Some smaller Janus funds beat bigger retail accounts

This usually occurs at time of their launch

Dollars & Sense

May 20, 2001|By Christine Benz | Christine Benz,MORNINGSTAR.COM

You hear the term "clone" thrown around a lot in the fund world, and Janus managers run their share of accounts that are loosely based on their big, no-load retail funds: variable annuity sub-accounts, separate accounts for insurance companies, you name it.

The firm has also staked out a presence in the broker and institutional markets. Janus Advisor funds are sold by brokers, while Janus Aspen funds are geared toward institutional investors and wrap accounts.

With these additional portfolios to run, you might assume that Janus managers would just get out the cloning machine and create lots of mini Janus Twenties and Worldwides.

In large part, that appears to be what they've done. For example, if you buy a portfolio managed by Helen Young Hayes and Laurence Chang, its performance is going to be pretty similar to the pair's big retail fund, Janus Worldwide.

Yet, some Janus managers appear to be a little more creative with their side projects. Janus Adviser Growth and Income and Janus Aspen Growth and Income, for example, have outperformed the retail shares of Janus Growth and Income by an annualized 5 percentage points since the latter two funds were launched in mid-1998.

The Aspen and Adviser versions of Equity-Income have beaten the retail Janus Equity-Income by an annualized 3 percentage points since the Aspen and Advisor funds were launched in 1997.

If a manager must sell securities to meet redemptions at the very moment she would rather be buying, or has to rush to put cash to work in a poor market, that could put a crimp in returns.

Yet, variations in asset size likely play an equally significant role. Upon closer inspection, the broker-sold and institutional versions of Janus Growth and Income and Janus Equity-Income notched their biggest out-performances over their retail versions shortly after their launches.

That indicates that their managers might have been taking advantage of their still fairly small asset bases to buy smaller, high-flying stocks of which they couldn't buy enough for the much larger retail funds.

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