Janus has been hurt by more than a decade of turmoil. Its concentration in technology stocks led to a rapid rise and steep fall when the sector’s 1990s boom turned to bust. Assets peaked at $325 billion in the first quarter of 2000, before shrinking by 59 percent over the next three years.
The firm, based in Denver, introduced the first of its new funds, the Janus Diversified Alternatives Fund, in December, using derivatives to mirror returns from stocks, bonds, commodities, currencies and real estate.
Derivatives are contracts such as futures, swaps and options whose value is derived from one or more underlying assets. They typically use leverage to amplify returns.
With 82 percent of its investments in actively run equity portfolios, the company is seeking to reverse a 24 percent drop in assets since the end of 2007 as clients pulled money in 18 of the last 20 quarters.
Janus’s Brand
“Janus’s brand clearly stands for high-conviction stock- picking,” Weil, who has already built up the firm’s fixed- income group, said in the interview in New York. “We would like to expand the brand to mean more than that.”
Among 263 U.S.-registered mutual funds categorized by Bloomberg as asset-allocation products, 130 have opened since the end of 2009. The group ranges from traditional stock-and- bond balanced funds to more varied versions such as Janus’s Diversified Alternatives.
Invesco, based in Atlanta, beat the wave with its Balanced- Risk Allocation Fund in June 2009. The fund is similar to Janus’s offering in its use of derivatives.
Balanced Risk has grown to $12.9 billion, returning a risk- adjusted 6 percent from its June 2009 inception through Feb. 28, versus 4 percent for the S&P 500 Index. Versions sold in Canada, the U.K. and continental Europe hold an additional $7.5 billion.
“When other fund companies see Invesco getting $12 billion, you’re going to get some copycats,” Charlson said.