Janus Overseas is one of three international fund choices within the ASA JP Morgan 401k plan. The fund has historically attracted the retirement savings of plan participants due to its superior performance. The fund fell hard in 08 just like any other stock investment during the financial crisis only to have a tremendous rebound, quickly making up prior losses. Recently however the fund has failed to beat its benchmark and its competition within the 401k plan.
When choosing which funds to allocate to within the 401k plan you have to remember that you are picking a fund manager that has his own style of investing. Looking at just the fund name and performance is like judging a book by its cover.
The Janus Overseas Fund has taken a contrarian approach to investing over the last few years. In the funds prospectus, the fund manager, Brent Lynn, stated, “I added significant investments in depressed financials, cycilcals and emerging market stocks. This approach achieved some success in prior years but in the 2011-12 environment of investor risk aversion, contrarian investing clearly has not worked.” Mr. Lynn notes in the prospectus that he has high conviction in his picks.
While the fund is categorized as international, the asset class breakdown is actually 15% US stock and 85% International Stock. 58% of the fund is in developed countries and 42% in emerging markets. The emerging market allocation is high vs the average international fund at 13%. This alone will add volatility to the portfolio.
I receive many questions about how to best manage the Janus Fund. I believe that the Janus Fund should be used in a supporting role within an aggressive portfolio. This simply means that if you are currently holding the Janus fund consider moving part of you allocation out and into the Dodge and Cox or American Century Funds that have better managed the international sector. For those within 10 years of retirement or a risk tolerance below moderate aggressive I would not recommend this fund.