34 | &nbsp;&nbsp; 7000000<br>&nbsp;&nbsp;&nbsp; 6949254<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Greenwood Park CLO Ltd., 2018-1A E (3 <br> mo. Term SOFR + 5.212%) | &nbsp;&nbsp; 9.468% | &nbsp;&nbsp; 4/15/31 | &nbsp;&nbsp; 1570000<br>&nbsp;&nbsp;&nbsp; 1571199<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Greywolf CLO Ltd., 2015-1A DR (3 mo. <br> Term SOFR + 6.112%) | &nbsp;&nbsp; 10.393% | &nbsp;&nbsp; 1/27/31 | &nbsp;&nbsp; 6250000<br>&nbsp;&nbsp;&nbsp; 6286937<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Greywolf CLO Ltd., 2018-1A D (3 mo. <br> Term SOFR + 6.012%) | &nbsp;&nbsp; 10.294% | &nbsp;&nbsp; 4/26/31 | &nbsp;&nbsp; 3000000<br>&nbsp;&nbsp;&nbsp; 3017014<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; HalseyPoint CLO Ltd., 2019-1A FR (3 mo. <br> Term SOFR + 10.730%) | &nbsp;&nbsp; 14.999% | &nbsp;&nbsp; 10/20/37 | &nbsp;&nbsp; 2930000<br>&nbsp;&nbsp;&nbsp; 2867597<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Hartwick Park CLO Ltd., 2023-1A ER (3 <br> mo. Term SOFR + 4.850%) | &nbsp;&nbsp; 9.119% | &nbsp;&nbsp; 1/20/37 | &nbsp;&nbsp; 2015000<br>&nbsp;&nbsp;&nbsp; 1977290<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Hayfin US Ltd., 2021-14A E (3 mo. Term <br> SOFR + 7.442%) | &nbsp;&nbsp; 11.711% | &nbsp;&nbsp; 7/20/34 | &nbsp;&nbsp; 7000000<br>&nbsp;&nbsp;&nbsp; 7059475<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Hildene Community Funding CDO Ltd., <br> 2015-1A ARR | &nbsp;&nbsp; 2.600% | &nbsp;&nbsp; 11/1/35 | &nbsp;&nbsp; 607935<br>&nbsp;&nbsp;&nbsp; 541417<br> <sup>(a)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | |
|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†/<br> Units<br>|
| **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** |
| &nbsp;&nbsp;&nbsp; Huntington Bank Auto Credit-Linked <br> Notes, 2025-1 D (30 Day Average SOFR + <br> 3.500%) | &nbsp;&nbsp; 7.802% | &nbsp;&nbsp; 3/21/33 | &nbsp;&nbsp; 1049186<br>&nbsp;&nbsp;&nbsp; $1050011<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; LCM Ltd., 33A E (3 mo. Term SOFR + <br> 6.612%) | &nbsp;&nbsp; 10.881% | &nbsp;&nbsp; 7/20/34 | &nbsp;&nbsp; 3000000<br>&nbsp;&nbsp;&nbsp; 2593192<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Lunar Structured Aircraft Portfolio Notes, <br> 2021-1 C | &nbsp;&nbsp; 5.682% | &nbsp;&nbsp; 10/15/46 | &nbsp;&nbsp; 3838514<br>&nbsp;&nbsp;&nbsp; 3693443<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; MACH Cayman Ltd., 2019-1 B | &nbsp;&nbsp; 4.335% | &nbsp;&nbsp; 10/15/39 | &nbsp;&nbsp; 156569<br>&nbsp;&nbsp;&nbsp; 151209<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Magnetite Ltd., 2020-26A ER2 (3 mo. <br> Term SOFR + 4.700%) | &nbsp;&nbsp; 8.966% | &nbsp;&nbsp; 1/25/38 | &nbsp;&nbsp; 2750000<br>&nbsp;&nbsp;&nbsp; 2733421<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Magnetite Ltd., 2023-39A E1R (3 mo. <br> Term SOFR + 4.900%) | &nbsp;&nbsp; 9.182% | &nbsp;&nbsp; 1/25/37 | &nbsp;&nbsp; 1650000<br>&nbsp;&nbsp;&nbsp; 1631764<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; MAPS Trust, 2021-1A C | &nbsp;&nbsp; 5.437% | &nbsp;&nbsp; 6/15/46 | &nbsp;&nbsp; 73304<br>&nbsp;&nbsp;&nbsp; 72414<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Marathon CLO Ltd., 2019-1A C (3 mo. <br> Term SOFR + 4.332%) | &nbsp;&nbsp; 8.588% | &nbsp;&nbsp; 4/15/32 | &nbsp;&nbsp; 4625000<br>&nbsp;&nbsp;&nbsp; 4634086<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; MidOcean Credit CLO LLC, 2025-18A E (3 <br> mo. Term SOFR + 5.400%) | &nbsp;&nbsp; 9.692% | &nbsp;&nbsp; 10/18/35 | &nbsp;&nbsp; 2680000<br>&nbsp;&nbsp;&nbsp; 2693400<br> <sup>(a)(e)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Nassau Ltd., 2021-IA DR (3 mo. Term <br> SOFR + 3.600%) | &nbsp;&nbsp; 7.856% | &nbsp;&nbsp; 8/26/34 | &nbsp;&nbsp; 2840000<br>&nbsp;&nbsp;&nbsp; 2796120<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; National Collegiate Class A-3L <br> Commutation Trust, 2007-4VI O (1 mo. <br> USD LIBOR + 0.850%) | &nbsp;&nbsp; 5.810% | &nbsp;&nbsp; 3/29/38 | &nbsp;&nbsp; 27730208<br>&nbsp;&nbsp;&nbsp; 2757797<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; NMEF Funding LLC, 2025-A D | &nbsp;&nbsp; 8.070% | &nbsp;&nbsp; 7/15/32 | &nbsp;&nbsp; 3420000<br>&nbsp;&nbsp;&nbsp; 3449307<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ocean Trails CLO Ltd., 2020-10A ER (3 <br> mo. Term SOFR + 7.832%) | &nbsp;&nbsp; 12.088% | &nbsp;&nbsp; 10/15/34 | &nbsp;&nbsp; 3750000<br>&nbsp;&nbsp;&nbsp; 3763967<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ocean Trails CLO Ltd., 2024-16A E (3 mo. <br> Term SOFR + 6.690%) | &nbsp;&nbsp; 10.959% | &nbsp;&nbsp; 1/20/38 | &nbsp;&nbsp; 1020000<br>&nbsp;&nbsp;&nbsp; 1049502<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; OCP CLO Ltd., 2023-26A ER (3 mo. Term <br> SOFR + 4.450%) | &nbsp;&nbsp; 8.769% | &nbsp;&nbsp; 4/17/37 | &nbsp;&nbsp; 1780000<br>&nbsp;&nbsp;&nbsp; 1749038<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Point Broadband Funding LLC, 2025-1A C | &nbsp;&nbsp; 8.156% | &nbsp;&nbsp; 7/20/55 | &nbsp;&nbsp; 2000000<br>&nbsp;&nbsp;&nbsp; 2005010<br> <sup>(a)(e)</sup><br>|
| &nbsp;&nbsp;&nbsp; Renew, 2024-1A B | &nbsp;&nbsp; 9.001% | &nbsp;&nbsp; 11/20/59 | &nbsp;&nbsp; 927075<br>&nbsp;&nbsp;&nbsp; 919948<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Renew Financial, 2024-2A B | &nbsp;&nbsp; 8.223% | &nbsp;&nbsp; 11/20/60 | &nbsp;&nbsp; 1115556<br>&nbsp;&nbsp;&nbsp; 1080360<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Riserva CLO Ltd., 2016-3A FRR (3 mo. <br> Term SOFR + 8.772%) | &nbsp;&nbsp; 13.041% | &nbsp;&nbsp; 1/18/34 | &nbsp;&nbsp; 2500000<br>&nbsp;&nbsp;&nbsp; 2351236<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; RR Ltd., 2021-18A D (3 mo. Term SOFR + <br> 6.512%) | &nbsp;&nbsp; 10.768% | &nbsp;&nbsp; 10/15/34 | &nbsp;&nbsp; 7190000<br>&nbsp;&nbsp;&nbsp; 7243125<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Saratoga Investment Corp. CLO Ltd., <br> 2013-1A (3 mo. Term SOFR + 10.262%) | &nbsp;&nbsp; 14.554% | &nbsp;&nbsp; 4/20/33 | &nbsp;&nbsp; 4000000<br>&nbsp;&nbsp;&nbsp; 3177991<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; SEB Funding LLC, 2024-1A A2 | &nbsp;&nbsp; 7.386% | &nbsp;&nbsp; 4/30/54 | &nbsp;&nbsp; 2030000<br>&nbsp;&nbsp;&nbsp; 2078662<br> <sup>(a)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†/<br> Units<br>| Value |
| **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** | **Asset-Backed Securities — continued** |
| &nbsp;&nbsp;&nbsp; SMB Private Education Loan Trust, <br> 2015-C R | &nbsp;&nbsp; 14.342% | &nbsp;&nbsp; 9/18/46 | &nbsp;&nbsp; 7570<br>| &nbsp;&nbsp;&nbsp; $2030275<br> <sup>(a)(n)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sound Point CLO Ltd., 2020-1A ER (3 mo. <br> Term SOFR + 7.122%) | &nbsp;&nbsp; 11.391% | &nbsp;&nbsp; 7/20/34 | &nbsp;&nbsp; 4200000<br>| &nbsp;&nbsp;&nbsp; 3916552<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sunnova Hellios II Issuer LLC, 2018-1A B | &nbsp;&nbsp; 7.710% | &nbsp;&nbsp; 7/20/48 | &nbsp;&nbsp; 3691417<br>| &nbsp;&nbsp;&nbsp; 2913263<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Symphony CLO Ltd., 2019-21A ER (3 mo. <br> Term SOFR + 6.862%) | &nbsp;&nbsp; 11.118% | &nbsp;&nbsp; 7/15/32 | &nbsp;&nbsp; 2800000<br>| &nbsp;&nbsp;&nbsp; 2686835<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Symphony CLO Ltd., 2021-28A SUB | &nbsp;&nbsp; 35.616% | &nbsp;&nbsp; 10/23/50 | &nbsp;&nbsp; 6045000<br>| &nbsp;&nbsp;&nbsp; 2086102<br> <sup>(a)(g)(n)</sup><br>|
| &nbsp;&nbsp;&nbsp; TCI-Symphony CLO Ltd., 2016-1A ER2 (3 <br> mo. Term SOFR + 7.012%) | &nbsp;&nbsp; 11.253% | &nbsp;&nbsp; 10/13/32 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3426345<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Venture CLO Ltd., 2021-43A D (3 mo. <br> Term SOFR + 3.732%) | &nbsp;&nbsp; 7.988% | &nbsp;&nbsp; 4/15/34 | &nbsp;&nbsp; 1500000<br>| &nbsp;&nbsp;&nbsp; 1458750<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Voya CLO Ltd., 2018-2A E (3 mo. Term <br> SOFR + 5.512%) | &nbsp;&nbsp; 9.768% | &nbsp;&nbsp; 7/15/31 | &nbsp;&nbsp; 6750000<br>| &nbsp;&nbsp;&nbsp; 6700704<br> <sup>(a)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Voya CLO Ltd., 2020-3A D1RR (3 mo. <br> Term SOFR + 2.700%) | &nbsp;&nbsp; 6.969% | &nbsp;&nbsp; 1/20/38 | &nbsp;&nbsp; 2840000<br>| &nbsp;&nbsp;&nbsp; 2843534<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Whitebox CLO Ltd., 2020-2A E1R2 (3 mo. <br> Term SOFR + 5.750%) | &nbsp;&nbsp; 10.025% | &nbsp;&nbsp; 10/24/37 | &nbsp;&nbsp; 1430000<br>| &nbsp;&nbsp;&nbsp; 1439715<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Wind River CLO Ltd., 2021-4A E3 (3 mo. <br> Term SOFR + 8.512%) | &nbsp;&nbsp; 12.781% | &nbsp;&nbsp; 1/20/35 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp; 2765638<br> <sup>(a)(c)(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; Wind River CLO Ltd., 2021-4A F (3 mo. <br> Term SOFR + 6.522%) | &nbsp;&nbsp; 10.791% | &nbsp;&nbsp; 1/20/35 | &nbsp;&nbsp; 2450000<br>| &nbsp;&nbsp;&nbsp; 1206820<br> <sup>(a)(g)</sup><br>|
| **Total Asset-Backed Securities (Cost — $193,402,308)** | **Total Asset-Backed Securities (Cost — $193,402,308)** | **Total Asset-Backed Securities (Cost — $193,402,308)** | **Total Asset-Backed Securities (Cost — $193,402,308)** | &nbsp;&nbsp; **170726425** |
|  |  |  | &nbsp;&nbsp; Face <br>Amount†<br>|  |
| **Senior Loans — 16.0%** | **Senior Loans — 16.0%** | **Senior Loans — 16.0%** | **Senior Loans — 16.0%** | **Senior Loans — 16.0%** |
| **Communication Services — 2.5%** | **Communication Services — 2.5%** | **Communication Services — 2.5%** | **Communication Services — 2.5%** | **Communication Services — 2.5%** |
| *Entertainment — 0.6%* | *Entertainment — 0.6%* | *Entertainment — 0.6%* | *Entertainment — 0.6%* | *Entertainment — 0.6%* |
| &nbsp;&nbsp;&nbsp; Allen Media LLC, Term Loan B (3 mo. <br> Term SOFR + 5.650%) | 9.946% | &nbsp;&nbsp; 2/10/27 | &nbsp;&nbsp; 4702845<br>| &nbsp;&nbsp;&nbsp; 3035686<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Voyager Parent LLC, Term Loan B | —  | &nbsp;&nbsp; 5/9/32 | &nbsp;&nbsp; 1380000<br>| &nbsp;&nbsp;&nbsp; 1367732<br> <sup>(q)</sup><br>|
| *Total Entertainment* | *Total Entertainment* | *Total Entertainment* | *Total Entertainment* | &nbsp;&nbsp; *4403418* |
| *Interactive Media & Services — 0.7%* | *Interactive Media & Services — 0.7%* | *Interactive Media & Services — 0.7%* | *Interactive Media & Services — 0.7%* | *Interactive Media & Services — 0.7%* |
| &nbsp;&nbsp;&nbsp; X Corp., Term Loan B1 (1 mo. Term SOFR <br> + 6.600%) | 10.927% | &nbsp;&nbsp; 10/26/29 | &nbsp;&nbsp; 3462245<br>| &nbsp;&nbsp;&nbsp; 3386785<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; X Corp., Term Loan B3 | 9.500% | &nbsp;&nbsp; 10/26/29 | &nbsp;&nbsp; 2350000<br>| &nbsp;&nbsp;&nbsp; 2288313<br> <sup>(o)(p)</sup><br>|
| *Total Interactive Media & Services* | *Total Interactive Media & Services* | *Total Interactive Media & Services* | *Total Interactive Media & Services* | &nbsp;&nbsp; *5675098* |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Media — 1.2%* | *Media — 1.2%* | *Media — 1.2%* | *Media — 1.2%* | *Media — 1.2%* |
| &nbsp;&nbsp;&nbsp; CB Poly US Holdings Inc., Initial Term <br> Loan (3 mo. Term SOFR + 5.500%) | 9.796% | &nbsp;&nbsp; 5/18/29 | &nbsp;&nbsp; 4862500<br>| &nbsp;&nbsp;&nbsp; $4264802<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; iHeartCommunications Inc., Refinanced <br> Term Loan B (1 mo. Term SOFR + 5.889%) | 10.216% | &nbsp;&nbsp; 5/1/29 | &nbsp;&nbsp; 5671500<br>| &nbsp;&nbsp;&nbsp; 4638805<br> <sup>(g)(o)(p)</sup><br>|
| *Total Media* | *Total Media* | *Total Media* | *Total Media* | &nbsp;&nbsp; *8903607* |
| **Total Communication Services** | **Total Communication Services** | **Total Communication Services** | **Total Communication Services** | &nbsp;&nbsp; **18982123** |
| **Consumer Discretionary — 2.2%** | **Consumer Discretionary — 2.2%** | **Consumer Discretionary — 2.2%** | **Consumer Discretionary — 2.2%** | **Consumer Discretionary — 2.2%** |
| *Automobile Components — 1.2%* | *Automobile Components — 1.2%* | *Automobile Components — 1.2%* | *Automobile Components — 1.2%* | *Automobile Components — 1.2%* |
| &nbsp;&nbsp;&nbsp; Autokiniton US Holdings Inc., 2024 <br> Replacement Term Loan B (1 mo. Term <br> SOFR + 4.114%) | 8.441% | &nbsp;&nbsp; 4/6/28 | &nbsp;&nbsp; 3841500<br>| &nbsp;&nbsp;&nbsp; 3717861<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; First Brands Group LLC, 2021 First Lien <br> Term Loan (3 mo. Term SOFR + 5.262%) | 9.541% | &nbsp;&nbsp; 3/30/27 | &nbsp;&nbsp; 5754599<br>| &nbsp;&nbsp;&nbsp; 5452684<br> <sup>(g)(o)(p)</sup><br>|
| *Total Automobile Components* | *Total Automobile Components* | *Total Automobile Components* | *Total Automobile Components* | &nbsp;&nbsp; *9170545* |
| *Diversified Consumer Services — 0.2%* | *Diversified Consumer Services — 0.2%* | *Diversified Consumer Services — 0.2%* | *Diversified Consumer Services — 0.2%* | *Diversified Consumer Services — 0.2%* |
| &nbsp;&nbsp;&nbsp; Adtalem Global Education Inc., 2024 <br> Second Repricing Term Loan (1 mo. Term <br> SOFR + 2.750%) | 7.077% | &nbsp;&nbsp; 8/12/28 | &nbsp;&nbsp; 881155<br>| &nbsp;&nbsp;&nbsp; 884278<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; WW International Inc., Take-Back Term <br> Loan (3 mo. Term SOFR + 6.800%) | 11.121% | &nbsp;&nbsp; 6/25/30 | &nbsp;&nbsp; 1100710<br>| &nbsp;&nbsp;&nbsp; 1001646<br> <sup>(g)(o)(p)</sup><br>|
| *Total Diversified Consumer Services* | *Total Diversified Consumer Services* | *Total Diversified Consumer Services* | *Total Diversified Consumer Services* | &nbsp;&nbsp; *1885924* |
| *Hotels, Restaurants & Leisure — 0.4%* | *Hotels, Restaurants & Leisure — 0.4%* | *Hotels, Restaurants & Leisure — 0.4%* | *Hotels, Restaurants & Leisure — 0.4%* | *Hotels, Restaurants & Leisure — 0.4%* |
| &nbsp;&nbsp;&nbsp; Catawba Nation Gaming Authority, Initial <br> Term Loan B (3 mo. Term SOFR + 4.750%)  | 9.046% | &nbsp;&nbsp; 3/28/32 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *3041250*<br> <sup>(g)(o)(p)</sup><br>|
| *Specialty Retail — 0.4%* | *Specialty Retail — 0.4%* | *Specialty Retail — 0.4%* | *Specialty Retail — 0.4%* | *Specialty Retail — 0.4%* |
| &nbsp;&nbsp;&nbsp; Empire Today IP LLC, Second Out Term <br> Loan (3 mo. Term SOFR + 5.262%) | 9.541% | &nbsp;&nbsp; 8/3/29 | &nbsp;&nbsp; 1799720<br>| &nbsp;&nbsp;&nbsp; 584909<br> <sup>(g)(i)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Harbor Freight Tools USA Inc., Initial <br> Term Loan (1 mo. Term SOFR + 2.250%) | 6.577% | &nbsp;&nbsp; 6/11/31 | &nbsp;&nbsp; 1745603<br>| &nbsp;&nbsp;&nbsp; 1711599<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Michaels Cos. Inc., Term Loan B (3 mo. <br> Term SOFR + 4.512%) | 8.807% | &nbsp;&nbsp; 4/15/28 | &nbsp;&nbsp; 652999<br>| &nbsp;&nbsp;&nbsp; 548927<br> <sup>(g)(o)(p)</sup><br>|
| *Total Specialty Retail* | *Total Specialty Retail* | *Total Specialty Retail* | *Total Specialty Retail* | &nbsp;&nbsp; *2845435* |
| **Total Consumer Discretionary** | **Total Consumer Discretionary** | **Total Consumer Discretionary** | **Total Consumer Discretionary** | &nbsp;&nbsp; **16943154** |
| **Consumer Staples — 0.2%** | **Consumer Staples — 0.2%** | **Consumer Staples — 0.2%** | **Consumer Staples — 0.2%** | **Consumer Staples — 0.2%** |
| *Beverages — 0.2%* | *Beverages — 0.2%* | *Beverages — 0.2%* | *Beverages — 0.2%* | *Beverages — 0.2%* |
| &nbsp;&nbsp;&nbsp; Triton Water Holdings Inc., 2025 <br> Refinancing Term Loan (3 mo. Term SOFR <br> + 2.250%)  | 6.546% | &nbsp;&nbsp; 3/31/28 | &nbsp;&nbsp; 1465919<br>| &nbsp;&nbsp;&nbsp;&nbsp; *1472838*<br> <sup>(g)(o)(p)</sup><br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Household Products — 0.0%††* | *Household Products — 0.0%††* | *Household Products — 0.0%††* | *Household Products — 0.0%††* | *Household Products — 0.0%††* |
| &nbsp;&nbsp;&nbsp; Knight Health Holdings LLC, Term Loan B <br> (1 mo. Term SOFR + 5.364%)  | 9.691% | &nbsp;&nbsp; 12/23/28 | &nbsp;&nbsp; 964498<br>| &nbsp;&nbsp;&nbsp; $*398579*<br> <sup>(g)(o)(p)</sup><br>|
| **Total Consumer Staples** | **Total Consumer Staples** | **Total Consumer Staples** | **Total Consumer Staples** | &nbsp;&nbsp; **1871417** |
| **Financials — 3.0%** | **Financials — 3.0%** | **Financials — 3.0%** | **Financials — 3.0%** | **Financials — 3.0%** |
| *Financial Services — 1.6%* | *Financial Services — 1.6%* | *Financial Services — 1.6%* | *Financial Services — 1.6%* | *Financial Services — 1.6%* |
| &nbsp;&nbsp;&nbsp; Boost Newco Borrower LLC, Term Loan <br> B2 (3 mo. Term SOFR + 2.000%) | 6.296% | &nbsp;&nbsp; 1/31/31 | &nbsp;&nbsp; 2985019<br>| &nbsp;&nbsp;&nbsp; 2996212<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Deerfield Dakota Holding LLC, 2021 <br> Replacement Term Loan (3 mo. Term <br> SOFR + 7.012%) | 11.307% | &nbsp;&nbsp; 4/7/28 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1918130<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Greystone Select Holdings LLC, Term <br> Loan B (3 mo. Term SOFR + 5.262%) | 9.534% | &nbsp;&nbsp; 6/16/28 | &nbsp;&nbsp; 3327160<br>| &nbsp;&nbsp;&nbsp; 3310525<br> <sup>(g)(i)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Nexus Buyer LLC, Amendment No. 9 <br> Refinancing Term Loan (1 mo. Term SOFR <br> + 3.500%) | 7.827% | &nbsp;&nbsp; 7/31/31 | &nbsp;&nbsp; 3918478<br>| &nbsp;&nbsp;&nbsp; 3934309<br> <sup>(g)(o)(p)</sup><br>|
| *Total Financial Services* | *Total Financial Services* | *Total Financial Services* | *Total Financial Services* | &nbsp;&nbsp; *12159176* |
| *Insurance — 1.4%* | *Insurance — 1.4%* | *Insurance — 1.4%* | *Insurance — 1.4%* | *Insurance — 1.4%* |
| &nbsp;&nbsp;&nbsp; Asurion LLC, New Term Loan B4 (1 mo. <br> Term SOFR + 5.364%) | 9.691% | &nbsp;&nbsp; 1/20/29 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4651950<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Asurion LLC, Second Lien Term Loan B3 <br> (1 mo. Term SOFR + 5.364%) | 9.691% | &nbsp;&nbsp; 1/31/28 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4795325<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sedgwick Claims Management <br> Services Inc., 2024 Term Loan (1 mo. <br> Term SOFR + 3.000%) | 7.327% | &nbsp;&nbsp; 7/31/31 | &nbsp;&nbsp; 1558349<br>| &nbsp;&nbsp;&nbsp; 1565712<br> <sup>(g)(o)(p)</sup><br>|
| *Total Insurance* | *Total Insurance* | *Total Insurance* | *Total Insurance* | &nbsp;&nbsp; *11012987* |
| **Total Financials** | **Total Financials** | **Total Financials** | **Total Financials** | &nbsp;&nbsp; **23172163** |
| **Health Care — 1.4%** | **Health Care — 1.4%** | **Health Care — 1.4%** | **Health Care — 1.4%** | **Health Care — 1.4%** |
| *Health Care Providers & Services — 0.5%* | *Health Care Providers & Services — 0.5%* | *Health Care Providers & Services — 0.5%* | *Health Care Providers & Services — 0.5%* | *Health Care Providers & Services — 0.5%* |
| &nbsp;&nbsp;&nbsp; EyeCare Partners LLC, Term Loan B (3 mo. <br> Term SOFR + 1.100%) | 5.227% | &nbsp;&nbsp; 11/30/28 | &nbsp;&nbsp; 1071298<br>| &nbsp;&nbsp;&nbsp; 851237<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Team Services Group LLC, Incremental <br> Term Loan (3 mo. Term SOFR + 5.250%) | 9.530% | &nbsp;&nbsp; 12/20/27 | &nbsp;&nbsp; 2985000<br>| &nbsp;&nbsp;&nbsp; 2980030<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Team Services Group LLC, Senior Secured <br> First Lien Term Loan (3 mo. Term SOFR + <br> 5.262%) | 9.541% | &nbsp;&nbsp; 12/20/27 | &nbsp;&nbsp; 465142<br>| &nbsp;&nbsp;&nbsp; 463514<br> <sup>(g)(o)(p)</sup><br>|
| *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | *Total Health Care Providers & Services* | &nbsp;&nbsp; *4294781* |
| *Health Care Technology — 0.6%* | *Health Care Technology — 0.6%* | *Health Care Technology — 0.6%* | *Health Care Technology — 0.6%* | *Health Care Technology — 0.6%* |
| &nbsp;&nbsp;&nbsp; MPH Acquisition Holdings LLC, First Out <br> Term Loan (3 mo. Term SOFR + 3.750%) | 8.030% | &nbsp;&nbsp; 12/31/30 | &nbsp;&nbsp; 532774<br>| &nbsp;&nbsp;&nbsp; 525848<br> <sup>(g)(o)(p)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Health Care Technology — continued* | *Health Care Technology — continued* | *Health Care Technology — continued* | *Health Care Technology — continued* | *Health Care Technology — continued* |
| &nbsp;&nbsp;&nbsp; MPH Acquisition Holdings LLC, Second <br> Out Term Loan (3 mo. Term SOFR + <br> 4.862%) | 9.141% | &nbsp;&nbsp; 12/31/30 | &nbsp;&nbsp; 4416359<br>| &nbsp;&nbsp;&nbsp; $3974723<br> <sup>(g)(o)(p)</sup><br>|
| *Total Health Care Technology* | *Total Health Care Technology* | *Total Health Care Technology* | *Total Health Care Technology* | &nbsp;&nbsp; *4500571* |
| *Pharmaceuticals — 0.3%* | *Pharmaceuticals — 0.3%* | *Pharmaceuticals — 0.3%* | *Pharmaceuticals — 0.3%* | *Pharmaceuticals — 0.3%* |
| &nbsp;&nbsp;&nbsp; Gainwell Acquisition Corp., Term Loan B <br> (3 mo. Term SOFR + 4.100%)  | 8.396% | &nbsp;&nbsp; 10/1/27 | &nbsp;&nbsp; 2333890<br>| &nbsp;&nbsp;&nbsp;&nbsp; *2253955*<br> <sup>(g)(o)(p)</sup><br>|
| **Total Health Care** | **Total Health Care** | **Total Health Care** | **Total Health Care** | &nbsp;&nbsp; **11049307** |
| **Industrials — 2.1%** | **Industrials — 2.1%** | **Industrials — 2.1%** | **Industrials — 2.1%** | **Industrials — 2.1%** |
| *Building Products — 0.5%* | *Building Products — 0.5%* | *Building Products — 0.5%* | *Building Products — 0.5%* | *Building Products — 0.5%* |
| &nbsp;&nbsp;&nbsp; ACProducts Holdings Inc., Initial Term <br> Loan (3 mo. Term SOFR + 4.512%)  | 8.807% | &nbsp;&nbsp; 5/17/28 | &nbsp;&nbsp; 4897959<br>| &nbsp;&nbsp;&nbsp;&nbsp; *3733176*<br> <sup>(g)(o)(p)</sup><br>|
| *Commercial Services & Supplies — 1.6%* | *Commercial Services & Supplies — 1.6%* | *Commercial Services & Supplies — 1.6%* | *Commercial Services & Supplies — 1.6%* | *Commercial Services & Supplies — 1.6%* |
| &nbsp;&nbsp;&nbsp; DS Parent Inc., Term Loan B (3 mo. Term <br> SOFR + 5.500%) | 9.796% | &nbsp;&nbsp; 1/31/31 | &nbsp;&nbsp; 4950000<br>| &nbsp;&nbsp;&nbsp; 4464281<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; GEO Group Inc., Term Loan (1 mo. Term <br> SOFR + 5.250%) | 9.577% | &nbsp;&nbsp; 4/4/29 | &nbsp;&nbsp; 4123147<br>| &nbsp;&nbsp;&nbsp; 4144401<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Neptune Bidco US Inc., Term Loan A (3 <br> mo. Term SOFR + 4.850%) | 9.080% | &nbsp;&nbsp; 10/11/28 | &nbsp;&nbsp; 3920000<br>| &nbsp;&nbsp;&nbsp; 3702303<br> <sup>(g)(o)(p)</sup><br>|
| *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | *Total Commercial Services & Supplies* | &nbsp;&nbsp; *12310985* |
| **Total Industrials** | **Total Industrials** | **Total Industrials** | **Total Industrials** | &nbsp;&nbsp; **16044161** |
| **Information Technology — 3.7%** | **Information Technology — 3.7%** | **Information Technology — 3.7%** | **Information Technology — 3.7%** | **Information Technology — 3.7%** |
| *Communications Equipment — 0.7%* | *Communications Equipment — 0.7%* | *Communications Equipment — 0.7%* | *Communications Equipment — 0.7%* | *Communications Equipment — 0.7%* |
| &nbsp;&nbsp;&nbsp; Global Tel Link Corp., Initial Term Loan (1 <br> mo. Term SOFR + 7.500%)  | 11.827% | &nbsp;&nbsp; 7/31/29 | &nbsp;&nbsp; 4962500<br>| &nbsp;&nbsp;&nbsp;&nbsp; *4911337*<br> <sup>(g)(o)(p)</sup><br>|
| *Software — 2.1%* | *Software — 2.1%* | *Software — 2.1%* | *Software — 2.1%* | *Software — 2.1%* |
| &nbsp;&nbsp;&nbsp; DCert Buyer Inc., Second Lien Initial Term <br> Loan (1 mo. Term SOFR + 7.000%) | 11.327% | &nbsp;&nbsp; 2/19/29 | &nbsp;&nbsp; 5000000<br>| &nbsp;&nbsp;&nbsp; 4393750<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Magenta Security Holdings LLC, First Out <br> Term Loan (3 mo. Term SOFR + 7.010%) | 11.290% | &nbsp;&nbsp; 7/27/28 | &nbsp;&nbsp; 377438<br>| &nbsp;&nbsp;&nbsp; 317154<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Planview Parent Inc., 2024 Incremental <br> Term Loan B (3 mo. Term SOFR + 3.500%) | 7.796% | &nbsp;&nbsp; 12/17/27 | &nbsp;&nbsp; 4111098<br>| &nbsp;&nbsp;&nbsp; 4009861<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Starlight Parent LLC, Term Loan (3 mo. <br> Term SOFR + 4.000%) | 8.261% | &nbsp;&nbsp; 4/16/32 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3430735<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; X.Ai Corp., Initial Term Loan | —  | &nbsp;&nbsp; 6/30/28 | &nbsp;&nbsp; 4140000<br>| &nbsp;&nbsp;&nbsp; 4162646<br> <sup>(q)</sup><br>|
| *Total Software* | *Total Software* | *Total Software* | *Total Software* | &nbsp;&nbsp; *16314146* |
| *Technology Hardware, Storage & Peripherals — 0.9%* | *Technology Hardware, Storage & Peripherals — 0.9%* | *Technology Hardware, Storage & Peripherals — 0.9%* | *Technology Hardware, Storage & Peripherals — 0.9%* | *Technology Hardware, Storage & Peripherals — 0.9%* |
| &nbsp;&nbsp;&nbsp; Vericast Corp., 2024 Extended Term Loan <br> (3 mo. Term SOFR + 7.750%)  | 12.046% | &nbsp;&nbsp; 6/16/26 | &nbsp;&nbsp; 7334329<br>| &nbsp;&nbsp;&nbsp;&nbsp; *7068497*<br> <sup>(g)(o)(p)</sup><br>|
| **Total Information Technology** | **Total Information Technology** | **Total Information Technology** | **Total Information Technology** | &nbsp;&nbsp; **28293980** |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Materials — 0.9%** | **Materials — 0.9%** | **Materials — 0.9%** | **Materials — 0.9%** | **Materials — 0.9%** |
| *Chemicals — 0.9%* | *Chemicals — 0.9%* | *Chemicals — 0.9%* | *Chemicals — 0.9%* | *Chemicals — 0.9%* |
| &nbsp;&nbsp;&nbsp; Natgasoline LLC, Term Loan B (1 mo. <br> Term SOFR + 5.500%) | 9.827% | &nbsp;&nbsp; 3/29/30 | &nbsp;&nbsp; 2484375<br>| &nbsp;&nbsp;&nbsp; $2475058<br> <sup>(g)(o)(p)</sup><br>|
| &nbsp;&nbsp;&nbsp; Plastics Management LLC, First Lien <br> Initial Term Loan (3 mo. Term SOFR + <br> 5.000%) | 9.296% | &nbsp;&nbsp; 8/3/27 | &nbsp;&nbsp; 4818261<br>| &nbsp;&nbsp;&nbsp; 4846732<br> <sup>(g)(o)(p)</sup><br>|
| **Total Materials** | **Total Materials** | **Total Materials** | **Total Materials** | &nbsp;&nbsp; **7321790** |
| **Total Senior Loans (Cost — $129,868,590)** | **Total Senior Loans (Cost — $129,868,590)** | **Total Senior Loans (Cost — $129,868,590)** | **Total Senior Loans (Cost — $129,868,590)** | &nbsp;&nbsp; **123678095** |
| **Sovereign Bonds — 6.1%** | **Sovereign Bonds — 6.1%** | **Sovereign Bonds — 6.1%** | **Sovereign Bonds — 6.1%** | **Sovereign Bonds — 6.1%** |
| *Angola — 0.4%* | *Angola — 0.4%* | *Angola — 0.4%* | *Angola — 0.4%* | *Angola — 0.4%* |
| &nbsp;&nbsp;&nbsp; Angolan Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 8.750% | &nbsp;&nbsp; 4/14/32 | &nbsp;&nbsp; 3500000<br>| &nbsp;&nbsp;&nbsp; 3095570<br> <sup>(a)(j)</sup><br>|
| &nbsp;&nbsp;&nbsp; Angolan Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 9.125% | &nbsp;&nbsp; 11/26/49 | &nbsp;&nbsp; 620000<br>| &nbsp;&nbsp;&nbsp; 481465<br> <sup>(k)</sup><br>|
| *Total Angola* | *Total Angola* | *Total Angola* | *Total Angola* | &nbsp;&nbsp; *3577035* |
| *Argentina — 0.8%* | *Argentina — 0.8%* | *Argentina — 0.8%* | *Argentina — 0.8%* | *Argentina — 0.8%* |
| &nbsp;&nbsp;&nbsp; Ciudad Autonoma De Buenos Aires, <br> Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 6/1/27 | &nbsp;&nbsp; 3400170<br>| &nbsp;&nbsp;&nbsp; 3458296<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ciudad Autonoma De Buenos Aires, <br> Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 6/1/27 | &nbsp;&nbsp; 1333400<br>| &nbsp;&nbsp;&nbsp; 1356195<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Provincia de Cordoba, Senior Notes | &nbsp;&nbsp; 6.875% | &nbsp;&nbsp; 12/10/25 | &nbsp;&nbsp; 1083355<br>| &nbsp;&nbsp;&nbsp; 1091480<br> <sup>(a)</sup><br>|
| *Total Argentina* | *Total Argentina* | *Total Argentina* | *Total Argentina* | &nbsp;&nbsp; *5905971* |
| *Bahamas — 0.4%* | *Bahamas — 0.4%* | *Bahamas — 0.4%* | *Bahamas — 0.4%* | *Bahamas — 0.4%* |
| &nbsp;&nbsp;&nbsp; Bahamas Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 8.250% | &nbsp;&nbsp; 6/24/36 | &nbsp;&nbsp; 3000000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *3051000*<br> <sup>(a)</sup><br>|
| *Brazil — 0.5%* | *Brazil — 0.5%* | *Brazil — 0.5%* | *Brazil — 0.5%* | *Brazil — 0.5%* |
| &nbsp;&nbsp;&nbsp; Brazil Letras do Tesouro Nacional | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 1/1/26 | &nbsp;&nbsp; 1209000 <br><sup>BRL</sup><br>| &nbsp;&nbsp;&nbsp; 207194<br>|
| &nbsp;&nbsp;&nbsp; Brazil Notas do Tesouro Nacional Serie F, <br> Notes | &nbsp;&nbsp; 10.000% | &nbsp;&nbsp; 1/1/31 | &nbsp;&nbsp; 21052000 <br><sup>BRL</sup><br>| &nbsp;&nbsp;&nbsp; 3401561<br>|
| *Total Brazil* | *Total Brazil* | *Total Brazil* | *Total Brazil* | &nbsp;&nbsp; *3608755* |
| *Dominican Republic — 0.4%* | *Dominican Republic — 0.4%* | *Dominican Republic — 0.4%* | *Dominican Republic — 0.4%* | *Dominican Republic — 0.4%* |
| &nbsp;&nbsp;&nbsp; Dominican Republic International Bond, <br> Senior Notes | &nbsp;&nbsp; 4.500% | &nbsp;&nbsp; 1/30/30 | &nbsp;&nbsp; 430000<br>| &nbsp;&nbsp;&nbsp; 409339<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Dominican Republic International Bond, <br> Senior Notes | &nbsp;&nbsp; 4.875% | &nbsp;&nbsp; 9/23/32 | &nbsp;&nbsp; 2750000<br>| &nbsp;&nbsp;&nbsp; 2546087<br> <sup>(j)(k)</sup><br>|
| *Total Dominican Republic* | *Total Dominican Republic* | *Total Dominican Republic* | *Total Dominican Republic* | &nbsp;&nbsp; *2955426* |
| *Ecuador — 0.3%* | *Ecuador — 0.3%* | *Ecuador — 0.3%* | *Ecuador — 0.3%* | *Ecuador — 0.3%* |
| &nbsp;&nbsp;&nbsp; Ecuador Government International Bond, <br> Senior Notes, Step bond (5.500% to <br> 7/31/25 then 6.900%) | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 7/31/35 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 728240<br> <sup>(k)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Ecuador — continued* | *Ecuador — continued* | *Ecuador — continued* | *Ecuador — continued* | *Ecuador — continued* |
| &nbsp;&nbsp;&nbsp; Ecuador Government International Bond, <br> Senior Notes, Step bond (5.000% to <br> 7/31/26 then 5.500%) | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 7/31/40 | &nbsp;&nbsp; 2500000<br>| &nbsp;&nbsp;&nbsp; $1579873<br> <sup>(a)</sup><br>|
| *Total Ecuador* | *Total Ecuador* | *Total Ecuador* | *Total Ecuador* | &nbsp;&nbsp; *2308113* |
| *Egypt — 0.1%* | *Egypt — 0.1%* | *Egypt — 0.1%* | *Egypt — 0.1%* | *Egypt — 0.1%* |
| &nbsp;&nbsp;&nbsp; Egypt Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 7.053% | &nbsp;&nbsp; 1/15/32 | &nbsp;&nbsp; 700000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *641994*<br> <sup>(k)</sup><br>|
| *El Salvador — 0.2%* | *El Salvador — 0.2%* | *El Salvador — 0.2%* | *El Salvador — 0.2%* | *El Salvador — 0.2%* |
| &nbsp;&nbsp;&nbsp; El Salvador Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 9.250% | &nbsp;&nbsp; 4/17/30 | &nbsp;&nbsp; 440000<br>| &nbsp;&nbsp;&nbsp; 466950<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; El Salvador Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 9.650% | &nbsp;&nbsp; 11/21/54 | &nbsp;&nbsp; 900000<br>| &nbsp;&nbsp;&nbsp; 929250<br> <sup>(a)</sup><br>|
| *Total El Salvador* | *Total El Salvador* | *Total El Salvador* | *Total El Salvador* | &nbsp;&nbsp; *1396200* |
| *Ethiopia — 0.1%* | *Ethiopia — 0.1%* | *Ethiopia — 0.1%* | *Ethiopia — 0.1%* | *Ethiopia — 0.1%* |
| &nbsp;&nbsp;&nbsp; Ethiopia International Bond, Senior Notes | &nbsp;&nbsp; 6.625% | &nbsp;&nbsp; 12/11/25 | &nbsp;&nbsp; 560000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *517622*<br> <sup>(k)</sup><br>|
| *Ghana — 0.1%* | *Ghana — 0.1%* | *Ghana — 0.1%* | *Ghana — 0.1%* | *Ghana — 0.1%* |
| &nbsp;&nbsp;&nbsp; Ghana Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 7/3/26 | &nbsp;&nbsp; 23280<br>| &nbsp;&nbsp;&nbsp; 22623<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ghana Government International Bond, <br> Senior Notes, Step bond (5.000% to <br> 7/3/28 then 6.000%) | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 7/3/29 | &nbsp;&nbsp; 234740<br>| &nbsp;&nbsp;&nbsp; 220638<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ghana Government International Bond, <br> Senior Notes, Step bond (5.000% to <br> 7/3/28 then 6.000%) | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; 7/3/35 | &nbsp;&nbsp; 337560<br>| &nbsp;&nbsp;&nbsp; 263464<br> <sup>(a)</sup><br>|
| *Total Ghana* | *Total Ghana* | *Total Ghana* | *Total Ghana* | &nbsp;&nbsp; *506725* |
| *Ivory Coast — 0.4%* | *Ivory Coast — 0.4%* | *Ivory Coast — 0.4%* | *Ivory Coast — 0.4%* | *Ivory Coast — 0.4%* |
| &nbsp;&nbsp;&nbsp; Ivory Coast Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 7.625% | &nbsp;&nbsp; 1/30/33 | &nbsp;&nbsp; 2040000<br>| &nbsp;&nbsp;&nbsp; 2016955<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ivory Coast Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 8.250% | &nbsp;&nbsp; 1/30/37 | &nbsp;&nbsp; 1000000<br>| &nbsp;&nbsp;&nbsp; 965789<br> <sup>(a)</sup><br>|
| *Total Ivory Coast* | *Total Ivory Coast* | *Total Ivory Coast* | *Total Ivory Coast* | &nbsp;&nbsp; *2982744* |
| *Jamaica — 0.1%* | *Jamaica — 0.1%* | *Jamaica — 0.1%* | *Jamaica — 0.1%* | *Jamaica — 0.1%* |
| &nbsp;&nbsp;&nbsp; Jamaica Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 9.625% | &nbsp;&nbsp; 11/3/30 | &nbsp;&nbsp; 82000000 <br><sup>JMD</sup><br>| &nbsp;&nbsp;&nbsp; *531973*<br>|
| *Kenya — 0.4%* | *Kenya — 0.4%* | *Kenya — 0.4%* | *Kenya — 0.4%* | *Kenya — 0.4%* |
| &nbsp;&nbsp;&nbsp; Republic of Kenya Government <br> International Bond, Senior Notes | &nbsp;&nbsp; 6.300% | &nbsp;&nbsp; 1/23/34 | &nbsp;&nbsp; 3200000<br>| &nbsp;&nbsp;&nbsp; 2596654<br> <sup>(a)(j)</sup><br>|
| &nbsp;&nbsp;&nbsp; Republic of Kenya Government <br> International Bond, Senior Notes | &nbsp;&nbsp; 6.300% | &nbsp;&nbsp; 1/23/34 | &nbsp;&nbsp; 550000<br>| &nbsp;&nbsp;&nbsp; 446300<br> <sup>(k)</sup><br>|
| *Total Kenya* | *Total Kenya* | *Total Kenya* | *Total Kenya* | &nbsp;&nbsp; *3042954* |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Mexico — 0.4%* | *Mexico — 0.4%* | *Mexico — 0.4%* | *Mexico — 0.4%* | *Mexico — 0.4%* |
| &nbsp;&nbsp;&nbsp; Mexican Bonos, Bonds | &nbsp;&nbsp; 5.750% | &nbsp;&nbsp; 3/5/26 | &nbsp;&nbsp; 40930000 <br><sup>MXN</sup><br>| &nbsp;&nbsp;&nbsp; $2145345<br>|
| &nbsp;&nbsp;&nbsp; Mexican Bonos, Senior Notes | &nbsp;&nbsp; 8.500% | &nbsp;&nbsp; 5/31/29 | &nbsp;&nbsp; 23320000 <br><sup>MXN</sup><br>| &nbsp;&nbsp;&nbsp; 1239392<br>|
| *Total Mexico* | *Total Mexico* | *Total Mexico* | *Total Mexico* | &nbsp;&nbsp; *3384737* |
| *Mozambique — 0.0%††* | *Mozambique — 0.0%††* | *Mozambique — 0.0%††* | *Mozambique — 0.0%††* | *Mozambique — 0.0%††* |
| &nbsp;&nbsp;&nbsp; Mozambique International Bond, Senior <br> Notes | &nbsp;&nbsp; 9.000% | &nbsp;&nbsp; 9/15/31 | &nbsp;&nbsp; 460000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *380557*<br> <sup>(k)</sup><br>|
| *Nigeria — 0.1%* | *Nigeria — 0.1%* | *Nigeria — 0.1%* | *Nigeria — 0.1%* | *Nigeria — 0.1%* |
| &nbsp;&nbsp;&nbsp; Nigeria Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 7.143% | &nbsp;&nbsp; 2/23/30 | &nbsp;&nbsp; 940000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *896196*<br> <sup>(k)</sup><br>|
| *Romania — 0.1%* | *Romania — 0.1%* | *Romania — 0.1%* | *Romania — 0.1%* | *Romania — 0.1%* |
| &nbsp;&nbsp;&nbsp; Romanian Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 7.500% | &nbsp;&nbsp; 2/10/37 | &nbsp;&nbsp; 850000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *884339*<br> <sup>(a)</sup><br>|
| *Senegal — 0.0%††* | *Senegal — 0.0%††* | *Senegal — 0.0%††* | *Senegal — 0.0%††* | *Senegal — 0.0%††* |
| &nbsp;&nbsp;&nbsp; Senegal Government International Bond, <br> Senior Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 5/23/33 | &nbsp;&nbsp; 550000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *363536*<br> <sup>(k)</sup><br>|
| *Sri Lanka — 0.0%††* | *Sri Lanka — 0.0%††* | *Sri Lanka — 0.0%††* | *Sri Lanka — 0.0%††* | *Sri Lanka — 0.0%††* |
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes | &nbsp;&nbsp; 4.000% | &nbsp;&nbsp; 4/15/28 | &nbsp;&nbsp; 55179<br>| &nbsp;&nbsp;&nbsp; 51937<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes, Step bond (3.100% <br> to 7/15/27 then 3.350%) | &nbsp;&nbsp; 3.100% | &nbsp;&nbsp; 1/15/30 | &nbsp;&nbsp; 59046<br>| &nbsp;&nbsp;&nbsp; 52773<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes, Step bond (3.350% <br> to 9/15/27 then 3.600%) | &nbsp;&nbsp; 3.350% | &nbsp;&nbsp; 3/15/33 | &nbsp;&nbsp; 115818<br>| &nbsp;&nbsp;&nbsp; 93770<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes, Step bond (3.600% <br> to 12/15/27 then 5.100%) | &nbsp;&nbsp; 3.600% | &nbsp;&nbsp; 6/15/35 | &nbsp;&nbsp; 78204<br>| &nbsp;&nbsp;&nbsp; 53836<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes, Step bond (3.600% <br> to 11/15/27 then 3.850%) | &nbsp;&nbsp; 3.600% | &nbsp;&nbsp; 5/15/36 | &nbsp;&nbsp; 54275<br>| &nbsp;&nbsp;&nbsp; 44301<br> <sup>(a)</sup><br>|
| &nbsp;&nbsp;&nbsp; Sri Lanka Government International <br> Bond, Senior Notes, Step bond (3.600% <br> to 8/15/27 then 3.850%) | &nbsp;&nbsp; 3.600% | &nbsp;&nbsp; 2/15/38 | &nbsp;&nbsp; 108597<br>| &nbsp;&nbsp;&nbsp; 88432<br> <sup>(a)</sup><br>|
| *Total Sri Lanka* | *Total Sri Lanka* | *Total Sri Lanka* | *Total Sri Lanka* | &nbsp;&nbsp; *385049* |
| *Supranational — 0.7%* | *Supranational — 0.7%* | *Supranational — 0.7%* | *Supranational — 0.7%* | *Supranational — 0.7%* |
| &nbsp;&nbsp;&nbsp; International Bank for Reconstruction & <br> Development, Senior Notes | &nbsp;&nbsp; 8.050% | &nbsp;&nbsp; 5/10/28 | &nbsp;&nbsp; 227000000 <br><sup>UYU</sup><br>| &nbsp;&nbsp;&nbsp; *5481133*<br>|
| *Turkey — 0.4%* | *Turkey — 0.4%* | *Turkey — 0.4%* | *Turkey — 0.4%* | *Turkey — 0.4%* |
| &nbsp;&nbsp;&nbsp; Turkiye Ihracat Kredi Bankasi AS, Senior <br> Notes | &nbsp;&nbsp; 5.750% | &nbsp;&nbsp; 7/6/26 | &nbsp;&nbsp; 3200000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *3204294*<br> <sup>(a)(j)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| *Ukraine — 0.1%* | *Ukraine — 0.1%* | *Ukraine — 0.1%* | *Ukraine — 0.1%* | *Ukraine — 0.1%* |
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (0.000% to <br> 2/1/27 then 3.000%) | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 2/1/30 | &nbsp;&nbsp; 59069<br>| &nbsp;&nbsp;&nbsp; $28259<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (0.000% to <br> 2/1/27 then 3.000%) | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 2/1/34 | &nbsp;&nbsp; 220732<br>| &nbsp;&nbsp;&nbsp; 84429<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (1.750% to <br> 8/1/25 then 4.500%) | &nbsp;&nbsp; 1.750% | &nbsp;&nbsp; 2/1/34 | &nbsp;&nbsp; 216271<br>| &nbsp;&nbsp;&nbsp; 111268<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (0.000% to <br> 2/1/27 then 3.000%) | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 2/1/35 | &nbsp;&nbsp; 186534<br>| &nbsp;&nbsp;&nbsp; 86987<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (1.750% to <br> 8/1/25 then 4.500%) | &nbsp;&nbsp; 1.750% | &nbsp;&nbsp; 2/1/35 | &nbsp;&nbsp; 378474<br>| &nbsp;&nbsp;&nbsp; 191536<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (0.000% to <br> 2/1/27 then 3.000%) | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 2/1/36 | &nbsp;&nbsp; 155445<br>| &nbsp;&nbsp;&nbsp; 73718<br> <sup>(k)</sup><br>|
| &nbsp;&nbsp;&nbsp; Ukraine Government International Bond, <br> Senior Notes, Step bond (1.750% to <br> 8/1/25 then 4.500%) | &nbsp;&nbsp; 1.750% | &nbsp;&nbsp; 2/1/36 | &nbsp;&nbsp; 486610<br>| &nbsp;&nbsp;&nbsp; 237434<br> <sup>(k)</sup><br>|
| *Total Ukraine* | *Total Ukraine* | *Total Ukraine* | *Total Ukraine* | &nbsp;&nbsp; *813631* |
| *Uzbekistan — 0.1%* | *Uzbekistan — 0.1%* | *Uzbekistan — 0.1%* | *Uzbekistan — 0.1%* | *Uzbekistan — 0.1%* |
| &nbsp;&nbsp;&nbsp; Republic of Uzbekistan International <br> Bond, Senior Notes | &nbsp;&nbsp; 3.900% | &nbsp;&nbsp; 10/19/31 | &nbsp;&nbsp; 590000<br>| &nbsp;&nbsp;&nbsp;&nbsp; *520990*<br> <sup>(k)</sup><br>|
| **Total Sovereign Bonds (Cost — $47,597,560)** | **Total Sovereign Bonds (Cost — $47,597,560)** | **Total Sovereign Bonds (Cost — $47,597,560)** | **Total Sovereign Bonds (Cost — $47,597,560)** | &nbsp;&nbsp; **47340974** |
| **Convertible Bonds & Notes — 0.6%** | **Convertible Bonds & Notes — 0.6%** | **Convertible Bonds & Notes — 0.6%** | **Convertible Bonds & Notes — 0.6%** | **Convertible Bonds & Notes — 0.6%** |
| **Communication Services — 0.0%††** | **Communication Services — 0.0%††** | **Communication Services — 0.0%††** | **Communication Services — 0.0%††** | **Communication Services — 0.0%††** |
| *Media — 0.0%††* | *Media — 0.0%††* | *Media — 0.0%††* | *Media — 0.0%††* | *Media — 0.0%††* |
| &nbsp;&nbsp;&nbsp; EchoStar Corp., Senior Secured Notes <br> (3.875% Cash or 3.875% PIK) | &nbsp;&nbsp; 3.875% | &nbsp;&nbsp; 11/30/30 | &nbsp;&nbsp; 3293<br>| &nbsp;&nbsp;&nbsp;&nbsp; **3886**<br> <sup>(d)</sup><br>|
| **Financials — 0.6%** | **Financials — 0.6%** | **Financials — 0.6%** | **Financials — 0.6%** | **Financials — 0.6%** |
| *Mortgage Real Estate Investment Trusts (REITs) — 0.6%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.6%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.6%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.6%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.6%* |
| &nbsp;&nbsp;&nbsp; Blackstone Mortgage Trust Inc., Senior <br> Notes | &nbsp;&nbsp; 5.500% | &nbsp;&nbsp; 3/15/27 | &nbsp;&nbsp; 2000000<br>| &nbsp;&nbsp;&nbsp; 1952000<br>|
| &nbsp;&nbsp;&nbsp; Two Harbors Investment Corp., Senior <br> Notes | &nbsp;&nbsp; 6.250% | &nbsp;&nbsp; 1/15/26 | &nbsp;&nbsp; 3010000<br>| &nbsp;&nbsp;&nbsp; 2960335<br>|
| **Total Financials** | **Total Financials** | **Total Financials** | **Total Financials** | &nbsp;&nbsp; **4912335** |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Security | Rate | &nbsp;&nbsp; Maturity<br> Date<br>| &nbsp;&nbsp; Face<br> Amount†<br>| Value |
| **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** |
| *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* |
| &nbsp;&nbsp;&nbsp; China Aoyuan Group Ltd., Senior Notes | &nbsp;&nbsp; 0.000% | &nbsp;&nbsp; 9/30/28 | &nbsp;&nbsp; 70334<br>| &nbsp;&nbsp;&nbsp;&nbsp; **$1055**<br> <sup>(k)</sup><br>|
| **Total Convertible Bonds & Notes (Cost — $4,830,968)** | **Total Convertible Bonds & Notes (Cost — $4,830,968)** | **Total Convertible Bonds & Notes (Cost — $4,830,968)** | **Total Convertible Bonds & Notes (Cost — $4,830,968)** | &nbsp;&nbsp; **4917276** |
|  |  |  | Shares |  |
| **Preferred Stocks — 0.5%** | **Preferred Stocks — 0.5%** | **Preferred Stocks — 0.5%** | **Preferred Stocks — 0.5%** | **Preferred Stocks — 0.5%** |
| **Financials — 0.5%** | **Financials — 0.5%** | **Financials — 0.5%** | **Financials — 0.5%** | **Financials — 0.5%** |
| *Mortgage Real Estate Investment Trusts (REITs) — 0.5%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.5%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.5%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.5%* | *Mortgage Real Estate Investment Trusts (REITs) — 0.5%* |
| &nbsp;&nbsp;&nbsp; Chimera Investment Corp., Non Voting <br> Shares (7.750% to 9/30/25 then 3 mo. <br> USD LIBOR + 4.743%) | &nbsp;&nbsp; 7.750% |  | &nbsp;&nbsp; 77758 | &nbsp;&nbsp;&nbsp; 1754998<br> <sup>(g)</sup><br>|
| &nbsp;&nbsp;&nbsp; MFA Financial Inc., Non Voting Shares (3 <br> mo. Term SOFR + 5.607%) | &nbsp;&nbsp; 9.902% |  | &nbsp;&nbsp; 76957 | &nbsp;&nbsp;&nbsp; 1810029<br> <sup>(g)</sup><br>|
| **Total Preferred Stocks (Cost — $3,696,399)** | **Total Preferred Stocks (Cost — $3,696,399)** | **Total Preferred Stocks (Cost — $3,696,399)** | **Total Preferred Stocks (Cost — $3,696,399)** | &nbsp;&nbsp; **3565027** |
| **Common Stocks — 0.2%** | **Common Stocks — 0.2%** | **Common Stocks — 0.2%** | **Common Stocks — 0.2%** | **Common Stocks — 0.2%** |
| **Consumer Discretionary — 0.1%** | **Consumer Discretionary — 0.1%** | **Consumer Discretionary — 0.1%** | **Consumer Discretionary — 0.1%** | **Consumer Discretionary — 0.1%** |
| *Diversified Consumer Services — 0.1%* | *Diversified Consumer Services — 0.1%* | *Diversified Consumer Services — 0.1%* | *Diversified Consumer Services — 0.1%* | *Diversified Consumer Services — 0.1%* |
| &nbsp;&nbsp;&nbsp; WW International Inc. | &nbsp;&nbsp;&nbsp; WW International Inc. |  | &nbsp;&nbsp; 21540 | &nbsp;&nbsp;&nbsp; **650,508**<br> \*<br>|
| **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** |
| *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* |
| &nbsp;&nbsp;&nbsp; Spirit Airlines LLC | &nbsp;&nbsp;&nbsp; Spirit Airlines LLC |  | &nbsp;&nbsp; 977 | &nbsp;&nbsp;&nbsp; 4,875<br> \*<sup>(h)(r)</sup><br>|
| &nbsp;&nbsp;&nbsp; Spirit Aviation Holdings Inc. | &nbsp;&nbsp;&nbsp; Spirit Aviation Holdings Inc. |  | &nbsp;&nbsp; 168247 | &nbsp;&nbsp;&nbsp; 839,553<br> \*<br>|
| **Total Industrials** | **Total Industrials** | **Total Industrials** | **Total Industrials** | &nbsp;&nbsp; **844428** |
| **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** | **Real Estate — 0.0%††** |
| *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* | *Real Estate Management & Development — 0.0%††* |
| &nbsp;&nbsp;&nbsp; China Aoyuan Group Ltd. | &nbsp;&nbsp;&nbsp; China Aoyuan Group Ltd. |  | &nbsp;&nbsp; 196741 | &nbsp;&nbsp;&nbsp; **3,021**<br> \*<sup>(h)</sup><br>|
| **Total Common Stocks (Cost — $3,320,599)** | **Total Common Stocks (Cost — $3,320,599)** | **Total Common Stocks (Cost — $3,320,599)** | **Total Common Stocks (Cost — $3,320,599)** | &nbsp;&nbsp;&nbsp; **1497957**<br>|
|  |  | &nbsp;&nbsp; Expiration <br>Date<br>| Warrants |  |
| **Warrants — 0.1%** | **Warrants — 0.1%** | **Warrants — 0.1%** | **Warrants — 0.1%** | **Warrants — 0.1%** |
| **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** | **Industrials — 0.1%** |
| *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* | *Passenger Airlines — 0.1%* |
| &nbsp;&nbsp;&nbsp; Spirit Airlines LLC (Cost — $1,455,203) |  | &nbsp;&nbsp; 3/12/30 | &nbsp;&nbsp; 119540<br>| &nbsp;&nbsp;&nbsp; **596,505**<br> \*<sup>(a)(h)(r)</sup><br>|

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

(Percentages shown based on Fund net assets)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Security |  | Rate | &nbsp;&nbsp; Maturity <br>Date<br>| &nbsp;&nbsp; Face <br>Amount†<br>| Value |
| **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** | **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** | **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** | **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** | **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** | **Non-U.S. Treasury Inflation Protected Securities — 0.0%††** |
| *Uruguay — 0.0%††* | *Uruguay — 0.0%††* | *Uruguay — 0.0%††* | *Uruguay — 0.0%††* | *Uruguay — 0.0%††* | *Uruguay — 0.0%††* |
| &nbsp;&nbsp;&nbsp; Uruguay Government International Bond, <br> Senior Notes (Cost — $101,792) | &nbsp;&nbsp;&nbsp; Uruguay Government International Bond, <br> Senior Notes (Cost — $101,792) | &nbsp;&nbsp; 3.400% | &nbsp;&nbsp; 5/16/45 | &nbsp;&nbsp; 3939134 <br><sup>UYU</sup><br>| &nbsp;&nbsp;&nbsp; **$98461**<br>|
|  | Counterparty | Expiration <br>Date<br>| Contracts | &nbsp;&nbsp; Notional <br>Amount†<br>|  |
| **Purchased Options — 0.0%††** | **Purchased Options — 0.0%††** | **Purchased Options — 0.0%††** | **Purchased Options — 0.0%††** | **Purchased Options — 0.0%††** | **Purchased Options — 0.0%††** |
| **OTC Purchased Options — 0.0%††** | **OTC Purchased Options — 0.0%††** | **OTC Purchased Options — 0.0%††** | **OTC Purchased Options — 0.0%††** | **OTC Purchased Options — 0.0%††** | **OTC Purchased Options — 0.0%††** |
| &nbsp;&nbsp;&nbsp; U.S. Dollar/Swiss Franc, <br> Call @ 0.836<sup>CHF</sup> <br> (Cost — $37,967)<br>| Bank of <br> America N.A.<br>| 7/11/25 | &nbsp;&nbsp; 4535000 | &nbsp;&nbsp; 4535000 | &nbsp;&nbsp;&nbsp; **32**<br>|
| **Total Investments before Short-Term Investments (Cost — $1,145,114,094)** | **Total Investments before Short-Term Investments (Cost — $1,145,114,094)** | **Total Investments before Short-Term Investments (Cost — $1,145,114,094)** | **Total Investments before Short-Term Investments (Cost — $1,145,114,094)** | **Total Investments before Short-Term Investments (Cost — $1,145,114,094)** | &nbsp;&nbsp; **1083773883** |
|  |  | Rate |  | Shares |  |
| **Short-Term Investments — 5.2%** | **Short-Term Investments — 5.2%** | **Short-Term Investments — 5.2%** | **Short-Term Investments — 5.2%** | **Short-Term Investments — 5.2%** | **Short-Term Investments — 5.2%** |
| &nbsp;&nbsp;&nbsp; Western Asset Premier Institutional <br> Government Reserves, Premium Shares <br> (Cost — $39,729,002)  | &nbsp;&nbsp;&nbsp; Western Asset Premier Institutional <br> Government Reserves, Premium Shares <br> (Cost — $39,729,002)  | &nbsp;&nbsp; 4.301% |  | &nbsp;&nbsp; 39729002<br>| &nbsp;&nbsp;&nbsp;&nbsp; **39729002**<br> <sup>(s)(t)</sup><br>|
| **Total Investments — 145.6% (Cost — $1,184,843,096)** | **Total Investments — 145.6% (Cost — $1,184,843,096)** | **Total Investments — 145.6% (Cost — $1,184,843,096)** | **Total Investments — 145.6% (Cost — $1,184,843,096)** | **Total Investments — 145.6% (Cost — $1,184,843,096)** | &nbsp;&nbsp; **1123502885** |
| &nbsp;&nbsp;&nbsp; Liabilities in Excess of Other Assets — (45.6)% | &nbsp;&nbsp;&nbsp; Liabilities in Excess of Other Assets — (45.6)% | &nbsp;&nbsp;&nbsp; Liabilities in Excess of Other Assets — (45.6)% | &nbsp;&nbsp;&nbsp; Liabilities in Excess of Other Assets — (45.6)% | &nbsp;&nbsp;&nbsp; Liabilities in Excess of Other Assets — (45.6)% | &nbsp;&nbsp;&nbsp; (351703946)<br>|
| **Total Net Assets — 100.0%** | **Total Net Assets — 100.0%** | **Total Net Assets — 100.0%** | **Total Net Assets — 100.0%** | **Total Net Assets — 100.0%** | &nbsp;&nbsp; **$771798939** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

---

| | |
|:---|:---|
| † | Face amount/notional amount denominated in U.S. dollars, unless otherwise noted. |
| †† | Represents less than 0.1%. |
| \* | Non-income producing security. |
| <sup>(a)</sup> | Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in <br> transactions that are exempt from registration, normally to qualified institutional buyers. This security has been <br> deemed liquid pursuant to guidelines approved by the Board of Trustees. <br>|
| <sup>(b)</sup> | The coupon payment on this security is currently in default as of June 30, 2025. |
| <sup>(c)</sup> | All or a portion of this security is pledged as collateral pursuant to the loan agreement (Note 5). |
| <sup>(d)</sup> | Payment-in-kind security for which the issuer has the option at each interest payment date of making interest <br> payments in cash or additional securities. <br>|
| <sup>(e)</sup> | Securities traded on a when-issued or delayed delivery basis. |
| <sup>(f)</sup> | Security has no maturity date. The date shown represents the next call date. |
| <sup>(g)</sup> | Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate <br> securities are not based on a published reference rate and spread but are determined by the issuer or agent and <br> are based on current market conditions. These securities do not indicate a reference rate and spread in their <br> description above.<br>|
| <sup>(h)</sup> | Security is fair valued in accordance with procedures approved by the Board of Trustees (Note 1). |
| <sup>(i)</sup> | Security is valued using significant unobservable inputs (Note 1). |
| <sup>(j)</sup> | All or a portion of this security is held by the counterparty as collateral for open reverse repurchase agreements. |
| <sup>(k)</sup> | Security is exempt from registration under Regulation S of the Securities Act of 1933. Regulation S applies to <br> securities offerings that are made outside of the United States and do not involve direct selling efforts in the <br> United States. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees.<br>|
| <sup>(l)</sup> | The maturity principal is currently in default as of June 30, 2025. |
| <sup>(m)</sup> | Collateralized mortgage obligations are secured by an underlying pool of mortgages or mortgage pass-through <br> certificates that are structured to direct payments on underlying collateral to different series or classes of the <br> obligations. The interest rate may change positively or inversely in relation to one or more interest rates, financial <br> indices or other financial indicators and may be subject to an upper and/or lower limit.<br>|
| <sup>(n)</sup> | Rate shown is the current yield based on income received over the trailing twelve months. |
| <sup>(o)</sup> | Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to <br> multiple contracts under the same loan.<br>|
| <sup>(p)</sup> | Senior loans may be considered restricted in that the Fund ordinarily is contractually obligated to receive approval <br> from the agent bank and/or borrower prior to the disposition of a senior loan. <br>|
| <sup>(q)</sup> | All or a portion of this loan has not settled as of June 30, 2025. Interest rates are not effective until settlement <br> date. Interest rates shown, if any, are for the settled portion of the loan.<br>|
| <sup>(r)</sup> | Restricted security (Note 10). |
| <sup>(s)</sup> | Rate shown is one-day yield as of the end of the reporting period.  |
| <sup>(t)</sup> | In this instance, as defined in the Investment Company Act of 1940, an "Affiliated Company" represents Fund <br> ownership of at least 5% of the outstanding voting securities of an issuer, or a company which is under common <br> ownership or control with the Fund. At June 30, 2025, the total market value of investments in Affiliated <br> Companies was $39,729,002 and the cost was $39,729,002 (Note 9).<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

---

| | | |
|:---|:---|:---|
| **Abbreviation(s) used in this schedule:** | **Abbreviation(s) used in this schedule:** | **Abbreviation(s) used in this schedule:** |
| BRL |  | Brazilian Real |
| CAS | —  | Connecticut Avenue Securities |
| CDO | —  | Collateralized Debt Obligation |
| CHF | —  | Swiss Franc |
| CLO | —  | Collateralized Loan Obligation |
| EUR | —  | Euro |
| GBP | —  | British Pound |
| IO | —  | Interest Only |
| JMD | —  | Jamaican Dollar |
| LIBOR | —  | London Interbank Offered Rate |
| MXN | —  | Mexican Peso |
| PIK | —  | Payment-In-Kind |
| REMIC | —  | Real Estate Mortgage Investment Conduit |
| SOFR | —  | Secured Overnight Financing Rate |
| USD | —  | United States Dollar |
| UYU | —  | Uruguayan Peso |

---

At June 30, 2025, the Fund had the following open reverse repurchase agreements:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Counterparty  | Rate | Effective <br>Date<br>| Maturity <br>Date<br>| Face Amount <br>of Reverse <br>Repurchase <br>Agreements<br>| Asset Class <br>of Collateral\*<br>| Collateral <br>Value\*\*<br>|
| Goldman Sachs Group Inc. | 5.000% | 12/20/2024 | TBD\*\*\* | $9437191 | Corporate Bonds & <br>Notes <br>Sovereign Bonds <br>Cash<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>$2040991 <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>11722528 <br>198000<br>|
|  |  |  |  | **$9437191** |  | **$13961519** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Refer to the Schedule of Investments for positions held at the counterparty as collateral for reverse repurchase agreements. 

\*\* Including accrued interest.

\*\*\* TBD — To Be Determined; These reverse repurchase agreements have no maturity dates because they are renewed daily and can be terminated by either the Fund or the counterparty in accordance with the terms of the agreements. The rates for these agreements are variable. The rate disclosed is the rate as of June 30, 2025. 

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

At June 30, 2025, the Fund had the following open written options contracts:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **OTC Written Options** | **OTC Written Options** | **OTC Written Options** | **OTC Written Options** | **OTC Written Options** | **OTC Written Options** | **OTC Written Options** |
| Security | Counterparty | Expiration <br>Date<br>| Strike <br>Price<br>| Contracts | Notional <br>Amount†<br>| Value |
| U.S. Dollar/Swiss Franc, Call <br>(Premiums received — $15,981)<br>| Bank of America <br> N.A.<br>| &nbsp;&nbsp; 7/11/25 | 0.859 <br><sup>CHF</sup><br>| &nbsp;&nbsp;&nbsp; 4535000 | &nbsp;&nbsp; 4535000 | &nbsp;&nbsp; **$(2)**<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Abbreviation(s) used in this schedule:** | **Abbreviation(s) used in this schedule:** | **Abbreviation(s) used in this schedule:** |
| CHF |  | Swiss Franc |

---

At June 30, 2025, the Fund had the following open futures contracts:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp; Number of <br>Contracts<br>| &nbsp;&nbsp; Expiration <br>Date<br>| &nbsp;&nbsp; Notional <br>Amount<br>| &nbsp;&nbsp; Market <br>Value<br>| &nbsp;&nbsp; Unrealized <br>Appreciation <br>(Depreciation)<br>|
| **Contracts to Buy:** <br>|  |  |  |  |  |
| Euro-Bund | &nbsp;&nbsp; 64 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; $9885823 | &nbsp;&nbsp; $9811852 | &nbsp;&nbsp; $(73971)<br>|
| U.S. Treasury 10-Year <br> Notes<br>| &nbsp;&nbsp; 1267 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 140041259 | &nbsp;&nbsp; 142062375 | &nbsp;&nbsp; 2021116 |
| U.S. Treasury Long-Term <br> Bonds<br>| &nbsp;&nbsp; 246 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 27540350 | &nbsp;&nbsp; 28405312 | &nbsp;&nbsp; 864962 |
| U.S. Treasury Ultra <br> 10-Year Notes<br>| &nbsp;&nbsp; 170 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 18878202 | &nbsp;&nbsp; 19425157 | &nbsp;&nbsp; 546955 |
|  |  |  |  |  | &nbsp;&nbsp; 3359062 |
| **Contracts to Sell:** <br>|  |  |  |  |  |
| U.S. Treasury 2-Year <br> Notes<br>| &nbsp;&nbsp; 437 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 90558619 | &nbsp;&nbsp; 90906242 | &nbsp;&nbsp; (347623)<br>|
| U.S. Treasury 5-Year <br> Notes<br>| &nbsp;&nbsp; 22 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 2373611 | &nbsp;&nbsp; 2398000 | &nbsp;&nbsp; (24389)<br>|
| U.S. Treasury Ultra Long-<br> Term Bonds<br>| &nbsp;&nbsp; 101 | &nbsp;&nbsp; 9/25 | &nbsp;&nbsp; 11587782 | &nbsp;&nbsp; 12031625 | &nbsp;&nbsp; (443843)<br>|
|  |  |  |  |  | &nbsp;&nbsp; (815855)<br>|
| **Net unrealized appreciation on open futures contracts** | **Net unrealized appreciation on open futures contracts** | **Net unrealized appreciation on open futures contracts** | **Net unrealized appreciation on open futures contracts** | **Net unrealized appreciation on open futures contracts** | &nbsp;&nbsp; **$2543207** |

---

At June 30, 2025, the Fund had the following open forward foreign currency contracts:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Currency <br>Purchased | Currency <br>Purchased | Currency <br>Sold | Currency <br>Sold | Counterparty | Settlement <br>Date<br>| Unrealized <br>Appreciation <br>(Depreciation)<br>|
| BRL | 440000 | &nbsp;&nbsp; USD | 80629 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; $316 |
| BRL | 11280000 | &nbsp;&nbsp; USD | 2067032 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; 8100 |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Currency<br> Purchased | Currency<br> Purchased | Currency<br> Sold | Currency<br> Sold | Counterparty | Settlement<br> Date<br>| Unrealized<br> Appreciation<br> (Depreciation)<br>|
| BRL | 11720000 | &nbsp;&nbsp; USD | 2112092 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; $43984 |
| USD | 76957 | &nbsp;&nbsp; BRL | 440000 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; (3988)<br>|
| USD | 1973441 | &nbsp;&nbsp; BRL | 11280000 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; (101690)<br>|
| USD | 2147661 | &nbsp;&nbsp; BRL | 11720000 | Citibank N.A. | &nbsp;&nbsp; 7/2/25 | &nbsp;&nbsp; (8416)<br>|
| CHF | 1681337 | &nbsp;&nbsp; USD | 2086000 | Bank of America N.A. | &nbsp;&nbsp; 7/15/25 | &nbsp;&nbsp; 37183 |
| USD | 1043050 | &nbsp;&nbsp; CHF | 856673 | Bank of America N.A. | &nbsp;&nbsp; 7/15/25 | &nbsp;&nbsp; (38752)<br>|
| CHF | 150000 | &nbsp;&nbsp; USD | 181866 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 7579 |
| CHF | 170000 | &nbsp;&nbsp; USD | 206865 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 7839 |
| CHF | 330000 | &nbsp;&nbsp; USD | 399998 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 16781 |
| CNH | 1500000 | &nbsp;&nbsp; USD | 204522 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 5298 |
| CNH | 4300000 | &nbsp;&nbsp; USD | 600359 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 1123 |
| CNH | 5360000 | &nbsp;&nbsp; USD | 728983 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 20772 |
| CNH | 5370000 | &nbsp;&nbsp; USD | 730857 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 20297 |
| CNH | 5370000 | &nbsp;&nbsp; USD | 731761 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 19393 |
| CNH | 29760000 | &nbsp;&nbsp; USD | 4152593 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 10226 |
| EUR | 440000 | &nbsp;&nbsp; USD | 483590 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 35281 |
| EUR | 500000 | &nbsp;&nbsp; USD | 550024 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 39602 |
| EUR | 590000 | &nbsp;&nbsp; USD | 669172 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 26586 |
| EUR | 820000 | &nbsp;&nbsp; USD | 929129 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 37858 |
| EUR | 870000 | &nbsp;&nbsp; USD | 980867 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 45082 |
| EUR | 970000 | &nbsp;&nbsp; USD | 1104629 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 39245 |
| GBP | 200000 | &nbsp;&nbsp; USD | 265415 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 9135 |
| USD | 629051 | &nbsp;&nbsp; AUD | 1010000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (35872)<br>|
| USD | 942544 | &nbsp;&nbsp; CHF | 760000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (17310)<br>|
| USD | 1870728 | &nbsp;&nbsp; CHF | 1530000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (61612)<br>|
| USD | 817774 | &nbsp;&nbsp; CNH | 5990000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (20105)<br>|
| USD | 1089983 | &nbsp;&nbsp; CNH | 7980000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (26257)<br>|
| USD | 8039019 | &nbsp;&nbsp; CNH | 58833557 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (190599)<br>|
| USD | 410222 | &nbsp;&nbsp; EUR | 350000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (2516)<br>|
| USD | 445691 | &nbsp;&nbsp; EUR | 380000 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (2425)<br>|
| USD | 579607 | &nbsp;&nbsp; EUR | 526600 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (41387)<br>|
| USD | 13686247 | &nbsp;&nbsp; GBP | 10717416 | Bank of America N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (1026105)<br>|
| AUD | 1160000 | &nbsp;&nbsp; USD | 743205 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 20470 |
| AUD | 16619685 | &nbsp;&nbsp; USD | 10060377 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 881030 |
| USD | 19161 | &nbsp;&nbsp; AUD | 30000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (590)<br>|
| USD | 292572 | &nbsp;&nbsp; AUD | 450000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (3681)<br>|
| USD | 404308 | &nbsp;&nbsp; AUD | 635546 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (14097)<br>|
| USD | 406475 | &nbsp;&nbsp; AUD | 640000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (14862)<br>|
| USD | 727371 | &nbsp;&nbsp; AUD | 1140000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (23137)<br>|

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Currency<br> Purchased | Currency<br> Purchased | Currency<br> Sold | Currency<br> Sold | Counterparty | Settlement<br> Date<br>| Unrealized<br> Appreciation<br> (Depreciation)<br>|
| USD | 729082 | &nbsp;&nbsp; AUD | 1150000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; $(28010)<br>|
| USD | 734051 | &nbsp;&nbsp; AUD | 1150000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (23040)<br>|
| USD | 989419 | &nbsp;&nbsp; AUD | 1572161 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (45598)<br>|
| USD | 870685 | &nbsp;&nbsp; CAD | 1210000 | Citibank N.A. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (18642)<br>|
| CAD | 569988 | &nbsp;&nbsp; USD | 402778 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 16153 |
| CHF | 460000 | &nbsp;&nbsp; USD | 561386 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 19578 |
| JPY | 119370000 | &nbsp;&nbsp; USD | 815227 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 15253 |
| JPY | 132130000 | &nbsp;&nbsp; USD | 902613 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 16640 |
| JPY | 166730000 | &nbsp;&nbsp; USD | 1169459 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (9487)<br>|
| JPY | 291724000 | &nbsp;&nbsp; USD | 1992977 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 36601 |
| JPY | 291780000 | &nbsp;&nbsp; USD | 2045022 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (15054)<br>|
| JPY | 458510000 | &nbsp;&nbsp; USD | 3218683 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (28743)<br>|
| USD | 195031 | &nbsp;&nbsp; AUD | 300000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (2471)<br>|
| USD | 741436 | &nbsp;&nbsp; CAD | 1024991 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (11913)<br>|
| USD | 933389 | &nbsp;&nbsp; EUR | 813000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (25343)<br>|
| USD | 761414 | &nbsp;&nbsp; JPY | 109620000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (1233)<br>|
| USD | 761482 | &nbsp;&nbsp; JPY | 109590000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (956)<br>|
| USD | 914074 | &nbsp;&nbsp; JPY | 131710000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (2257)<br>|
| USD | 918250 | &nbsp;&nbsp; JPY | 132260000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (1907)<br>|
| USD | 1016097 | &nbsp;&nbsp; JPY | 146160000 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (765)<br>|
| USD | 3610216 | &nbsp;&nbsp; MXN | 75515568 | Goldman Sachs Group Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; (407246)<br>|
| CHF | 350000 | &nbsp;&nbsp; USD | 426665 | JPMorgan Chase & Co. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 15373 |
| EUR | 610000 | &nbsp;&nbsp; USD | 670841 | Morgan Stanley & Co. Inc. | &nbsp;&nbsp; 7/16/25 | &nbsp;&nbsp; 48502 |
| USD | 2096114 | &nbsp;&nbsp; BRL | 11720000 | Citibank N.A. | &nbsp;&nbsp; 8/4/25 | &nbsp;&nbsp; (42326)<br>|
| **Net unrealized depreciation on open forward foreign currency contracts** | **Net unrealized depreciation on open forward foreign currency contracts** | **Net unrealized depreciation on open forward foreign currency contracts** | **Net unrealized depreciation on open forward foreign currency contracts** | **Net unrealized depreciation on open forward foreign currency contracts** | **Net unrealized depreciation on open forward foreign currency contracts** | &nbsp;&nbsp; **$(797112)**<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Abbreviation(s) used in this table:** | **Abbreviation(s) used in this table:** | **Abbreviation(s) used in this table:** |
| AUD |  | Australian Dollar |
| BRL | —  | Brazilian Real |
| CAD | —  | Canadian Dollar |
| CHF | —  | Swiss Franc |
| CNH | —  | Chinese Offshore Yuan |
| EUR | —  | Euro |
| GBP | —  | British Pound |
| JPY | —  | Japanese Yen |
| MXN | —  | Mexican Peso |
| USD | —  | United States Dollar |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

At June 30, 2025, the Fund had the following open swap contracts:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  | <br> **OTC INTEREST RATE SWAPS**  |
| Swap Counterparty | Notional <br>Amount\*<br>| Termination <br>Date<br>| Payments <br>Made by <br>the Fund<sup>†</sup> <br>| Payments <br>Received by <br>the Fund<sup>†</sup> <br>| Market <br>Value<br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Depreciation<br>|
| Bank of America <br> N.A.<br>| 137545000<sup>BRL</sup> <br>| 1/2/26 | BRL-CDI\*\* | 11.035%\*\* | $(681049) |  | $(681049) |
| JPMorgan Chase & <br> Co.<br>| 63990000<sup>BRL</sup> <br>| 1/2/29 | BRL-CDI\*\* | 10.230%\*\* | &nbsp;&nbsp;&nbsp;&nbsp; (953324) |  | &nbsp;&nbsp;&nbsp;&nbsp; (953324) |
| **Total** |  |  |  |  | **$(1634373)** | **—** | **$(1634373)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  | <br> **CENTRALLY CLEARED INTEREST RATE SWAPS**  |
|  | Notional <br>Amount\*<br>| Termination <br>Date<br>| Payments <br>Made by <br>the Fund<sup>†</sup> <br>| Payments <br>Received by <br>the Fund<sup>†</sup> <br>| Market <br>Value<br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Appreciation <br>(Depreciation)<br>|
|  | 21308000 | 1/31/32 | 3.730% <br>annually<br>| Daily SOFR <br>Compound <br>annually<br>| $(277843) | $47892 | $(325735) |
|  | 173910000<sup>MXN</sup> <br>| 11/10/34 | 28-Day MXN TIIE - <br> Banxico <br>every 28 days<br>| 8.885% <br>every 28 days<br>| &nbsp;&nbsp; 506219 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | &nbsp;&nbsp; 506219 |
| **Total** |  |  |  |  | **$228376** | **$47892** | **$180484** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup>  |
| Reference <br> Entity<br>| Notional <br>Amount<sup>2</sup> <br>| Termination <br>Date<br>| Implied <br>Credit <br>Spread at <br>June 30, <br>2025<sup>3</sup> <br>| Periodic <br>Payments <br>Received by <br>the Fund<sup>†</sup> <br>| Market <br>Value<br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Appreciation <br>(Depreciation)<br>|
| American <br> Airlines <br> Group Inc., <br> 6.500%, due <br> 7/1/25<br>| $1290000 | 12/20/29 | 5.431% | 5.000% quarterly | $(19838) | $52550 | $(72388) |
| American <br> Airlines <br> Group Inc., <br> 6.500%, due <br> 7/1/25<br>| &nbsp;&nbsp;&nbsp;&nbsp; 318000 | 6/20/30 | 5.696% | 5.000% quarterly | &nbsp;&nbsp;&nbsp;&nbsp; (8487) | &nbsp;&nbsp;&nbsp; (14037) | &nbsp;&nbsp;&nbsp;&nbsp; 5550 |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** | **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — SELL PROTECTION**<sup>1</sup> **(cont'd)** |
| Reference <br> Entity<br>| Notional<br> Amount<sup>2</sup><br>| Termination<br> Date<br>| Implied<br> Credit<br> Spread at<br> June 30,<br> 2025<sup>3</sup><br>| Periodic<br> Payments<br> Received by<br> the Fund<sup>†</sup><br>| Market<br> Value<br>| Upfront<br> Premiums<br> Paid<br> (Received)<br>| Unrealized<br> Appreciation<br> (Depreciation)<br>|
| Caesars <br> Entertainment Inc., <br> 4.625%, due <br> 10/15/29<br>| $1123000 | 6/20/30 | 2.391% | 5.000% quarterly | $126110 | $123160 | $2950 |
| Nabors <br> Industries Inc., <br> 9.125%, due <br> 1/31/30<br>| &nbsp;&nbsp;&nbsp;&nbsp; 604000 | 6/20/29 | 11.312% | 1.000% quarterly | &nbsp;&nbsp; (173007) | &nbsp;&nbsp;&nbsp; (87461) | &nbsp;&nbsp;&nbsp; (85546) |
| Nabors <br> Industries Inc., <br> 9.125%, due <br> 1/31/30<br>| &nbsp;&nbsp;&nbsp;&nbsp; 862000 | 6/20/30 | 11.873% | 1.000% quarterly | &nbsp;&nbsp; (291370) | &nbsp;&nbsp; (213567) | &nbsp;&nbsp;&nbsp; (77803) |
| **Total** | **$4197000** |  |  |  | **$(366592)** | **$(139355)** | **$(227237)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION**<sup>4</sup>  |
| Reference <br> Entity<br>| Notional <br>Amount<sup>2</sup> <br>| Termination <br>Date<br>| Implied <br>Credit <br>Spread at <br>June 30, <br>2025<sup>3</sup> <br>| Periodic <br>Payments <br>Made by <br>the Fund<sup>†</sup> <br>| Market <br>Value<br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Appreciation <br>(Depreciation)<br>|
| MGM Resorts <br> International, <br> 4.750%, due <br> 10/15/28<br>| $1123000 | 6/20/30 | 1.815% | 5.000% quarterly | $(156549) | $(150671) | $(5878) |
| Transocean Inc., <br> 8.000%, due <br> 2/1/27<br>| &nbsp;&nbsp;&nbsp;&nbsp; 604000 | 6/20/29 | 6.308% | 1.000% quarterly | &nbsp;&nbsp; 101181 | &nbsp;&nbsp;&nbsp;&nbsp; 54708 | 46473 |
| Transocean Inc., <br> 8.000%, due <br> 2/1/27<br>| &nbsp;&nbsp;&nbsp;&nbsp; 862000 | 6/20/30 | 6.863% | 1.000% quarterly | &nbsp;&nbsp; 185383 | &nbsp;&nbsp; 152548 | 32835 |
| **Total** | **$2589000** |  |  |  | **$130015** | **$56585** | **$73430** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  | <br> **CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION**<sup>4</sup>  |
| Reference Entity | Notional <br>Amount<sup>2</sup> <br>| Termination <br>Date<br>| Periodic <br>Payments <br>Made by <br>the Fund<sup>†</sup> <br>| Market <br>Value<sup>5</sup> <br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Depreciation<br>|
| Markit CDX.NA.HY.44 Index | $3565000 | 6/20/30 | 5.000% quarterly | **$(268165)** | **$(217546)** | **$(50619)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Schedule of investments (unaudited) (cont'd)

June 30, 2025

 **Western Asset Diversified Income Fund**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  | <br> **OTC TOTAL RETURN SWAPS**  |
| Swap <br>Counterparty<br>| Notional <br>Amount<br>| Termination <br>Date<br>| Periodic <br>Payments <br>Made by <br>the Fund<sup>†</sup> <br>| Periodic <br>Payments <br>Received by <br>the Fund<sup>‡</sup> <br>| Market <br>Value<br>| Upfront <br>Premiums <br>Paid <br>(Received)<br>| Unrealized <br>Appreciation<br>|
| JPMorgan <br> Chase & Co.<br>| $4461000 | 7/3/25 | Daily SOFR <br>Compound + <br>1.100%\*\*<br>| JPEIFNTR^\*\* | **$175529** | **—** | **$175529** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| <sup>1</sup> | If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap <br> agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the <br> swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) <br> pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the <br> recovery value of the referenced obligation or underlying securities comprising the referenced index.<br>|
| <sup>2</sup> | The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a <br> buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.<br>|
| <sup>3</sup> | Implied credit spreads, utilized in determining the market value of credit default swap agreements on corporate or <br> sovereign issues as of period end, serve as an indicator of the current status of the payment/performance risk and <br> represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular <br> referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be <br> made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit <br> soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of <br> the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced <br> entity or obligation.<br>|
| <sup>4</sup> | If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap <br> agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of <br> the swap and deliver the referenced obligation or the underlying securities comprising the referenced index or (ii) <br> receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the <br> recovery value of the referenced obligation or the underlying securities comprising the referenced index.<br>|
| <sup>5</sup> | The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and <br> credit indices serve as an indicator of the current status of the payment/performance risk and represent the <br> likelihood of an expected loss (or profit) for the credit derivative had the notional amount of the swap agreement <br> been closed/sold as of the period end. Decreasing market values (sell protection) or increasing market values (buy <br> protection), when compared to the notional amount of the swap, represent a deterioration of the referenced <br> entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under <br> the terms of the agreement.<br>|
| † | Percentage shown is an annual percentage rate. |
| ‡ | Periodic payments made/received by the Fund are based on the total return of the referenced entity. |
| ^ | Custom emerging markets debt basket is comprised of 40 bonds in the Sovereign Frontier sector. |
| \* | Notional amount denominated in U.S. dollars, unless otherwise noted. |
| \*\* | One time payment made at termination date. |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

 **Western Asset Diversified Income Fund**

Reference rate(s) and their value(s) as of period end used in this table:

---

| | |
|:---|:---|
| Reference Index | Reference <br>Rate<br>|
| &nbsp;&nbsp;&nbsp; 28-Day MXN TIIE - Banxico | 8.304% |
| &nbsp;&nbsp;&nbsp; BRL-CDI | 14.900% |
| &nbsp;&nbsp;&nbsp; Daily SOFR Compound | 4.450% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Abbreviation(s) used in this table:** | **Abbreviation(s) used in this table:** | **Abbreviation(s) used in this table:** |
| BRL |  | Brazilian Real |
| BRL-CDI | —  | Brazilian Cetip InterBank Deposit Rate |
| JPEIFNTR | —  | Western Asset Management Emerging Markets Frontier Custom Basket |
| MXN | —  | Mexican Peso |
| SOFR | —  | Secured Overnight Financing Rate |
| TIIE | —  | Tasa de Intere's Interbancaria de Equilibrio (Equilibrium Interbanking Interest Rate) |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Statement of assets and liabilities (unaudited)

June 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| &nbsp;&nbsp;&nbsp; Investments in unaffiliated securities, at value (Cost — $1,145,114,094) | &nbsp;&nbsp; $1083773883 |
| &nbsp;&nbsp;&nbsp; Investments in affiliated securities, at value (Cost — $39,729,002) | &nbsp;&nbsp; 39729002 |
| &nbsp;&nbsp;&nbsp; Foreign currency, at value (Cost — $9,559,240) | &nbsp;&nbsp; 9629043 |
| &nbsp;&nbsp;&nbsp; Cash | &nbsp;&nbsp; 9038390 |
| &nbsp;&nbsp;&nbsp; Interest receivable | &nbsp;&nbsp; 18634448 |
| &nbsp;&nbsp;&nbsp; Receivable for securities sold  | &nbsp;&nbsp; 4880673 |
| &nbsp;&nbsp;&nbsp; Deposits with brokers for open futures contracts and exchange-traded options | &nbsp;&nbsp; 3451502 |
| &nbsp;&nbsp;&nbsp; Deposits with brokers for centrally cleared swap contracts | &nbsp;&nbsp; 2443800 |
| &nbsp;&nbsp;&nbsp; Deposits with brokers for OTC derivatives | &nbsp;&nbsp; 1660000 |
| &nbsp;&nbsp;&nbsp; Unrealized appreciation on forward foreign currency contracts | &nbsp;&nbsp; 1501280 |
| &nbsp;&nbsp;&nbsp; Receivable from brokers — net variation margin on open futures contracts | &nbsp;&nbsp; 564005 |
| &nbsp;&nbsp;&nbsp; Deposits with brokers for open reverse repurchase agreements | &nbsp;&nbsp; 198000 |
| &nbsp;&nbsp;&nbsp; OTC swaps, at value (premiums received — $0) | &nbsp;&nbsp; 175529 |
| &nbsp;&nbsp;&nbsp; Foreign currency collateral for open futures contracts and exchange-traded options, at <br> value (Cost — $112,258)<br>| &nbsp;&nbsp; 116456 |
| &nbsp;&nbsp;&nbsp; Dividends receivable from affiliated investments | &nbsp;&nbsp; 98200 |
| &nbsp;&nbsp;&nbsp; Principal paydown receivable | &nbsp;&nbsp; 3683 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses | &nbsp;&nbsp; 441857 |
| ***Total Assets*** | &nbsp;&nbsp; ***1176339751*** |
| **Liabilities:** |  |
| &nbsp;&nbsp;&nbsp; Loan payable (Note 5) | &nbsp;&nbsp; 358000000 |
| &nbsp;&nbsp;&nbsp; Payable for securities purchased | &nbsp;&nbsp; 22288918 |
| &nbsp;&nbsp;&nbsp; Payable for open reverse repurchase agreements (Note 3) | &nbsp;&nbsp; 9437191 |
| &nbsp;&nbsp;&nbsp; Distributions payable | &nbsp;&nbsp; 7696857 |
| &nbsp;&nbsp;&nbsp; Unrealized depreciation on forward foreign currency contracts | &nbsp;&nbsp; 2298392 |
| &nbsp;&nbsp;&nbsp; Interest expense payable | &nbsp;&nbsp; 1843086 |
| &nbsp;&nbsp;&nbsp; OTC swaps, at value (paid — $0) | &nbsp;&nbsp; 1634373 |
| &nbsp;&nbsp;&nbsp; Investment management fee payable | &nbsp;&nbsp; 1020947 |
| &nbsp;&nbsp;&nbsp; Payable for open OTC swap contracts | &nbsp;&nbsp; 79277 |
| &nbsp;&nbsp;&nbsp; Payable to brokers — net variation margin on centrally cleared swap contracts | &nbsp;&nbsp; 29475 |
| &nbsp;&nbsp;&nbsp; Trustees' fees payable | &nbsp;&nbsp; 26586 |
| &nbsp;&nbsp;&nbsp; Written options, at value (premiums received — $15,981) | &nbsp;&nbsp; 2 |
| &nbsp;&nbsp;&nbsp; Accrued expenses | &nbsp;&nbsp; 185708 |
| ***Total Liabilities*** | &nbsp;&nbsp; ***404540812*** |
| **Total Net Assets** | &nbsp;&nbsp; **$771798939** |
| **Net Assets:** |  |
| &nbsp;&nbsp;&nbsp; Par value ($0.001 par value; 51,830,687 shares issued and outstanding; Unlimited shares <br> authorized) <br>| &nbsp;&nbsp; $51831 |
| &nbsp;&nbsp;&nbsp; Paid-in capital in excess of par value | &nbsp;&nbsp; 1034268930 |
| &nbsp;&nbsp;&nbsp; Total distributable earnings (loss)  | &nbsp;&nbsp; (262521822)<br>|
| **Total Net Assets** | &nbsp;&nbsp; **$771798939** |
| **Shares Outstanding** | &nbsp;&nbsp; 51830687 |
| **Net Asset Value** | &nbsp;&nbsp; $14.89 |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Statement of operations (unaudited)

For the Six Months Ended June 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| &nbsp;&nbsp;&nbsp; Interest | &nbsp;&nbsp; $58583916 |
| &nbsp;&nbsp;&nbsp; Dividends from affiliated investments | &nbsp;&nbsp; 723457 |
| &nbsp;&nbsp;&nbsp; Dividends from unaffiliated investments | &nbsp;&nbsp; 132174 |
| &nbsp;&nbsp;&nbsp; Less: Foreign taxes withheld | &nbsp;&nbsp; (223)<br>|
| ***Total Investment Income*** | &nbsp;&nbsp; ***59439324*** |
| **Expenses:** |  |
| &nbsp;&nbsp;&nbsp; Interest expense (Notes 3 and 5)  | &nbsp;&nbsp; 9844168 |
| &nbsp;&nbsp;&nbsp; Investment management fee (Note 2) | &nbsp;&nbsp; 6215814 |
| &nbsp;&nbsp;&nbsp; Legal fees | &nbsp;&nbsp; 163127 |
| &nbsp;&nbsp;&nbsp; Trustees' fees | &nbsp;&nbsp; 153534 |
| &nbsp;&nbsp;&nbsp; Audit and tax fees | &nbsp;&nbsp; 48741 |
| &nbsp;&nbsp;&nbsp; Fund accounting fees | &nbsp;&nbsp; 46808 |
| &nbsp;&nbsp;&nbsp; Shareholder reports | &nbsp;&nbsp; 23538 |
| &nbsp;&nbsp;&nbsp; Transfer agent fees  | &nbsp;&nbsp; 17552 |
| &nbsp;&nbsp;&nbsp; Stock exchange listing fees | &nbsp;&nbsp; 13161 |
| &nbsp;&nbsp;&nbsp; Insurance | &nbsp;&nbsp; 3569 |
| &nbsp;&nbsp;&nbsp; Custody fees | &nbsp;&nbsp; 1343 |
| &nbsp;&nbsp;&nbsp; Excise tax (Note 1) | &nbsp;&nbsp; (13262)<br>|
| &nbsp;&nbsp;&nbsp; Miscellaneous expenses  | &nbsp;&nbsp; 8150 |
| ***Total Expenses*** | &nbsp;&nbsp; ***16526243*** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Fee waivers and/or expense reimbursements (Note 2) | &nbsp;&nbsp; (17253)<br>|
| ***Net Expenses*** | &nbsp;&nbsp; ***16508990*** |
| **Net Investment Income** | &nbsp;&nbsp; **42930334** |
| **Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options, Swap** <br> **Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions** <br>**(Notes 1, 3 and 4):** | **Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options, Swap** <br> **Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions** <br>**(Notes 1, 3 and 4):** |
| &nbsp;&nbsp;&nbsp; Net Realized Gain (Loss) From: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment transactions in unaffiliated securities | &nbsp;&nbsp; (6880451)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Futures contracts | &nbsp;&nbsp; (2174219)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Written options | &nbsp;&nbsp; 89229 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Swap contracts | &nbsp;&nbsp; 118595 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward foreign currency contracts | &nbsp;&nbsp; (109007)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency transactions | &nbsp;&nbsp; 187020 |
| ***Net Realized Loss***  | &nbsp;&nbsp; ***(8768833***<br> ***)***<br>|
| &nbsp;&nbsp;&nbsp; Change in Net Unrealized Appreciation (Depreciation) From: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments in unaffiliated securities | &nbsp;&nbsp; (6342684)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Futures contracts | &nbsp;&nbsp; 4514984 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Written options | &nbsp;&nbsp; (20394)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Swap contracts | &nbsp;&nbsp; 832375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward foreign currency contracts | &nbsp;&nbsp; (1055902)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currencies | &nbsp;&nbsp; 1155780 |
| ***Change in Net Unrealized Appreciation (Depreciation)***  | &nbsp;&nbsp; ***(915841***<br> ***)***<br>|
| **Net Loss on Investments, Futures Contracts, Written Options, Swap Contracts,** <br> **Forward Foreign Currency Contracts and Foreign Currency Transactions** <br>| &nbsp;&nbsp; **(9684674)**<br>|
| **Increase in Net Assets From Operations** | &nbsp;&nbsp; **$33245660** |

---

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Statements of changes in net assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| For the Six Months Ended June 30, 2025 (unaudited) <br>and the Year Ended December 31, 2024<br>| 2025 | 2024 |
| **Operations:** |  |  |
| &nbsp;&nbsp;&nbsp; Net investment income  | &nbsp;&nbsp; $42930334 | $89617313 |
| &nbsp;&nbsp;&nbsp; Net realized loss  | &nbsp;&nbsp; (8768833)<br>| (14426792)<br>|
| &nbsp;&nbsp;&nbsp; Change in net unrealized appreciation (depreciation)  | &nbsp;&nbsp; (915841)<br>| (4876870)<br>|
| ***Increase in Net Assets From Operations*** | &nbsp;&nbsp; ***33245660*** | ***70313651*** |
| **Distributions to Shareholders From (Note 1):** |  |  |
| &nbsp;&nbsp;&nbsp; Total distributable earnings | &nbsp;&nbsp; (46149603)<br>| (90940097)<br>|
| ***Decrease in Net Assets From Distributions to Shareholders*** | &nbsp;&nbsp; ***(46149603***<br> ***)***<br>| ***(90940097***<br> ***)***<br>|
| **Fund Share Transactions:** |  |  |
| &nbsp;&nbsp;&nbsp; Net proceeds from sale of shares (15,124 and 0 shares issued, respectively) <br>(Note 7)<br>| &nbsp;&nbsp; 221434 <br><sup>†</sup><br>|  |
| &nbsp;&nbsp;&nbsp; Reinvestment of distributions (27,353 and 0 shares issued, respectively) | &nbsp;&nbsp; 400174 |  |
| ***Increase in Net Assets From Fund Share Transactions*** | &nbsp;&nbsp; ***621608*** | ***—*** |
| ***Decrease in Net Assets*** | &nbsp;&nbsp; ***(12282335***<br> ***)***<br>| ***(20626446***<br> ***)***<br>|
| **Net Assets:** |  |  |
| &nbsp;&nbsp;&nbsp; Beginning of period | &nbsp;&nbsp; 784081274 | 804707720 |
| **End of period** | &nbsp;&nbsp; **$771798939** | **$784081274** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

† Net of sales charges of $1,796 and shelf registration offering costs of $1,239 (Note
 8)

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Statement of cash flows (unaudited)

For the Six Months Ended June 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Increase (Decrease) in Cash:** |  |
| **Cash Flows from Operating Activities:** |  |
| &nbsp;&nbsp;&nbsp; Net increase in net assets resulting from operations | &nbsp;&nbsp; $33245660 |
| &nbsp;&nbsp;&nbsp; Adjustments to reconcile net increase in net assets resulting from operations to net cash <br> provided (used) by operating activities:<br>|  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of portfolio securities | &nbsp;&nbsp; (227112500)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales of portfolio securities | &nbsp;&nbsp; 225138082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net purchases, sales and maturities of short-term investments | &nbsp;&nbsp; 5149948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net inflation adjustment | &nbsp;&nbsp; (2865)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net amortization of premium (accretion of discount) | &nbsp;&nbsp; (8182475)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in receivable for securities sold | &nbsp;&nbsp; (4879048)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in interest receivable | &nbsp;&nbsp; (1170225)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in receivable from brokers — net variation margin on centrally cleared swap <br> contracts<br>| &nbsp;&nbsp; 1374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in prepaid expenses | &nbsp;&nbsp; (384970)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in dividends receivable from affiliated investments | &nbsp;&nbsp; 116962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in principal paydown receivable | &nbsp;&nbsp; 76031 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in receivable from brokers — net variation margin on open futures contracts | &nbsp;&nbsp; (564005)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in payable to brokers — net variation margin on centrally cleared swap <br> contracts<br>| &nbsp;&nbsp; 29475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in deposits from brokers for OTC derivatives | &nbsp;&nbsp; (40000)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in payable for securities purchased | &nbsp;&nbsp; 15450766 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in investment management fee payable | &nbsp;&nbsp; (60035)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in Trustees' fees payable | &nbsp;&nbsp; (7223)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in interest expense payable | &nbsp;&nbsp; 155026 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in premiums received from written options | &nbsp;&nbsp; (21207)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in payable to brokers — net variation margin on futures contracts | &nbsp;&nbsp; (262438)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in payable for open OTC swap contracts | &nbsp;&nbsp; 40904 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in accrued expenses | &nbsp;&nbsp; (689448)<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net realized loss on investments | &nbsp;&nbsp; 6880451 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in net unrealized appreciation (depreciation) of investments, written options, <br> OTC swap contracts and forward foreign currency contracts<br>| &nbsp;&nbsp; 6860330 |
| ***Net Cash Provided in Operating Activities\**** | &nbsp;&nbsp; ***49768570*** |
| **Cash Flows from Financing Activities:** |  |
| &nbsp;&nbsp;&nbsp; Distributions paid on common stock (net of distributions payable) | &nbsp;&nbsp; (38052572)<br>|
| &nbsp;&nbsp;&nbsp; Decrease in payable for open reverse repurchase agreements | &nbsp;&nbsp; (1904245)<br>|
| &nbsp;&nbsp;&nbsp; Proceeds from sale of shares | &nbsp;&nbsp; 221434 |
| ***Net Cash Used by Financing Activities*** | &nbsp;&nbsp; ***(39735383***<br> ***)***<br>|
| **Net Increase in Cash and Restricted Cash** | &nbsp;&nbsp; **10033187** |
| Cash and restricted cash at beginning of period | &nbsp;&nbsp; 16504004 |
| Cash and restricted cash at end of period | &nbsp;&nbsp; $26537191 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Included in operating expenses is $9,689,142 paid for interest on borrowings.

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Statement of cash flows (unaudited) (cont'd)

For the Six Months Ended June 30, 2025

The following table provides a reconciliation of cash (including foreign currency) and restricted cash reported within the Statement of Assets and Liabilities that sums to the total of such amounts shown on the Statement of

Cash Flows.

---

| | |
|:---|:---|
|  | **June 30, 2025** |
| &nbsp;&nbsp;&nbsp; Cash | &nbsp;&nbsp; $18667433 |
| &nbsp;&nbsp;&nbsp; Restricted cash | &nbsp;&nbsp; 7869758 |
| **Total cash and restricted cash shown in the Statement of Cash Flows** | &nbsp;&nbsp; **$26537191** |

---

Restricted cash consists of cash that has been segregated to cover the Fund's collateral or margin obligations under derivative contracts and for reverse repurchase agreements. It is separately reported on the Statement of

Assets and Liabilities as Deposits with brokers.

---

| | |
|:---|:---|
| **Non-Cash Financing Activities:** |  |
| &nbsp;&nbsp;&nbsp; Proceeds from reinvestment of distributions | &nbsp;&nbsp; $400174 |

---

See Notes to Financial Statements.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Financial highlights

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** | **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** | **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** | **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** | **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** | **For a share of capital stock outstanding throughout each year ended December 31,** <br>**unless otherwise noted:** |
|  | 2025<sup>12</sup> <br>| 2024<sup>1</sup> <br>| 2023<sup>1</sup> <br>| 2022<sup>1</sup> <br>| 2021<sup>13</sup> <br>|
| **Net asset value, beginning of period** | $15.14 | &nbsp;&nbsp; $15.54 | &nbsp;&nbsp; $14.74 | &nbsp;&nbsp; $19.65 | &nbsp;&nbsp; $20.00 |
| **Income (loss) from operations:** | **Income (loss) from operations:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net investment income | 0.83 | 1.73 | 1.73 | 1.59 | 0.58 |
| &nbsp;&nbsp;&nbsp; Net realized and unrealized gain (loss) | (0.19)<br>| &nbsp;&nbsp; (0.37)<br>| 0.68 | &nbsp;&nbsp; (5.05)<br>| &nbsp;&nbsp; (0.34)<br>|
| ***Total income (loss) from operations*** | ***0.64*** | ***1.36*** | ***2.41*** | &nbsp;&nbsp; ***(3.46)*** | ***0.24*** |
| **Less distributions from:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net investment income | (0.89 )<sup>4</sup><br>| &nbsp;&nbsp; (1.76)<br>| &nbsp;&nbsp; (1.61)<br>| &nbsp;&nbsp; (1.45)<br>| &nbsp;&nbsp; (0.59)<br>|
| ***Total distributions***  | ***(0.89***<br> ***)***<br>| &nbsp;&nbsp; ***(1.76***<br> ***)***<br>| &nbsp;&nbsp; ***(1.61***<br> ***)***<br>| &nbsp;&nbsp; ***(1.45***<br> ***)***<br>| &nbsp;&nbsp; ***(0.59***<br> ***)***<br>|
| **Net asset value, end of period** | $14.89 | &nbsp;&nbsp; $15.14 | &nbsp;&nbsp; $15.54 | &nbsp;&nbsp; $14.74 | &nbsp;&nbsp; $19.65 |
| **Market price, end of period** | $14.84 | &nbsp;&nbsp; $14.25 | &nbsp;&nbsp; $14.10 | &nbsp;&nbsp; $12.70 | &nbsp;&nbsp; $18.31 |
| ***Total return, based on NAV***<sup>5,6</sup> <br>| ***4.33%***<br>| ***9.10%***<br>| ***17.32%***<br>| &nbsp;&nbsp; ***(18.07***<br> *)%***<br>| ***1.19%***<br>|
| ***Total return, based on Market Price***<sup>7</sup> <br>| ***10.62%***<br>| ***13.78%***<br>| ***24.97%***<br>| &nbsp;&nbsp; ***(23.44***<br> *)%***<br>| &nbsp;&nbsp; ***(5.62***<br> *)%***<br>|
| **Net assets, end of period (millions)** | $772 | &nbsp;&nbsp; $784 | &nbsp;&nbsp; $805 | &nbsp;&nbsp; $763 | &nbsp;&nbsp; $1018 |
| **Ratios to average net assets:** | **Ratios to average net assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Gross expenses | 4.32 %<sup>8</sup><br>| 4.66<br> %<br>| 4.79<br> %<br>| 2.98<br> %<br>| 1.82 %<sup>8</sup><br>|
| &nbsp;&nbsp;&nbsp; Net expenses<sup>9,10</sup> <br>| 4.32 <br><sup>8</sup><br>| 4.66 | 4.79 | 2.98 | 1.82 <br><sup>8</sup><br>|
| &nbsp;&nbsp;&nbsp; Net investment income | 11.22 <br><sup>8</sup><br>| 11.13 | 11.46 | 9.48 | 5.57 <br><sup>8</sup><br>|
| **Portfolio turnover rate** | **21%**<br>| &nbsp;&nbsp; **36%**<br>| &nbsp;&nbsp; **35%**<br>| &nbsp;&nbsp; **42%**<br>| &nbsp;&nbsp; **19%**<br>|
| **Supplemental data:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Loan Outstanding, End of Period (000s) | $358000 | &nbsp;&nbsp; $358000 | &nbsp;&nbsp; $358000 | &nbsp;&nbsp; $358000 | &nbsp;&nbsp; $370000 |
| &nbsp;&nbsp;&nbsp; Asset Coverage Ratio for Loan Outstanding<sup>11</sup> <br>| 316<br> %<br>| &nbsp;&nbsp; 319<br> %<br>| &nbsp;&nbsp; 325<br> %<br>| &nbsp;&nbsp; 313<br> %<br>| &nbsp;&nbsp; 375<br> %<br>|
| &nbsp;&nbsp;&nbsp; Asset Coverage, per $1,000 Principal Amount <br> of Loan Outstanding<sup>11</sup> <br>| $3156 | &nbsp;&nbsp; $3190 | &nbsp;&nbsp; $3248 | &nbsp;&nbsp; $3133 | &nbsp;&nbsp; $3751 |
| &nbsp;&nbsp;&nbsp; Weighted Average Loan (000s) | $358000 | &nbsp;&nbsp; $358000 | &nbsp;&nbsp; $358000 | &nbsp;&nbsp; $370288 | &nbsp;&nbsp; $314938 |
| &nbsp;&nbsp;&nbsp; Weighted Average Interest Rate on Loan | 5.33<br> %<br>| 6.13<br> %<br>| 6.11<br> %<br>| 2.71<br> %<br>| 1.13<br> %<br>|

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

See Notes to Financial Statements.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Financial highlights (cont'd)

<sup>1</sup> Per share amounts have been calculated using the average shares method.

<sup>2</sup> For the six months ended June 30, 2025 (unaudited).

<sup>3</sup> For the period June 25, 2021 (commencement of operations) to December 31, 2021.

<sup>4</sup> The actual source of the Fund's current fiscal year distributions may be from net investment income, realized capital gains, return of capital or a combination thereof. Shareholders will be informed of the tax characteristics of the distributions after the close of the fiscal year. 

<sup>5</sup> 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. Total returns for periods of less than one year are not annualized. 

<sup>6</sup> The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized. 

<sup>7</sup> The total return calculation assumes that distributions are reinvested in accordance with the Fund's dividend reinvestment plan. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized. 

<sup>8</sup> Annualized.

<sup>9</sup> Reflects fee waivers and/or expense reimbursements.

<sup>10</sup> 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. 

<sup>11</sup> Represents value of net assets plus the loan outstanding at the end of the period divided by the loan outstanding at the end of the period. 

See Notes to Financial Statements.

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**1. Organization and significant accounting policies** 

Western Asset Diversified Income Fund (the "Fund") was organized in Maryland on July 27, 2020 and is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The Board of Trustees (the "Board") has authorized the issuance of an unlimited number of common shares of beneficial interest, $0.001 par value per share (the "Common Shares"). The Fund's primary investment objective is to seek high current income. As a secondary investment objective, the Fund will seek capital appreciation. The Fund seeks to achieve its investment objectives by investing, under normal market conditions, across fixed income sectors and securities in seeking to deliver a well-diversified portfolio. The Fund expects to dissolve on or about June 24, 2033 (the "Dissolution Date"); provided that the Board may, without shareholder approval, extend the Dissolution Date for up to two years. As of a date within the 6-18 months preceding the Dissolution Date, the Board may cause the Fund to conduct a tender offer to all shareholders to purchase 100% of the then outstanding Common Shares of the Fund at a price equal to the NAV per Common Share on the expiration date of the tender offer (the "Eligible Tender Offer"). The Board has established that the Fund must have at least $200 million of aggregate net assets immediately following the completion of an Eligible Tender Offer to ensure the continued viability of the Fund (the "Dissolution Threshold"). In an Eligible Tender Offer, the Fund will offer to purchase all Common Shares held by each Common Shareholder; provided that if the payment for properly tendered Common Shares would result in the Fund having aggregate net assets below the Dissolution Threshold, the Eligible Tender Offer will be canceled, no Common Shares will be repurchased and the Fund will dissolve as scheduled. If an Eligible Tender Offer is conducted and the payment for properly tendered Common Shares would result in the Fund having aggregate net assets greater than or equal to the Dissolution Threshold, all Common Shares properly tendered and not withdrawn will be purchased by the Fund pursuant to the terms of the Eligible Tender Offer. Following the completion of an Eligible Tender Offer, the Board may eliminate the Dissolution Date without shareholder approval and provide for the Fund's perpetual existence. Upon its dissolution, it is anticipated that the Fund will have distributed substantially all of its net assets to shareholders, although securities for which no market exists or securities trading at depressed prices, if any, may be placed in a liquidating trust.

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

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

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 Board.

Pursuant to policies adopted by the Board, 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 the Fund's manager and the Board. 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

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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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, 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 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.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

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

---

| | | | | |
|:---|:---|:---|:---|:---|
| **ASSETS** | **ASSETS** | **ASSETS** | **ASSETS** | **ASSETS** |
| Description | &nbsp;&nbsp; Quoted Prices <br>(Level 1)<br>| &nbsp;&nbsp; Other Significant <br>Observable Inputs <br>(Level 2)<br>| &nbsp;&nbsp; Significant <br>Unobservable <br>Inputs <br>(Level 3)<br>| Total |
| Long-Term Investments†: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Corporate Bonds & Notes: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Energy | &nbsp;&nbsp; — | &nbsp;&nbsp; $70749416 | &nbsp;&nbsp; $4029448 | &nbsp;&nbsp; $74778864 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrials | &nbsp;&nbsp; — | &nbsp;&nbsp; 101282072 | &nbsp;&nbsp; 4644299 | &nbsp;&nbsp; 105926371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other Corporate Bonds & <br> Notes<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 366830112 | &nbsp;&nbsp; — | &nbsp;&nbsp; 366830112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Collateralized Mortgage <br> Obligations<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 183817784 | &nbsp;&nbsp; — | &nbsp;&nbsp; 183817784 |
| &nbsp;&nbsp;&nbsp; Asset-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 170726425 | &nbsp;&nbsp; — | &nbsp;&nbsp; 170726425 |
| &nbsp;&nbsp;&nbsp; Senior Loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consumer Discretionary | &nbsp;&nbsp; — | &nbsp;&nbsp; 16358245 | &nbsp;&nbsp; 584909 | &nbsp;&nbsp; 16943154 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financials | &nbsp;&nbsp; — | &nbsp;&nbsp; 19861638 | &nbsp;&nbsp; 3310525 | &nbsp;&nbsp; 23172163 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other Senior Loans | &nbsp;&nbsp; — | &nbsp;&nbsp; 83562778 | &nbsp;&nbsp; — | &nbsp;&nbsp; 83562778 |
| &nbsp;&nbsp;&nbsp; Sovereign Bonds | &nbsp;&nbsp; — | &nbsp;&nbsp; 47340974 | &nbsp;&nbsp; — | &nbsp;&nbsp; 47340974 |
| &nbsp;&nbsp;&nbsp; Convertible Bonds & Notes | &nbsp;&nbsp; — | &nbsp;&nbsp; 4917276 | &nbsp;&nbsp; — | &nbsp;&nbsp; 4917276 |
| &nbsp;&nbsp;&nbsp; Preferred Stocks | &nbsp;&nbsp; $3565027 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 3565027 |
| &nbsp;&nbsp;&nbsp; Common Stocks: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consumer Discretionary | &nbsp;&nbsp; 650508 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 650508 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrials | &nbsp;&nbsp; 839553 | &nbsp;&nbsp; 4875 | &nbsp;&nbsp; — | &nbsp;&nbsp; 844428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Real Estate | &nbsp;&nbsp; — | &nbsp;&nbsp; 3021 | &nbsp;&nbsp; — | &nbsp;&nbsp; 3021 |
| &nbsp;&nbsp;&nbsp; Warrants | &nbsp;&nbsp; — | &nbsp;&nbsp; 596505 | &nbsp;&nbsp; — | &nbsp;&nbsp; 596505 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-U.S. Treasury Inflation <br> Protected Securities<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 98461 | &nbsp;&nbsp; — | &nbsp;&nbsp; 98461 |
| &nbsp;&nbsp;&nbsp; Purchased Options | &nbsp;&nbsp; — | &nbsp;&nbsp; 32 | &nbsp;&nbsp; — | &nbsp;&nbsp; 32 |
| Total Long-Term Investments | &nbsp;&nbsp; 5055088 | &nbsp;&nbsp; 1066149614 | &nbsp;&nbsp; 12569181 | &nbsp;&nbsp; 1083773883 |
| Short-Term Investments† | &nbsp;&nbsp; 39729002 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 39729002 |
| **Total Investments** | &nbsp;&nbsp; **$44784090** | &nbsp;&nbsp; **$1066149614** | &nbsp;&nbsp; **$12569181** | &nbsp;&nbsp; **$1123502885** |

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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| | | | | |
|:---|:---|:---|:---|:---|
| **ASSETS (cont'd)** | **ASSETS (cont'd)** | **ASSETS (cont'd)** | **ASSETS (cont'd)** | **ASSETS (cont'd)** |
| Description | &nbsp;&nbsp; Quoted Prices<br> (Level 1)<br>| &nbsp;&nbsp; Other Significant<br> Observable Inputs<br> (Level 2)<br>| &nbsp;&nbsp; Significant<br> Unobservable<br> Inputs<br> (Level 3)<br>| Total |
| Other Financial Instruments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Futures Contracts†† | &nbsp;&nbsp; $3433033 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; $3433033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward Foreign Currency <br> Contracts††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; $1501280 | &nbsp;&nbsp; — | &nbsp;&nbsp; 1501280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Interest <br> Rate Swaps††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 506219 | &nbsp;&nbsp; — | &nbsp;&nbsp; 506219 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Credit <br> Default Swaps on <br> Corporate Issues — Sell <br> Protection††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 8500 | &nbsp;&nbsp; — | &nbsp;&nbsp; 8500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Credit <br> Default Swaps on <br> Corporate Issues — Buy <br> Protection††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 79308 | &nbsp;&nbsp; — | &nbsp;&nbsp; 79308 |
| &nbsp;&nbsp;&nbsp; OTC Total Return Swaps | &nbsp;&nbsp; — | &nbsp;&nbsp; 175529 | &nbsp;&nbsp; — | &nbsp;&nbsp; 175529 |
| **Total Other Financial** <br> **Instruments**<br>| &nbsp;&nbsp; **$3433033** | &nbsp;&nbsp; **$2270836** | &nbsp;&nbsp; **—** | &nbsp;&nbsp; **$5703869** |
| **Total** | &nbsp;&nbsp; **$48217123** | &nbsp;&nbsp; **$1068420450** | &nbsp;&nbsp; **$12569181** | &nbsp;&nbsp; **$1129206754** |

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **LIABILITIES**  | **LIABILITIES**  | **LIABILITIES**  | **LIABILITIES**  | **LIABILITIES**  |
| Description | &nbsp;&nbsp; Quoted Prices <br>(Level 1)<br>| &nbsp;&nbsp; Other Significant <br>Observable Inputs <br>(Level 2)<br>| &nbsp;&nbsp; Significant <br>Unobservable <br>Inputs <br>(Level 3)<br>| Total |
| Other Financial Instruments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Written Options | &nbsp;&nbsp; — | &nbsp;&nbsp; $2 | &nbsp;&nbsp; — | &nbsp;&nbsp; $2 |
| &nbsp;&nbsp;&nbsp; Futures Contracts†† | &nbsp;&nbsp; $889826 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 889826 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward Foreign Currency <br> Contracts††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 2298392 | &nbsp;&nbsp; — | &nbsp;&nbsp; 2298392 |
| &nbsp;&nbsp;&nbsp; OTC Interest Rate Swaps | &nbsp;&nbsp; — | &nbsp;&nbsp; 1634373 | &nbsp;&nbsp; — | &nbsp;&nbsp; 1634373 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Interest <br> Rate Swaps††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 325735 | &nbsp;&nbsp; — | &nbsp;&nbsp; 325735 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Credit <br> Default Swaps on <br> Corporate Issues — Sell <br> Protection††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 235737 | &nbsp;&nbsp; — | &nbsp;&nbsp; 235737 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Credit <br> Default Swaps on <br> Corporate Issues — Buy <br> Protection††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 5878 | &nbsp;&nbsp; — | &nbsp;&nbsp; 5878 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Centrally Cleared Credit <br> Default Swaps on Credit <br> Indices — Buy <br> Protection††<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; 50619 | &nbsp;&nbsp; — | &nbsp;&nbsp; 50619 |
| **Total** | &nbsp;&nbsp; **$889826** | &nbsp;&nbsp; **$4550736** | &nbsp;&nbsp; **—** | &nbsp;&nbsp; **$5440562** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

† See Schedule of Investments for additional detailed categorizations. <br> †† Reflects the unrealized appreciation (depreciation) of the instruments.

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value: <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Investments in <br>Securities<br>| Balance <br>as of <br>December 31, <br> 2024<br>| Accrued <br>premiums/ <br>discounts<br>| Realized <br>gain <br>(loss)<sup>1</sup> <br>| Change in <br>unrealized <br>appreciation <br>(depreciation)<sup>2</sup> <br>| Purchases |
| **Corporate Bonds &** <br> **Notes:**<br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Energy | $1259203 | $3636 |  | $(3636) | $2770245 |
| &nbsp;&nbsp;&nbsp; Industrials | 4733449 |  |  | 35850 |  |
| **Asset-Backed** <br> **Securities**<br>| 1816000 | 629 |  | 30585 |  |
| **Senior Loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Consumer <br> Discretionary<br>| 1675318 | 242 |  | (535262) | 1808765 |
| &nbsp;&nbsp;&nbsp; Financials |  | (2403) | $(113) | (5748) |  |
| &nbsp;&nbsp;&nbsp; Health Care | 93732 |  | (328026) | 322852 | 12208 |

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Investments in<br> Securities<br>| Balance<br> as of<br> December 31, <br> 2024<br>| Accrued<br> premiums/<br> discounts<br>| Realized<br> gain<br> (loss)<sup>1</sup><br>| Change in<br> unrealized<br> appreciation<br> (depreciation)<sup>2</sup><br>| Purchases |
| &nbsp;&nbsp;&nbsp; Industrials | $2637283 | $14004 | $62619 | $(83199) |  |
| &nbsp;&nbsp;&nbsp; Information <br> Technology<br>| 8027276 | 26855 | (5623) | 317518 | $191226 |
| **Total** | **$20242261** | **$42963** | **$(271143)** | **$78960** | **$4782444** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Investments in <br>Securities (cont'd)<br>| Sales | Transfers <br>into <br>Level 3<sup>3</sup> <br>| Transfers <br>out of <br>Level 3<sup>4</sup> <br>| Balance <br>as of <br>June 30, 2025<br>| Net change <br>in unrealized <br>appreciation <br>(depreciation) <br> for <br> investments <br>in securities <br>still held at <br>June 30, 2025<sup>2</sup> <br>|
| **Corporate Bonds &** <br> **Notes:**<br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Energy |  |  |  | $4029448 | $(3636) |
| &nbsp;&nbsp;&nbsp; Industrials | $(125000) |  |  | 4644299 | 35850 |
| **Asset-Backed** <br> **Securities**<br>|  |  | $(1847214) |  |  |
| **Senior Loans:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Consumer <br> Discretionary<br>| (2364154) |  |  | 584909 | (1214811) |
| &nbsp;&nbsp;&nbsp; Financials | (21605) | $3340394 |  | 3310525 | (5748) |
| &nbsp;&nbsp;&nbsp; Health Care | (100766) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Industrials | (2630707) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Information <br> Technology<br>| (4163502) |  | (4393750) |  |  |
| **Total** | **$(9405734)** | **$3340394** | **$(6240964)** | **$12569181** | **$(1188345)** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>1</sup> This amount is included in net realized gain (loss) from investment transactions in the accompanying Statement of Operations. 

<sup>2</sup> This amount is included in the change in net unrealized appreciation (depreciation) in the accompanying Statement of Operations. Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. 

<sup>3</sup> Transferred into Level 3 as a result of the unavailability of a quoted price in an active market for an identical investment or the unavailability of other significant observable inputs in the valuation obtained from independent third party pricing services or broker/dealer quotations. 

<sup>4</sup> Transferred out of Level 3 as a result of the availability of a quoted price in an active market for an identical investment or the availability of other significant observable inputs. 

**(b) Purchased options.** The Fund may purchase option contracts generally to gain or reduce exposure to certain types of investments or market factors or as a means of

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

attempting to enhance returns. When the Fund purchases an option, an amount equal to the premium paid by the Fund is recorded as an investment on the Statement of Assets and Liabilities, the value of which is marked-to-market to reflect the current market value of the option purchased. If the purchased option expires, the Fund realizes a loss equal to the amount of premium paid. When an instrument is purchased or sold through the exercise of an option, the related premium paid is added to the basis of the instrument acquired or deducted from the proceeds of the instrument sold. The risk associated with purchasing put and call options is limited to the premium paid.

**(c) Written options.** The Fund may write option contracts generally to gain or reduce exposure to certain types of investments or market factors or as a means of attempting to enhance returns. When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the premium received is recorded as a realized gain. When a written call option is exercised, the difference between the premium received plus the option exercise price and the Fund's basis in the underlying security (in the case of a covered written call option), or the cost to purchase the underlying security (in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss. When a written put option is exercised, the amount of the premium received is subtracted from the cost of the security purchased by the Fund from the exercise of the written put option to form the Fund's basis in the underlying security purchased. The writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in a realized gain or loss to the Fund.

The risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. The risk in writing an uncovered call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

**(d) 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 securities 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

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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.

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.

**(e) 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.

Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency.

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.

**(f) Swap agreements.** The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes, including to increase the Fund's return. The use of swaps involves risks that are different from those associated with other portfolio transactions. Swap agreements are privately negotiated in the over-the-counter market and may be entered into as a bilateral contract ("OTC Swaps") or centrally cleared ("Centrally Cleared Swaps"). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.

In a Centrally Cleared Swap, immediately following execution of the swap, the swap agreement is submitted to a clearinghouse or central counterparty (the "CCP") and the CCP becomes the ultimate counterparty of the swap agreement. The Fund is required to interface with the CCP through a broker, acting in an agency capacity. All payments are settled with the CCP through the broker. Upon entering into a Centrally Cleared Swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities.

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Notes to financial statements (unaudited) (cont'd)

Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of Centrally Cleared Swaps, if any, is recorded as a net receivable or payable for variation margin on the Statement of Assets and Liabilities. Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Fund's custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments and restricted cash, if any, is identified on the Statement of Assets and Liabilities. Risks may exceed amounts recorded in the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms, and the possible lack of liquidity with respect to the swap agreements.

OTC Swap payments received or made at the beginning of the measurement period are reflected as a premium or deposit, respectively, on the Statement of Assets and Liabilities. These upfront payments are amortized over the life of the swap and are recognized as realized gain or loss in the Statement of Operations. Net periodic payments received or paid by the Fund are recognized as a realized gain or loss in the Statement of Operations.

The Fund's maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of June 30, 2025, the total notional value of all credit default swaps to sell protection was $4,197,000. This amount would be offset by the value of the swap's reference entity, upfront premiums received on the swap and any amounts received from the settlement of a credit default swap where the Fund bought protection for the same referenced security/entity.

For average notional amounts of swaps held during the six months ended June 30, 2025, see Note 4.

***<u>Credit default swaps</u>***

The Fund enters into credit default swap ("CDS") contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically corporate or sovereign issuers, on a specified obligation, or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index. The Fund may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk where the Fund has exposure to an issuer) or to take an active long or short position with respect to the likelihood of a particular issuer's default. As a seller of protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap, provided that there is no credit event. If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the maximum potential amount of future payments (undiscounted) that the Fund could be required to

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make under a CDS agreement would be an amount equal to the notional amount of the agreement. These amounts of potential payments will be partially offset by any recovery of values from the respective referenced obligations. As a seller of protection, the Fund effectively adds leverage to its portfolio because, in addition to its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied spreads are the theoretical prices a lender receives for credit default protection. When spreads rise, market perceived credit risk rises and when spreads fall, market perceived credit risk falls. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and decreasing market values, when compared to the notional amount of the swap, represent a deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. Credit spreads utilized in determining the period end market value of CDS agreements on corporate or sovereign issues are disclosed in the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For CDS agreements on asset-backed securities and credit indices, the quoted market prices and resulting values, particularly in relation to the notional amount of the contract as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.

The Fund's maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund's exposure to the counterparty). As the protection seller, the Fund's maximum risk is the notional amount of the contract. CDS are considered to have credit risk-related contingent features since they require payment by the protection seller to the protection buyer upon the occurrence of a defined credit event.

Entering into a CDS agreement involves, to varying degrees, elements of credit, market and documentation risk in excess of the related amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates.

***<u>Interest rate swaps</u>***

The Fund enters into interest rate swap contracts to manage its exposure to interest rate risk. Interest rate swaps are agreements between two parties to exchange cash flows based on a notional principal amount. The Fund may elect to pay a fixed rate and receive a floating rate, or receive a fixed rate and pay a floating rate, on a notional principal amount.

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Notes to financial statements (unaudited) (cont'd)

Interest rate swaps are marked-to-market daily based upon quotations from market makers and the change in value, if any, is recorded as an unrealized appreciation or depreciation in the Statement of Operations. When a swap contract is terminated early, the Fund records a realized gain or loss equal to the difference between the original cost and the settlement amount of the closing transaction.

The risks of interest rate swaps include changes in market conditions that will affect the value of the contract or changes in the present value of the future cash flow streams and the possible inability of the counterparty to fulfill its obligations under the agreement. The Fund's maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract's remaining life, to the extent that amount is positive. This risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund's exposure to the counterparty.

***<u>Total return swaps</u>***

The Fund enters into total return swaps for investment purposes. Total return swaps are agreements to exchange the return generated by one instrument for the return generated by another instrument. For example, the agreement to pay a predetermined or fixed interest rate in exchange for a market-linked return based on a notional amount. To the extent the total return of a referenced index or instrument exceeds the offsetting interest obligation, the Fund will receive a payment from the counterparty. To the extent it is less, the Fund will make a payment to the counterparty.

**(g) Swaptions.** The Fund may purchase or write swaption contracts to manage exposure to fluctuations in interest rates or to enhance yield. The Fund may also purchase and write swaption contracts to manage exposure to an underlying instrument. Swaption contracts written by the Fund represent an option that gives the purchaser the right, but not the obligation, to enter into a previously agreed upon swap contract at a future date. Swaption contracts purchased by the Fund represent an option that gives the Fund the right, but not the obligation, to enter into a previously agreed upon swap contract at a future date.

When the Fund writes a swaption, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the swaption written. If the swaption expires, the Fund realizes a gain equal to the amount of the premium received.

When the Fund purchases a swaption, an amount equal to the premium paid by the Fund is recorded as an investment on the Statement of Assets and Liabilities, the value of which is marked-to-market daily to reflect the current market value of the swaption purchased. If the swaption expires, the Fund realizes a loss equal to the amount of the premium paid.

Swaptions are marked-to-market daily based upon quotations from market makers. Changes in the value of the swaption are reported as unrealized gains or losses in the Statement of Operations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(h) Loan participations.** The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Fund's investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of offset against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.

The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower. In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower.

**(i) Stripped securities.** The Fund may invest in ''Stripped Securities,'' a term used collectively for components, or strips, of fixed income securities. Stripped Securities can be principal only securities ("PO"), which are debt obligations that have been stripped of unmatured interest coupons, or interest only securities ("IO"), which are unmatured interest coupons that have been stripped from debt obligations. The market value of Stripped Securities will fluctuate in response to changes in economic conditions, rates of pre-payment, interest rates and the market's perception of the securities. However, fluctuations in response to interest rates may be greater in Stripped Securities than for debt obligations of comparable maturities that pay interest currently. The amount of fluctuation may increase with a longer period of maturity.

The yield to maturity on IO's is sensitive to the rate of principal repayments (including prepayments) on the related underlying debt obligation and principal payments may have a material effect on yield to maturity. If the underlying debt obligation experiences greater than anticipated prepayments of principal, the Fund may not fully recoup its initial investment in IO's.

**(j) Reverse repurchase agreements.** The Fund may enter into reverse repurchase agreements. Under the terms of a typical reverse repurchase agreement, a fund sells a security subject to an obligation to repurchase the security from the buyer at an agreed upon time and price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Fund's use of the proceeds of the agreement may be restricted pending a determination by the counterparty, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities. In entering into reverse repurchase agreements, the Fund will pledge cash, U.S. government securities or other liquid debt obligations at least equal in value to its obligations with respect to reverse repurchase agreements or will take other actions permitted by law to cover its obligations. If the market value of the collateral declines during the period, the Fund may be required to post additional collateral to cover its obligation. Cash collateral that has been

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

pledged to cover obligations of the Fund under reverse repurchase agreements, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral are noted in the Schedule of Investments. Interest payments made on reverse repurchase agreements are recognized as a component of "Interest expense" on the Statement of Operations. In periods of increased demand for the security, the Fund may receive a fee for use of the security by the counterparty, which may result in interest income to the Fund.

**(k) Securities traded on a when-issued and delayed delivery basis.** The Fund may trade securities on a when-issued or delayed delivery basis. In when-issued and delayed delivery transactions, the securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction.

Purchasing such securities involves risk of loss if the value of the securities declines prior to settlement. These securities are subject to market fluctuations and their current value is determined in the same manner as for other securities.

**(l) 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.

**(m) Cash flow information.** The Fund invests in securities and distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are reported in the Statements of Changes in Net Assets and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows.

**(n) 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

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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 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.

**(o) Credit and market risk.** The Fund invests in high-yield instruments that are subject to certain credit and market risks. The yields of high-yield obligations reflect, among other things, perceived credit and market risks. The Fund's investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

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.

**(p) 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.

**(q) Counterparty risk and credit-risk-related contingent features of derivative instruments.** The Fund may invest in certain securities or engage in other transactions

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

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.

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

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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 June 30, 2025, the Fund held OTC written options, forward foreign currency contracts and OTC interest rate swaps with credit related contingent features which had a liability position of $3,932,767. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties. As of June 30, 2025, the Fund had posted with its counterparties cash and/or securities as collateral to cover the net liability of these derivatives amounting to $1,660,000 which could be used to reduce the required payment.

**(r) 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. 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.

**(s) Partnership accounting policy.** The Fund records its pro rata share of the income (loss) and capital gains (losses), to the extent of distributions it has received, allocated from the underlying partnerships and accordingly adjusts the cost basis of the underlying partnerships for return of capital. These amounts are included in the Fund's Statement of Operations.

**(t) Distributions to shareholders.** Distributions from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. The actual source of the Fund's monthly distributions may be from net investment income, realized capital gains, return of capital or a combination thereof. Distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

**(u) Compensating balance arrangements.** The Fund had an arrangement with its custodian bank whereby a portion of the custodian's fees was paid indirectly by credits earned on the Fund's cash on deposit with the bank. Effective April 1, 2025, credits earned, if any, are recognized as income.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**(v) 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.

However, due to the timing of when distributions are made by the Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Fund's annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable income and realized gains for the calendar year. During the period, the Fund paid $636,738 of federal income taxes attributable to calendar year 2024.

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, 2024, 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.

Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

**(w) 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.

**2. Investment management agreement and other transactions with affiliates**

Franklin Templeton Fund Adviser, LLC ("FTFA") is the Fund's investment manager. Western Asset Management Company, LLC ("Western Asset"), Western Asset Management Company Pte. Ltd. ("Western Asset Singapore"), Western Asset Management Company Ltd ("Western Asset Japan") and Western Asset Management Company Limited ("Western Asset London") are the Fund's sub-subadvisers. FTFA, Western Asset, Western Asset Singapore, Western Asset Japan and Western Asset London are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. ("Franklin Resources").

FTFA provides administrative and certain oversight services to the Fund. The Fund pays FTFA an investment management fee, calculated daily and paid monthly, at an annual rate of 1.10% of the Fund's average daily managed assets, which are the net assets of the Fund plus the principal amount of any borrowings or preferred shares that may be outstanding, reverse repurchase agreements, dollar rolls or similar transactions.

FTFA delegates to Western Asset the day-to-day portfolio management of the Fund. Western Asset Singapore, Western Asset Japan and Western Asset London provide certain

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subadvisory services to the Fund relating to currency transactions and investments in non-U.S. dollar denominated securities and related foreign currency instruments. For its services, FTFA pays Western Asset a fee monthly, at an annual rate equal to 70% of the net management fee it receives from the Fund. In turn, Western Asset pays Western Asset Singapore, Western Asset Japan and Western Asset London a monthly subadvisory fee in an amount equal to 100% of the management fee paid to Western Asset on the assets that Western Asset allocates to each such non-U.S. subadviser to manage.

During periods in which the Fund utilizes financial leverage, the fees paid to FTFA will be higher than if the Fund did not utilize leverage because the fees are calculated as a percentage of the Fund's assets, including those investments purchased with leverage.

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").

During the six months ended June 30, 2025, fees waived and/or expenses reimbursed amounted to $17,253, all of which was an affiliated money market fund waiver.

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

**3. Investments**

During the six months ended June 30, 2025, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) and U.S. Government & Agency Obligations were as follows: <br>

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| | | |
|:---|:---|:---|
|  | Investments | &nbsp;&nbsp; U.S. Government & <br>Agency Obligations<br>|
| Purchases | &nbsp;&nbsp; $223001672 | &nbsp;&nbsp; $4110828 |
| Sales | &nbsp;&nbsp; 220044716 | &nbsp;&nbsp; 5093366 |

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At June 30, 2025, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows: <br>

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| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp; Cost/Premiums <br>Paid (Received)<br>| &nbsp;&nbsp; Gross <br>Unrealized <br>Appreciation<br>| &nbsp;&nbsp; Gross <br>Unrealized <br>Depreciation<br>| &nbsp;&nbsp; Net <br>Unrealized <br>Appreciation <br>(Depreciation)<br>|
| Securities | &nbsp;&nbsp; $1187291063 | &nbsp;&nbsp; $45023961 | &nbsp;&nbsp; $(108812139) | &nbsp;&nbsp; $(63788178) |
| Written options | &nbsp;&nbsp; (15981) | &nbsp;&nbsp; 15979 | &nbsp;&nbsp; — | &nbsp;&nbsp; 15979 |
| Futures contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; 3433033 | &nbsp;&nbsp; (889826) | &nbsp;&nbsp; 2543207 |
| Forward foreign currency contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; 1501280 | &nbsp;&nbsp; (2298392) | &nbsp;&nbsp; (797112) |
| Swap contracts | &nbsp;&nbsp; (252424) | &nbsp;&nbsp; 769556 | &nbsp;&nbsp; (2252342) | &nbsp;&nbsp; (1482786) |

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

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Notes to financial statements (unaudited) (cont'd)

Transactions in reverse repurchase agreements for the Fund during the six months ended June 30, 2025, were as follows: <br>

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| | | |
|:---|:---|:---|
| Average Daily <br>Balance\*<br>| &nbsp;&nbsp; Weighted Average <br>Interest Rate\*<br>| &nbsp;&nbsp; Maximum Amount <br>Outstanding<br>|
| $9963226 | &nbsp;&nbsp; 5.000% | &nbsp;&nbsp; $11341436 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Averages based on the number of days that the Fund had reverse repurchase agreements outstanding.<br>

The interest rate on reverse repurchase agreements was 5.000% during the six months ended June 30, 2025. Interest expense incurred on reverse repurchase agreements totaled $250,464.

**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 June 30, 2025. <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **ASSET DERIVATIVES**<sup>1</sup>  | **ASSET DERIVATIVES**<sup>1</sup>  | **ASSET DERIVATIVES**<sup>1</sup>  | **ASSET DERIVATIVES**<sup>1</sup>  | **ASSET DERIVATIVES**<sup>1</sup>  | **ASSET DERIVATIVES**<sup>1</sup>  |
|  | &nbsp;&nbsp; Interest <br>Rate Risk<br>| &nbsp;&nbsp; Foreign <br>Exchange Risk<br>| &nbsp;&nbsp; Credit <br>Risk<br>| &nbsp;&nbsp; Market <br>Risk<br>| Total |
| Purchased options<sup>2</sup> <br>| &nbsp;&nbsp; — | &nbsp;&nbsp; $32 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; $32 |
| Futures contracts<sup>3</sup> <br>| &nbsp;&nbsp; $3433033 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 3433033 |
| Forward foreign currency contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; 1501280 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 1501280 |
| OTC swap contracts<sup>4</sup> <br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; $175529 | &nbsp;&nbsp; 175529 |
| Centrally cleared swap contracts<sup>5</sup> <br>| &nbsp;&nbsp; 506219 | &nbsp;&nbsp; — | &nbsp;&nbsp; $87808 | &nbsp;&nbsp; — | &nbsp;&nbsp; 594027 |
| **Total** | &nbsp;&nbsp; **$3939252** | &nbsp;&nbsp; **$1501312** | &nbsp;&nbsp; **$87808** | &nbsp;&nbsp; **$175529** | &nbsp;&nbsp; **$5703901** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **LIABILITY DERIVATIVES**<sup>1</sup>  | **LIABILITY DERIVATIVES**<sup>1</sup>  | **LIABILITY DERIVATIVES**<sup>1</sup>  | **LIABILITY DERIVATIVES**<sup>1</sup>  | **LIABILITY DERIVATIVES**<sup>1</sup>  |
|  | &nbsp;&nbsp; Interest <br>Rate Risk<br>| &nbsp;&nbsp; Foreign <br>Exchange Risk<br>| &nbsp;&nbsp; Credit <br>Risk<br>| Total |
| Written options | &nbsp;&nbsp; — | &nbsp;&nbsp; $2 | &nbsp;&nbsp; — | &nbsp;&nbsp; $2 |
| Futures contracts<sup>3</sup> <br>| &nbsp;&nbsp; $889826 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 889826 |
| Forward foreign currency contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; 2298392 | &nbsp;&nbsp; — | &nbsp;&nbsp; 2298392 |
| OTC swap contracts<sup>4</sup> <br>| &nbsp;&nbsp; 1634373 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 1634373 |
| Centrally cleared swap contracts<sup>5</sup> <br>| &nbsp;&nbsp; 325735 | &nbsp;&nbsp; — | &nbsp;&nbsp; $292234 | &nbsp;&nbsp; 617969 |
| **Total** | &nbsp;&nbsp; **$2849934** | &nbsp;&nbsp; **$2298394** | &nbsp;&nbsp; **$292234** | &nbsp;&nbsp; **$5440562** |

---

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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

<sup>2</sup> Market value of purchased options is reported in Investments at value in the Statement of Assets and Liabilities. 

<sup>3</sup> 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. 

<sup>4</sup> Values include premiums paid (received) on swap contracts which are shown separately in the Statement of Assets and Liabilities. 

<sup>5</sup> Includes cumulative unrealized appreciation (depreciation) of centrally cleared swap 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 six months ended June 30, 2025. The first 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. <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** | **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** | **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** | **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** | **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** | **AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED** |
|  | &nbsp;&nbsp; Interest <br>Rate Risk<br>| &nbsp;&nbsp; Foreign <br>Exchange Risk<br>| &nbsp;&nbsp; Credit <br>Risk<br>| &nbsp;&nbsp; Market <br>Risk<br>| Total |
| Purchased options<sup>1</sup> <br>| &nbsp;&nbsp; $(1856)<br>| &nbsp;&nbsp; $(47137)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; $(48993)<br>|
| Futures contracts | &nbsp;&nbsp; (2174219)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (2174219)<br>|
| Written options | &nbsp;&nbsp; — | &nbsp;&nbsp; 89229 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 89229 |
| Swap contracts | &nbsp;&nbsp; 46246 | &nbsp;&nbsp; — | &nbsp;&nbsp; $(55890)<br>| &nbsp;&nbsp; $128239 | &nbsp;&nbsp; 118595 |
| Forward foreign currency contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; (109007)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (109007)<br>|
| **Total** | &nbsp;&nbsp; **$(2129829)**<br>| &nbsp;&nbsp; **$(66915)**<br>| &nbsp;&nbsp; **$(55890)**<br>| &nbsp;&nbsp; **$128239** | &nbsp;&nbsp; **$(2124395)**<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>1</sup> Net realized gain (loss) from purchased options is reported in Net Realized Gain (Loss) From Investment transactions in the Statement of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** | **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** | **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** | **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** | **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** | **CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED** |
|  | &nbsp;&nbsp; Interest <br>Rate Risk<br>| &nbsp;&nbsp; Foreign <br>Exchange Risk<br>| &nbsp;&nbsp; Credit <br>Risk<br>| &nbsp;&nbsp; Market <br>Risk<br>| Total |
| Purchased options<sup>1</sup> <br>| &nbsp;&nbsp; $19117 | &nbsp;&nbsp; $(29368)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; $(10251)<br>|
| Futures contracts | &nbsp;&nbsp; 4514984 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 4514984 |
| Written options | &nbsp;&nbsp; — | &nbsp;&nbsp; (20394)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (20394)<br>|
| Swap contracts | &nbsp;&nbsp; 957214 | &nbsp;&nbsp; — | &nbsp;&nbsp; $(178080)<br>| &nbsp;&nbsp; $53241 | &nbsp;&nbsp; 832375 |
| Forward foreign currency contracts | &nbsp;&nbsp; — | &nbsp;&nbsp; (1055902)<br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (1055902)<br>|
| **Total** | &nbsp;&nbsp; **$5491315** | &nbsp;&nbsp; **$(1105664)**<br>| &nbsp;&nbsp; **$(178080)**<br>| &nbsp;&nbsp; **$53241** | &nbsp;&nbsp; **$4260812** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>1</sup> The change in net unrealized appreciation (depreciation) from purchased options is reported in the Change in Net Unrealized Appreciation (Depreciation) From Investments in the Statement of Operations.

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Notes to financial statements (unaudited) (cont'd)

During the six months ended June 30, 2025, the volume of derivative activity for the Fund was as follows: <br>

---

| | |
|:---|:---|
|  | &nbsp;&nbsp; Average Market <br>Value\*<br>|
| Purchased options | &nbsp;&nbsp; $193147 |
| Written options | &nbsp;&nbsp; 4733 |
| Futures contracts (to buy) | &nbsp;&nbsp; 165621262 |
| Futures contracts (to sell) | &nbsp;&nbsp; 136789793 |
| Forward foreign currency contracts (to buy) | &nbsp;&nbsp; 39760298 |
| Forward foreign currency contracts (to sell) | &nbsp;&nbsp; 55999694 |
|  | &nbsp;&nbsp; Average Notional <br>Balance\*\*<br>|
| Interest rate swap contracts | &nbsp;&nbsp; $49701146 |
| Credit default swap contracts (buy protection) | &nbsp;&nbsp; 3595000 |
| Credit default swap contracts (sell protection) | &nbsp;&nbsp; 3924929 |
| Total return swap contracts | &nbsp;&nbsp; 4337571 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Based on the average of the market values at each month-end during the period.

\*\* Based on the average of the notional amounts at each month-end during the period.

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 June 30, 2025. <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Counterparty | &nbsp;&nbsp; Gross Assets <br>Subject to <br>Master <br>Agreements<sup>1</sup> <br>| &nbsp;&nbsp; Gross <br>Liabilities <br>Subject to <br>Master <br>Agreements<sup>1</sup> <br>| &nbsp;&nbsp; Net Assets <br>(Liabilities) <br>Subject to <br>Master <br>Agreements<br>| &nbsp;&nbsp; Collateral <br>Pledged <br>(Received)<sup>2,3</sup> <br>| &nbsp;&nbsp; Net <br>Amount<sup>4,5</sup> <br>|
| Bank of America N.A. | &nbsp;&nbsp; $379312 | &nbsp;&nbsp; $(2143991) | &nbsp;&nbsp; $(1764679) | &nbsp;&nbsp; $670000 | &nbsp;&nbsp; $(1094679) |
| Citibank N.A. | &nbsp;&nbsp; 953900 | &nbsp;&nbsp; (328077) | &nbsp;&nbsp; 625823 | &nbsp;&nbsp; 80000 | &nbsp;&nbsp; 705823 |
| Goldman Sachs <br> Group Inc.<br>| &nbsp;&nbsp; 104225 | &nbsp;&nbsp; (507375) | &nbsp;&nbsp; (403150) | &nbsp;&nbsp; — | &nbsp;&nbsp; (403150) |
| JPMorgan Chase & Co. | &nbsp;&nbsp; 190902 | &nbsp;&nbsp; (953324) | &nbsp;&nbsp; (762422) | &nbsp;&nbsp; 910000 | &nbsp;&nbsp; 147578 |
| Morgan Stanley & Co. <br> Inc.<br>| &nbsp;&nbsp; 48502 | &nbsp;&nbsp; — | &nbsp;&nbsp; 48502 | &nbsp;&nbsp; — | &nbsp;&nbsp; 48502 |
| **Total** | &nbsp;&nbsp; **$1676841** | &nbsp;&nbsp; **$(3932767)** | &nbsp;&nbsp; **$(2255926)** | &nbsp;&nbsp; **$1660000** | &nbsp;&nbsp; **$(595926)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>1</sup> 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. 

<sup>2</sup> Gross amounts are not offset in the Statement of Assets and Liabilities.

<sup>3</sup> In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. 

<sup>4</sup> Net amount may also include forward foreign currency exchange contracts that are not required to be collateralized. 

<sup>5</sup> Represents the net amount receivable (payable) from (to) the counterparty in the event of default.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**5. Loan**

The Fund entered into a revolving credit agreement (the "BNYM Credit Agreement") with The Bank of New York Mellon ("BNYM"). The BNYM Credit Agreement allows the Fund to borrow up to an aggregate amount of $385,000,000 and renews daily for a 179-day term unless notice to the contrary is given to the Fund. The Fund pays interest on borrowings calculated based on SOFR plus applicable margin. The Fund pays a commitment fee on the unutilized portion of the loan commitment amount at an annual rate of 0.25% except that the commitment fee is 0.00% when the aggregate outstanding balance of the loan is equal to or greater than 75% of the maximum commitment amount. To the extent of the borrowing outstanding, the Fund is required to maintain collateral in a special custody account at the Fund's custodian on behalf of BNYM. The BNYM Credit Agreement contains customary covenants that, among other things, may limit the Fund's ability to pay distributions in certain circumstances, incur additional debt, change certain material investment policies and engage in certain transactions, including mergers and consolidations, and require asset coverage ratios in addition to those required by the 1940 Act. In addition, the BNYM Credit Agreement may be subject to early termination under certain conditions and may contain other provisions that could limit the Fund's ability to utilize borrowing under the agreement. Interest expense related to the loan for the six months ended June 30, 2025 was $9,593,704. For the six months ended June 30, 2025, the Fund incurred commitment fees in the amount of $0. For the six months ended June 30, 2025, based on the number of days during the reporting period that the Fund had a loan balance outstanding, the average daily loan balance was $358,000,000 and the weighted average interest rate was 5.33%. At June 30, 2025, the Fund had $358,000,000 of borrowings outstanding per the Credit Agreement.

**6. Distributions subsequent to June 30, 2025**

The following distributions have been declared by the Board and are payable subsequent to the period end of this report: <br>

---

| | | |
|:---|:---|:---|
| Record Date | Payable Date | Amount |
| 6/23/2025 | &nbsp;&nbsp; 7/1/2025 | &nbsp;&nbsp; $0.1485 |
| 7/24/2025 | &nbsp;&nbsp; 8/1/2025 | &nbsp;&nbsp; $0.1485 |
| 8/22/2025 | &nbsp;&nbsp; 9/2/2025 | &nbsp;&nbsp; $0.1485 |
| 9/23/2025 | &nbsp;&nbsp; 10/1/2025 | &nbsp;&nbsp; $0.1485 |
| 10/24/2025 | &nbsp;&nbsp; 11/3/2025 | &nbsp;&nbsp; $0.1485 |
| 11/20/2025 | &nbsp;&nbsp; 12/1/2025 | &nbsp;&nbsp; $0.1485 |

---

**7. Stock repurchase program**

On July 29, 2021, the Fund announced that the Board had authorized the Fund to repurchase in the open market up to approximately 10% of the Fund's outstanding common stock when the Fund's shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase shares of common stock at such times and in such

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Notes to financial statements (unaudited) (cont'd)

amounts as management reasonably believes may enhance stockholder value. The Fund is under no obligation to purchase shares at any specific discount levels or in any specific amounts. During the year ended June 30, 2025 and the six months ended December 31, 2024, the Fund did not repurchase any shares.

**8. Capital shares**

The Fund filed a registration statement with the Securities and Exchange Commission, effective December 18, 2024, authorizing the Fund to offer and sell shares of common stock having an aggregate offering price of up to $75,000,000. Under the equity shelf offering program, the Fund, subject to market conditions, may raise additional equity capital from time to time in varying amounts and offering methods at a net price at or above the Fund's then-current net asset value per common share. Costs incurred by the Fund in connection with the shelf offering are recorded as a prepaid expense. These costs are amortized on a pro-rata basis as shares are sold and are presented as a reduction to the net proceeds from the sale of shares on the Statement of Changes in Net Assets, if applicable. Any deferred shares remaining at the end of the life of the shelf offering period will be expensed. For the period ended June 30, 2025, the Fund sold 15,124 shares of common stock and the proceeds from such sales were $221,434, net of offering costs and sales charges of $1,239 and $1,796, respectively.

**9. 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 six months ended June 30, 2025. The following transactions were effected in such company for the six months ended June 30, 2025. <br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Affiliate <br>Value at <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>December 31, <br>2024 | Purchased | Purchased | Sold | Sold |
|  | Affiliate <br>Value at <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>December 31, <br>2024 | Cost | Shares | Proceeds | Shares |
| Western Asset <br> Premier <br> Institutional <br> Government <br> Reserves, Premium <br> Shares<br>| $43613536 | $129149644 | 129149644 | $133034178 | 133034178 |

---

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Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| (cont'd) | Realized <br>Gain (Loss)<br>| Dividend <br>Income<br>| Net Increase <br>(Decrease) in <br>Unrealized <br>Appreciation <br>(Depreciation)<br>| Affiliate <br>Value at <br>June 30, <br>2025<br>|
| Western Asset Premier <br> Institutional <br> Government Reserves, <br> Premium Shares<br>|  | $723457 |  | $39729002 |

---

**10. Restricted securities**

The following Fund investments are restricted as to resale and, in the absence of readily ascertainable market values, are fair valued in accordance with procedures approved by the Board. <br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Security | &nbsp;&nbsp; Number of <br>Shares/ <br>Warrants<br>| Acquisition <br>Date<br>| Cost | Fair Value <br>at 6/30/2025<br>| Value Per <br>Share/Warrant<br>| &nbsp;&nbsp; Percent of <br>Net Assets<br>|
| Spirit Airlines LLC, <br>Common Shares<br>| &nbsp;&nbsp; 977 | 3/25 | $11893 | $4875 | &nbsp;&nbsp; $4.99 | 0.00<br> %<sup>(a)</sup><br>|
| Spirit Airlines LLC, <br>Warrants<br>| &nbsp;&nbsp; 119540 | 3/25 | 1455203 | 596505 <br><sup>(b)</sup><br>| 4.99 | 0.08<br> %<br>|
|  |  |  | **$1467096** | **$601380** |  | **0.08%**<br>|

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>(a)</sup> Amount represents less than 0.005%.

<sup>(b)</sup> 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. 

**11. Deferred capital losses**

As of December 31, 2024, the Fund had deferred capital losses of $206,826,362, which have no expiration date, that will be available to offset future taxable capital gains.

**12. Recent accounting pronouncement**

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, *Income Taxes (Topic 740) – Improvements to Income Tax Disclosures*. The amendments enhance income tax disclosures by requiring greater disaggregation in the rate reconciliation and income taxes paid by jurisdiction, while removing certain disclosure requirements. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. Management is currently evaluating the impact and believes that the adoption of the ASU will not have a material impact on the financial statements.

**13. Operating segments**

The Fund has adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2023-07, *Segment Reporting (Topic 280) - Improvements to* 

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Notes to financial statements (unaudited) (cont'd)

*Reportable Segment Disclosures*. The update is limited to disclosure requirements and does not impact the Fund's financial position or results of operations.

The Fund operates as a single operating segment, which is an investment portfolio. The Fund's Investment Manager serves as the Chief Operating Decision Maker (CODM), evaluating fund-wide results and performance under a unified investment strategy. The CODM uses these measures to assess fund performance and allocate resources effectively. Internal reporting provided to the CODM aligns with the accounting policies and measurement principles used in the financial statements.

For information regarding segment assets, segment profit or loss, and significant expenses, refer to the Statement of Assets and Liabilities and the Statement of Operations, along with the related Notes to Financial Statements. The Fund's Schedule of Investments provides details of the Fund's investments that generate returns such as interest, dividends, and realized and unrealized gains or losses. Performance metrics, including portfolio turnover and expense ratios, are disclosed in the Financial Highlights.

------

Western Asset Diversified Income Fund 2025 Semi-Annual Report

------

Board approval of management and

subadvisory agreements (unaudited)

**Background**

The Investment Company Act of 1940, as amended (the "1940 Act"), requires that the Board of Trustees (the "Board") of Western Asset Diversified Income Fund (the "Fund"), including a majority of its members who are not considered to be "interested persons" under the 1940 Act (the "Independent Trustees") voting separately, approve on an annual basis the continuation of the investment management agreement (the "Management Agreement") between the Fund and the Fund's manager, Franklin Templeton Fund Adviser, LLC (the "Manager"), and the sub-advisory agreements (individually, a "Sub-Advisory Agreement," and collectively, the "Sub-Advisory Agreements") with the Manager's affiliates, Western Asset Management Company, LLC ("Western Asset"), Western Asset Management Company Limited ("Western Asset London"), Western Asset Management Company Pte. Ltd. ("Western Asset Singapore") and Western Asset Management Company Ltd ("Western Asset Japan," and together with Western Asset, Western Asset London and Western Asset Singapore, collectively, the "Sub-Advisers"), with respect to the Fund.

At an in-person meeting (the "Contract Renewal Meeting") held on May 8-9, 2025, the Board, including the Independent Trustees, considered and approved the continuation of each of the Management Agreement and the Sub-Advisory Agreements for an additional one-year period. To assist in its consideration of the renewal of each of the Management Agreement and the Sub-Advisory Agreements, the Board received and considered extensive information (together with the information provided at the Contract Renewal Meeting, the "Contract Renewal Information") about the Manager and the Sub-Advisers, as well as the management and sub-advisory arrangements for the Fund and the other closed-end funds in the same complex under the Board's purview (the "Franklin Templeton Closed-end Funds"), certain portions of which are discussed below.

A presentation made by the Manager and the Sub-Advisers to the Board at the Contract Renewal Meeting in connection with the Board's evaluation of each of the Management Agreement and the Sub-Advisory Agreements encompassed the Fund and other Franklin Templeton Closed-end Funds. In addition to the Contract Renewal Information, the Board received performance and other information throughout the year related to the respective services rendered by the Manager and the Sub-Advisers to the Fund. The Board's evaluation took into account the information received throughout the year and also reflected the knowledge and experience gained as members of the Boards of the Fund and other Franklin Templeton Closed-end Funds with respect to the services provided to the Fund by the Manager and the Sub-Advisers. The information received and considered by the Board (including its various committees) in conjunction with both the Contract Renewal Meeting and throughout the year was both written and oral. The contractual arrangements discussed below are the product of multiple years of review and negotiation and information received and considered by the Board during each of those years.

Western Asset Diversified Income Fund

------

Board approval of management and

subadvisory agreements (unaudited) (cont'd)

At a meeting held on April 25, 2025, the Independent Trustees, in preparation for the Contract Renewal Meeting, met in a private session with their independent legal counsel to review the Contract Renewal Information regarding the Franklin Templeton Closed-end Funds, including the Fund, received to date. No representatives of the Manager or the Sub-Advisers participated in this meeting. Following the April 25, 2025 meeting, the Independent Trustees submitted certain questions and requests for additional information to Fund management. The Independent Trustees also met in private sessions with their independent legal counsel to consider the Contract Renewal Information and Fund management's responses to the Independent Trustees' questions and requests for additional information in advance of and during the Contract Renewal Meeting. The discussion below reflects all of these reviews.

The Manager provides the Fund with investment advisory and administrative services pursuant to the Management Agreement, and the Sub-Advisers together provide the Fund with investment sub-advisory services pursuant to the Sub-Advisory Agreements. The discussion below covers both the advisory and administrative functions being rendered by the Manager, each such function being encompassed by the Management Agreement, and the investment sub-advisory functions being rendered by the Sub-Advisers pursuant to the Sub-Advisory Agreements.

**Board Approval of Management Agreement and Sub-Advisory Agreements**

The Independent Trustees were advised by separate independent legal counsel throughout the process. Prior to voting, the Independent Trustees received a memorandum discussing the legal standards for their consideration of the proposed continuation of the Management Agreement and the Sub-Advisory Agreements. The Independent Trustees considered the Management Agreement and each Sub-Advisory Agreement separately during the course of their review. In doing so, they noted the respective roles of the Manager and the Sub-Advisers in providing services to the Fund.

In approving the continuation of the Management Agreement and Sub-Advisory Agreements, the Board, including the Independent Trustees, considered a variety of factors, including those factors discussed below. No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the continuation of the Management Agreement and the Sub-Advisory Agreements. Each Board member may have attributed different weight to the various factors in evaluating the Management Agreement and the Sub-Advisory Agreements.

After considering all relevant factors and information, the Board, exercising its reasonable business judgment, determined that the continuation of the Management Agreement and Sub-Advisory Agreements were in the best interests of the Fund's stockholders and approved the continuation of each such agreement for an additional one-year period.

------

Western Asset Diversified Income Fund

------

**Nature, Extent and Quality of the Services under the Management Agreement and Sub-Advisory Agreements**

The Board received and considered Contract Renewal Information regarding the nature, extent, and quality of services provided to the Fund by the Manager and the Sub-Advisers under the Management Agreement and the Sub-Advisory Agreements, respectively, during the past year. The Board noted information received at regular meetings throughout the year related to the services provided by the Manager in its management of the Fund's affairs and the Manager's role in coordinating the activities of the Sub-Advisers and the Fund's other service providers. The Board observed that the scope of services provided by the Manager and the Sub-Advisers, and of the undertakings required of the Manager and Sub-Advisers in connection with those services, including maintaining and monitoring their respective compliance programs as well as the Fund's compliance programs, had expanded over time as a result of regulatory, market and other developments. The Board also noted that on a regular basis it received and reviewed information from the Manager and the Sub-Advisers regarding the Fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the risks borne by the Manager, the Sub-Advisers and their respective affiliates on behalf of the Fund, including entrepreneurial, operational, reputational, litigation and regulatory risks, as well as the Manager's and the Sub-Advisers' risk management processes.

The Board reviewed the qualifications, backgrounds, and responsibilities of the Manager's senior personnel and the Sub-Advisers' portfolio management teams primarily responsible for the day-to-day portfolio management of the Fund. The Board also considered, based on its knowledge of the Manager and its affiliates, the financial resources of Franklin Resources, Inc., the parent organization of the Manager and the Sub-Advisers. The Board recognized the importance of having a fund manager with significant resources.

The Board considered the division of responsibilities between the Manager and the Sub-Advisers under the Management Agreement and the Sub-Advisory Agreements, respectively, including the Manager's coordination and oversight of the services provided to the Fund by the Sub-Advisers and the Fund's other service providers and Western Asset's coordination and oversight of the services provided to the Fund by Western Asset London, Western Asset Singapore and Western Asset Japan. The Management Agreement permits the Manager to delegate certain of its responsibilities, including its investment advisory duties thereunder, provided that the Manager, in each case, will supervise the activities of the delegee.

In reaching its determinations regarding continuation of the Management Agreement and the Sub-Advisory Agreements, the Board took into account that Fund stockholders, in pursuing their investment goals and objectives, may have purchased their shares of the

Western Asset Diversified Income Fund

------

Board approval of management and

subadvisory agreements (unaudited) (cont'd)

Fund based upon the reputation and the investment style, philosophy and strategy of the Manager and the Sub-Advisers, as well as the resources available to the Manager and the Sub-Advisers.

The Board concluded that, overall, the nature, extent, and quality of the management and other services provided (and expected to be provided) to the Fund, under the Management Agreement and the Sub-Advisory Agreements were satisfactory.

**Fund Performance**

The Board received and considered information regarding Fund performance, including information and analyses (the "Broadridge Performance Information") for the Fund, as well as for a group of comparable funds (the "Performance Universe") selected by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent third-party provider of investment company data. The Board was provided with a description of the methodology Broadridge used to determine the similarity of the Fund with the funds included in the Performance Universe, which included all leveraged closed-end general bond funds. It was noted that while the Board found the Broadridge Performance Information generally useful, they recognized its limitations, including that the data may vary depending on the end date selected, and that the results of the performance comparisons may vary depending on the selection of the peer group and its composition over time. The Board also noted that Board members had received and discussed with the Manager and the Sub-Advisers information throughout the year at periodic intervals comparing the Fund's performance against its benchmark and against the Fund's peers. In addition, the Board considered the Fund's performance in view of overall financial market conditions.

The Broadridge Performance Information comparing the Fund's performance to that of its Performance Universe, consisting of the Fund and all leveraged closed-end general bond funds classified by Broadridge, regardless of asset size, showed, among other data, that based on net asset value per share, the Fund's performance was above the median for the 1-year period ended December 31, 2024, and was below the median for the 3-year period ended December 31, 2024. The Board noted the explanations from the Manager and the Sub-Advisers regarding the Fund's relative performance versus the Performance Universe for the various periods.

Based on the reviews and discussions of Fund performance and considering other relevant factors, including those noted above, the Board concluded, under the circumstances, that continuation of the Management Agreement and the Sub-Advisory Agreements for an additional one-year period would be consistent with the interests of the Fund and its stockholders.

------

Western Asset Diversified Income Fund

------

**Management and Sub-Advisory Fees and Expense Ratios**

The Board reviewed and considered the contractual management fee (the "Contractual Management Fee") and the actual management fee (the "Actual Management Fee") payable by the Fund to the Manager under the Management Agreement and the sub-advisory fees (the "Sub-Advisory Fees") payable by the Manager to the Sub-Advisers under the Sub-Advisory Agreements in view of the nature, extent and overall quality of the management, investment advisory and other services provided by the Manager and the Sub-Advisers, respectively. The Board noted that the Sub-Advisory Fee payable to Western Asset under its Sub-Advisory Agreement with the Manager is paid by the Manager, not the Fund, and, accordingly, that the retention of Western Asset does not increase the fees or expenses otherwise incurred by the Fund's stockholders. Similarly, the Board noted that the Sub-Advisory Fees payable to Western Asset London, Western Asset Singapore and Western Asset Japan under their respective Sub-Advisory Agreements with Western Asset are paid by Western Asset, not the Fund, and, accordingly, that the retention of Western Asset London, Western Asset Singapore and Western Asset Japan does not increase the fees or expenses otherwise incurred by the Fund's stockholders.

In addition, the Board received and considered information and analyses prepared by Broadridge (the "Broadridge Expense Information") comparing the Contractual Management Fee and the Actual Management Fee and the Fund's actual total expenses with those of funds in an expense group (the "Expense Group"), as well as a broader group of funds, each selected and provided by Broadridge. The comparison was based upon the constituent funds' latest fiscal years. It was noted that while the Board found the Broadridge Expense Information generally useful, they recognized its limitations, including that the data may vary depending on the selection of the peer group.

The Broadridge Expense Information showed that the Fund's Contractual Management Fee was above the median. The Broadridge Expense Information also showed that the Fund's Actual Management Fee was above the median based on both common stock assets and total managed assets, which includes common stock assets and leveraged assets. The Broadridge Expense Information also showed that the Fund's actual total expenses were above the median based on both common stock assets and total managed assets. The Board took into account management's discussion of the Fund's expenses.

The Board also reviewed Contract Renewal Information regarding fees charged by the Manager and/or the Sub-Advisers to other U.S. clients investing primarily in an asset class similar to that of the Fund, including, where applicable, institutional and separate accounts. The Manager reviewed with the Board the differences in services provided to these different types of accounts, noting that the Fund is provided with certain administrative services, office facilities, and Fund officers, and that the Fund is subject not only to heightened regulatory requirements relative to institutional clients but also to requirements

Western Asset Diversified Income Fund

------

Board approval of management and

subadvisory agreements (unaudited) (cont'd)

for listing on the New York Stock Exchange, and that the Manager coordinates and oversees the provision of services to the Fund by the Fund's other service providers. The Board considered the fee comparisons in view of the different services provided in managing these other types of clients and funds.

The Board considered the overall management fee, the fees of the Sub-Advisers and the amount of the management fee retained by the Manager after payment of the Sub-Advisory Fees in each case in view of the services rendered for those amounts. The Board also received an analysis of complex-wide management fees provided by the Manager, which, among other things, set out a framework of fees based on asset classes.

Taking all of the above into consideration, as well as the factors identified below, the Board determined that the management fee and the Sub-Advisory Fees were reasonable in view of the nature, extent and overall quality of the management, investment advisory and other services provided by the Manager and the Sub-Advisers to the Fund under the Management Agreement and the Sub-Advisory Agreements, respectively.

**Manager Profitability**

The Board, as part of the Contract Renewal Information, received an analysis of the profitability to the Manager and its affiliates in providing services to the Fund for the Manager's fiscal years ended September 30, 2024 and September 30, 2023. The Board also received profitability information with respect to the Franklin Templeton fund complex as a whole. In addition, the Board received Contract Renewal Information with respect to the Manager's revenue and cost allocation methodologies used in preparing such profitability data. It was noted that the allocation methodologies had been reviewed by an outside consultant. The profitability to each of the Sub-Advisers was not considered to be a material factor in the Board's considerations since the Sub-Advisory Fee is paid by the Manager in the case of Western Asset and by Western Asset in the case of Western Asset London, Western Asset Singapore and Western Asset Japan, not the Fund, although the Board noted the affiliation of the Manager with the Sub-Advisers. The profitability of the Manager and its affiliates was considered by the Board to be reasonable in view of the nature, extent and quality of services provided to the Fund.

**Economies of Scale**

The Board received and discussed Contract Renewal Information concerning whether the Manager realizes economies of scale if the Fund's assets grow. The Board noted that because the Fund is a closed-end fund, it has limited ability to increase its assets. The Board determined that the management fee structure was appropriate under the circumstances. For similar reasons as stated above with respect to the Sub-Advisers' profitability and the costs of the Sub-Advisers' provision of services, the Board did not consider the potential for economies of scale in the Sub-Advisers' management of the Fund to be a material factor in the Board's consideration of the Sub-Advisory Agreements.

------

Western Asset Diversified Income Fund

------

**Other Benefits to the Manager and the Sub-Advisers**

The Board considered other benefits received by the Manager, the Sub-Advisers and their affiliates as a result of their relationship with the Fund, including the opportunity to offer additional products and services to the Fund's stockholders. In view of the costs of providing investment management and other services to the Fund and the ongoing commitment of the Manager and the Sub-Advisers to the Fund, the Board considered that the ancillary benefits received by the Manager and its affiliates, including the Sub-Advisers, were reasonable.

Western Asset Diversified Income Fund

------

Additional shareholder information (unaudited)

**Results of annual meeting of shareholders**

The Annual Meeting of Shareholders Western Asset Diversified Income Fund was held on April 14, 2025 for the purpose of considering and voting upon the proposals presented at the Meeting. The following table provides information concerning the matters voted upon at the Meeting:

**Election of Trustees** 

---

| | | | |
|:---|:---|:---|:---|
| **Nominees** | **FOR** | **WITHHELD** | **ABSTAIN** |
| Robert Abeles, Jr. | &nbsp;&nbsp; 41,443,929 | &nbsp;&nbsp; 863,258 | &nbsp;&nbsp; 496,997 |
| Carol L. Colman | &nbsp;&nbsp; 41,425,264 | &nbsp;&nbsp; 901,413 | &nbsp;&nbsp; 477,507 |
| Anthony Grillo | &nbsp;&nbsp; 41,476,171 | &nbsp;&nbsp; 796,857 | &nbsp;&nbsp; 531,156 |

---

At the Meeting, Ms. Colman and Messrs. Agdern and Grillo were each duly elected by the shareholders to serve as Class I Directors of the Fund until the 2028 Annual Meeting of Shareholders, or until their successors have been duly elected and qualified or until their resignation or are otherwise removed.

At June 30, 2025, in addition to Ms. Colman and Messrs. Agdern and Grillo, the other Trustees of the Fund were as follows:

Eileen A. Kamerick <br>Nisha Kumar <br>Peter Mason <br>Hillary A. Sale <br>Jane E. Trust

**Ratification of Selection of Independent Registered Public Accountants**

To ratify the selection of PricewaterhouseCoopers LLP ("PwC") as independent registered public accountants of the Fund for the fiscal year ended December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **FOR** | **AGAINST** | **ABSTAIN** | **BROKER NON-VOTES** |
| 42,118,249 | &nbsp;&nbsp; 385,004 | &nbsp;&nbsp; 300,931 | &nbsp;&nbsp; N/A |

---

------

Western Asset Diversified Income Fund

------

Dividend reinvestment plan (unaudited)

Unless you elect to receive distributions in cash (i.e., opt-out), all dividends, including any capital gain dividends and return of capital distributions, on your Common Shares will be automatically reinvested by Computershare Trust Company, N.A., as agent for the shareholders (the "Plan Agent"), in additional Common Shares under the Fund's Dividend Reinvestment Plan (the "Plan"). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all cash distributions paid by check mailed directly to you by Computershare Trust Company, N.A., as dividend paying agent.

In the case of a registered shareholder such as a broker, bank or other nominee (together, a "nominee") that holds Common Shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common Shares certified by the nominee/record shareholder as representing the total amount registered in such shareholder's name and held for the account of beneficial owners who are to participate in the Plan. If your Common Shares are held through a nominee and are not registered with the Plan Agent, neither you nor the nominee will be participants in or have distributions reinvested under the Plan. If you are a beneficial owner of Common Shares and wish to participate in the Plan, and your nominee is unable or unwilling to become a registered shareholder and a Plan participant on your behalf, you may request that your nominee arrange to have all or a portion of your shares re-registered with the Plan Agent in your name so that you may be enrolled as a participant in the Plan. Please contact your nominee for details or for other possible alternatives. Registered shareholders whose shares are registered in the name of one nominee firm may not be able to transfer the shares to another firm and continue to participate in the Plan.

If you participate in the Plan, the number of Common Shares you will receive will be determined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;(1) If the market price of the Common Shares (plus $0.03 per share processing fee which includes any brokerage commission the Plan Agent is required to pay) on the payment date (or, if the payment date is not a NYSE trading day, the immediately preceding trading day) is equal to or exceeds the net asset value per share of the Common Shares at the close of trading on the NYSE on the payment date, the Fund will issue new Common Shares at a price equal to the greater of (a) the net asset value per share at the close of trading on the NYSE on the payment date or (b) 95% of the market price per share of the Common Shares on the payment date.

&nbsp;&nbsp;&nbsp;&nbsp;(2) If the net asset value per share of the Common Shares exceeds the market price of the Common Shares (plus $0.03 per share processing fee) at the close of trading on the NYSE on the payment date, the Plan Agent will receive the dividend or distribution in cash and will buy Common Shares in the open market, on the NYSE or elsewhere, for your account as soon as practicable commencing on the trading day following the payment date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the payment date for the next succeeding dividend or distribution to be made to the shareholders; except when necessary to comply with

Western Asset Diversified Income Fund

------

Dividend reinvestment plan (unaudited) (cont'd)

applicable provisions of the federal securities laws. If during this period: (i) the market price (plus $0.03 per share processing fee) rises so that it equals or exceeds the net asset value per share of the Common Shares at the close of trading on the NYSE on the payment date before the Plan Agent has completed the open market purchases or (ii) if the Plan Agent is unable to invest the full amount eligible to be reinvested in open market purchases, the Plan Agent will cease purchasing Common Shares in the open market and the Fund will issue the remaining Common Shares at a price per share equal to the greater of (a) the net asset value per share at the close of trading on the NYSE on the day prior to the issuance of shares for reinvestment or (b) 95% of the then current market price per share.

Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.

You may withdraw from the Plan (i.e., opt-out) by notifying the Plan Agent through the Internet at www.computershare.com/investor, in writing at P.O. Box 43006 Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151. Such withdrawal will be effective immediately if notice is received by the Plan Agent prior to any dividend or distribution record date; otherwise such withdrawal will be effective as soon as practicable after the Plan Agent's investment of the most recently declared dividend or distribution on the Common Shares.

Plan participants who sell their shares will be charged a service charge (currently $5.00 per transaction) and the Plan Agent is authorized to deduct per share processing fees actually incurred from the proceeds (currently $0.05 per share, which includes any brokerage commission the Plan Agent is required to pay). There is no service charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay per share processing fees (currently $0.03 per share) incurred by the Plan Agent when it makes open market purchases. Because all dividends and distributions will be automatically reinvested in additional Common Shares, this allows you to add to your investment through dollar cost averaging, which may lower the average cost of your Common Shares over time. Dollar cost averaging is a technique for lowering the average cost per share over time if the Fund's net asset value declines. While dollar cost averaging has definite advantages, it cannot assure profit or protect against loss in declining markets.

Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Investors will be subject to income tax on amounts reinvested under the Plan.

The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board of Trustees, the change is warranted. The Plan may be terminated, amended or supplemented by the Fund upon notice in writing mailed to shareholders at least 30 days prior to the record date for the payment of any dividend or distribution by the Fund for which the termination or amendment is to be effective. Upon any termination, you will be sent cash for any fractional share of Common Shares in your account less any applicable fees.

------

Western Asset Diversified Income Fund

------

You may elect to notify the Plan Agent in advance of such termination to have the Plan Agent sell part or all of your Common Shares on your behalf. Additional information about the Plan and your account may be obtained from the Plan Agent through the Internet at www.computershare.com/investor, in writing at P.O. Box 43006 Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151.

Western Asset Diversified Income Fund

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Western Asset <br>

Diversified Income Fund

**Trustees**

Robert D. Agdern

Carol L. Colman

Anthony Grillo

Eileen A. Kamerick

*Chair*

Nisha Kumar

Peter Mason

Hillary A. Sale

Jane Trust

**Officers**

Jane Trust <br>*President and Chief Executive* <br>*Officer*

Christopher Berarducci <br>*Treasurer and Principal Financial* <br>*Officer*

Fred Jensen <br>*Chief Compliance Officer*

Marc A. De Oliveira <br>*Secretary and Chief Legal Officer*

Thomas C. Mandia <br>*Senior Vice President*

Jeanne M. Kelly <br>*Senior Vice President*

**Western Asset Diversified Income Fund**

One Madison Avenue <br>17th Floor <br>New York, NY 10010

**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.

**Custodian**

The Bank of New York Mellon

**Transfer agent**

Computershare Inc. <br>P.O. Box 43006 <br>Providence, RI 02940-3078

**Independent registered** <br>**public accounting firm**

PricewaterhouseCoopers LLP <br>Baltimore, MD

**Legal counsel**

Simpson Thacher & Bartlett LLP <br>900 G Street NW <br>Washington, DC 20001

**New York Stock** <br>**Exchange Symbol**

WDI

------

Franklin Templeton Funds Privacy and Security Notice

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>**Your Privacy and the Security of Your Personal Information is Very Important to Us**

This Privacy and Security Notice (the "Privacy Notice") addresses the Funds' privacy and data protection practices with respect to nonpublic personal information the Fund receives. The Legg Mason Funds include the Western Asset Money Market Funds (Funds) sold by the Funds' distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end funds. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

**The Type of Nonpublic Personal Information the Funds Collect About You**

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

• Personal information included on applications or other forms;

• Account balances, transactions, and mutual fund holdings and positions;

• Bank account information, legal documents, and identity verification documentation; and

• Online account access user IDs, passwords, security challenge question responses.

**How the Funds Use Nonpublic Personal Information About You**

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law. The Funds may disclose information about you to:

&nbsp;&nbsp;&nbsp;&nbsp;• Employees, agents, and affiliates on a "need to know" basis to enable the Funds to conduct ordinary business or to comply with obligations to government regulators;

&nbsp;&nbsp;&nbsp;&nbsp;• Service providers, including the Funds' affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds' behalf, including companies that may perform statistical analysis, market research and marketing services solely for the Funds;

&nbsp;&nbsp;&nbsp;&nbsp;• Permit access to transfer, whether in the United States or countries outside of the United States to such Funds' employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

&nbsp;&nbsp;&nbsp;&nbsp;• The Funds' representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

&nbsp;&nbsp;&nbsp;&nbsp;• Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

Except as otherwise permitted by applicable law, companies acting on the Funds' behalf, including those outside the United States, are contractually obligated to keep nonpublic

**NOT PART OF THE SEMI-ANNUAL REPORT**

------

Franklin Templeton Funds Privacy and Security Notice

(cont'd)

personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.

The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds' practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

**Keeping You Informed of the Funds' Privacy and Security Practices**

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time, they will notify you promptly if this privacy policy changes.

**The Funds' Security Practices**

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds' internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, if you have questions about the Funds' privacy practices, or our use of your nonpublic personal information, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds' website at www.franklintempleton.com, or contact the Funds at 1-877-721-1926 for the Western Asset Money Market Funds or 1-888-777-0102 for the Legg Mason-sponsored closed-end funds. For additional information related to certain state privacy rights, please visit https://www.franklintempleton.com/help/privacy-policy.

Revised December 2023.

**NOT PART OF THE SEMI-ANNUAL REPORT**

------

**Western Asset Diversified Income Fund**

Western Asset Diversified Income Fund <br>One Madison Avenue <br>17th Floor <br>New York, NY 10010

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase, at market prices, shares of its stock.

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 1-888-777-0102.

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 1-888-777-0102, (2) at www.franklintempleton.com and (3) on the SEC's website at www.sec.gov.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton's website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton's website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton's website in this report.

This report is transmitted to the shareholders of Western Asset Diversified Income Fund for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.

Computershare Inc. <br>P.O. Box 43006 <br>Providence, RI 02940-3078

**96370-S 8/25** 

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 1 of this Form
N-CSR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 10. REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.

The information is disclosed as part of the Financial Statements included in Item 1 of this Form N-CSR, as applicable.

ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 13. INVESTMENT PROFESSIONALS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

---

| | |
|:---|:---|
| ITEM 15. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |

---

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

ITEM 16. CONTROLS AND PROCEDURES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 17. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

ITEM 19. EXHIBITS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (1) Not applicable.

Exhibit 99.CODE ETH

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[(a) (3) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.](wadif-efp17089_ex99cert.htm)

Exhibit 99.CERT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.](wadif-efp17089_ex99906cert.htm)

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 Diversified Income Fund**

---

| | |
|:---|:---|
| By: | /s/ Jane Trust |
|  | Jane Trust |
|  | Chief Executive Officer |
| Date: | August 25, 2025 |

---

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: | August 25, 2025 |

---

---

| | |
|:---|:---|
| By: | /s/ Christopher Berarducci |
|  | Christopher Berarducci |
|  | Principal Financial Officer |

---

Date: August 25, 2025

## Ex-99.Cert

CERTIFICATIONS PURSUANT TO SECTION 302

EX-99.CERT

**<u>CERTIFICATIONS</u>**

I, Jane Trust, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form N-CSR of **Western Asset Diversified Income Fund;** 

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule
30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officers and I have disclosed to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and
report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | August 25, 2025 | /s/ Jane Trust |
|  |  | Jane Trust |
|  |  | Chief Executive Officer |

---

**<u>CERTIFICATIONS</u>**

I, Christopher Berarducci, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form N-CSR of **Western Asset Diversified Income Fund**;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial information included in this report, and the financial statements
on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes
in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of,
and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report
based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officers and I have disclosed to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | August 25, 2025 | /s/ Christopher Berarducci |
|  |  | Christopher Berarducci |
|  |  | Principal Financial Officer |

---

## Exhibit 99.906

CERTIFICATIONS PURSUANT TO SECTION 906

EX-99.906CERT

**CERTIFICATION**

**Jane Trust,** Chief Executive Officer, and **Christopher Berarducci,** Principal Financial Officer of **Western Asset Diversified Income Fund** (the "Registrant"), each certify to the best of their knowledge that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Registrant's periodic report on Form N-CSR for the period ended **June 30, 2025** (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | |
|:---|:---|
| **Chief Executive Officer** | **Principal Financial Officer** |
| Western Asset Diversified Income Fund | Western Asset Diversified Income Fund |
| /s/ Jane Trust | /s/ Christopher Berarducci |
| Jane Trust | Christopher Berarducci |
| Date: August 25, 2025 | Date: August 25, 2025 |

---

This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.