Plus, Janus makes restitution to shareholders, and more.
Morningstar's fund analysts cover 2,000 mutual funds. Their full analyst reports, including Stewardship Grades, are available in Morningstar Principia Mutual Funds Advanced and Morningstar Advisor Workstation Office Edition.
The first quarter of 2008 hasn't been kind to Legg Mason. The Baltimore-based asset-management firm reported a $255 million loss for the period, its first quarterly loss since it went public in 1983. The firm wrote off $291 million to support a pair of money market funds stung by a small exposure to structured investment vehicles, which have struggled amid the ongoing liquidity crunch. Investor outflows amid poor recent performance for a number of its offerings are also on the rise, contributing to a $48 billion dollar drop in the firm's assets under management in the first quarter alone.
As the firm's flagship fund, Legg Mason Value Trust
Despite the fund's recent dry spell, we think shareholders cashing out now are making a mistake. Miller and his deep, experienced team strike us as one of the most thoughtful and fundamentally focused investing units around, and their willingness to invest with great conviction and ride out short-term pain are appealing traits that should continue to work in the fund's favor over the long haul.
Janus to Shareholders: Your Check's in the Mail
The SEC has approved Janus' plan to pay shareholders back for losses incurred as a result of the firm's involvement in the market-timing scandal. As part of its August 2004 settlement, Janus set aside $100 million to make restitution payments to shareholders. After an independent distribution consultant determined the level of damage for each shareholder, a proposed plan was submitted to the SEC for approval almost a year ago. The firm will start making payments on or around July 23.
Individual shareholders shouldn't expect a huge payout, though. Roughly two thirds of affected Janus fund shareholders--those who were due damages in an amount less than $10--won't receive anything. Instead, that money will go directly to the funds in proportion to the estimated damages, which only provides a small benefit to current fundholders. For shareholders who meet the $10 hurdle, the average payment they'll receive amounts to $55.
Affected funds include: Janus Mercury (now named Janus Research
AMF Loses Bond Manager
In what we consider a loss for shareholders of certain AMF bond funds, portfolio manager David Petrosinelli has parted ways with Shay Assets Management to take a position with Sandler O'Neill & Partners. Shay Assets Management is the advisor to the AMF family of mutual funds, including AMF Ultra Short Mortgage
Van Wagoner Overhaul Muddled
A proposed plan to shake up the organization responsible for Morningstar Fund Analyst Pan Van Wagoner Emerging Growth
This untidy attempt to reverse an ailing fundshop's course looks remarkably uninspiring. Emerging Growth has been managed by firm founder Garrett Van Wagoner since its launch at the end of 1995. The fund's size reached $1.5 billion at the start of the decade, but staggering losses throughout the bear market and a constant string of bad investment decisions sent shareholders packing, whittling assets down to a feeble $17 million today.