 "Logo of Janus Capital near Nasdaq, New York (pic: Nasdaq's Twitter account)")
Janus Capital, a leading US-based fund house that was among the most bullish investors in India till December, appears to have changed its position in just one quarter.
In the first quarter of 2016, the fund house cut its stake in Indian companies by around half. In December 2015, 23.03 per cent of its $1.73-billion Janus Overseas Fund was invested in Indian companies. By March 2016, this was down to 10.5 per cent. Another scheme, the $727-million Janus Aspen Overseas Fund, also reduced its stake in Indian firms substantially.
These funds’ weights in Reliance Industries Ltd (RIL) came down to just 1.35 per cent, from about 10 per cent (top holding in the quarter ended December 2015) and sold its entire position in DLF (among the top 10 in December).
Other Indian stocks where weights have been reduced are Vakrangee, Axis Bank, and Cox & Kings, while Mahindra & Mahindra (1.5 per cent of assets) and LIC Housing Finance (0.8 per cent) were added to the portfolio. In March 2016, United Continental Holdings and Alibaba Group Holding were the top two holdings of these funds.
Investment research firm Morningstar’s analyst Greg Carlson said this was because of the change in manager at the fund house. George Maris took over as manager of these two funds from Brent Lynn in January. He said it was not unusual for a new manager to make big changes after taking over. “The previous manager crafted portfolios that at times looked radically different from the fund’s benchmark. Maris is willing to deviate from his benchmark, but not to the same degree,” said Carlson.
Janus Capital did not respond to an email query from Business Standard.
While these funds are not the biggest US mutual fund investors in India, they are among the largest in terms of weights in their category (foreign large-blend) as a percentage of assets invested. Most funds in this category do not have any exposure to India, with the average category weight being one per cent.
In the first quarter of 2016, the fund house cut its stake in Indian companies by around half. In December 2015, 23.03 per cent of its $1.73-billion Janus Overseas Fund was invested in Indian companies. By March 2016, this was down to 10.5 per cent. Another scheme, the $727-million Janus Aspen Overseas Fund, also reduced its stake in Indian firms substantially.
These funds’ weights in Reliance Industries Ltd (RIL) came down to just 1.35 per cent, from about 10 per cent (top holding in the quarter ended December 2015) and sold its entire position in DLF (among the top 10 in December).
Other Indian stocks where weights have been reduced are Vakrangee, Axis Bank, and Cox & Kings, while Mahindra & Mahindra (1.5 per cent of assets) and LIC Housing Finance (0.8 per cent) were added to the portfolio. In March 2016, United Continental Holdings and Alibaba Group Holding were the top two holdings of these funds.
Investment research firm Morningstar’s analyst Greg Carlson said this was because of the change in manager at the fund house. George Maris took over as manager of these two funds from Brent Lynn in January. He said it was not unusual for a new manager to make big changes after taking over. “The previous manager crafted portfolios that at times looked radically different from the fund’s benchmark. Maris is willing to deviate from his benchmark, but not to the same degree,” said Carlson.
Janus Capital did not respond to an email query from Business Standard.
While these funds are not the biggest US mutual fund investors in India, they are among the largest in terms of weights in their category (foreign large-blend) as a percentage of assets invested. Most funds in this category do not have any exposure to India, with the average category weight being one per cent.
RIL was the top stock in Janus Aspen Overseas and Janus Overseas Fund with weights of 10.1 per cent and 9.2 per cent in December 2015. Both funds have reduced their weights in RIL to 1.4 per cent each. The two funds sold a combined holding in RIL of $231 million (Rs 1,530.4 crore) in the March quarter. They have also completely exited DLF — among the top 10 stocks in their portfolio, worth around $70 million (Rs 463.8 crore). ($1 = Rs 66.25.)
Janus’ entry into RIL in 2000 created waves. At the time, the fund house purchased a 5.69 per cent stake in the company. According to reports, the value of the purchase was around Rs 2,000 crore.
Since then, the fund house has increased its stake in the company and other Indian companies as well. In 2011, it held 41 million shares of RIL (the highest) and its weight for the fund house was 12.93 per cent. In March 2016, it held around two million shares. Similarly, it held 58 million shares of DLF in December 2015 and holds none now.
Despite the sale, foreign institutional investors’ holdings in RIL rose from 18.77 per cent to 19.54 per cent between December 2015 and March 2016.
| Janus Aspen Overseas Instl | Janus Overseas D | |||
| Portfolio Date | Dec 31, 2015 | Mar 31, 2016 | Dec 31, 2015 | Mar 31, 2016 |
| Weight in RIL (in%) | 10.1 | 1.4 | 9.2 | 1.4 |
| No of shares in RIL (in Mn) | 5.4 | 0.6 | 12.0 | 1.5 |
| Value of shares in RIL (in $ Mn) | 82.4 | 9.8 | 183.6 | 23.2 |
| Weight in DLF (in %) | 2.7 | 0.0 | 2.5 | 0.0 |
| No of shares in DLF (in Mn) | 30.4 | 0.0 | 11.4 | 0.0 |
| Value of shares in RIL ($ Mn) | 53.3 | 0.0 | 20.0 | 0.0 |
| * Two other Janus schemes hold another 21,000 shares of RIL | ||||
| Source: © 2016 Morningstar, Inc. | ||||
