Janus

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 the Region Giant's parent gets OK to buy 56 Grand Unions Royal Ahold NV, the East Coast's largest supermarket retailer and parent of Giant Food Inc., said yesterday that it has won U.S. government approval to buy 56 Grand Union stores and eight sites for future stores for $178 million. Ahold said the Federal Trade Commission approved its purchase of the stores--in Massachusetts, New York; Connecticut and Rhode Island - from C&S Wholesale Distributors. Ahold said it will take a one-time $50 million charge this year to convert those stores into Shop & Shop and Tops markets.

I'll take a look at funds worthy of immediate consideration. As luck would have it, many interesting value funds were launched this year just in time for the rebound. Vanguard U.S. Value: Co-manager Chris Darnell has produced strong results at GMO US Core and average results at GMO US Value. GMO picks stocks for the fund using quantitative models to good effect on the institutional side of its business. The fund should offer fairly broad-based, tax-efficient exposure to value stocks, and of course, it comes with a modest expense ratio.

If misery loves company, then a bunch of the miserable characters in the fund industry are about to get chummy. Last week, this column covered half of the 2000 Lump of Coal Awards, given to the fund industry's bad children, who deserve nothing more than a bituminous bangle in their Christmas stocking this year. Now it's time for the rest of the story. Lumps of Coal are bestowed on the industry's miscreants for behavior, attitude, or performance that is offensive, disingenuous, reprehensible, or just plain stupid.

Large-growth funds have had a bit of a comeuppance this year. Whereas a large technology weighting was a one-way ticket to big returns in 1999, several of the most widely owned technology names have since stumbled. Microsoft, Lucent, Nokia and America Online have all foundered, wounding Analyst Picks such as Marsico Focus, Janus Mercury, and Vanguard Growth Index. Among the Analyst Picks, Gabelli Growth has been replaced by Vanguard Growth Equity. Here's a roundup of our current large-growth Analyst Picks: * Janus Mercury: Most of Janus' large-growth funds have struggled this year.

The stock market sent a wake-up call recently to investors in the Janus Funds, but most investors probably hit the snooze button and ignored the whole thing. One day is almost never significant over the life cycle of an investment, but July 27 presented a good lesson in how you might not be diversified if you own several funds from one company. What's more, it hinted at how big a problem this shortcoming could become if the market hits the skids. Here's what happened: Nokia, the world's leading maker of mobile phones, said third-quarter earnings wouldn't be as good as its second quarter.

The much-ballyhooed battle over the destiny of the Janus funds has been settled (at least for now). What lingers, however, are lessons for most fund investors. Janus has been the subject of a nasty public dispute over its future. That situation, plus a flurry of merger activity in the fund world, makes a good case study in what investors should watch for in the corporate offices of their funds. Mergers and corporate turmoil affect funds in many ways; patience is the correct response to all possible outcomes.

Some people can't stop themselves from looking for storm clouds when they are on the beach in the middle of a sunny day. So it is with many shareholders in the Janus funds, who have been thrilled and amazed by terrific returns but who fear the party could be over depending on which side wins a nasty battle for control of America's hottest fund company. If you are a Janus shareholder, the situation bears watching and not much else. This fight is out of the realm of shareholders, who will have no say whatsoever in the outcome, and does not affect day-to-day management of the funds - at least for now. Here's the situation: Janus is one of several financial services operations owned or controlled by Kansas City Southern, a railroad company.

Among the hottest topics in my mailbag for the last month have been two interesting new funds that opened this month. Yet, few wanted to know how Janus Strategic Value or Baron iOpportunity funds will run money. Instead, their questions ran to whether the first sale of a mutual fund is like the initial public offering of a stock, complete with the potential for shares to skyrocket on opening day. The answer is no. Proof of that should start rolling in this month as both funds start putting their money to work.

Putting a slightly milder spin on the Janus formula hasn't hurt the Janus Growth and Income Fund's returns.Like the rest of its family's big-cap offerings, this offering lands in the category's upper reaches for the year to date through mid-October. The story behind the fund's success is a familiar one for Janus watchers. With stocks like Nokia among its top holdings, the fund has trounced the competition. And, while manager David Corkins believes that most Internet stocks are overvalued, he has also had success with small positions in a few Internet names, including Verisign and DoubleClick.