A Disappointing Turn for Janus
A new wave of manager and executive departures leads us to downgrade Janus.
In the summer, Janus was looking like a great comeback story. Following poor bear market returns, the firm had managed to rebound to produce strong performance at a number of funds. Even longtime laggards Janus Fund (JANSX) and Janus Worldwide (JAWWX) had started to outperform. In addition, we were pleased to see the firm hiring experienced analysts and revising manager bonuses to better align them with shareholder interests. Managers appeared to be buying in by investing large sums in their own funds.
However, just as we were warming up to the idea of recommending Janus again, it has taken a couple of big steps backward with the departures of three managers of its largest funds. Scott Schoelzel, who has put up strong returns at Janus Twenty (JAVLX) over the past 10 years and at Janus Olympus before that, is leaving at year-end. Now we have two more departures. Within the past month, David Corkins, manager of Janus Fund, and Minyoung Sohn, manager of Janus Growth & Income (JAGIX) and Janus Fundamental Equity (JAEIX), have abruptly left the firm. Schoelzel and Corkins were two of its best and most experienced managers, and Sohn is a rising star who it tapped to run a substantial amount of money.
It's a big disappointment for a firm whose talents and depth had just finally caught up with its asset size. Previous waves of manager departures--some welcome, some not--had left Janus thin at the top even as the analyst ranks had been restocked. Put another way, it really couldn't afford to lose these three.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.