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Fund Spy

Skippers Struggling to Add Value

Despite experienced investment pros and support, these funds haven't delivered.

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Anyone familiar with the argument for passive investing knows that active managers, on average, have a tough time beating their benchmarks net of fees--particularly when risk is taken into account. Below, we take a closer look at funds where managers have been on board for at least a few years, yet have lagged their bogies on a risk-adjusted basis during their tenures.

 Janus Fund (JANSX),
 Janus Growth & Income (JAGIX)
The past couple of years have been a tough slog for most of Janus' U.S. large-cap funds, and these two aren't exceptions. In November 2007, Jonathan Coleman took the helm of Janus Fund when David Corkins left the company, and Marc Pinto replaced the departing Minyoung Sohn at Janus Growth & Income. (Corkins and Sohn left to form their own firm.) Both funds landed in the bottom quintile of the large-growth category--and well behind their benchmark, the S&P 500--in 2010, in part due to an increased focus on very large, sturdy companies in a year where smaller, cyclical companies performed better. Both funds (especially Janus Fund) then moved off that stance going into 2011, incorporating more mid-caps into the mix. That only made things worse, though, because investors fled to huge, stable firms in 2011. So the funds again lagged the S&P. (Thus far in 2012, Janus Fund is modestly ahead of the index while Janus Growth & Income is slightly behind.) All told, Coleman at Janus Fund and Pinto at Janus Growth & Income are an annualized 1.3% and 2.5% behind the S&P 500, respectively, during their tenures.

Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.