Short Interests: Miller Leggs one out, keeps streak alive

Miller Leggs one out, keeps streak alive

For portfolio manager Bill Miller, last year’s loss for Legg Mason Value Trust still marks a win.

For the 10th straight year, the Baltimore-based fund beat the Standard & Poor’s 500 stock index. His fund lost 7.1%, but the index fell 9.1%.

The last time the $11.7 billion fund posted a yearly loss was in 1990, when it dropped 16.96% – 13.84 percentage points behind the S&P 500’s loss of 3.12%.

Mr. Miller took over the fund in 1990 after serving as co-manager for several years. His first full year at the helm in 1991 resulted in a 34.73% return. That beat the S&P 500 by 4.25 percentage points and started his record-setting winning streak.

Rally? What rally?

The Fidelity Mid-Cap Fund was left in a cloud of dust Wednesday when the Nasdaq Composite Index took off, leaving investors wondering what went wrong. While most other mid-cap growth funds saw their fortunes improve, the $6.1 billion Fidelity offering lost 0.12%, placing it among the bottom 1% of its category for that day, according to Morningstar Inc., the Chicago-based fund watcher.

“Can anyone explain how Fidelity Mid-Cap … managed to go down yesterday?” asked one participant in an Internet discussion the day after the Nasdaq rally.

“I know it has positions in some areas that dropped yesterday, but so do almost all mid-cap funds.”

A Fidelity spokeswoman wouldn’t comment on the fund’s performance.

But Morningstar analyst Bill Harding suggests the poor showing probably had to do with the fact that the fund is not as heavily weighted in technology stocks as its peers.

It is, however, heavily weighted in health-care and energy stocks, which fared poorly on Wednesday. Its strategy of emphasizing those sectors helped the Fidelity Mid-Cap Fund finish 2000 with a total return of 32.1%, placing it among the top 1% of its category, according to Morningstar. But if the Nasdaq ever sustains a rally – a big “if” – that could hurt the fund in the end.

Tighter abs,

fatter wallet

Here’s a new spin on keeping a healthy perspective on the stock market.

Peremel & Co. Inc. has set up “investment stations” at a health club in its hometown of Baltimore.

The idea is that customers of LifeBridge Health and Fitness can check stock prices and make trades during workout breaks. There are three investment stations that are equipped with a PC and access to the Internet. The health club will provide a printer, fax machine, phone and an automated teller machine.

“From day one, our goal has been to make investing easy – to cater to people’s busy lifestyles,” explains Mitch Peremel, a vice president at the brokerage.

Star power

devalued

What is the drawing power of growth stock picker Lee Munder worth? Apparently not 1.75% against the assets of four new funds in registration with the Securities and Exchange Commission.

Just about a year ago, Mr. Munder sold his remaining stake in Munder Capital Management to Detroit regional bank Comerica Inc. and set up a new money management shop in Palm Beach, Fla. While the new Lee Munder Capital Group attracted about $500 million in assets through September, Mr. Munder’s new LMCG Funds mutual fund boutique has yet to get off the ground since filing a registration with the SEC in August. In a filing last month, Mr. Munder cut the original 1.75% expense cap for the new funds to 1.50% for his small-cap growth and small-cap tax-sensitive offerings, and 1.40% for his mid-cap growth and technology funds. Plans to launch an Internet fund — run by Mr. Munder and his 24-year-old twin sons — have been shelved.