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Is Legg Mason’s Rebound Sustainable?

The firm is on the mend after a period of turmoil, but questions remain.

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For many mutual fund investors,  Legg Mason (LM) might still be best known as the home of Bill Miller, whose Legg Mason Value Trust famously beat the S&P 500 benchmark every calendar year from 1991 through 2005. But that fund, now known as  ClearBridge Value (LMVTX), hasn't been managed by Miller since 2012, and in any case, Legg Mason has always been a lot more complex than that.

The firm went through a rough time in the years surrounding the 2008 financial crisis and suffered big outflows, especially in its Western Asset subsidiary, but it has been working to recover and strengthen itself during the past few years under new CEO Joe Sullivan. Legg Mason has always had numerous bright spots from an investment perspective, though it's still a bit early to tell how well the firm's revamped structure will play out in the long term.

David Kathman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.