Rzeczpospolita, a Polish nation-wide daily newspaper, published a ranking of fund-managing companies grouped by type of funds (October 15, 2009). Legg Mason won the first and second place in the ranking of equity funds and stable growth funds, respectively.
LM Equity Fund wins in the equity funds class
The LM Equity Fund (Legg Mason Akcji FIO) was definitely the best performing equity fund in the period of the last five years. Despite these were turbulent times, which saw both bull and over two-year bear market, the fund was able to achieve a return at a rate over 75 percent, i.e. 20 percentage points higher than the second best fund in the ranking and as much as 27 percent percentage points above the benchmark growth level.
(Rzeczpospolita, Who weathered the bear market in a good shape, October 15, 2009)
In shorter periods, we could certainly see “one-season stars”, which, however, lit up and faded in the blink of the eye. In our assessment, it takes a few years before the market verifies any talents and funds managers can prove their actual skills in achieving statutory investment goals. In the case of the Legg Mason Equity Fund, it is about the ability to generate above-average returns against a reasonable cost of risk. Our success is the more significant as we achieved it in a period of differentiated and changing investing conditions. And I mean here not only the 5-year bull market followed by a steep 70-percent downhill in stock markets, but also – and even more important – previous huge flows of cash from bank deposits into equity markets and its hasty outflow last year,” says Mr. Jacek Treumann, Member of the Board of Legg Mason TFI.
“Our victory in the equity fund category is the triumph of the selective investing style, contrarian concept and the belief in the effectiveness of fundamental analysis. Our success seems to be even more valuable if we note that only few fund managers were able to generate any value added for their customers and to beat the WIG index (which increased by 48%). Compared to that benchmark, our return was higher by as much as 27%,” adds Mr. Jacek Treumann.
Legg Mason Senior SFIO ranked second best in its group
In the stable-growth group, the Legg Mason Senior Fund took the second place for the second time in a row. The Fund is valued for its low sensitivity to downturns and stable performance even in shorter periods, e.g. 2-year ones. The Legg Mason Senior Fund is also among those few funds that exceeded the last bull market high (July 2007) in terms of current valuation of shares. Investing performance was evaluated on the basis of the Information Ratio (IR). It, in turn, was calculated on results of funds in the last five years (end of September 2004 – end of September 2009). A key advantage of this ratio is that – in addition to the rate of return generated by a given fund – it also takes account of its relation to a specified benchmark and risk.
“The leading positions of Legg Mason funds in those Rzeczpospolita rankings confirm that the investment philosophy adopted by our management team is effective. Looking backwards, I think the fact we perceived ourselves just as humble market players was our key success factor, since we were able to focus on what was most valuable in companies and on valuations of their future cash flows, and not on vain attempts to forecast the index trend for the next couple of weeks. We always invest for a long time. We don’t care much what will happen in months or quarters – our time horizon is measured in years. We have been aiming to stick to such an approach since we started our business,” points out Mr. Tomasz Jedrzejczak, President of Legg Mason TFI.
Rzeczpospolita is one of the leading newspapers and the most-frequently quoted daily in Poland.