For Janus Capital Group Inc (JNS) funds, 2015 could be the best year since the wildly popular era in the late 1990s when it seemed every investor on the planet owned a Janus fund.
Since Bill Gross left Pimco for Janus at the end of September a bright spotlight of publicity has been shining on Janus funds, and this attention has resulted in billions of new dollars in inflows from investors.
In October, the first full month of Gross’s new gig, Janus funds raked in $1.1 billion in inflows, their biggest month of 2014. While other mutual fund families, such as Vanguard and BlackRock Inc., (BLK) pulled in more inflows in the wake of Gross’s Pimco exit, the billion-dollar injection of assets for a moderately-sized mutual fund shop like Janus can only make their active management style easier in 2015, which is shaping up to be a stock-picker’s year.
For our three finalists on the list of best Janus funds for 2015, I hand-selected funds that can benefit from the new Janus momentum but also those that are well-managed and have the best performance potential for the coming year.
Best Janus Funds for 2015: Janus Research Fund Class T (JAMRX)
2015 finds the stock market in the mid-to-late phase of its cycle, which is a time where growth tends to lead value and large-cap stocks win favor over small-caps, as investors shift assets away from higher relative risk.
This environment is ideal for funds like Janus Research Fund Class T (JAMRX), which happens to be a throwback to the glory days of Janus, when the fund’s name was Janus Mercury.
Although the fund management is changing at the end of 2014, Janus uses an analyst team approach and the lead manager is primarily an overseer. With that in mind, the team in place for Janus Research has produced outstanding returns since the fall from glory a little more than 10 years ago.
The 10-year performance places JAMRX above 88% of large growth category peers and all of the other historical returns, from the 1-year and beyond, rank in the top quartile.
The expense ratio for JAMRX is a reasonable 0.8% and the minimum initial purchase amount is $2,500.
Best Janus Funds for 2015: Janus Contrarian Fund Class T
Janus Contrarian Fund Class T (JSVAX) is an all-cap fund that is off to a strong start since Dan Kozlowski took the helm three years ago. The fund outperformed 98% of its large-blend peers for the three-year return.
But while the fund’s recent track record is impressive, it should be noted that Janus Contrarian’s market risk is higher compared to the average large-cap stock fund. The fund owns far bigger stakes in mid- and small-cap stocks than its typical peer. Recently its holdings were split nearly evenly between large-cap, mid-cap and small-cap stocks.
Therefore Janus Contrarian stands good odds of being one of the best Janus funds for 2015 if the economy remains healthy and stock prices continue their march upward. Otherwise it can make a solid core holding in a long-term investor’s diversified portfolio.
Expenses are below-average at 0.89% and the initial purchase minimum is $2,500.
Best Janus Funds for 2015: Janus Global Unconstrained Bond Fund Class A (JUCAX)
The 2015 environment for capital markets may very well reward the greatest of stock pickers but also the most seasoned fixed income portfolio managers. And Bill Gross, even after his fall from grace at Pimco, remains the smartest man in the room when it comes to bond selection.
His new job at Janus will have him focus squarely on his new fund, Janus Global Unconstrained Bond Fund Class A (JUCAX), which began in May. If his greatest weakness at Pimco was being spread too thin among his numerous executive and portfolio management duties, we may see a revived and determined bond king that is primed for success.
New assets coming into the fund in recent months will also make portfolio management much easier than the mass exodus of assets Gross experienced at Pimco in the past year.
As for Janus Unconstrained’s prospects for 2015, the non-traditional, go-anywhere style will prove to be more wind in the sails for Gross’s shiny new ship. The only thing holding him back in 2015 will be an unexpected turn for the worse in the U.S. and global economies.
With that said, the recent cash position for JUCAX was nearly 74% of assets, which can be an advantage if things go south in a hurry. My bet is that the former bond king will play his cards patiently and will be holding a winning hand when he feels the time is right.
JUCAX has a frontload of 4.75%, which can be waived if investors meet certain criteria. The expense ratio is 1.08% and the minimum initial purchase is $2,500.
As of this writing, Kent Thune did not hold a position in any of the aforementioned securities. Under no circumstances does this information represent a recommendation to buy or sell securities.