News that the Denver company will lose roughly 3.7 percent of its assets under management in the next months, disclosed in a regulatory filing, spread like butter through the $7.6 trillion mutual fund industry.
Analysts said more redemptions are likely and speculated that firms like Fidelity Investments, Vanguard Group and T. Rowe Price Group Inc would benefit.
Recently, Janus settled regulatory probes of improper mutual fund trading. But poor performance still dogs the firm and investors had already pulled out $3.5 billion in the first six months of 2004, data from Financial Research Corp show.
Analysts speculated that the investor removing $5 billion may be a pension fund. Brad Pacheco, a spokesman for the California Public Employees' Retirement System, the country's biggest public retirement fund, said it was not Calpers.
Even with no name attached, the investor wields power.
"That investor will have influence," said Robert McCarthy, president of consulting firm Kanon Bloch Carre. "I could not see this event not having some knock-on effect."
Poor returns plus a string of new managers are seen as the main reasons for more investors to quit Janus, analysts said.
Over the last five years, Louis Harvey, president of financial research firm Dalbar Inc, said the average Janus investor lost about $20,000, adding that the mutual fund scandal has cost investors only 25 cents each during the same time.
To boost sagging performance, Janus has turned over management, several times. New Chief Executive Officer Steven Scheid now heads a team of newcomers; in recent months, a string of well known fund managers like Helen Young Hayes, Warren Lammert and James Craig have left.
Most recently, Laurence Chang was dropped from Janus Worldwide and replaced by Jason Yee.
Friday's news suggests some investors still aren't happy.
"This is a no confidence vote," said Dan McNeela, analyst at fund research firm Morningstar Inc.
Kanon's McCarthy called the stream of departures at Janus "very troubling" and explained that even though many fund companies see managers leave, the frequent rotation at Janus suggests something more worrying may be at play.
For the handful of firms that not been tainted by the mutual fund scandal, the prospect of more redemptions at Janus may be positive, analysts said. "There are people out there on the glory train like Fidelity, Vanguard and T. Rowe Price and they'll get the money," said Dalbar's Harvey.