Stilwell Isn't (Still Well)
Stilwell Lost $1.7 Billion/Day in Nov.
By Christopher Noble
BOSTON (Reuters) - Janus Capital's parent, Stilwell Financial Inc. (NYSE:SV - news), saw its assets shrink nearly $2 billion a day in November as the hottest technology fund firm of the 1990s was hit by sharp market declines.
Stilwell reported on Friday it had $262 billion under management at the end of November -- a $38 billion plunge from the $300 billion at the end of October. That works out to a huge $1.73 billion for each trading day, most of it directly from Janus, which is 82.5 percent owned by Stilwell.
Much of the shrinkage is attributable to the dizzying drop of the Nasdaq, which logged a 23 percent decline in November, its second-worst fall ever. Only October 1987, the month of the stock market crash when Nasdaq lost 27 percent, was worse.
The Dow Jones Industrial average, with much less exposure to technology, fell only 5.1 percent in November.
``The decline in assets under management has infinitely more to do with market depreciation than it does with investor redemptions,'' said Jane Ingalls, spokeswoman for Janus.
She declined to give specific figures for monthly net cash flow, but said November was shaping up much like September and October, when redemptions from Janus retail funds were offset by inflows through its institutional channels.
``We were very squarely positive in September,'' she said. ''In October, we had modest outflows on the retail side, but they were offset almost entirely by institutional flows.''
Janus had retail outflows of $772 million in October after September net redemptions of $46 million. September was the first time since December 1997 that Janus had net outflows.
``For November, it is still a little early to tell,'' she said. ``But again, it's looking like modest outflows on the retail side and either flat or slightly negative on the institutional side.''
A shrinking asset base is just the latest bump in the road the once sleepy fund firm traveled in the 1990s. It has endured an acrimonious dispute with its former parent, Kansas City Southern Industries, over a spinoff plan and its funds have been punished as investors soured on the tech and growth sectors that are heavily favored by Janus portfolio managers.
Of Janus's 16 retail equity funds, 14 are in negative territory year-to-date and all of them lost ground in November, according to data from fund tracker Morningstar.
But recent filings with the Securities and Exchange Commission (news - web sites) show Janus has stuck with its investments and has not changed its investment style.
Stilwell also includes the Berger fund family, Nelson Money Managers Plc and a stake in DST Systems Inc.
Stilwell is not alone to suffer from investor hesitancy in recent months.
Preliminary estimates from TrimTabs, a firm that tracks money flowing in and out of the stock market, show $4.5 billion of new money flowed into mutual funds in November, the lowest figure for the year and the smallest since February 1999, when inflows were $758 million.
The estimate excludes activity on Nov. 30 and is based on actual data from 20 percent of the industry. TrimTabs extrapolates overall flows from its sample.
The money still went heavily to technology and small capitalization funds, indicating a surprisingly resilient enthusiasm for the sectors, Wittnebert said.
``The thing the public is really afraid of is missing a resumption of the rally of the Nasdaq and another indication of that is the continuing outflow from bond funds,'' he said. |
