gave investors only a few hours notice on Friday before shutting the doors of its
Janus Twenty fund to new investors with a deafening thud.
If you were too late to get in on Janus Twenty, one of the top-performing funds of the past one-, three- and five-year periods, don't despair. There are other concentrated, tech-loving growth funds for the '90s that are still open.
One of them,
Idex JCC Growth, is even run by Janus Twenty portfolio manager Scott Schoelzel. Makes sense, since Janus is the subadviser to the fund.
"If you're trying to get the performance of Janus Twenty, this is going to be it," says Omer Mohammed, a fund analyst with the
Value Line Mutual Fund Survey
in New York. "It's a backdoor way in."
But there's a big admission price to pay at this door. Idex JCC Growth is a load fund, which means you pay a sales charge to own it. How much you'll pay depends on the share class. The most popular A shares come with a 5.5% load and a 1.5% expense ratio. The no-load Janus Twenty has an expense ratio of 0.91%.
Otherwise, the funds are practically twins. Mohammed notes that the top holdings of Janus Twenty and Idex JCC Growth were practically the same as of Dec. 31, with each fund holding
Idex JCC Growth returned 43.0% in the last 12 months, with fees accounting for much of the difference between its return and Janus Twenty's 58.5% performance.
Another fund with a Janus Twenty pedigree is
Marsico Focus, which has gained 30.4% in the past 12 months and is up 11.0% year to date. It is run by Tom Marsico, the manager who catapulted Janus Twenty into the spotlight in the early 1990s before leaving Janus to start his own firm in 1997.
Despite the connection between the two funds through Marsico, their current portfolios bear little resemblance. Instead of Janus Twenty's high-flying tech names, Focus has big stakes in automakers and airlines, represented by
Delta Air Lines
Marsico sold off
last quarter. He also got out of
last summer and again last quarter after buying it back at the market low last October.
As for the market's apparent shift in sentiment recently from growth to cyclicals, Marsico sees some overreaction.
"It frankly seems extreme to me on both ends," he says. "It seems extreme on the moves in some of the more cyclically sensitive issues," like
and chemical manufacturer
, "and it seems extreme on some companies where we think the earnings outlook is very stable and favorable," like
, a maker of computer storage products.
Marsico owns the latter pair of companies, both of which have seen their stock trade down in the recent market shift. But he says he's not heavily weighted in technology -- or any one industry -- for that matter.
"We look for adequate diversification by owning between seven to 10 different industries," says Marsico, whose Focus portfolio holds "27 or 28" stocks.
Like Janus Twenty, Marsico Focus is a no-load fund, though it has a higher annual expense ratio of 1.56%.
Other Concentrated Funds
Schoelzel and Marsico aren't the only fund managers who have found success concentrating in a few large-cap stocks. Others are Phil Treick at
Transamerica Premier Aggressive Growth, which has jumped 58.1% in the past year, and Bill Miller at
Legg Mason Value, which has gained 45.4% in the past year. Treick's fund holds 23 stocks, while Miller's has 48.
Do You Really Want Janus Twenty?
Janus Twenty has been a great fund for many years, but nothing lasts forever. The recent market turmoil and apparent shift in sentiment toward cyclical stocks could be a sign that Janus Twenty's run is nearing an end.
"You're coming off of four really hot years where technology stocks have just roared, so you're buying yesterday's news" in Janus Twenty, says Steve Janachowski, a financial planner with
Brouwer & Janachowski
in Tiburon, Calif.
He's also skeptical about the notion that concentration is a key to success. "It's not so much that it's a concentrated bet; it's the type of concentrated bet," says Janachowski. "I'd call it the funds that have focused on Wall Street's darlings over the last four years."
Oakmark fund, run by Robert Sanborn, also is concentrated, with only 30 stocks in its portfolio, Janachowski says. But Sanborn has focused on less-popular companies like
Black & Decker
. Accordingly, his return last year was a disappointing 3.7%. But for 1999, it's 7.3%, a fraction better than the return of the
With the market seemingly at a crossroads, that might make a fund like Oakmark the most viable alternative to Janus Twenty. Take your pick.