Janus Capital Group Inc. (NYSE: JNS) today announced the launch of Janus Protected Series - Growth, which aims to improve the investor experience by balancing potential capital appreciation with a measure of downside protection. This will be the first U.S.-based capital protection mutual fund to offer daily liquidity with no set maturity date. The fund’s capital protection will be provided by BNP Paribas, one of the world’s largest banks with over $2.67 trillion in assets and a market capitalization of $93 billion.1
Janus Protected Series – Growth, which was launched on May 4, 2011, is managed by Janus portfolio manager Jonathan Coleman. Coleman, who also serves as Co-Chief Investment Officer, Equities, of Janus Capital Management, believes the most compelling feature of this product is the degree of downside certainty that it will provide.
“Financial advisors have told us that their clients want to reinvest in the equity markets, but have concerns about significant equity market downturns,” said Coleman. “We believe this strategy, with its expected ability to protect on the downside, may be a solution for these investors to meet their financial goals.”
Janus Protected Series - Growth aims to balance capital appreciation and capital protection by actively allocating its assets between domestic large cap equities, cash and cash equivalents, U.S. Treasuries or other instruments that have the potential to reduce risk such as short index futures, assisted by BNP Paribas’ risk allocation methodology. The fund is designed to provide investors with a protected NAV of no less than 80% of the highest NAV ever achieved by each individual share class of the fund, reduced for dividends, distributions, extraordinary items and extraordinary expenses. If the NAV per share for any share class is less than the protected NAV, the fund would liquidate. When Janus Protected Series – Growth’s NAV is above its protected NAV, the fund’s equity exposure could be up to 100%. In the event that the fund’s NAV approaches its protected NAV, the equity exposure could be as low as 0%. As a result, the fund may lag in a rising market due to the re-allocation process, particularly following a period of market decline. The fund may also lag other similarly managed growth funds that do not pay a capital protection fee.
BNP Paribas is one of only a few AA-rated banks in the world. The bank made its initial entry into the capital protection marketplace in 1995. As of December 31, 2010, BNP Paribas provided capital protection for approximately EUR20 billion in principal.
“We are very excited to partner with Janus to deliver to investors for the first time an open-ended product that combines Janus' capabilities in active management with our long-standing experience in sound and adaptive risk-management principles to preserve capital,” said Edward Speal, BNP Paribas’ Head of Global Equities and Commodity Derivatives for the Americas. “As a result, we are comfortable providing the fund with protection.”
“BNP Paribas has been providing capital protection for European-based investment strategies for over 15 years,” said Coleman. “We believe this makes them the perfect partner for this innovative strategy.”
There is no guarantee that the investment techniques used by the fund’s portfolio manager and the risk allocation methodology employed by the capital protection provider will produce the desired results.
For more information, please visit www.janus.com
1 BNP assets and market capitalization provided by Bloomberg. Assets are as of December 31, 2010. Market capitalization is as of April 12, 2011.
About Janus Capital Group Inc.
Janus Capital Group Inc. (JCG) is a global investment firm offering strategies from three individual investment boutiques: Janus Capital Management LLC (Janus), INTECH Investment Management LLC (INTECH) and Perkins Investment Management LLC (Perkins). Each manager employs a research-intensive approach that is distinct within its respective asset class. This multi-boutique approach enables the firm to provide style-specific expertise across an array of strategies, including growth, value and risk-managed equities, fixed income and alternatives through one common distribution platform.
At the end of December 2010, JCG managed $169.5 billion in assets for shareholders, clients and institutions around the globe. Based in Denver, JCG also has offices in London, Milan, Munich, Singapore, Hong Kong, Tokyo and Melbourne.
About BNP Paribas
BNP Paribas (www.bnpparibas.com) is among the strongest banks in the world*. The Group has a presence in more than 80 countries and more than 200,000 employees, including more than 160,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across the Europe-Mediterranean zone and boasts a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia.
* Rated AA by Standard & Poor's i.e. 3rd rating level on a scale of 22.
Janus Protected Series - Growth is not a capital guaranteed or insured fund. As with all investments, there are inherent risks when investing in the Fund including, but not limited to allocation risk, maximum settlement amount risk, turnover risk, liquidation risk, opportunity cost risk, capital protection termination risk, market underperformance risk and counterparty risk, each as disclosed in the Fund’s prospectus.
The terms and conditions of the Capital Protection Agreement are designed to provide capital protection to the Fund if the then current NAV is below the Protected NAV for any share class. The capital protection is not provided in the event of gross negligence, fraud, willful misconduct, bad faith, or a criminal act on the part of the Fund, Janus Capital, certain key employees of Janus Capital, or the Fund’s custodian that could negatively impact the Fund. Such events result in the termination of the Protection without obligating the Capital Protection Provider and its parent guarantor (the “Parent Guarantor”) to make any payment to the Fund. Neither the Fund nor Janus Capital is obligated to make any payment to the Fund or cover any shortfall. Therefore, in the event that the Protection is terminated you could lose money as a result of the Fund losing the Protection under the Capital Protection Agreement, including amounts that would have otherwise been protected. The Fund is expected to liquidate in these events.
Should a termination or liquidation event occur, shareholders who own shares of any share class on the Fund’s termination date would be entitled to receive either the Protected NAV or the then-current NAV for their share class, whichever is higher, which will include any protection amount due to the Fund. See prospectus for situations when this could occur.
A shareholder’s ability to receive the Protected NAV from the Fund is dependent on the Fund’s ability to collect the Settlement Amount from the Capital Protection Provider, and/or the Parent Guarantor, pursuant to the terms of the Capital Protection Agreement. Fund transactions involving a counterparty, such as the Capital Protection Provider, are subject to the risk that the counterparty will not fulfill its obligation to the Fund.
The Fund’s asset allocation will vary over time depending on market conditions and therefore the Fund’s allocation to each investment component could change as frequently as daily resulting in a higher portfolio turnover rate than other mutual funds. Increased portfolio turnover may result in higher costs, which may have a negative effect on the Fund’s performance.
The Fund will use short index futures and other types of derivatives in an attempt to hedge risk. Derivatives can be highly volatile and involve risks in addition to the risks of the underlying referenced securities. Gains or losses from a derivative can be substantially greater than the derivative’s original cost.
If the Fund, Janus Capital or any other third party service provider, such as the custodian, fails to comply with the terms and conditions of the Capital Protection Agreement, including the allocation of Fund assets in accordance with specified risk parameters, the Fund may allocate up to 100% of its assets to cash and the Capital Protection Provider may terminate the Capital Protection Agreement.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or containing this and other information, please call Janus at 877.33JANUS (52687) (or 800.525.3713 if you hold shares directly with Janus Capital). You can also visit janus.com/info (or janus.com/reports if you hold shares directly with Janus Capital). Read it carefully before you invest or send money.
Janus Protected Series - Growth's Protection Component currently consists of cash, cash equivalents and U.S. Treasuries less the net notional value of short index futures. The Equity Component currently consists of the market value of equity securities and options plus the net notional value of equity index futures.
U.S. Treasury securities are issued and guaranteed by the full faith and credit of the U.S. Government. They are generally considered to be free of credit risk and typically carry lower yield than other securities.
Fund distributed by Janus Distributors LLC (05/11)
James Aber, 303-217-1990