Utilizing Broader Resources Sets Janus Henderson Contrarian’s Manager Apart

Janus Henderson Contrarian’s JACNX manager has demonstrated his ability to leverage the fund’s broad, flexible approach to ably navigate through tough markets. This earned the D share class a People upgrade to Above Average from Average in June 2024 and a Morningstar Medalist Rating upgrade to Silver from Bronze.

Manager Nick Schommer took the lead in this strategy in July 2017 and brings nearly two decades of industry experience here. This team’s demonstrated ability to take advantage of the fund’s broad, flexible mandate sets it apart from rivals. This approach to sourcing ideas, which might deviate from the central analyst team’s focus on large growth stocks, helps the team successfully navigate through challenging markets. However, analyst turnover remains a mild concern, but the firm’s ability to hire experienced replacements keeps the team reasonably resourced.

Schommer focuses on three areas: misunderstood business models, undervalued assets, and underappreciated growth, with emphasis on the first one as he looks for durable competitive edges. Anchoring the portfolio to these types of businesses keeps risks in check, and diversifying into more typical growth and value stocks should help the portfolio excel through various market environments. Schommer does not tie the portfolio to any index, thus sector weightings can deviate significantly.

Since Schommer took the lead in July 2017, the D shares’ annualized 11.4% gain through April 2024 beat the Russell Midcap Index by 2 percentage points and outpaced 94% of the mid-cap blend Morningstar Category peers.

Key Morningstar Metrics for Janus Henderson Contrarian

• Morningstar Medalist Rating: Silver
• Process Pillar: Above Average
• People Pillar: Above Average
• Parent: Average

Allspring Special Global Small Cap’s Rating Drops After Team Turnover

Analyst turnover over the past year is concerning, which resulted in a downgrade to Allspring Special Global Small Cap’s EKGAX People rating to Average from Above Average. The fund’s A shares’ Morningstar Medalist Rating fell to Neutral from Bronze.

Managers Jim Tringas and Bryant VanCronkhite oversee this fund, along with another international strategy and three US strategies. The team concentrates its efforts in the US rather than global/international strategies, which only account for about 10% of the team’s $26 billion asset base. Most of the team’s success has come from its three US offerings: Allspring Special Small Cap Value ESPRX, Allspring Special Mid Cap Value WFMDX, and Allspring Special Large Cap Value EIVCX. Each of these funds has beaten its respective index since the team began managing them through May 2024. However, this fund and its sibling international strategy both lagged their index during the team’s tenure. Additionally, the recent departure of two analysts is concerning since they covered sizable allocations on the consumer cyclicals, consumer staples, and healthcare sectors.

Key Morningstar Metrics for Allspring Special Global Small Cap

• Morningstar Medalist Rating: Neutral
• Process Pillar: Above Average
• People Pillar: Average
• Parent: Average

Consistency Proves Its Edge Over Peers

SPDR SSgA Ultra Short Term Bond ETF’s ULST consistent, risk-conscious approach warranted a Process upgrade to Above Average from Average; this raised its Morningstar Medalist Rating to Bronze from Neutral.

Since manager James Palmieri took the reins in February 2019, his securitized credit expertise has made this a more compelling offering. Alongside him, comanager John Mele leads the firm’s investment-grade credit team. While the exchange-traded fund’s top-down and bottom-up approach is typical of other offerings, consistently strong decision-making sets this process apart from peers. For example, the managers direct their analysts to seek the best relative value picks across corporate and securitized debt, aligning with the firm’s investment themes and recommended asset-allocation mixes based on its macro views. The process allows for more duration (a measure of interest-rate risk) flexibility, including the use of Treasury futures to tactically hedge interest-rate risk. In addition, the team judiciously invests in lower-rated bonds, typically less than 5% of assets. A diverse toolkit helps the managers navigate through various market conditions.

Key Morningstar Metrics for SPDR SSgA Ultra Short Term Bond ETF

• Morningstar Medalist Rating: Bronze
• Process Pillar: Above Average
• People Pillar: Average
• Parent: Above Average