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A Raft of Portfolio Manager Changes at Janus

Also, Vanguard rolls out an emerging-markets bond fund, major portfolio manager departures at T. Rowe Price and FPA, Neuberger Berman to launch a China fund, and Invesco to rework its quant funds.

Morningstar Fund Analysts, 05/16/2013

Three Janus fund managers are leaving the firm, spurring even more changes in the process.

Chad Meade and Brian Schaub, who have posted stellar returns at Silver-rated Janus Triton JATTX since 2006 and Silver-rated Janus Venture JAVTX since 2010, departed on May 10. This is a big loss for the firm, as the duo had been Janus' best-performing stock fund managers over the past three and five years. Their funds have been among the few sources of net inflows within the equity-fund lineup, which has produced subpar results overall of late. The two managers have not yet announced where they will work next.

Taking Meade and Schaub's place at those small-growth funds is Jonathan Coleman, who recently stepped down as co-CIO and now will depart the Neutral-rated Janus Fund JDGAX. Coleman struggled during much of his 5.5-year tenure at the latter fund, but previously generated a fine record at Bronze-rated mid-growth offering Janus Enterprise JAENX from 2002-07--and Janus Triton invests in a mix of small- and mid-cap stocks. Janus Fund will now be run solely by Barney Wilson, who had comanaged the fund since May 2011. Wilson is the firm's assistant director of research and previously managed Janus Global Technology JATAX for five years.

The third manager to depart is Ron Sachs of Neutral-rated funds Janus Twenty JAVLX and Janus Forty JACTX. Sachs had posted poor returns at both funds since taking the helm of each in January 2008, although he previously performed well at Neutral-rated Janus Global Select (then called Orion) JORNX. He's leaving Janus at the end of May. Taking his place at Janus Twenty is veteran Marc Pinto, who has managed Neutral-rated Janus Growth & Income JAGIX since 2007, the equity portion of Silver-rated Janus Balanced JABAX since 2005, and large-growth separate accounts (including a concentrated strategy) since 2003. He'll retain his other duties.

The firm also has hired Douglas Rao to manage Janus Forty, which should differentiate it in the future from the previously identical Janus Twenty. Rao worked at Marsico Capital Management (founded by former Janus manager Tom Marsico) as an analyst and manager from 2005-12, steered Negative-rated Marsico Flexible Capital MFCFX to a fine record in a five-year tenure, and comanaged Neutral-rated flagships Marsico Growth MGRIX and Marsico Focus MFOCX for 2.5 years. Janus Forty is now expected to have a larger stake in non-U.S. stocks than Janus Twenty.

Vanguard Launches Emerging-Markets Bond Fund Amid Strong Category Inflows
More than a year after putting its emerging-markets government-bond index fund on hold because of deficiencies in existing indexes at the time, Vanguard is launching Vanguard Emerging Markets Government Bond Index Fund at the end of this month.

Vanguard's entry into the emerging-markets bond category comes as investors have flocked to such funds. Flows over the past 12 months have exceeded $25 billion. Vanguard's offering, which includes three open-end mutual fund share classes and one exchange-traded fund share class, will be the first index fund in the category of more than 75 open-end funds and fewer than 20 ETFs, though most of the existing choices don't limit their investments to U.S. dollar-denominated government bonds like Vanguard's does.

The new Vanguard fund is the firm's first international fixed-income portfolio introduced in the U.S., but Vanguard has also registered an international bond fund that will attempt to track the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged). That fund is expected to launch by the end of the second quarter, and it will include only investment-grade debt and fall into Morningstar's international-bond category. The emerging-markets bond fund will attempt to track the Barclays USD Emerging Markets RIC Capped Index. Both funds will have expense ratios substantially lower than their actively managed peers, but only the emerging-markets fund will assess a 0.75% purchase fee on its share classes (ex-ETF).

Morningstar fund analysts cover more than 1,700 mutual funds and write regular commentary covering fund industry news, fund investing trends, picks, portfolio planning, international investing, and more.

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