Until recently it seemed that nothing could knock any of the


funds off their perches. Then, the


tumbled this spring, taking many of Janus' offerings with it. Still, none have fared as poorly as Janus'

(JAVTX) - Get Report

Venture fund, a small-cap portfolio with a sizable bet on the Internet.

Of course, the tech selloff has been hard on most growth funds. But Venture has suffered more than most. Such a reversal of fortune is stunning for a fund that put up triple-digit returns last year and beat its peers by a wide margin in 1998.

"They came down so far, and that's because they bought smaller players in the Internet sector," says Diahann Lassus, a financial adviser with

Lassus, Wherley & Associates

in New Providence, N.J.

Indeed, other small-cap funds have been able to diversify away from the volatile sectors to limit the damage. The average fund in the category is down just 5.8%, while Venture is off by 29.8%. That puts its performance in a league with clobbered Net funds like


Monument Internet, down 31.2%, or the


WWW Internet fund, down 31.6%, year to date.

What's more, Venture has taken it on the chin more than most other Janus funds, which co-manager Jonathan Coleman attributes to the portfolio's inherently more volatile small-cap style. But the fund has sunk to the bottom of its peer group, with a performance worse on both relative and absolute bases than any of the once highflying Janus funds.

Lipper reports that the fund is in 238th place among 242 mid-cap growth funds through last Thursday -- a pretty dramatic turnaround from its 14th place position in 1999 with a return of 141%.

"We're not happy about the performance of the last couple of months," concedes Coleman, adding that the company remains bullish on tech.

To long-time fund watchers, it may be surprising to see Venture in this kind of bind. The fund, along with several of Janus's older offerings, only became a standout in 1998 when it took on increasing amounts of technology in its portfolio, stretching the risk-reward profile considerably.

Venture specializes in high-octane growth stocks, and had more than 60% of its assets in technology. Among its top holdings are




Liberate Technologies

(LBRT) - Get Report




, down 51.1%, 75.5% and 20.8% respectively, for the year.

"Basically they're a tech fund," says Lou Stanasolovich, a Pittsburgh-based financial adviser with

Legend Financial


Internet is the largest of its subsectors, which together with software and Net content stocks, makes up about 28% of the fund's assets. And at $2.2 billion in assets, it's one of the biggest small-cap funds around, so it can't duck an assault to its largest sector.

But it's less of one than before, Coleman says. During March and April, he and co-manager William Bales raised cash by selling out of technology names. The pair now have a 15% cash stake, while their tech allocation has slipped to 40%. Though Coleman refused to say which stocks were on the sell list, the top 10 holdings reveals some of them.


Radio One


, down 24% for the year, and

Broadbase Software


, down 69.1%, are out of the top holdings.

With the proceeds from the sales of its tech stocks, Coleman says he and Bales have moved into some unlikely sectors, including gambling, chemicals, consumer products and retail, though he wouldn't mention new acquisitions by name.

Coleman acknowledges that some of the stocks in Venture's portfolio had run up huge valuations. The stocks they are finding today are noticeably lower on the price-to-earnings spectrum. The fund's average P/E ratio as of April 30 was 42.3, just slightly higher than that of the

S&P 500


"We've raised some cash from the tech side," Coleman says. "And put it to work in new opportunities."

But those move came too late to spare investors from the bloodbath. Because the fund's been closed to new shareholders since 1991, the entire investor base has felt the pain along with Janus.