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Product matters

The launch of a new American fund is probably cause for a big yawn

from most of you. It has been a difficult region to sell to

investors. But, as the biggest economy in the world, it should have a

significant weighting in any portfolio.

Most American fund managers last year took value away through stock

selection, according to our own analysis.Therefore, the launch of

Legg Mason&#39s American value fund in March/April should be of

interest. It is based on an existing fund which over the last 11

years has beaten the S&P 500 every year and is run by Bill

Miller, little known here but almost as famous as Warren Buffett in

the US.

As a value investor, Miller&#39s performance over the last few years

seems at odds with the growth surge we have seen. However, two of his

greatest successes have been Dell and AOL, where he has made between

30 to 40 times his money.

For Miller, valuation is the absolute key. He and his team research

for undervalued companies which over the longer term will produce the

greatest returns. Like Buffett, he is not a short-term trader but a

long-term investor looking to realise not 100 per cent gains but many

more times this amount. This fund looks to have the potential to be

an excellent long-term core holding. The only downside is that the

fund will not be Isable, from my understanding. Bill will be over in

late February.

Legg Mason clearly is looking to move from being an incidental player

to a major player. This fund and the appointment of Kieran Gallagher

as joint chief investment officer are the early markers.

Mark Dampier is head of research at Hargreaves Lansdown

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