Legg Mason funds cut Amazon stake, sell Freddie

By Muralikumar Anantharaman

BOSTON, Oct 10 (Reuters) - Fund manager Bill Miller's Legg Mason Capital Management (LMCM) unit has cut its holdings of online retailer Amazon.com Inc (AMZN.O: Quote, Profile, Research, Stock Buzz) and exited mortgage finance firm Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), according to regulatory filings on Friday.

Losses at Miller's main Legg Mason Value Trust fund, meanwhile, have ballooned with the stock market's slump and the fund sank 23.69 percent in October through Thursday's close, according to Lipper Inc.

The fund is down 51.7 percent so far in 2008 and ranks at the bottom of large-cap growth funds, according Lipper data. Its size was down to about $8 billion in late September compared with $20.6 billion in June 2007. Lipper is a unit of Thomson Reuters (TRI.TO: Quote, Profile, Research, Stock Buzz) (TRIL.L: Quote, Profile, Research, Stock Buzz).

U.S. asset manager Legg Mason Inc (LM.N: Quote, Profile, Research, Stock Buzz), which is the parent of LMCM, declined to comment on the Value Trust's performance. Miller, the only fund manager to beat the Standard & Poor's 500 index for 15 straight years till 2006, is chairman and chief investment officer of LMCM.

LMCM reduced its holdings of Amazon at end-September to 24.3 million shares, or 5.7 percent, from 36.1 million shares, or 8.5 percent, as of June 30, according to a filing with the U.S. Securities and Exchange Commission.

LMCM was Amazon's biggest institutional shareholder as of the end of June and the online retailer was the Value Trust's second-largest holding then.

In a separate filing, LMCM also said it had sold out of Freddie Mac, which was taken over by the U.S. government last month. LMCM was the biggest institutional shareholder of Freddie as of July 31, when it owned 79.9 million shares, or 12.35 percent, of the mortgage finance firm, as per Reuters data.

Legg Mason managed $923 billion in assets as of June 30. (Editing by Leslie Gevirtz)