Janus Shoots for More With "Less" in New Fund

March 3, 2003 (PLANSPONSOR.com) - Janus Capital Group has unveiled a new stock fund that purports to use a mathematical model to outdo the S&P 500 by anywhere from 1.5 to 4 or 5 percentage points.

The Janus Risk-Managed Stock Fund will be managed by Enhanced Investment Technologies LLC (INTECH), a subsidiary of Janus.   INTECH had been 50.1%-owned by Berger Financial Group LLC, a former Stilwell unit that is now part of Janus (see  Berger Buys INTECH from Pru ).

Math “Matic”

The fund will use complex mathematics to construct a portfolio that will have fewer stocks and different weightings than its targeted index, identifying stocks with high relative volatility and low correlations with each other.   The portfolio is regularly rebalanced back to the target weights in an effort to “capture” an excess return, according to the firm.

The INTECH proprietary investment process was developed by its chief investment officer, Dr. Robert Fernholz, a former professor at Princeton University.   The process relies on mathematical methodology rather than fundamental analysis of companies, according to the firm.

The strategy has been in place for portfolios that INTECH has managed for its institutional clients for the past 15 years, according to the report.

The new fund is available directly from Janus, unlike two other INTECH-managed fund products launched earlier this year and sold through financial advisers and other intermediaries.