Variable containing multiple nodes

I have this XSL:

  <xsl:variable name="str">
    <FONT COLOR="#FF0000">Red</FONT>
  </xsl:variable>
  <xsl:value-of select="$str">

Why does this output:

  Red

and not:

  <FONT COLOR="#FF0000">Red</FONT>

?

Ted Weatherly                         Usability Engineer, R&D
Slam Dunk Networks, Inc.                    main 650.632.5500
http://www.slamdunknetworks.com           direct 650.632.5594
email: tweather@xxxxxxxxxxxxxxxxxxxx         fax 650.632.5501
 

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