Janus to Sell 11 of Its Funds Through Brokers
You can never be too rich or too thin and, if you're a mutual fund company, you can never have enough distribution.
Janus
, the nation's fastest growing mutual fund company, wants to start selling 11 of its funds through brokers sometime in August. These new shares will charge an annual marketing fee, known as a 12b-1 fee, equal to 0.25% of assets. That fee will pay brokers and other advisers for selling shares.
Traditionally, the firm has sold its funds directly to consumers without any sales or marketing charges.
The new broker-sold share classes, called
Janus Adviser Series
shares, will be added to 11 of the firm's
Aspen
funds, which are typically sold only to institutional investors and retirement plans.
Many of the funds getting the new share classes are essentially clones of Janus' popular, growth-oriented retail funds, including
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Growth and Income and
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Worldwide. In addition,
Adviser International
closely resembles the closed
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Overseas fund and
Adviser Aggressive Growth
looks a lot like mid-cap growth
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Enterprise, which could close to new investors soon, given its $8.5 billion girth.
Adviser Strategic Value
is a version of the firm's sole value offering of the same name.
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Janus Strategic Value
launched on March 1 and has already gathered more than $2 billion.
Janus already has a toe in the broker-sold waters through subadvisory agreements with firms like
American Skandia
. These subadvisory agreements call for Janus to manage the assets of broker-sold funds distributed by American Skandia.
Industrywide, sales through the adviser channel are expected to
grow as investors' account balances rise and their need for advice about investing, taxes and other issues increases. Many no-load fund shops, including
T.Rowe Price
,
Strong
and
Gabelli
, have recently made plans to add share classes that pay advisers for selling their funds.
Even brokers are trying to expand their fund distribution through advisers. This week,
Merrill Lynch
(MER)
inked a deal to sell its
revamped mutual fund lineup through brokers at competitor
A.G. Edwards
.
Janus' move comes at a time when many might wonder if it's possible for the firm to take in more money. Investors have clearly wrapped their arms around the tech- and telecom-heavy large-cap growth investment style that drives nearly
all its funds. The average return for Janus stock funds last year was 81.6%.
Over the last year, the firm's assets have grown from $85 billion to more than $200 billion, and the firm set one-month sales records in January and February with $9 billion and $10 billion in inflows, respectively, according to Boston fund consultant
Financial Research
. That works out to almost 50 cents of every dollar invested in domestic stock funds during those periods.
Of course, given the market's current punishment of growth stocks, it will be interesting to see how the funds weather these squalls and how quick brokers are to pitch the funds when investors can buy many on their own without paying an annual fee.
