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Sector Viewpoints
Viewpoints from Janus Analysts

Get access to the insights and opinions of Janus' seven global sector teams and learn how they are using bottom-up, fundamental research to uncover investment opportunities. 

 


Sector : Financials
Analyst:
Rachel Young, Global Credit Analyst
   












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- U.S. banks have led a global system overhaul and are healthier today than pre-crisis due to strict regulatory reform and proactive management balance sheet discipline.

- Europe is in the early stages of reform, but opportunities in the UK, Spain and Ireland appear compelling.

- Despite spread tightening, we believe that financials will offer some of the best risk-adjusted returns in the credit space in 2014 and beyond.


 























Sector : Industrials
Analyst:
Ken Spruell, CFA
   












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- A stronger economy is a tailwind for industrial companies, but economic improvements are already reflected in valuations.

- Investment opportunities lie at the individual stock level. A number of companies have brought in new management teams who are improving an underperforming company operating in an attractive industry structure.

- Industrial companies became extremely efficient and productive during the downturn, but we believe there is still room for margin expansion.


 























Sector : Technology
Analyst:
Garth Yettick, Equity Research Analyst
   












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- We expect rapid growth in devices that interact and communicate with each other. Examples range from self-driving cars to devices that optimize water and fertilizer use in agriculture.

- The cost of key components for the Internet of Things has recently come down considerably, which is allowing these interconnected devices to proliferate.

- As this trend plays out, it will present growth opportunities in the technology sector, and create competitive advantages and disruption for companies in other sectors.


 























Sector : Health Care
Analyst:
Brad Smith, Global Credit Analyst
   












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- The Affordable Care Act (ACA) and other trends are changing the U.S. fee-for-service model, creating potential opportunities for credit investors.

- Hospitals likely will benefit from reform, while insurers will shoulder greater burdens.

- We are focusing on companies engaged in eliminating unnecessary system costs, and biotech companies with novel therapies that address unmet needs


 























Sector : Agriculture
Analyst:
Andy Summers and Matt Hochstetler, Equity Research Analyst and Co-Portfolio Manager
   











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- Global population growth and emerging market standard of living increases are driving increased demand for grain, creating an emphasis on enhancing agricultural yields.

- Genetic seed innovations are the key to enhancing yields. Many of the seed trait advancements in corn yield gains are now being applied to soybeans, opening significant pricing potential for seed companies.

- Potash- and phosphate - based fertilizers appear to offer strong long-term supply/demand fundamentals, but nitrogen demand is susceptible to seed innovation.


 























Sector : Japan
Analyst:
Julian McManus, Portfolio Manager & Equity Research Analyst
   











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- Initiatives proposed by Prime Minister Shinzo Abe such as labor reform, corporate tax cuts and privatization of select industries could be a long-term tailwind for Japan.

- We believe a sense of urgency by Japanese politicians makes those reforms more likely.

- Japanese e-commerce companies, select exporters and Japanese banks could be attractive investment opportunities as the economy improves.


 























Sector :  Autos
Analyst:
Seth Meyer, Fixed Income Research Analyst
   











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- Automakers in the U.S. and Europe have made progress in reducing debt, costs and production capacity since the 2007-2009 recession.

- We believe the European auto industry is showing signs that it has reached bottom and may begin to improve.

- We continue to favor U.S. auto companies that are focused on balance-sheet-constructive activities.


 























Sector : Technology
Analyst:
Brad Slingerlend and Brinton Johns, Portfolio Manager & Equity Analyst
   











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- Valuations for many companies associated with hyper-growth tech trends are reminiscent of the last tech bubble.

- We are placing more emphasis on companies with resilient business models that are not dependent on a particular future outcome for success.


 























Sector : European Financials
Analyst:
Carmel Wellso, Portfolio Manager & Equity Analyst
   











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- Key measures of European banks' financial health are generally improving. Non-performing loans have stabilized, and most banks are on pace to meet new capital requirements.

- Most European banks' valuations are well below their historical averages, and well below their peers in the U.S. and Asia.

- We believe the market is underestimating the profit boost from cost cutting at large banks and missing investment opportunities.


 























Sector : Securitized Products
Analyst:
John Kerschner and Jason Brooks, Global Head of Securitized Products and Research Analyst
   











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- We do not own the type of MBS that the Federal Reserve has been buying for QE3.

- Janus has expanded its fixed income securitized products resources as we perceive new opportunities in the market. 


 























Sector : Healthcare
Analyst:
Andy Acker, Portfolio Manager Equity Analyst
  











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- Improvements in understanding the genetic basis of diseases have led to a wave of novel therapies that offer better outcomes for patients.

- Many of the largest biotechnology companies are in the early stages of major new product launches. 

- Innovative drug companies and companies that improve efficiency within the health care system present two of the biggest investment opportunities, in our view. 


 


















Sector : Communications
Analyst:
Jean Barnard, Equity Analyst
  











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- Alternative platforms for viewing television content have driven up the value of hit content.

- We believe companies will be able to further monetize viewing across new, on-demand platforms as the industry improves viewing measurement, and hones its ability to insert new ads for delayed viewers. 

- One of our major investment themes within the sector is companies that could benefit from the shift from desktop to mobile Internet use. 


 


















Sector : Housing
Analyst:
John Lloyd, Global Head of Credit Research/Fixed Income Research Analyst, Housing
  











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- The housing industry has been a strong driver of recent U.S. economic growth, and in our opinion the pace shows no signs of slowing.


- High rental rates have encouraged investors to buy properties to rent. This has put a floor on prices. 


- Single-family home demand is increasing as an improving economy encourages household formation and more people are able to qualify for mortgages. 


 


















Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

The views expressed are those of the author as of the date noted. They do not necessarily reflect the views of Janus portfolio managers or other persons in Janus' organization. These views are subject to change at any time based on market and other conditions, and Janus disclaims any responsibility to update such views. No forecast can be guaranteed. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any Janus fund.

Statements in the audio content that reflect projections or expectations of future financial or economic performance of a mutual fund or strategy and of the markets in general and statements of the Fund's plans and objectives for future operations are forward-looking statements. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Important factors that could result in such differences, in addition to the other factors noted with such forward-looking statements, include general economic conditions such as inflation, recession and interest rates.

A Fund's performance may be affected by risks that include those associated with nondiversification, non-investment grade debt securities, high-yield/high-risk securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest. Additional risks to a Fund may also include, but are not limited to, those associated with investing in foreign securities, emerging markets, initial public offerings, real estate investment trusts (REITs), derivatives, short sales, commodity-linked investments, and companies with relatively small market capitalizations. Each Fund has different risks. Please see a Janus prospectus for more information about risks, Fund holdings and other details.

Foreign securities have additional risks including exchange rate changes, political and economic upheaval, the relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. These risks are magnified in emerging markets. The prices of foreign securities held by the fund, and therefore a fund's performance, may decline in response to such risks.

The financials industries can be significantly affected by extensive government regulation, can be subject to relatively rapid change due to increasingly blurred distinctions between service segments, and can be significantly affected by availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, and price competition.

The health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.

Bonds in a portfolio are typically intended to provide income and/or diversification. In general, the bond market is volatile. Bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

Real estate is a cyclical industry that is sensitive to interest rates, economic conditions (both nationally and locally), property tax rates, and other factors. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry.

Alpha is a measure of a portfolio's risk relative to the market. An alpha of 1.0 means the portfolio outperformed the market 1.0%. A positive alpha is the extra return awarded to the investor for taking additional risk rather than accepting the market return.

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