is shuffling managers on three funds representing more than 20% of the firm's assets, including the flagship, $31 billion
Janus fund, the nation's ninth largest.
Jim Craig, the high-profile manager of the Janus fund since 1986, will relinquish his portfolio management duties Jan. 1 to become the firm's director of research. Blaine Rollins, manager of the $2.5 billion
Janus Balanced and the $969 million
Janus Equity Income funds since 1996, will leave those funds to take the Janus fund's reins.
Karen Reidy, an assistant portfolio manager on the Janus fund since July 1998, will take Rollins' place on Balanced and Equity Income. John Schrieber, Rollins' assistant portfolio manager on Balanced and Equity Income, will join Rollins on the Janus fund team.
Rollins' old funds are very unlike the high-growth Janus fund -- Equity Income is less aggressive and Balanced is currently 50.5% in bonds -- but each has a solid performance record vs. its peers.
Janus says the changes should be seamless since Rollins and Reidy have worked with Craig and former
Janus Twenty star manager Tom Marsico in the past.
Still, there are notable differences between the Janus fund and the other two. Equity Income and Balanced each invest more than half their equity portfolios in cyclicals and financials, according to Janus' Sept. 30 reports. Meanwhile, 30% of Janus fund's portfolio is invested in tech stocks, and the fund's average price-to-earnings ratio of 44.5 is significantly higher than the other two funds', both around 38.
"The differences are certainly of consequence, but there's not much an investor can do. You hope someone will be around forever, but that won't happen. The changes could be good, but if they're not, you can always vote with your feet," says Jim Folwell, a consultant at Boston fund-researcher
Still, Craig says the new manager doesn't foreshadow drastic changes to the portfolio. "I don't expect Blaine will change much in the fund because he has worked with me so closely that the portfolio is a reflection of his efforts as well," says Craig, adding that Rollins may increase the portfolio's growth orientation.
The portfolio management changes come as Janus is engaged in a very public battle for independence from parent company
Kansas City Southern
, but Craig says the situations are unrelated. "This has nothing at all to do with the sideshow with Kansas City Southern," he says.
Aside from the spat with Kansas City Southern, Janus is enjoying great success. Janus fund, Twenty and Worldwide are among the top funds in the categories, and their success has brought in billions of dollars in new investment. Assets under management have grown from just under $3 billion in 1989 to more than $167 billion today.
Not a Bad Decade
Janus spokeswoman Shelley Grice says this shuffle represents the firm's most significant personnel changes since Marsico left the firm in 1997 to start his own no-load fund firm. Since his departure, Janus Twenty has performed well under manager Scott Schoelzel. It was closed to new investors in April. Generally, the firm hasn't had high manager turnover. The Janus fund started in 1970, and Rollins is only its third manager.
In many ways, this may be a significant and inevitable changing of the guard. Although Craig is only 43, he has been with Janus for 16 years. Rollins joined the firm in 1990, Reidy in 1995 and assistant portfolio manager Schreiber in 1997.
Though Reidy has no experience running her own fund, "I have to ask the shareholders to trust my intuition in knowing she has the skill and the style to run these portfolios," Craig says.
Grice says Janus is making the changes to spread Craig's expertise among many funds. And the move will help the growing company maintain a stable of analysts and managers, she says, while leaving the funds in the hands of managers who have worked closely with Craig in the past.
"With Jim in this role, every Janus shareholder will benefit directly from his influence, not just shareholders of his funds," says Janus founder and Chief Executive Tom Bailey.
These moves, together with the recently announced addition of co-portfolio manager Laurence Chang to Janus'
Worldwide fund, means the company has made management changes on funds representing more than one-third of its assets.
"I think shareholders might be comforted by the fact that there's typically an enormous amount of overlap among Janus' equity funds. They often own the same stocks," says Joel Davis, a senior financial planner with
American Express Financial Advisors
in Portland, Maine.
Craig says a big part of his new job will be to focus on sectors that Janus has typically ignored: consumer durables, consumer nondurables and finance. He adds that Janus will be launching new products next year and that he'll be beefing up the firm's international investment staff to lighten the load of Worldwide and
Overseas manager Helen Young Hayes.