Miller's $21 billion Legg Mason Value Trust was up 6.7 percent as of yesterday, trailing the 16.5 percent gain of the S&P 500. The mutual fund is the worst performer of 108 "multicap value'' funds tracked by Bloomberg that buy stocks managers perceive as being cheap. Miller's fund, which holds fewer than 45 stocks, was hurt by Amazon.com Inc. and UnitedHealth Group Inc.
"It's not the right portfolio for 2006," said Jeff Tjornehoj, a Denver-based analyst at Lipper who tracks the fund industry. "Perhaps it will be the right portfolio for 2007."
The Legg Mason fund has beaten the S&P 500 every year since 1991, rising at an average annual rate of 15.8 percent, compared with 11.9 percent for the U.S. stock benchmark. Miller also manages the $6.7 billion Legg Mason Opportunity Trust, which is lagging behind the S&P 500 this year with its 14.2 percent return. Miller, 56, declined to comment.