PORTFOLIO MANAGER Q&A
Finding opportunity in global fixed income
Janus Global Bond Fund
A: JGBAX C: JGBCX I: JGBIX T: JHBTX
Diversifying fixed income exposure
The uncertainty around rising interest rates in the United
States has led many investors to consider global fixed
income investing as an important diversifier in their portfolio.
In this Q&A, Janus Global Bond Fund Portfolio Manager
Chris Diaz, CFA discusses the benefits and risks of global
fixed income investing.
Why should investors consider global fixed income
for their portfolio?
DIAZ: Two important points come to mind. First, global investing
provides a much broader opportunity set than just investing
domestically. As an active global manager, we can invest in
corporate credit, sovereigns and securitized bonds all over the
world, oftentimes in countries that are at different points
economically than the U.S.
Second, a global mandate allows us to diversify risk exposures.
For example, many clients are concerned interest rates are going
to rise in the United States. We have the ability to diversify interest
rate exposure across a variety of yield curves. Importantly, we gain
exposure to yield curves in countries where rates are not expected
to rise. This diversifies the interest-rate risk or volatility associated
with a U.S.-only portfolio. Ultimately, global fixed income could be
considered as a core, long-term allocation given the total return
and diversification potential.
We have the ability to diversify interest rate exposure across
a variety of yield curves.
How would you describe the Janus Global Bond Fund?
DIAZ: The Janus Global Bond Fund is an all-weather, multi-sector
portfolio that draws upon Janus’ 25+ year tradition of fixed income
investing. We employ a fundamental, bottom-up approach and focus
on delivering risk-adjusted returns and capital preservation for
clients. We have the flexibility to deviate significantly from the
index on a sector, country, duration and currency basis – we won’t
invest if the expected returns are not commensurate with the risks.
JUNE 2014
Is your process focused on one sector or risk factor?
DIAZ: No. Our multi-sector approach allows us to diversify our risk
exposures. We anticipate security selection and sector positioning
to be important contributors to our returns, along with our actively
managed duration and currency exposure. While we are very flexible
in our approach, we are capital-preservation minded. For instance, we
have averaged less than 20% emerging-market currency exposure
and we limit overall high-yield exposure to 35% by prospectus.
We believe we can get to the same
place long term as many of our more
aggressive competitors, but with less
volatility along the way. As opposed
to pulling a single lever or relying
on a single sector for returns,
we’ve generated income and returns
from a wide variety of issuers across
sectors globally.
“Janus Global Bond
is a different type
of fund – you’re
going to find a lot
of corporate bond
exposure, but we
avoid allocating
too much risk to
a single decision,
which has helped
keep volatility
low relative to
many other global
bond funds.”
Chris Diaz, CFA
Portfolio Manager
PORTFOLIO MANAGER Q&A | FINDING OPPORTUNITY IN GLOBAL FIXED INCOME
Continued on next page
PORTFOLIO MANAGER Q&A | FINDING OPPORTUNITY IN GLOBAL FIXED INCOME | JUNE 2014
How is the team aligned to support the Janus
Global Bond Fund?
DIAZ: We have a very integrated approach to asset management.
Portfolio Managers, analysts, traders, and risk management all work
closely together and meet every day. There are no silos within our
team. For instance, the risk team is not on a different floor or in
a different building. They attend all of our meetings and are fully
integrated into the investment process.
How does risk management impact the research and
portfolio construction process?
DIAZ: We take a very prudent approach to risk-management
within the Fund. We have a proprietary research and riskmanagement system, Quantum Global, which aggregates the
risk factors within the portfolio so that we can be fully aware
of our exposures in real time. Some global fixed income funds
are solely focused on returns and can give investors a volatile ride.
We’re focused on the total experience and carefully consider
both security and portfolio-level risks.
How do you manage geopolitical events?
DIAZ: The difficulty in global risk management often lies in the
unforeseen. Geopolitical risks lurk around many corners of the world.
For example, we have very limited ability to forecast the outcome of
a Russian invasion or annexation of land in Ukraine. Our challenge is
to anticipate and adapt to events and the ever-changing risks in the
u
asset class. To address these challenges, our team meets with not
only companies but politicians, central bankers, industry groups,
think tanks, etc. in order to develop our thesis on a particular
country or region.
Why should investors consider the Janus Global Bond Fund?
DIAZ: Our diversified approach across sectors, including global
corporate bonds, and avoidance of concentrated, single decision
risks, has kept the volatility relatively low. We believe the fund can
be considered as an anchor to a client’s overall portfolio and as a
diversified source of income. We as fixed income investors need to
remember – equities typically provide the upside, but clients expect
their fixed income allocation to provide more stable returns, downside
protection and income.
PORTFOLIO MANAGER BIO
Chris Diaz, CFA | Portfolio Manager
Chris Diaz serves as Head of Global Rates and is the lead
portfolio manager of the Janus Global Bond Fund. Prior to
joining, Mr. Diaz served as head of the global rates group
and was a portfolio manager at ING Investment Management.
Mr. Diaz received his bachelor of science degree in finance from
the University of South Carolina and also earned an MBA, with
a concentration in finance, from Emory University – Goizueta
Business School. Mr. Diaz holds the Chartered Financial Analyst
designation and has 17 years of financial industry experience.
A
sk your financial advisor if your portfolio could benefit from a diversified source of income with the
Janus Global Bond Fund.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if
available, a summary prospectus containing this and other information, please call Janus at 877.33JANUS (52687) or download
the file from janus.com/info. Read it carefully before you invest or send money.
Investing involves risk, including the possible loss of principal and fluctuation of value. Past performance is no guarantee of future results. There is no
assurance the stated objective(s) will be met.
Fixed income securities are subject to interest rate, inflation, credit and default risk. The bond market is volatile. As interest rates rise, bond prices usually fall,
and vice versa. The return of principal is not guaranteed, and prices may decline if an issuer fails to make timely payments or its credit strength weakens.
Foreign securities, including sovereign debt, are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility
and differing financial and information reporting standards, all of which are magnified in emerging markets. Securitized products, such as mortgage- and assetbacked securities, are also subject to prepayment and liquidity risk.
Risk management includes an effort to monitor and manage risk, but does not imply low risk or ability to control certain risk factors. Diversification neither assures a
profit nor eliminates the risk of experiencing investment losses.
The opinions are as of 6/1/14 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as
a recommendation of individual holdings or market sectors, but as an illustration of broader themes.
Janus Distributors LLC
C-0614-65827 05-30-15 199-15-28262 06-14