Janus Capital Is Riding on Gross Expertise, International Funds
Performance of funds
Janus Capital Group (JNS), like any other asset manager or mutual fund operator, attracts more capital when it performs well. Overall fund performance is one of the most important drivers of inflows and outflows. Of the company’s complex mutual funds, 56% get a four-star or five-star overall rating from Morningstar.
As of September 30, 2015, 69% of Janus Capital Group’s fundamental equity mutual fund assets ranked in the top half of Morningstar’s categories for one-year returns. A total of 75% figured in the top half for three-year returns, and 56% of its assets were included in the top half for five-year returns.
The company performed less impressively on fixed income mutual funds over the past few quarters than it has historically. As of September 30, 2015, 75% of fixed income mutual fund assets ranked in the top half of Morningstar’s categories for one-year returns. Meanwhile, 100% of funds ranked in the top half for three-year returns and in the top half for five-year returns.
Of the firm’s mathematical relative return strategies, 80% finished in the top half for Morningstar’s one-year category, 53% were in the three-year category, and 75% topped the five-year category, surpassing their respective benchmarks.
Opportunities across debt funds
Bill Gross, the successful debt fund manager, manages $1.5 billion under the Janus Global Unconstrained Bond Fund. His fund’s performance trailed 77% of similar funds in the first half of 2015. Janus Capital’s remaining debt funds have delivered consistently over the past few quarters.
The company is positioning itself for strong results once the Fed increases interest rates. The company is expecting higher flows in its unconstrained bonds, which provide exposure to the bond market with less correlation to rates.
Mutual fund managers, including T. Rowe Price Group (TROW), American Funds, and Vanguard, have a higher market share of the domestic industry.
Janus Capital Group’s net income last fiscal year stood at $155 million. Peers that have posted strong net profits include the following:
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BlackRock (BLK) – $3.3 billion
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T. Rowe Price Group (TROW) – $1.2 billion
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Bank of New York Mellon (BK) – $2.7 billion
Together, these companies form 0.9% of the iShares Russell 1000 Value ETF (IWD).
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