Janus Builds Modular Portfolio Construction Offering

The fund (ticker: JSMPX) is a fund of funds that seeks long-term growth of capital, with a secondary emphasis on income by investing primarily in other Janus mutual funds, as well as exchange-traded funds (ETFs), exchange-traded notes (ETNs), and derivatives, according to a press release.

The announcement notes that portfolio manager Dan Scherman plans to use Janus’ proprietary Modular Portfolio Construction (MPC) methodology, which looks to leverage investment strategies that are commonly used by large institutional investors, such as endowments and pension plans.

Allocation Categories

The fund will allocate its assets among three categories: core, alpha, and alternative. The core category includes funds that have broad domestic and international market exposure and fixed-income investments. The alpha category consists of funds that seek high risk-adjusted returns through investments in equities across a wide range of market capitalization sizes and geographic regions. The alternative category is comprised primarily of commodities, hedge strategies and real estate investments, which typically have a low correlation to equity and fixed-income investments.

Scherman will be assisted by an Asset Allocation Committee that will help guide the fund’s asset classification parameters and portfolio optimization strategies. Scherman joined Janus in 2005 as director of Risk Management and Performance. Prior to Janus, he spent 13 years at MFS in both equity and fixed income capacities.

“By making investments in funds and securities that aren’t strongly correlated, we think our Modular Portfolio Construction process has the potential to deliver consistent risk-adjusted returns across all market cycles,” Scherman said.

The new fund could be a “compelling option for clients looking for an institutional investment approach and exposure to a wide range of asset classes,’ according to Dominic Martellaro, executive vice president and managing director of Janus Global Advisors.