Bill Miller Sees Better Times Ahead

If the once-revered Legg Mason fund manager is right about the future, his funds should continue their rebound.

From 1991 through 2005, Bill Miller was the toast of the mutual fund world. Over that period, the primary fund he manages, Legg Mason Value Trust (symbol LMVTX), beat Standard & Poor’s 500-stock index 15 consecutive calendar years, a record for consistency that no other fund could touch. The record ended in 2006, and after that the roof caved in on Miller and Value Trust shareholders. During the bear market that ran from October 9, 2007, through March 9, 2009, Value lost 72.0%, compared with a drop of 55.3% in the S&P 500. Miller’s newer fund, Legg Mason Opportunity Trust (LMOPX), lost a stunning 80.9%.

When the market turned in 2009, so did the fortunes of Miller’s funds. They ended the year with solid gains (Value returned 40.6% and Opportunity soared 83.1%). The 2010 results are mixed. This year through November 15, Value has advanced 3.6%, while Opportunity has returned 8.9%, compared with 9.3% for the S&P 500.

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Jennifer Schonberger
Staff Writer, Kiplinger's Personal Finance