Craig to Leave as Manager of Janus Fund
James Craig, manager of the popular Janus Fund, said Tuesday that he will step down from that post Jan. 1 to become research chief of the fund’s parent company.
Craig, who took over the now $32-billion fund in 1987, has produced spectacular returns for shareholders during his tenure. Janus Fund earned 17.5% a year, on average, in the 10 years ended Sept. 30, beating the 16.3% annualized return of the average Standard & Poor’s 500 stock index fund.
Only a relative handful of stock funds have managed to top the S&P; over that stretch.
Craig’s retirement from direct fund management is reminiscent of Fidelity Investments legend Peter Lynch’s decision to quit in 1990--after generating stellar returns for Fidelity’s flagship Magellan Fund throughout the 1980s.
Like Lynch, “Craig is really going out at the top of his game,” said senior analyst Christine Benz at fund tracker Morningstar Inc.
Craig, 43, is chief investment officer of Denver-based Janus Capital in addition to managing Janus Fund and co-managing Janus Venture Fund.
On Jan. 1, he will add the title of director of research. Craig will remain chief investment officer of parent Janus Capital.
As Lynch did at Fidelity, Craig will take on more of a mentoring role for other Janus managers, in addition to overseeing all portfolio management, Janus said.
Blaine Rollins, 32, Craig’s assistant at Janus Fund, will replace him as manager. Rollins, who now sole-manages Janus Balanced Fund and Janus Equity Income Fund, will turn those funds over to Karen Reidy, 32, an assistant manager.
Craig’s success in the 1990s has stemmed in large part from his growth stock focus, and from a willingness to make large bets on the stocks he likes--a hallmark of many Janus funds.
As of Aug. 31, for example, his top 10 holdings made up 42% of the portfolio. Those top holdings included American Express, Cisco Systems, General Electric, Time Warner and Tyco International.
Despite the recent plunge in Tyco’s shares, Janus Fund is up 13.7% year to date, whereas the S&P; 500 index is up less than 4% on a total-return basis.
Analysts said Craig’s decision was most likely unrelated to a dispute between Janus and its corporate parent, Kansas City Southern Industries, over the terms of a planned spinoff of the parent’s financial services business, which includes Janus.
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Janus’ Run
Janus Fund, under manager James Craig, has beaten the average Standard & Poor’s 500 index fund over the last decade--a rare feat among stock funds.
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Source: Lipper Inc.
