Janus Capital to Add Its 1st Value Fund

Janus Capital Corp. spent almost 30 years betting on fast-growing companies. Now it wants to invest in cheap ones too.

Denver-based Janus, whose focus on fast-growing technology and media companies has made it one of the top-selling mutual fund companies, said it’s adding its first fund that will focus on supposedly undervalued companies.

The unit of railroad operator Kansas City Southern Industries Inc., which aims to roll out its Janus Strategic Value Fund on Jan. 31, hopes to attract investors from a shrinking segment of the market. Value funds, which seek out companies selling at low prices relative to their earnings, asset values and other measures, have struggled to keep investors as their returns have badly lagged growth funds in recent years.

David Decker, who runs the $1.3-billion Janus Special Situations Fund--up 62% in the last 12 months, compared with the Standard & Poor’s 500 index’s 24% rise--will manage the new offering. Decker, 33, and a seven-year Janus veteran, also is assistant portfolio manager on the $38-billion flagship Janus Fund.

Given Janus’ hot record with its growth funds, “Any product they roll out is going to generate a lot of interest,” said Christine Benz, associate editor at fund tracker Morningstar Inc. But, she added, “Value has been really cold this year, so that will probably work against the fund attracting a lot of assets,” at least at first.

Janus’ sharp growth-stock picking in the 1990s has produced high returns and attracted an army of investors to its funds. In the last six years, Janus’ mutual fund assets have grown from $12.7 billion to about $120 billion, according to the Investment Company Institute.

Marketing a value fund signals a departure for Janus and is a sign it aims to broaden its product line as it prepares to go public in a spinoff, analysts said.

Janus previously offered a fund it called Janus Value, but that focused fund was eventually renamed Janus Twenty to more accurately reflect its investment objective, spokeswoman Jane Ingalls said. Janus Twenty holds $30.4 billion in assets today.

Janus’ 22 mutual funds have gained an average 50% this year, compared with an average return of 18.4% of all 5,678 funds tracked by Bloomberg Fund Performance.

Benz expects the new fund to offer “kind of a modified version of value.”

“If you look at [Decker’s] other fund, Special Situations, he’s not buying cyclicals and utilities,” Benz said. “He’s more sort of a cash flow maven.”