Can you make money by investing in companies that most investors and money managers are not? Of course you can. It may not seem like a very good idea but a contrarian approach can prove to be very profitable. The Janus Contrarian Fund (JSVAX) does just that–it invests in companies that are actually out-of-favor and may hold unrealized value.
Key Stats
- Manager: David C. Decker (7 year tenure)
- Min. Initial Investment: $2,500 / $1,000 (IRA)
- Front-Load: None
- 12(b)-1 Fee: None
- Expense Ratio: 0.94%
- Net Assets: $5.2 billion
- Average Market Cap: $11.4 billion
- Turnover: 39%
Performance
Looking back over the past five years you can clearly see how strong this fund has performed. During this time it has outperformed the S&P by a significant margin. The fund has a limited track record since it was established in 2000 but in this time the fund has experienced both a strong bear and bull market. This fund outperformed the market every year since inception except in 2002 where it underperformed by about 1.6%.
I would like to see a longer history to compare performance but given the fund has done well in down markets as well as in up markets it shows promise for long-term success. The Janus Contrarian fund is given five stars by Morningstar and since 2003 it has been ranked in the top 1 or 2% of its category. With a 5-year annualized return of 19.11% it clearly has been a top performer in the large-cap blend style.
Pros
- No load
- Low minimum investment, especially in IRAs
- 5 stars by Morningstar
- Outstanding past performance
- Low turnover
Cons
- Above average expense ratio
- Less than 10 years since inception
- A concentrated portfolio means that performance could be hindered if a few stocks have trouble
The Bottom Line
If you are looking for a large-cap blend fund to compliment your core holdings this could fill the position quite well. While it uses an interesting contrarian strategy it clearly has shown it can do so effectively. If you are comfortable with a little risk associated with the strategy and active management for the type of returns this fund has seen over the past few years I would take a look at this fund to see if it has a place in your portfolio.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
