Janus Research Group is a leading provider of investment research and advisory services. The company offers institutional investors unbiased insights and recommendations to help them make more informed investment decisions. With a strong focus on bottom-up stock selection, Janus aims to identify high-quality companies that can deliver sustainable growth over the long term.
Overview of Janus Research Group
Janus Research Group was founded in 1969 in Denver, Colorado. It started out managing the Janus Fund and has since grown to offer a diverse range of equity, fixed income and asset allocation strategies. Today, Janus manages over $180 billion in assets for institutional and retail clients globally. Its research team consists of over 100 analysts with deep expertise across sectors and geographies.
Janus focuses exclusively on fundamental research and aims to truly understand each company from the inside out. Its analysts build financial models, assess management capabilities, analyze industry dynamics and evaluate competitive positioning. This intensive due diligence allows Janus to identify differentiated investment opportunities with asymmetric risk/reward profiles.
Janus employs a collaborative approach to research where analysts share ideas and debate investments. The Janus Fundamental Research Principles outline the framework for how analysts conduct analysis and make investment decisions. This includes focusing on cash flow based valuations, assessing management’s capital allocation track record and identifying catalysts for sustainable growth.
Investment Strategies
Janus offers a range of equity, fixed income and asset allocation strategies to meet the diverse needs of institutional investors. Its core equity strategies aim to deliver superior risk-adjusted returns over a full market cycle through a concentrated portfolio of 25-50 stocks.
Some key equity strategies include:
- U.S. Equity: Focused primarily on large- and mid-cap U.S. stocks across growth and value styles.
- Global and International Equity: Invests in high-quality companies globally or specifically outside the U.S.
- Emerging Markets Equity: Targets growing companies in emerging markets.
- Small-Cap Equity: Invests in overlooked small-cap companies with strong competitive advantages.
On the fixed income side, Janus offers active core, unconstrained and absolute return bond strategies. It leverages top-down macro analysis alongside bottom-up credit research to optimize risk-adjusted returns. The asset allocation team constructs multi-asset class portfolios to deliver balanced returns in different market environments.
Research Capabilities
Janus’s research platform is the engine behind its investment strategies. With over 100 equity and fixed income analysts located globally, Janus conducts proprietary bottom-up research to gain an informational edge.
Key aspects of the Janus research platform include:
- Fundamental Analysis: Analysts analyze financial statements, build valuation models, assess competitive dynamics and meet regularly with company management to support investment decisions.
- Quantitative Research: The quantitative team builds analytical and risk management tools to complement fundamental insights.
- ESG Research: Dedicated ESG analysts provide insights into material sustainability issues impacting companies.
- Global Presence: Janus has research offices across the Americas, Europe and Asia Pacific to provide local perspectives.
Janus also leverages technology to support its research efforts. The team built the proprietary Janus Research Platform which centralizes all company data, analysis, earnings calls transcripts and external research into one searchable system. This allows efficient access to information and collaboration across the research organization.
Portfolio Management Approach
Janus portfolio managers are responsible for constructing high-conviction portfolios that reflect the team’s best ideas. They determine position sizing, risk management and implementation after extensive collaboration with analysts. The portfolio management team follows a systematic approach focused on bottom-up stock selection.
Key tenets of the Janus portfolio management process include:
- High Conviction: Portfolios typically hold less than 50 stocks with position sizes reflecting conviction in each investment thesis.
- Constant Collaboration: PMs work closely with analysts throughout the investment process to leverage insights.
- Risk Management: PMs analyze portfolio level risk and returns to construct optimal portfolios.
- Long-term Focus: PMs take a 3-5 year view to allow investments to play out over time.
Within equities, Janus managers will overweight industry sectors and geographies where they see the strongest bottom-up opportunities. They size positions based on upside/downside analysis and conviction level. The PM team regularly reviews holdings and trims or exits positions when investment theses change. Fixed income managers leverage macro analysis to determine optimal portfolio duration, credit quality and sector allocation.
Investment Philosophy
Janus adheres to a fundamental active management approach based on rigorous bottom-up analysis. Its investment philosophy consists of these core principles:
- Focus on Fundamentals: Conduct in-depth analysis on companies and industries to gain an informational edge.
- Long-term Perspective: Invest with a 3-5 year horizon allowing investment theses to fully play out.
- High Conviction: Construct concentrated portfolios reflecting the team’s highest confidence ideas.
- Unconstrained Approach: Willingness to differ from benchmarks to maximize opportunities.
- Risk Management: Seek asymmetric risk/reward investments where upside outweighs downside risks.
Janus believes markets are inefficient and high-quality fundamental research can uncover mispriced opportunities. It aims to capitalize on these inefficiencies through actively managed, high conviction portfolios. This philosophy has remained consistent even as the firm has evolved over 50+ years.
Stewardship and Sustainable Investing
Janus believes incorporating ESG factors into fundamental analysis can enhance risk-adjusted returns. It became a signatory to the UN Principles for Responsible Investment in 2011. Janus aims to be a responsible steward of client capital through the following efforts:
- ESG Integration: Analysts incorporate material ESG factors into investment theses and decision making.
- Active Ownership: Engage with companies on ESG issues through proxy voting, engagement meetings and shareholder proposals.
- Collaboration and Transparency: Participate in industry initiatives to advance sustainable finance and provide ESG reporting.
- Exclusions: Janus funds exclude investments in manufacturers of controversial weapons prohibited by international conventions.
Janus believes incorporating ESG helps identify well-managed companies poised for sustainable growth. Its stewardship program aims to drive positive change and deliver better risk-adjusted returns over the long-term.
Organizational Structure
Janus operates as an independent investment management firm owned by its employees. It has a streamlined business structure organized around investment professionals rather than business units. This allows Janus to maintain its investment-centric culture.
Janus is overseen by a 9 member Board of Directors responsible for corporate governance. The firm operates with a horizontal organizational structure led by its CEO and CIO. Key leadership roles include:
- CEO – Responsible for overarching strategy and firm management.
- CIO – Oversees investment team and chairs the investment committee.
- Heads of Equity and Fixed Income – Lead team of analysts and portfolio managers.
- Heads of Regions – Oversee analysts and investments within each region.
This management team leads a global team of over 150 investment professionals. Analysts and portfolio managers are organized into sector and regional teams supporting Janus’s various strategies. The firm aims to maintain a collaborative culture and flat structure for efficient information sharing.
Investment Oversight
Janus maintains a rigorous governance process to oversee its investment strategies and portfolio management activities. Oversight mechanisms include:
- Investment Committee: Comprised of senior PMs and analysts, provides top-down guidance and reviews bottom-up strategies.
- Risk Management Committee: Manages market and investment risk across portfolios and asset classes.
- Trading Oversight Committee: Oversees equity trading practices globally.
- Product Development Committee: Evaluates potential new strategies and products.
These committees facilitate collaboration, ensure alignment with the firm’s investment philosophy and provide effective risk management. Janus also maintains an independent Risk Management team that measures and monitors investment risk exposures.
Investment Performance
Janus has a strong long-term performance track record across its key investment strategies. Some historical performance highlights include:
- The Janus Fund (Ticker: JANSX): Delivered 13.11% annualized returns over the past 15 years, outperforming its benchmark by 223 basis points.
- Janus Henderson Enterprise Fund (Ticker: JDMNX): Returned 13.76% annualized over 20 years, exceeding its benchmark by 336 basis points.
- Janus Henderson Global Life Sciences Fund (Ticker: JFNIX): Posted 18.04% annualized returns over 10 years, beating its benchmark by 712 basis points.
Additionally, Janus fixed income strategies have outperformed benchmarks over 3, 5 and 10 year periods. Janus also has a successful track record in emerging markets equities, having outperformed for over a decade.
While past performance is not indicative of future results, Janus’s long-term outperformance highlights the strength of its research platform and portfolio management approach.
Conclusion
In summary, Janus Research Group is a premier active investment management firm guided by its commitment to fundamental research. Janus leverages its global team of equity, fixed income and ESG analysts to uncover insights and construct high conviction portfolios. Its bottom-up stock selection approach aims to generate alpha for clients across market environments.
With over 50 years of experience, Janus remains dedicated to its core investment philosophy centered on rigorous fundamental analysis. It combines this philosophy with stewardship, risk management and collaborative culture to optimize outcomes for clients. Janus continues to evolve its strategies and capabilities while staying true to its research-driven roots.