Double Whammy: Legg Mason Value Trust Unveils Second Distribution

Shareholders in (LMVTX Quote)Legg Mason Value Trust have been gritting their teeth this year, and not just because the fund is down more than 9% in the past 12 months. This spring, shareholders were hit with a capital gains distribution of about 9% of the fund's net asset value (NAV). And now they're about to get socked with another sizable distribution.

In a letter sent to shareholders Wednesday, Legg Mason said the $11.8 billion fund will distribute a long-term gain of between $7.50 and $8.25 in December. At yesterday's fund price of $62.93, that would be between 12% and 13% of the fund's NAV.

Given that the financial news media -- including TheStreet.com -- have talked at length about checking to see if a fund has made a distribution for the year before getting in, the notion of double whammies in one year by funds is an additional concern. While it's not unprecedented, it's also fairly uncommon. Because you won't know a second distribution is coming until it arrives, it might pay to call the fund company to find out. ...