NEW VALUE FOR SHAREHOLDERS
Janus shareholders now have access to some of the best talent in the value arena via two previously undiscovered high-quality funds: Janus US Value Fund and Janus International Equity Fund.
Managed by Ed Walczak and Rajiv Jain, respectively, both of Vontobel Asset Management, a firm with which Janus recently formed a partnership – Janus US Value Fund and Janus International Equity Fund boast experienced management, consistent and proven strategies, as well as solid long-term track records.
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Janus US Value Fund
Janus International Equity Fund
While these two funds have been around for more than 13 years (both launched in 1990) they’ve remained somewhat of an undiscovered secret. As a small, boutique-like firm, Vontobel chose to focus its resources primarily on the asset management side of its business, leaving marketing and distribution initiatives for another day. Over the years, however, strong fund performance and the realization that its funds are indeed a secret worth discovering prompted Vontobel’s managers to begin looking for what they refer to as a formidable distribution partner." Their search ended with Janus.
"We had strict criteria," explains Ed Walczak, manager of Janus US Value Fund. "We wanted to work with a firm that had a recognizable brand, major strength in all of its distribution channels and professionals that we liked and respected. After talking with a number of fund companies over a span of several years, we found ourselves face to face with Janus. It was the only firm that met all of our criteria."
Coincidentally, Janus happened to be conducting a search of its own. With the goal of providing its shareholders ample choice across a broad range of investment disciplines, Janus specifically was looking to offer new value funds to complement shareholders’ growth-oriented investments.
We were immediately attracted to Vontobel’s depth of experience and to the solid performance track records of its US Value and International Equity Funds," says Janus Chief Executive Officer Mark Whiston. "We want to offer investors the best mutual funds managed by the brightest people in the industry, and we believe that, in the value arena, this team is among the finest."
Like Janus, Vontobel’s philosophy is founded on the principle that shareholders deserve nothing less than superior long-term performance. "Whether offering our funds through an intermediary, such as a broker, or direct to investors, our focus is on what we view as our typical shareholder: the fourth-grade teacher from Dubuque, Iowa, who invests $37.50 a month with us," says Ed. "She is trusting us to invest her money wisely and grow it over time. Therefore, our goal is to give her the peace of mind that her money is being managed in accordance with her investment goals and also provide her with the satisfaction of strong returns."
To achieve this goal, Ed and Rajiv Jain, Janus International Equity Fund Manager, rely on in-house research to narrow their investible universe of stocks to approximately 100 companies for Janus US Value Fund and 150 for Janus International Equity Fund.
Both portfolio managers focus on companies with long operating histories, stable growth trends, strong fundamentals and easy-to-understand business strategies, and both invest only when they see stocks within their respective universes that they feel are priced right. They believe their shareholders’ money has a better chance of growing in a few superior companies – usually 20 to 25 for Janus US Value Fund and 40 to 55 for Janus International Equity Fund – whose stocks are priced well below what their research indicates is their true, fundamental worth. As such, once Ed and Rajiv invest in a company, they tend to stick with it until the value is realized.
That said, their sell discipline dictates that when a stock reaches the value they originally assigned to it, they sell that stock. “We’re happy to leave some upside for the next guy while we go looking for another great value,” says Ed.
As value investors, Ed and Rajiv don’t follow the investment crowd. “Instead, we search for overlooked opportunities that the crowd has passed by,” explains Ed. Consistent application of this independent approach requires discipline and commitment. It’s a simple investment process, but one that’s not always easy to carry out. “Confidence in our research and courage in our convictions have often enabled our shareholders to profit from our against-the-grain style.”
By nature of this rigorous and selective investment process, Ed admits that he’s developed biases toward some businesses and aversions to others. For example, while financial stocks have long been a favorite, he’s never owned a technology stock in Janus US Value Fund. “I’m only interested in businesses that are easy to understand and have a competitive advantage,” he explains, “or as Warren Buffet says, ‘companies with a moat around their castle.’ The bigger the moat, the more defensible the castle. While I’m sure there are some good tech companies out there, technology has a tendency to become obsolete, which means the moats around these companies could dry up.”
Despite his biases, the names on Ed’s list of 100 investible companies represent a wide cross-section of the investment universe. For example, Gillette, Harley-Davidson and Automatic Data Processing are all on his list – names many investors associate with growth stocks. But Ed believes that growth and value are joined at the hip and claims that companies cannot create value unless they grow.
"All investors want to buy something for less than what they think it is fundamentally worth,” he says. “In this respect, all true investors are looking for value.”
