LMC US Value Fund*
Investment Objective
The Legg Mason US Value Fund seeks to generate excess returns by owning securities that have been priced by the market at significant discounts to their intrinsic value.
Investment Strategy
Companies are evaluated following a disciplined approach to value investing. The intrinsic value of each company is measured, depending on the type of company, by factors such as the discounted value of its projected future free cash flow, the market value of similar companies, the value of its assets, and the cost to replace its business.
Intensive research is focused on each company’s management’s ability to demonstrate and articulate a clear, value creating capital allocation process. The objective of this research is to, confirm the valuation, understand the business model and capital allocation process, and to determine the potential to build intrinsic value.
The portfolio is made up of 30 to 50 stocks with the highest risk-adjusted three to five year expected returns.
The discipline of when to sell a security is an integral part of the investment process and how risk is controlled in the portfolio. Stocks are sold when fair value is reached, a better investment opportunity emerges or the investment case is no longer applicable.
Returns for the Period ended: June 30, 20101
 |
1 Mth.
%
|
3 Mth.
%
| Year to Date
% |
1 Yr.
%
|
3 Yrs.2
%
|
5 Yrs.2
%
|
10 Yrs.2
%
| Since Inception2
% |
| LMC US Value Fund | -6.3 | -11.2 | -9.6 | 0.8 | -20.1 | -11.4 | N/A | -6.4 |
| S&P 5003 | -4.2 | -7.2 | -5.4 | 4.7 | -9.8 | -3.6 | N/A | -4.6 |
Calendar Year Returns
| 2009
% | 2008
% | 2007
% | 2006
% | 2005
% |
| LMC US Value Fund | 19.4 | -43.3 | -19.7 | 7.0 | 4.0 |
| S&P 5003 | 7.4 | -21.2 | -10.5 | 15.4 | 2.3 |
* Legg Mason Canada Inc. is the manager and portfolio adviser of Legg Mason U.S. Value Fund (LMC US Value Fund). The manager has hired Legg Mason Capital Management, Inc. as portfolio sub-adviser to manage the fund’s portfolio. Legg Mason Capital Management, Inc. and Legg Mason Canada Inc. are wholly-owned subsidiaries of Legg Mason, Inc., a global asset management firm listed on the New York Stock Exchange.
The offering of the fund is not, and under no circumstances is to be construed as, an advertisement or a public offering of such securities. The fund is offered to Canadian resident investors pursuant to certain securities laws exemptions available to investors in their particular province or territory of residence. The fund is offered only in those jurisdictions where it may be lawfully offered for sale. An eligible investor should obtain and refer to the Confidential Offering Memorandum for the Legg Mason Canada Pooled Funds before investing. No securities commissions or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described therein, and any representations to the contrary is an offence.
1 The rates of return are used only to illustrate the effects of the compound growth rate and are not intended to reflect future values of the mutual funds or returns on the investment in the mutual funds. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing.
2 Sceptre Private Asset Management Fund Units are available for institutional and high net worth investors including other funds. Only investors who meet our discretionary account requirements and minimum investment levels will be eligible to purchase these Units.
3 In Canadian dollar terms.
