Plus, Legg Mason names a successor to Bill Miller, a T. Rowe Price Analyst Pick closes its doors, and more.
The final version of the financial reform bill that passed through the Senate on Thursday includes a section that directs the Comptroller General to study the impact that mutual fund advertising has on consumer behavior.
Select mutual fund companies are known for their ads in national newspapers and magazines that tout the recent performance of certain funds, even though the long-term records of these funds are average. Investors often purchase these funds based on this recent outperformance, which often is not sustained.
The Comptroller General, who heads Congress' Government Accountability Office (GAO), is required to make recommendations to the Congress that will improve investor protections in mutual fund advertising within one year after the law is passed
It is unclear whether this provision will remain in the final bill after it is reconciled with the financial reform bill already passed by the House since the House version does not contain a similar provision.
Miller Successor Named
Legg Mason has named a successor to Legg Mason Capital Management Value's
The firm hasn't yet said exactly when Peters will take the reins. It's likely Peters will share portfolio-management duties with Miller for a while before taking over as sole manager. That's the same path Miller followed; before he took over the fund in 1990, he comanaged it for eight years with Ernest Kiehne.
Miller and Value are best known for beating the S&P 500 in 15 straight calendar years through 2005. But the fund endured a poor period from 2006-08. As a result, its 10-year trailing return has sunk to the category's bottom. But its 15-year record remains in the category's top quintile. And since Miller took sole control of the fund in 1990, it has gained an annualized 9.8%, topping the S&P 500's 8.8% return and the category's 7.7% gain over that period.
Peters joined the firm from Fidelity in 2005 as an analyst and currently runs Legg Mason Capital Management Special Investment