Janus Unconstrained Bond Fund

varmint

Gross is now the manager of Janus Unconstrained Bond Fund which started in May 2014 and has, depending on the share class, about $13 million. Share Classes are A, B, C, D, I, N, T, R, S. Classes I (institutional) and N (not sure what it stands for) have the least expensive ratio. Class I is .84 and Class N is .82; there is a waiver on OER until 11/2015. I am conservative investor, don't sell or buy much, don't chase trends but I must admit I am thinking of placing some money in the fund (assuming I can get in Classes I or N) and there is no transaction fee. I checked Vanguard and Schwab and they do not offer the classes I am interested in .

rjb112

varmint said:

Share Classes are A, B, C, D, I, N, T, R, S. Classes I (institutional) and N (not sure what it stands for) have the least expensive ratio. Class I is .84 and Class N is .82 I checked Vanguard and Schwab and they do not offer the classes I am interested in .

Can't stand the "Alphabet Soup" nonsense in some mutual funds, especially the load funds

msf

varmint said:

... Unconstrained Bond Fund ... Share Classes are A, B, C, D, I, N, T, R, S. Classes I (institutional) and N (not sure what it stands for) have the least expensive ratio. ... I am thinking of placing some money in the fund (assuming I can get in Classes I or N) and there is no transaction fee. I checked Vanguard and Schwab and they do not offer the classes I am interested in .

As rjb112 listed in another thread the fund has "only" seven share classes - no B shares, no R shares. (Almost no fund sells B shares anymore, and likely no new fund is going to create that share class.) You can find my summary of who the seven share classes are for in my followup to rjb112's post.

I tried to paraphrase and summarize Janus' descriptions of its share classes. If you'd like Janus' official descriptions, you can find them (except for D, but including R) in the prospectus for Janus Flexible Bond Fund, Shareholder Guide Section here.

The D class shares are grandfathered for investors who already have investments directly through Janus (not through a broker/retirement plan). If that's not you, you don't need to think about them, you can't get in.

It's really very simple - if you're a new retail investor, and you don't want to pay a load, you'll buy T shares. End of story. Janus is not like PIMCO, where you might be able to get Institutional Share class shares if you go through the right broker, or you might buy D shares, or ???

David_Snowball

We'll profile the fund in our October issue, for instance that might hold.

David

varmint

I am a flagship holder at Vanguard and, in the past, they helped me get institutional shares of a mutual fund (front load) which helped me avoid paying the sales load and got me into the lowest OER. I may contact them tomorrow and see if I can get institutional shares of this Janus fund.

msf

rjb112 said:

Can't stand the "Alphabet Soup" nonsense in some mutual funds, especially the load funds

As I wrote in another thread, this Janus fund has seven classes. Vanguard, a pure noload family, has six share classes on some of its funds - Investor/Admiral, Institutional/Institutional Plus, Signal, and ETF.

This isn't a phenomenon that is so much worse at load funds. Is seven share classes that much different from six? At least with Janus, you only have to think about one share class (T). Contrast that with threads on Vanguard: which share class is better - Investor/Admiral/ETF?

Some Fidelity funds are sold in Advisor classes as well as retail classes, so that they have six share classes also (e.g. FFHRX, FFRAX, FFRBX, FFRCX, FFRIX, FFRTX) - retail, Advisor A, Advisor B, Advisor C, Advisor I, and Advisor T. That's not to mention all the clones for annuities, for Fidelity's internal use (funds of funds, etc.), and so on.

Many families do this. The proliferation of classes may seem more apparent in load funds because A,B,C,I are well known and (except for I) targeted at retail investors, while classes like Institutional Plus and Signal (at Vanguard) are not ones that one normally thinks about.

Nevertheless, the broth may be just as thick at some familiar noload families as at load families.

rjb112

msf said:

varmint said:

It's really very simple - if you're a new retail investor, and you don't want to pay a load, you'll buy T shares. End of story.

Odd that the expense ratio on the loaded A shares is the same as the no load T shares.

VintageFreak

rjb112 said:

msf said:

varmint said:

It's really very simple - if you're a new retail investor, and you don't want to pay a load, you'll buy T shares. End of story.

Odd that the expense ratio on the loaded A shares is the same as the no load T shares.

Not really that odd. The load is to pay brokers. We should not expect a lower ER, and FWIW it is good it does not have higher ER. All things remaining the same, it equals out.

MikeM

What am I missing? Why are people so enamored with Gross opening a new fund? Isn't this the same guy who has guided the PIMCO Total Return fund to mediocrity with some pretty bad calls in the last 5 years? Per M*, 65% of all intermediate-bond funds have outperformed his flagship fund. This is a guy who has consistently had problems playing in the same sandbox with his associates. The guy whose sanity was questioned during the Morningstar Conference earlier this year. And remember, Janus does not have the same bond analysis strength as PIMCO. Not even close.

I've never been a PIMCO fan though I do own PONDX. I think I didn't like PIMCO because of Gross and I think PIMCO will be a better fund-shop without him. I do like and respect Ivascyn. Maybe because Ivascyn stays out of the lime light and lets his record do his talking.

There are just to many other good unconstrained bond funds with good stable management to choose from to take a 'gamble' on Gross, IM<HO. I may be proven wrong?

JohnChisum

I agree MikeM. Bill Gross is not the same person he was just a few years ago. Reports of him blowing up at Pimco plus the antics he pulled at the conference earlier this year suggest it may be past time he retired.

msf

varmint said:

I am a flagship holder at Vanguard and, in the past, they helped me get institutional shares of a mutual fund (front load) which helped me avoid paying the sales load and got me into the lowest OER. I may contact them tomorrow and see if I can get institutional shares of this Janus fund.

Good luck with that (seriously). I'd love to be proven wrong.

Vanguard is good at getting some institutional class funds at "reasonable" mins - for example, you can get PTTRX at $25K vs. $100K at some other brokerages (should you still want this), but when I look at the Janus offerings at Vanguard, all I see are T class shares.

BobC

While I realize there will be individuals and some institutions who will follow Mr. Gross, his sauce was not secret any more. There are numerous other fixed-income options available to investors that do not have a so-called star manager in charge, that have managers who actually put a premium on running their fund (and not getting in front of every camera they can find) and providing shareholders with real value. For every Bill Gross and Jeff Gundlach there are multiple Carl Karufmans, Dan Fusses, Michael Hasenstabs, Dan Ivascyns, and Jason Bradys, to name a few.

The curious thing for me is that he has hooked up with Janus. Personally I would not invest a dime of my own or my clients money with Janus, given their past history of executive illegal actions that resulted in the firm almost collapsing. There was never any real corporate action that enumerated how they would re-build investor trust, let alone much of an apology for the crappy things that happened. I can only look at this as a way for Janus to gain a huge influx of dollars under management. They went from being one of the top no-load fund companies to a struggling group that offers more share classes of their funds than almost anyone else, whatever works to make the sale. And as for Mr. Gross hooking up with Janus, like most everything else in this world, follow the money. Perhaps this is a case of the two parties being made for each other.

Ted

@MFO Members: I recommend ignoring both Pimco and Janus, and try a little Fuss, or Gaffney.
Regards,
Ted

msf

Ted said:

@MFO Members: I recommend ignoring both Pimco and Janus, and try a little Fuss, or Gaffney.
Regards,
Ted

One might want to wait for Gaffney's ETMF (Eaton Vance Bond ETMF®) to come out and see what it looks like - it's in registration now.

To put it another way, don't make a gaff with a kneejerk reaction; one can afford to be a little fussy and take the time to select investments carefully.

JohnChisum

@BobC,

"Two parties made for each other."

I am guessing you are referring to the current SEC investigation into Pimco and how they valued investments?

I agree whole heartedly regarding putting any money with Janus. Once a firm loses my trust, they are banned for life from any business with me. A scarlet letter so to speak.

Old_Skeet

Perhaps, Janus is the only major shop that wanted him (B/G)?

VintageFreak

I think Bill is out to prove something. He doesn't really need to work. He needn't have stayed at PIMCO till he was 70 anyways. Anywhere he goes, we need to know people already there supplant him when he does retire. Janus bond managers are actually not half bad, and if they had any sense they would have changed their name from Janus to Uranus or whatever.

I think this mess will ultimately work out favorably to all parties concerned. PIMCO managers will show their worth. Gross will reclaim his glory. Janus will earn credibility. I don't recall feeling so optimistic about anything, and in this case, I'm feeling optimistic for OTHER people. I must be going soft.

Mona

VintageFreak said:

Janus bond managers are actually not half bad

I agree. When High Yield has done well in 2014, JAHYX has been very respectable.

Mona

TheShadow

As a Janus investor with "D" shares for years, I used to be able to make exchanges on-line for little as $100.00 into new non-taxable accounts. I logged into my account to make a small exchange from one of my other accounts on-line into the unconstrained bond fund only to "flagged" by the on-line system. Now you can open an account (at least non-taxable in my case) for little as $500.00 with a minimum $50.00 subsequent monthly investment or a minimum of $1,000.00 to start.

bee

msf said:

Ted said:

@MFO Members: I recommend ignoring both Pimco and Janus, and try a little Fuss, or Gaffney.
Regards,
Ted

One might want to wait for Gaffney's ETMF (Eaton Vance Bond ETMF®) to come out and see what it looks like - it's in registration now.

To put it another way, don't make a gaff with a kneejerk reaction; one can afford to be a little fussy and take the time to select investments carefully.

Here's a related article on the ETMF (Exchange Traded Managed Funds) that EV is trying to get approval for:

Wraps finally off Eaton Vance’s active ETF innovation
ft.com/intl/cms/s/0/c9e5c0e8-1c95-11e4-98d8-00144feabdc0.html#axzz3EklAhz3P

rjb112

Wraps finally off Eaton Vance’s active ETF innovation
ft.com/intl/cms/s/0/c9e5c0e8-1c95-11e4-98d8-00144feabdc0.html#axzz3EklAhz3P

That Financial Times site is a bear when it comes to access. Wasn't able to read that article

rjb112

MikeM said:

What am I missing? Why are people so enamored with Gross opening a new fund? Isn't this the same guy who has guided the PIMCO Total Return fund to mediocrity with some pretty bad calls in the last 5 years? Per M*, 65% of all intermediate-bond funds have outperformed his flagship fund.

I'm not seeing that 65% of all intermediate bond funds have outperformed his flagship fund. Looks to me like Gross outperformed his category nicely, in all time periods longer than one year. Am I reading this incorrectly?

msf

Fun with numbers. Mean is not the same as median, so it is possible for a fund to have above mean performance while still ranking below the category median. For example, if a category has five funds with performance figures of 10%, 10%, 10%, 9%, 1%, the category average performance is 8%. The 9% fund is below the median (50th percentile) in raking, but above category average in performance.

To find the category rankings, look at M*'s summary (quote) page, not the performance page.

Bond fund performances tend to cluster, so a small difference in expenses can make a large difference in rankings. In particular, different share classes can have vastly different rankings. PTRRX (as of 9/29/14) is ranked at the 65th percentile for five year performance, as MikeM wrote. PTTCX is even worse, at 78th percentile. Even the retail no load class, PTTDX barely breaks into the top half, at 49th percentile. PTTRX, the institutional class, does better, at 40th percentile, still lackluster.

MikeM

rjb112, not sure now where I saw the 65% rank. I must have been confused. Looking now I see PTTRX ranked 40% in it's category under 5 year returns. Still mediocre but not horrible.

p.s. why is the 'Rank in Category' data missing in your print?

rjb112

MikeM said:

rjb112, not sure now where I saw the 65% rank. I must have been confused. Looking now I see PTTRX ranked 40% in it's category under 5 year returns. Still mediocre but not horrible.

p.s. why is the 'Rank in Category' data missing in your print?

Good question MikeM. Have no idea. I noticed that before I posted it, and even looked at it using both Internet Explorer and Chrome as different browsers, thinking it could have been a browser issue. Still wasn't there with either one. But just now it IS there! I notice on Morningstar that at times, category rank numbers are "missing", then at a later time will be present. Here's what it shows now, 3 pm EST:

AndyJ

BG might do well starting with a low-AUM unconstrained fund, if the BOND-PTTRX history is any guide. Using essentially the same general strategy, BOND whipped PTTRX handily since inception in 2012: +15.5% vs. + 8.4% cumulative, per M* chart function, and although the two converged somewhat after the first year or so, BOND is still winning, YTD at 4.5% vs. 3.4%.

fundalarm

agree that no one, but some retail will follow Gross to Janus. No institution would do it without sufficient due diligence which takes three years for any consultant or fiduciary.

in term of working the phones and imposing himself on doubleline and then janus (thanks to a former colleague), it is curious to say the least. not to mention that janus, after the era of scandals, took great pains to shed the 'star manager' approach and craft a careful corporate investment management culture -- which was totally destroyed on friday.

why can't a 70 year old billionaire negotiate a graceful leave and quietly retire? in a year or so, if restless, he would do something else. this looks like action of desperation. he has not been a 'true' manager for years - he's been a 'talking head' and a decent economist, but not truly a PM. he should have handled this more like an adult...

BobC said:

While I realize there will be individuals and some institutions who will follow Mr. Gross, his sauce was not secret any more. There are numerous other fixed-income options available to investors that do not have a so-called star manager in charge, that have managers who actually put a premium on running their fund (and not getting in front of every camera they can find) and providing shareholders with real value. For every Bill Gross and Jeff Gundlach there are multiple Carl Karufmans, Dan Fusses, Michael Hasenstabs, Dan Ivascyns, and Jason Bradys, to name a few.

The curious thing for me is that he has hooked up with Janus. Personally I would not invest a dime of my own or my clients money with Janus, given their past history of executive illegal actions that resulted in the firm almost collapsing. There was never any real corporate action that enumerated how they would re-build investor trust, let alone much of an apology for the crappy things that happened. I can only look at this as a way for Janus to gain a huge influx of dollars under management. They went from being one of the top no-load fund companies to a struggling group that offers more share classes of their funds than almost anyone else, whatever works to make the sale. And as for Mr. Gross hooking up with Janus, like most everything else in this world, follow the money. Perhaps this is a case of the two parties being made for each other.