Money gushed into

Janus

funds when they were hot, but now that they've cooled, those greenbacks are leaving at a pretty quick clip, too.

Redemptions from Janus' battered direct-sold stock funds outpaced investments by more than $1.8 billion in February, according to estimates from Boston fund-consultancy

TST Recommends

Financial Research (FRC)

. It's the sixth consecutive month of net redemptions for the Denver firm, whose retail stock funds rode sizable bets on the tech- and telecom sectors to high returns in 1999 and record inflows, leading the firm to close eight stock funds to new investors. (Check out

Cramer's take on Janus redemptions.)

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But over the last year, favorite stocks like

Cisco Systems

(CSCO) - Get Report

and

Nokia

(NOK) - Get Report

have knocked the average retail Janus stock fund down nearly 40%, on average, according to

Morningstar

.

February's tally raises Janus' outflow total to more than $2 billion this year, according to FRC. Outflows of this size would cripple some firms, forcing fund managers to weigh down their own holdings when they sell stock to cash out rattled shareholders. This

less than virtuous cycle weighed down value funds when their style fell out of favor and investors voted with their feet in 1998 and 1999. Observers might perceive Janus as being particularly susceptible to this painful scenario, because the firm's managers tend to

make big bets on a relatively small number of stocks.

For their part, the folks at Janus say the firm's large asset base and some funds' hefty cash positions have staved off this painful scenario and the prospect of reopening funds currently closed to new investors like

(JAVLX)

Janus Twenty or

(JAWWX) - Get Report

Janus Worldwide.

"Right now

the redemptions aren't a concern," says Janus spokeswoman Shelley Peterson. "Our portfolio managers monitor the situation on a regular basis, but we've got 21 substantial funds, so the redemption situation shouldn't alarm shareholders right now."

Substantial is right. The three funds with the heaviest net outflows in February --Janus Worldwide, the

(JANSX)

Janus fund, and Janus Twenty -- lost more than $1.1 billion to net outflows, according to FRC. But together, the three funds, all closed to new investors, have more than $80 billion in assets.

A Very Different Time
Comparing this February's fund flows with flows from a year earlier puts investors' slackening taste for stock funds in stark relief. Figures in millions of dollars.

Source: Source: Financial Research Corp.

Janus officials say they weren't taken aback by the higher outflows. "Given the volatile months of February and March, we're still seeing the majority of shareholders taking a long-term view," says Janus' Peterson. "We did have firm-wide outflows in February but when you close nearly half your stock funds and hit this kind of volatility, well, it's not as if we were surprised."

Janus' retail stock and bond funds have some $143 billion in their coffers, making it the nation's sixth-largest fund shop by FRC's count. But counting the firm's institutional funds, not included in FRC's figures, Janus has some $223 billion in total assets under management. That said, Janus confirms firmwide outflows in February, declining to specify the figure. And its total assets are down from more than $330 billion last year, due to capital losses and outflows.

Perhaps to provide a cushion to pay out redemptions, some of the firm's fund managers have let their cash positions mount much higher than most funds' 5% average. At the end of February, for instance, portfolio manager Scott Schoelzel had the shuttered Janus Twenty fund's cash position at a whopping 19.6% And the Janus Worldwide fund, co-managed by Helen Young Hayes and Laurence Chang, had almost 10% in cash.

Other funds have refrained from following suit, however. Manager Blaine Rollins had just 1.6% of the Janus fund in cash at the end of February. The $19.9 billion fund lost $338 million in net outflows last month, according to FRC.

And there are some trends here that certainly merit watching, if not alarm. While February's outflow might seem small compared with Janus' vast asset base, keep in mind that those assets have shrunk more than $100 billion in just a year, due to flagging performance. If the firm's redemptions continue to trend up and its asset base continues to trend down, there could be trouble down the road.

After several key Janus executives (including fund managers like Schoelzel) reduced their equity in Janus private stock recently, news of this redemption will no doubt rekindle rumors that one or a few of the firm's star managers might start their own shop or defect to an operation where they can work under less scrutiny. Janus' Peterson denies rumors that any managers are leaving, but news of outlfows could rattle some investors.

And finally, there is simply good reason to believe these redemptions will pick up steam if growth sectors such as technology and telecommunications, where Janus' massive positions may preclude them from moving quickly, continue to stay down. The tech-laden

Nasdaq Composite Index

has lost more than half of its value over the last year, and many of Janus' largest, most popular funds have followed their tech favorites down.

Five of the firm's retail stock funds --

(JAVTX) - Get Report

Venture,

(JAOLX)

Olympus,

(JAGTX) - Get Report

Global Technology,

(JAENX) - Get Report

Enterprise and Twenty -- are down more than 50% over the last year, double the

S&P 500's

fall.

Eleven of Janus' 15 retail stock funds with a one-year track record are down more than 30%, according to Morningstar.

As tech-heavy stock funds like Janus' have tumbled, investors have shied away from stock funds in general, and high-octane growth funds in particular. Last month, U.S. stock funds took in just $674 million more than they lost to redemptions, compared with more than $22 billion last February, according to FRC. At the same time, cash flows to bond and money market funds spiked higher as investors became wary of stock funds.

Trending Down
Thanks to fund closings and sagging returns, Janus' retail stock funds have slipped into net redemptions over the last nine months. Figures in millions of dollars.

Source: Financial Research Corp.

The money that is going into stock funds is flowing into tech-light fare that follows a value strategy, essentially hunting for bargains in the stock market. Value funds, which lost nearly $90 billion in outflows when Janus lorded over the market in 1998 and 1999, saw $7.2 billion in Feburary inflows, according to FRC. Though Janus launched its Strategic Value fund last year and has filed for another, called Global Value, investors are turning to traditional value shops such as Oakmark for this style.

Large-cap growth and technology funds, the category where many of Janus' best-known funds live, had February outflows of $3.8 billion and $1.9 billion, respectively, according to FRC.

It's hard to imagine Janus funds' flows will turn positive until their performance figures do so first.