Welcome, Fools, to the inaugural edition of our several-thousand-part series, "Better Know a Fund Manager," which is loosely, but not too loosely, based on Stephen Colbert's "Better Know a District" from The Colbert Report.
Like Stephen and his thorough investigations into America's congressional districts, each week I'll be taking a look at a fund you may want to own. Well, except for Julius Baer International Equity (FUND:BJBIX), which I already own. It's also closed to new money, which makes it dead to me. And to you, too.
Anyway, moving on. Let's have a look at who we're profiling this week.
|
Fund |
Legg Mason Value Trust (LMVTX) |
|---|---|
|
Expense ratio |
1.68% |
|
Fund size |
$12.1 billion in assets |
|
1-year return |
12.70% |
|
5-year return |
5.27% |
|
10-year return |
14.47% |
Meet Bill Miller
Bill Miller is about as close as you get to a real rock star in fund management. Not only does he play a mean air guitar -- or so I've heard -- but also his record of stock-picking achievement is remarkable. As the leader of Legg Mason Value Trust, he has managed to beat the comparable S&P 500 index for 15 years running. Few this side of Warren Buffett can make a similar claim of investing prowess.
But he's also much more than Value Trust's top manager. He's also the manager of Legg Mason Opportunity Trust and co-manages Legg Mason Special Investment Trust. He's also been with the firm just short of forever. Miller began his stint on Value Trust in 1982 as co-manager of the fund.
That's not all. Miller became a military intelligence officer after graduating from Washington and Lee University in 1972 and then attended Johns Hopkins University to pursue graduate studies in philosophy.
Of course, Miller can't be all business all the time. I mean, who knew that he'd be one those fund managers who -- gasp! -- owns shares of Google (NASDAQ:GOOG)?
How he invests
Here's why that's strange: Miller professes to be a value investor. He hunts for stocks trading at a discount to their real worth. It's a discipline he knows well and has practiced with great success. Well, except in the case of Google, whose stock isn't generally considered cheap.
But let's be fair. Don't think for a second that Miller isn't a superior investor. Would you have the guts to buy 2,000 shares of Qwest (NYSE:Q) for $3.75 a stub, as Miller and his team did? Probably not. Of course I wouldn't have, either. So, we both gave up an 82% gain as of this writing. (Ugh.)
Is this fund for you?
More stock market gains are to be had, and Miller is likely to capture more than his share. Whether you ought to be along for the ride as an investor in Legg Mason Value Trust has a lot to do with your tolerance for risk and what you already own.
Value Trust, you see, specializes in large-cap stocks that Miller believes to be undervalued. Sprint Nextel (NYSE:S), UnitedHealthGroup (NYSE:UNH), and Tyco International (NYSE:TYC) top his list. Oh, and Google, too. If you already own shares in these firms, you may do better hunting elsewhere. But if not, you'd be hard-pressed to find a better stock picker to ally your portfolio with than Miller.
And that this week's profile. See you back here on Thursday, fund nation. Good night.
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Fool contributor Tim Beyers owns shares of the Julius Baer International Equity Fund. He's also a regular viewer of The Colbert Report. (Stay the course.) You can find out what else is in Tim's portfolio by checking his Foolprofile. UnitedHealth Group is a Stock Advisor recommendation. Tyco is an Inside Value recommendation. The Motley Fool has an ironcladdisclosure policy.
