Janus Gets Light on Tech Fare

Even Janus, the fund world's high priest of tech and telecom investing, is putting a few less bucks in that battered church's collection plate these days.

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That's the revelation from a list of the Denver growth shop's firm-wide holdings through the end of the first quarter, filed with regulators last week. Among the fallen angels: Tech bellwether Cisco Systems(CSCO), which went from the firm's No. 3 holding to No. 16.

The folks at Janus are ratcheting down their exposure to tech favorites and putting that money in sleepier, safer environs like financial and pharmaceutical stocks. So, if you own shares of a Janus fund you might notice a slackening tech appetite. And if you're just one of the many folks wondering where the Nasdaq is heading, these moves indicate that even tech believers are opting for a more modest bet on the sector.

While fund shops' managers routinely shift gears from one quarter to the next, Janus' defensive stance resonates more than most. After all, Janus stock-fund managers put an average of half their funds' $146 billion in the mercurial tech and telecom sectors and rode those fat bets to gains of more than 80% in 1999 and record sales in 2000. They've also ridden outsized bets on shops with sagging shares such as wireless titan Nokia(NOK) to fat losses and a spate of shareholder redemptions.

Yes, the firm's top-15 holdings still have many faves from the TMT, or tech-media-telecom, buffet. The likes of AOL Time Warner(AOL) (No. 1 holding), Nokia (No. 2) and data-storage giant EMC (EMC) (No. 8) are still massive positions in Janus' top-10 firm-wide holdings.

On March 31, Janus managers had $12.4 billion invested in AOL, $8.1 billion invested in Nokia and $2.3 billion invested in data storage titan EMC. But, in sum, they reduced each position significantly in the first quarter, dropping their AOL and Nokia share balances by more than 9.3 million and nearly 30 million shares, respectively, according to bigdough.com, a Web site that tracks institutional stock ownership. They also sold more than 9.2 million shares of EMC, leaving them with 64.7 million on their books.

Janus' Top-15
	Percentage of Funds' Assets	YTD Return
AOL Time Warner	5.8%	54.7%
Nokia	5	-29.5
General Electric	3.9	9.1
Viacom	3.1	22.7
Comcast	3	4.4
Enron	2.2	-37.1
Boeing	2.1	4.8
EMC	1.8	-36.4
Citigroup	1.6	-0.2
Tyco	1.6	3.2
Linear Technology	1.5	13.9
Telefonos de Mexico	1.5	27.8
Maxim Integrated Products	1.4	10.6
Goldman Sachs	1.4	-8.2
Pfizer	1.3	-2.2
Totals/Averages	37.2	2.5
S&P 500	13.9	-2
Source: bigdough.com and Morningstar. Returns through May 17.

If we compare Janus' top 15 at the beginning of this year and the end of the first quarter, we find that several tech behemoths have disappeared. At the start of this year networking dynamo Cisco was the firm's third-largest holding, comprising 3.8% of the firm's assets. But Cisco shares fell 59% in the first quarter and Janus managers sold more than 75 million shares, leaving them with some 107.5 million. At that point Cisco was Janus' 16th-largest holding, representing 1.3% of the firm's stock portfolio, according to bigdough.com. Since the end of the first quarter, Cisco's stock has risen 33%.

Other tech holdings like semiconductor titan Texas Instruments (TXN) and Sun Microsystems (SUNW) also tumbled out of the top 15, the result of both sagging returns and stock sales.

Slip Slidin' Away Janus managers aren't as jazzed about owning these tech shops' shares.
	Percentage of Funds' Assets on Dec. 31, 2000	Percentage of Funds' Assets on March 31, 2001	YTD Return
Texas Instruments	2.2%	0.9%	-15.9%
Cisco Systems	3.8	1.3	-48.1
EMC	2	1.8	-36.4
Sun Microsystems	1	0.8	-32.5
Verisign	0.9	0.2	-21.8
Source: bigdough.com and Morningstar. Returns through May 17.

What did they like?

A look at the fresh faces among Janus' top-10 holdings turns up shares of companies in defensive industries that tend to weather economic downturns better than pricey tech shares, like aerospace bellwether Boeing (BA), financial giant Citigroup(C) and conglomerate Tyco International (TYC).

The new names among Janus' top-20 holdings continue the themes, with financials such as Goldman Sachs (GS) and Merrill Lynch (MER), in addition to pharmaceutical giant Bristol-Myers Squibb (BMY). In each case, Janus managers propelled these names up their list of favorites by buying shares hand over fist.

The only new tech name in the top 20 is Veritas Software(VRTS).

Fresh Faces Among the rising stars in Janus' portfolios, you'll find few tech names.
New to the Top-Ten
	Percentage of Funds' Assets on Dec. 31, 2000	Percentage of Funds' Assets on March 31, 2001	YTD Return
Boeing	1.9	2.1	4.8
Citigroup	1.2	1.6	-0.2
Tyco	0.9	1.6	3.2
New to the Top-Twenty
	Percentage of Funds' Assets on Dec. 31, 2000	Percentage of Funds' Assets on March 31, 2001	YTD Return
Goldman Sachs	0.8	1.4	-8.2
Merrill Lynch	0.9	1.2	1.5
Veritas Software	0.7	1.1	-20.9
Bristol Myers Squibb	0.6	1	-22.8
Source: bigdough.com and Morningstar. Returns through May 17.

The only new position among Janus' top-100 holdings is Mexican wireless shop American Movil. Janus' 61 million-share stake in the firm makes it the firm's 30th-largest holding. It also adds up to a whopping 12.6% stake in the company, according to bigdough.com

Overall, however, Janus managers' sell orders outnumbered buy orders in the first quarter, when 262 existing positions were reduced and 158 were increased.

If you're looking for justification for these significant moves, look no further than Janus' sputtering lineup of tech-sick funds. Of the firm's 17 direct-sold stock funds, several of which are still closed to new investors after 2000's steep in-flows, 12 are lagging their peers so far this year and only the (JSVAX)Janus Strategic Value fund is in the black.

Still Blue Twelve of Janus' seventeen direct-sold stock funds are lagging their peers so far this year.
Janus Fund	YTD Return	Rank vs. Peers(1=Best, 100=Worst)
(JAENX)Enterprise	-20.7%	90%
(JAGLX)Global Life Sciences*	-19.2	88
(JAGTX)Global Technology*	-18.7	44
(JAOLX)Olympus*	-17.4	85
(JORNX)Orion	-15.4	75
(JAVLX)Twenty*	-11.4	63
(JAMRX)Mercury	-11	61
(JAOSX)Overseas*	-8.3	51
(JAWWX)Worldwide*	-6.7	56
(JAVTX)Venture*	-5.6	61
(JANSX)Janus*	-4.1	17
(JTWOX)Janus 2	-3.1	12
(JAGIX)Growth & Income	-2.3	9
(JAEIX)Equity- Income	-1.7	8
(JABAX)Balanced	-1.2	66
(JASSX)Special Situations	-0.9	62
(JSVAX)Strategic Value	1.2	64
S&P 500	-2	N/A
Source: Morningstar. Returns through May 17. *Closed to new investors.

Given Janus' sagging returns, some will no doubt ask if the firm's moves are worth watching. But the shop's stakes in bellwether tech companies and the millions of investors holding shares of Janus funds should keep them on growth investors' radar screens, whether they own funds, stocks or both.

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