Janus Will Lose Mandate
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Monday, December 16, 2002

Janus Will Lose Mandate

Denver-based Janus is losing more business. In this case the $100 million mandate from Transamerica Fund Advisors is disappearing altogether rather than being thrown to another sub-advisor. Janus will continue to subadvise roughly $5 billion in assets for Transamerica.

The Los Angeles-based fund family revealed its intent to merge the IDEX Janus Capital Appreciation Fund into the IDEX Transamerica Growth Opportunities Fund in an SEC filing last week. The explanation for the decision revealed in the filing was that Transamerica hopes to cut duplicate costs and inefficiencies resulting from offering two similar funds.

The Janus sub-advised fund holds roughly four times the assets as the Transamerica advised funds but the surviving fund has a superior track record. Typically when funds are merged, the fund with the superior performance is the survivor.

The Janus fund has just more than $100 million in assets, but a negative 27.18 percent return in 2002. Meanwhile, the Transamerica advised fund holds less than $25 million in assets and has a return of negative 10.85 percent in 2002, according to Morningstar.

While the funds expense rations differ by only 10 basis points, Transamerica stands to gain by shifting the assets into a fund that one of its affiliates advisors rather than paying to hire an external subadvisor.

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