Can Janus Regain Its Footing?
Repeated changes at the firm elevate levels of concern and uncertainty.
Since Morningstar issued its most recent Parent Rating and Stewardship Grade for Janus in late March 2013, that firm has seen big changes. First, firm veteran Jonathan Coleman relinquished his role as the co-CIO overseeing equities to focus on his portfolio-manager duties. Second, the firm hired an outside investor, Enrique Chang, formerly of American Century, to replace him. (Gibson Smith remains as the co-CIO in charge of fixed income.) Third, and of most concern, the firm saw a wave of portfolio-manager defections for the fourth time in the past 11 years. These changes set off a chain reaction at six Janus funds, including three of its largest.
Beyond the specific manager changes (you can read about those here), these developments suggest the firm's corporate culture and incentive programs are not working well enough to encourage good investment managers to stick with the firm for the long haul. As a result, Morningstar has reduced Janus' Parent Rating to Neutral from Positive and its overall Stewardship Grade to a C from a B.
Bridget B. Hughes does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.