Janus Managers Struggle While Its Analysts Thrive
These analyst-run funds are beating the in-house competition.
Janus' equity funds have seen more than their share of performance woes lately. The funds generally got back on track in the middle of the previous decade after dreadful performance in the 2000-02 bear market. However, they posted weak relative returns (and hefty absolute losses) on average in 2008's sharp decline. They looked so-so in 2010 after enjoying big runups in 2009, and they've struggled mightily thus far in 2011. True, there have been a few bright spots in the firm's equity fund lineup during this period. Small-growth offerings Janus Triton (JATTX) and Janus Venture (JAVTX), as well as foreign-stock funds Janus International Equity (JAIEX) and Janus Overseas (JAOSX), have looked pretty good over the past three years, for example.
But the solid performers that really should draw attention are the firm's analyst-driven funds, Janus Research (JAMRX) and Janus Global Research (JARFX). The same analysts who supply ideas to the managers of Janus' other equity funds choose the stocks for these portfolios. And yet the analyst-run funds have beaten their in-house competition soundly of late. During the three years ended July 6, 2011, the median return ranking of Janus' other diversified stock funds within their respective categories is a mediocre 60. Meanwhile, Research and Global Research respectively land just outside the large-growth and world-stock categories' top quartiles over the same period. Results are similarly impressive for the analyst-run funds versus the Janus funds they compete with directly: Research has beaten the firm's other four large-growth funds by margins that range from an annualized 2.5% ( Janus Fund (JANSX)) to an annualized 8.6% ( Janus Twenty (JAVLX)). Meanwhile, Global Research has beaten world-stock rivals Janus Worldwide (JAWWX) and Janus Global Select (JORNX) by an annualized 1.6% and 3.8%, respectively.
The picture over 12 months looks even worse for Janus managers: Global Research has beaten more than 80% of its world-stock peers and Research more than 60%; the other 12 diversified equity funds sport a median category rank of 88.
Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.