Janus Offers Mutual Fund That Uses Hedging Tactics
January 23, 2006
Janus Capital has launched a new mutual fund that utilizes hedge fund trading tactics. Called the Janus Adviser Long/Short Fund, it is the first of its sort for the asset manager, which continues to redefine itself after the losses it suffered in the tech crash and scandal. Earlier this month, for example, Janus shareholders voted to add performance-based fees to some of its stock and bond funds, another move that, at least coincidentally, is very hedge fund-like.
According to a regulatory filing, a key strategy of the fund is short selling, a popular hedge fund technique where the manager sells borrowed securities with the hopes that they can buy them back at a lower price and earn a profit on the difference. During the recently flat equities market, the strategy has enabled hedge funds to make more money than their mutual fund peers. But it's risky, as there's no limit to the amount that investors could lose if the price of the borrowed security rises instead of falls. Janus officials told The Wall Street Journal that the fund would seek to mitigate that risk by taking long positions, as well.
Janus veterans Matthew Ankrum and David Decker will co-manage the fund. The minimum investment is $10,000 and its class A and C shares will be available only through financial advisers, another new wrinkle the formerly direct-sale fund shop has been recently pursuing.
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