The Daring Guaranteed Funds

The asset allocation process operates according to a mathematical algorithm. Portfolio performance is monitored by system daily. Under certain circumstances, asset allocation will be adjusted automatically. More specific, adjustments take place whenever the index level changes by 15% and the NAV of the Reference Fund is key to drive the Index up and down. Essentially, the higher the NAV of the Reference Fund rises, the more assets will be put into it. Once the allocation rate hits a cushion level -- and it is likely that the investment portion covers almost the entire guaranteed fund portfolio at that time -- the fund may leverage up to 1.5 times of its total assets to capture higher returns.

 

Janus Twenty Guaranteed Fund 106
The Janus Twenty Guaranteed Fund 106 offers 106% capital guaranteed at maturity in 3.9 years, equivalent to an annualized return of 1.5%. Its investment portion invests directly in the Janus Twenty Fund.

 

The Janus Twenty Fund invests primarily in mega-cap, growth stocks and used to have considerable assets in the TMT sector in the late 1990s. After the tech bubble burst, fund manager Scott Schoelzel began to temper volatility by increasing stakes in defensive sectors, including finance (e.g. Citigroup and AIG) and energy (e.g. Exxon Mobil) that have rallied in recent months. The fund still adheres to its concentration strategy to hold around 30 investments, relying on Schoelzel's skills in picking stocks that can perform to expectation. Nevertheless, the fund's turnover ratio has dropped since 2000, and that helps save investors much trading costs.

 

Janus Balanced Guaranteed Fund 112
The Janus Balanced Guaranteed Fund 112 offers 112% capital guaranteed at maturity in 3.9 years, equivalent to an annualized return of 2.95%. Its investment portion invests directly in the Janus Balanced Fund.

 

The Janus Balanced Fund invests 40% to 60% of assets in bonds, having the remaining assets in equities. In early 2001, fund manager Karen Reidy moderated the fund's aggressiveness by reducing its tech stake, as she found the sector overvalued. After the September attack, she moved more assets back into equities that she found growth prospects and undervalued. Her portfolio movements in 2001 ended the fund with above-average performance among its Blend peers and limited downside risks for investors effectively. In fact, as of end-February, 2002, the fund has sustained above-average performance 4 years in a streak and is a top-quartile performer in the Blend category over 1- and 3-year periods.

 

About Charges
Both guaranteed choices pose no subscription fee but early redemption fee. Investors may switch into any Janus B-shares during the maturity period. The B-share fund switched-in will include the holding period and applies the lower early redemption fee schedule of the guaranteed funds.

 

They charge an annual fee of 2.25% (sum of the 0.75% annual Management fee and 1.5% annual Investment Advisor fee) to be deducted daily from fund assets. Once leverage is used, the annual fee will be based on the total value of the bond, fund and leveraged portions; leveraged investments will also be subject to interest charge.