Three Big Mutual Funds Lose 60% in 2008

A 38% drop in the Standard & Poor's 500 index last year seems almost rosy compared to the abysmal performance of three big mutual funds that all lost more than 60%.Legg Mason heavyweight manager Bill Miller - who once beat the S&P 15 years in a row - has gone from best to worst, with his Legg Mason Opportunity Trust fund down a staggering 65% for the year.According to Morningstar Inc., the second-worst performer was the Winslow Green Growth Fund, down 61%, followed by the Legg Mason Growth Trust fund, down 60%."[Miller] continued to try to position the fund for a recovery," Morningstar fund analyst Greg Carlson told The Wall Street Journal, adding that Miller kept holding on to stock in Amazon (down 45%), Expedia (down 74%) and Yahoo (down 48%) as well as Freddie Mac and American International Group Inc.Winslow manager Jack Robinson said the fund's losses were due to its concentrated portfolio and focus on green energy companies."We also made a couple of mistakes," Robinson said. "We stayed with some companies that had sound fundamentals but which had debt. We're going to be sticking with our investment philosophy for the long term."Morningstar's analysts are optimistic that Legg Mason's Growth fund, managed by Robert Hagstrom, is well positioned for an upswing in the markets, whenever that happens."Legg Mason Growth will soar again," Morningstar senior fund analyst Bridget Hughes. "We're confident that the fund will perform well in an upswing. In fact, since mid-November, it has gained more than 7.5%, putting it near the category's top."The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.