Janus Capital Group Inc. plans to tweak the stock-picking process at its Intech unit after a net $6.7 billion in client withdrawals from the quantitative-fund manager during the past six months.
Janus, based in Denver, disclosed in an April 21 regulatory filing that four mutual funds overseen by Intech Investment Management will “begin implementing adjustments to the parameters utilized to select stocks” through mathematical models. The move, effective July 1, will alter “portfolio composition,” according to the filing.
The company reported last week that none of the Intech funds beat their benchmark indexes during the past year. Clients withdrew a net $4.3 billion from the Intech funds during the first quarter after pulling out $2.4 billion at the end of 2009, overshadowing improved performance and asset growth at Janus and Perkins funds.
“From a marketing perspective, they need to differentiate their process going forward in order to stem the tide of these outflows,” said Andrew Lo, a finance professor at the Massachusetts Institute of Technology's Sloan School of Management in Cambridge, Mass.
“My guess is they are revising parameters to address the kinds of spikes in volatility that investors are not really signed up for,” said Mr. Lo, who also helps run a global macro hedge fund as the chief investment strategist for AlphaSimplex Group LLC in Cambridge, Mass.
Assets at Intech, formerly known as Enhanced Investment Technologies LLC, fell to $45.9 billion as of March 31 from $69.7 billion at the end of 2007. Intech's math-driven investment process is designed to capitalize on volatility in stock prices.