Janus Fund’s Rating Downgraded to 3 Stars

Janus Capital Corp.’s flagship stock fund, the $30.9-billion Janus Fund, has been stripped of its four-star rating by mutual fund tracker Morningstar Inc. because of poor performance.

Denver-based Janus Fund, which has slumped 22% this year, was given a three-star rating by Morningstar for its performance through July 31. This is the first time since 1985 the fund has been rated below four stars.

Janus stock funds overall have plunged this year, hurt by big bets on technology shares. Many of the company’s funds have reshuffled their portfolios, adding more non-tech issues.

Dropping to three stars from four could be a blow to Janus’ marketing efforts, analysts note. Many investors and financial advisors use Chicago-based Morningstar’s rating system to choose funds.

Morningstar’s system measures risk-adjusted performance over the previous three years. The top 10% of funds are awarded five stars, the next 22.5% receive four, the middle 35% get three, the next 22.5% get two and the bottom 10% get one.

“We’re obviously very disappointed with our performance,” said Blair Johnson, a spokesman for Janus. “We believe the Janus Fund, like all of our funds, is well positioned to reward our shareholders’ patience in the long run.”