After 15 straight years of beating the S&P 500 as sole manager of the Legg Mason Value Trust mutual fund, legendary fund manger Bill Miller is starting to feel the pressure of being a 'loser' - and the timing couldn't be worse. Miller's streak came to an end last year in a big way: his fund returned 5.9%, trailing almost threefold a 15.8% gain by the S&P 500. So far in 2007, Miller's Legg Mason Value Trust is again trailing the S&P 500, with a 1.7% loss through March 29, compared with only a 0.23% decline for the S&P 500. Unfortunately for Miller, his cold streak hit at a particularly inopportune moment; Legg Mason traded its brokerage arm for Citigroup's money management division in 2005, doubling Legg Mason's assets, which currently stand at roughly $945 billion. According to James Schmidt, a money manager at rival John Hancock Funds Advisers, Miller's slump has happened "just when sales of that fund could have really exploded." According to Legg Mason Senior VP David Nelson, "the pressure on Bill is enormous." Miller has been buying up shares in unpopular companies like AES Corp., Sprint Nextel and Tyco International Ltd. in hopes of turning things around.
Commentary: What Bill Miller Is Buying And Selling • Bill Miller's 15-Year Winning Streak Comes To An End • Bill Miller : 15 Years of Good Luck, or an Unlucky 2006?
Stocks/ETFs to watch: Legg Mason, Inc. (NYSE:LM). Competitors: A.G. Edwards, Inc. (AGE), BlackRock (NYSE:BLK), T. Rowe Price Group (NASDAQ:TROW), Franklin Resources (NYSE:BEN). ETFs: iShares Dow Jones US Broker-Dealer (NYSEARCA:IAI)
Related: Legg Mason Value Trust [LMVTX] Portfolio Holdings (as of 12/31/06)
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