Goldman, Franklin

BlackRock, the world’s largest money manager, refashioned a stock-and-bond fund in January 2012 when the New York-based company added asset classes and renamed it the BlackRock Multi- Asset Income Fund. The $2.4 billion fund has since returned a risk-adjusted 3.2 percent, compared with 1.3 percent for the S&P 500.

Goldman Sachs Group Inc., also based in New York, has seen its $1.3 billion Dynamic Allocation Fund return a risk-adjusted 2 percent since its January 2010 opening, compared with 2.3 percent for the S&P 500. San Mateo, California-based Franklin Resources Inc.’s $866 million Franklin Templeton Multi-Asset Real Return Fund has returned 1.4 percent after price swings since starting in December 2011, versus 2.3 percent for the U.S. benchmark.

As money poured into fixed-income and asset-allocation funds last year, the stock funds in Janus’s traditional wheelhouse dealt with redemptions. Large-cap growth funds, or those targeting large-capitalization companies expected to achieve above-average profit increases, lost $38 billion to withdrawals.

Black’s Reign

On top of the industrywide redemptions, Janus suffered a setback in 2004 when it agreed to a $225 million settlement with New York and Colorado regulators over allegations it permitted favored customers to engage in the improper trading practice known as market timing.

Struggling to regain assets even as fund performance recovered, then-Chief Executive Officer Gary Black set out to rein in the independence of fund managers and reduce their pay after taking over in 2006. Several top-rated managers left and one, Edward Keeley, won $4.8 million in 2009 when a Colorado jury found the firm had breached his contract and committed fraud in cutting his pay. Black quit that July, paving the way for Weil’s hiring in February 2010.

Fund performance slumped anew when the 2008 financial crisis struck. Even as the picture began to brighten in 2012, four-fifths of the company’s stock pickers remained in the bottom half of their Morningstar categories over the three years ended Dec. 31.

Industry ‘Failed’

In addition to improving core fund performance, Weil said Janus can do a better job than competitors with products promising risk-adjusted returns, because the company will focus more on diversifying the sources of risk.