Stay Diversified for the Long Haul: Legg Mason CEO
It was no September to remember for Legg Mason. The manager of $612 billion in assets had a 25 percent drop in net income last quarter as falling stocks prompted its institutional investors to pull out their funds.
But with the October rally, "things are looking a lot better," Chief Executive Mark Fetting told CNBC Friday.
"We've spent a lot of time with our clients in the midst of this [market] turmoil," making sure their portfolios are rebalanced and diversified to include bonds, cash and stocks. "That diversity is what plays well over the long haul," especially when maintaining a longer-term investment view.
Legg Mason's institutional investors "have an investment policy they conform to and maintain a diversification strategy that played out very well for them," he added.
Two key issues for Legg Mason's investors are Europe and the U.S., he said.
"What the markets want to see is resolution of issues in Europe, and there's been some progress this week," Fetting said. "Now they are turning to the U.S. and looking for progress with that super committee. That will give confidence backs to the markets and that will help us all."
He doesn't see double-dip recession coming and thinks the Federal Reservewill keep interest rates low, which he said is good for investors.
As for another potential round of quantitative easing , Fetting believes, "The Fed will do what it needs to do but you’d have to think the current results would suggest that they’re going to be more measured, but prepared."
An earlier version of this article contained an incorrect figure for the company's assets under management.