Janus Improved Performance in 4Q15 across Debt and Equity Funds
Janus Capital Beat Estimates, Expanded in 2015
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, 55% get a four-star or five-star overall rating from Morningstar.
As of December 31, 2015, 84% of Janus Capital’s fundamental equity mutual fund assets ranked in the top half of Morningstar’s categories for one-year returns. A total of 70% figured in the top half for three-year returns, and 62% 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 historically did. As of December 31, 2015, 82% 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 82% were in the top half for five-year returns.
Of the firm’s mathematical relative return strategies, 74% finished in the top half for Morningstar’s one-year category, 53% were in the three-year category, and 67% topped the five-year category, surpassing their respective benchmarks.
Opportunities across debt funds
Bill Gross—the debt fund manager—manages $1.3 billion under the Janus Global Unconstrained Bond Fund. His fund’s performance trailed more than 75% of similar funds in 2015. Janus Capital’s remaining debt funds have delivered consistently over the past few quarters.
The company has managed to generate higher returns on an absolute and relative basis in a highly volatile market. The first quarter in 2016 is expected to be difficult in terms of investment performance. However, on a relative basis, the company is expected to report strong investment performance.
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 $156 million. Peers that have posted strong net profits include the following:
BlackRock (BLK) – $3.3 billion
T. Rowe Price Group – $1.2 billion
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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