from legg masons may '10 report

been quiet here lately, not surprising i suppose with the sp doing virtually nothing, anyhow please find the following from Legg Masons May '10 report

Performance

The Legg Mason Property Securities Trust underperformed its benchmark over the month. Portfolio performance this month was negatively impacted by the portfolios exposure to selected A-REITs with exposure to offshore assets.

Some of the portfolios relatively more leveraged names also lost ground. The underperformance from these factors was on a thematic basis rather than any negative stock specific news.
In particular, the portfolios overweight exposure to Valad Property Group (-19.2%) detracted from performance as it lost ground this month over macro concerns regarding developments in Europe.

We note that Valad has enjoyed positive developments from its European business over recent months and believe that investors have underestimated the value and growth potential of Valads European business.

Outlook

A flat growth outlook and relatively stable earnings environment suggest
that A-REITs may lack catalysts for near term appreciation. However, our
view is that the medium term outlook for the sector is relatively bright as
A-REITs have reduced their risk profiles over the past year and they have
returned to focus on traditional property rental streams.

We believe that A-REITs� relatively low debt profiles and recapitalised
balance sheets have positioned a number of securities to outperform,
particularly against unlisted property as well as some of the more highly
leveraged Australian equity securities. As a result, A-REITs should produce
returns that are less correlated to the equity market than recently
experienced.

The outlook for attractive relative returns continues to be strong, while
opportunity measures for stock picking remain at four times normal levels.
With a valuation spread between the portfolio and the benchmark that
remains significantly wider than normal, we continue to expect to produce
above normal portfolio returns over the medium term.