Janus has launched the Janus Real Return Allocation Fund, which seeks to provide total returns in excess of the rate of inflation over a full market cycle. Janus will co-manage the fund with Armored Wolf.
Janus Co-CIO Gibson Smith said that many investors may not be prepared for a spike in inflation and the loss of purchasing power that would accompany that.
“As a nation, we are being forced to deal with the outcomes related to reflationary policy, a growing money supply, rising commodity prices and a rapidly expanding national budget deficit,” Smith said. “This new fund is aimed at helping investors confront inflation concerns.”
The fund will allocate its assets among six sleeves: inflation-linked bonds, commodities, emerging market debt, emerging market equity, global real estate and short-term bonds.
In a highly inflationary environment, inflation-protected bond funds may not be enough of a hedge, according to Armored Wolf Managing Director John Brynjolfsson.
“With the current rate of inflation at historically low levels, investors should prepare for higher levels of inflation in the coming years,” Brynjolfsson said. “I think it’s going to be important to invest in multiple asset classes that exhibit low historical correlations to equity and fixed income markets as a hedge against rising inflation.”
Smith added: “We are looking forward to our partnership with Armored Wolf on this new strategy. It is clear during his 19-year career at PIMCO, followed by his founding of Armored Wolf, John has distinguished himself as an expert in alternative real assets, commodities, global inflation-linked bonds and asset allocation strategies. Together we can leverage our individual strengths in a collaborative effort to help shield against the negative effects of inflation.”