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Janus Worldwide to Merge Into Janus Global Research

This former titan of the global tech bubble is disappearing.

Greg Carlson, 09/25/2012

Janus announced today that the board of trustees that oversees its funds has approved the merger of Janus Worldwide JAWWX into the analyst-run Janus Global Research JARFX. Pending shareholder approval, the merger is expected to take place in January 2013. From a technical standpoint, Global Research is merging into Worldwide, but the combined fund will be named and managed as Global Research. Because Global Research has a smaller shareholder base, this arrangement is expected to keep proxy solicitation costs lower and make achieving a quorum of shareholders more likely.

The once-vaunted Janus Worldwide has seen a remarkable reversal of fortune. It was once one of the most well-known growth funds around, and with good reason. From its May 1991 inception to the peak of the tech/media/telecom mania in March 2000, it nearly tripled the cumulative return of the typical world-stock fund. The fund's asset base peaked at close to $45 billion then--a close second at Janus to flagship Janus Fund JANSX, when the firm was the hottest shop in the fund industry.

It's been all downhill for this fund in the past 12.5 years, though. Like many Janus funds, Worldwide fell sharply to earth in the 2000-02 bear market as its portfolio of growth darlings was hammered. Just as the market and the fund began to rebound, longtime lead manager Helen Young Hayes retired in mid-2003. One year later, remaining skipper Laurence Chang was replaced by the value-oriented Jason Yee. His contrarian bets against financials and energy held the fund back in the value rally that lasted through late 2007. And the fund got whipsawed when Yee bought some of those same stocks when they first dipped at the start of the bear market, only to see them get crushed in late 2008 and early 2009.

Yee then exited in favor of growth investor Laurent Saltiel, who got off to a fine start but 13 months later left suddenly for AllianceBernstein. Clearly unprepared for Saltiel's exit, Janus embarked on a 10-month search for a replacement while Brent Lynn of Janus Overseas JAOSX looked after the fund. George Maris, who had managed funds in stints at Putnam, Columbia, and Northern, was hired in early 2011. He's posted subpar results in his first 17 months at Worldwide but was recently assigned to replace the departed John Eisinger at Janus Global Select JORNX and will continue to run that fund after Worldwide disappears. All told, Worldwide has outperformed the world-stock category norm only twice in the past 12 calendar years and has lagged 97% of its world-stock peers from March 10, 2000 (the Nasdaq peak), through Sept. 21, 2012. Unsurprisingly, its asset base has shrunk to $1.9 billion.

With its now-checkered history, continued struggles, and steady outflows, this merger is probably for the best. Premium Members of Morningstar.com can click here for a new analysis of Janus Worldwide and fundholders' postmerger prospects.


Greg Carlson is a fund analyst with Morningstar.

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