Considering the market losses suffered in funds run by Janus, investors in its funds should be applauded for their patience. Today, Stilwell Financial, the parent of Janus (and Berger Funds as well) said that investors pulled $4.7 billion from Janus funds during the second quarter.

Though large on an absolute bases, the figure is relatively small considering the steep losses in the firm's funds and rumors of forced selling by its fund managers. Indeed, for many market watchers Janus has become the bellweather for gauging the reaction of fund investors to events in the market. To date, the bulk of the decline in assets under management at Stilwell has been created by market losses rather than floods of redemptions.

This case supports the contention of many industry participants who believe that all but a minority of retail investors react to market losses by freezing their assets rather than cashing out. Last week, Strategic Insight backed up this commonly held belief with historical data published in a special report. In it, Avi Nachmany, director of research at the New York City firm, pointed out that the fund industry has not experience mass redemptions in any bear market since the Second World War.

Altogether, Stilwell reported that fund investors pulled $7.3 billion in assets from its affiliates. Assets under management fell to $177 billion at the end of the quarter from $189 billion at the start.

The declining asset base pushed earnings at the firm down by about 25 percent to $0.32 per share. That figure was $0.02 below what Wall Street analysts were expecting.

Keefe Bruyette responded to the report by downgrading Stilwell's rating to "outperform", from "market outperform." Stilwell has scheduled a conference call to discuss the results for this afternoon.  

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