Performance evaluation of the Janus Fund
The Janus Fund – Class A (JDGAX) has been a below-average performer in YTD 2016 through August 26. The past six months have been particularly bad for the fund, as it has emerged as the worst performer among the 12 funds chosen for this review.
In the one-year period, JDGAX figures among the bottom three funds. We have graphed its performance against two ETFs: the iShares S&P 500 Growth ETF (IVW) and the iShares Russell 1000 Growth ETF (IWF). Let’s look at what has contributed to the fund’s poor performance so far this year.
Contribution to returns
JDGAX’s high exposure to tech stocks, coupled with their strong performance, has been a boon to the fund in YTD 2016. The tech sector has been lifted mainly by Facebook (FB), with help from stocks like Cadence Design Systems (CDNS) and NetSuite (N). The absence of any major negative contributors has been beneficial to the sector.
Industrials are a distant second to tech stocks in terms of positive contribution. Honeywell International (HON), TransDigm Group (TDG), and Canadian Pacific Railway (CP) are the main benefactors to the sector.
On the other end of the spectrum are healthcare stocks, which have been the biggest pain point for the Janus Fund – Class A (JDGAX). Endo International (ENDP) is responsible for nearly half of the overall negative contribution from the sector. Allergan (AGN), Bristol-Myers Squibb (BMY), and athenahealth (ATHN) are other major negative contributors from the healthcare sector.
The top two invested sectors—tech and consumer discretionary—have been beneficial to the Janus Fund – Class A (JDGAX), while the third-largest sector—healthcare—has been the biggest detractor. However, sectors like consumer staples have been inconsequential.
Negative contributors have canceled out the positive contributors from these sector. This has pushed JDGAX to be a below-average performer from being in the middle of the pack in our last review. An upturn in consumer spending can benefit the fund, but any degradation in economic conditions would make this year even worse for the fund.
Let’s move to the next fund under review: the MFS Massachusetts Investors Growth Stock Fund – Class A (MIGFX).