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The Janus Henderson Forty Fund concluded the initial quarter of 2026 with a notable underperformance, registering a return of -12.25% against the Russell 1000® Growth Index's -9.78%. This disparity in outcomes stemmed from various strategic investment choices within the portfolio. The fund's performance was particularly influenced by its holdings in the consumer discretionary sector, where specific stock selections encountered headwinds. Conversely, strategic positions within the industrials sector provided some mitigation to the overall decline.

A significant factor in the fund's first-quarter downturn was the performance of Oracle. The company's stock experienced a decline as market participants voiced concerns regarding its capacity to finance an extensive infrastructure development program while simultaneously striving to broaden its footprint in the hyperscale market. This skepticism surrounding Oracle's financial maneuverability and growth ambitions directly impacted the fund's returns.

Similarly, DraftKings shares faced downward pressure following the release of its preliminary 2026 financial projections. These projections indicated a weaker outlook, attributed in part to escalating operational expenditures and a deceleration in customer acquisition trends. These factors collectively contributed to the underperformance within the consumer discretionary segment of the fund.

In contrast, the fund's holdings in Eaton demonstrated resilience and investor appeal. Enthusiasm for Eaton was primarily driven by its expanding role in supplying critical components to data centers, a segment experiencing robust growth in orders and backlog. This strategic positioning aligns the fund with the burgeoning demand for infrastructure supporting the artificial intelligence (AI) sector. Furthermore, Howmet Aerospace, leveraging its robust competitive standing, successfully capitalized on the surging demand for aircraft components. This demand is fueled by a growing backlog of aircraft orders and the ongoing need to maintain aging commercial airline fleets, positioning Howmet Aerospace as a positive contributor to the fund's industrial exposure.

Despite the challenges faced in the first quarter, the Janus Henderson Forty Fund remains strategically aligned with long-term growth opportunities. Its focus on companies integral to the AI investment cycle, alongside those benefiting from renewed demand in traditional industrial sectors, positions the fund for potential recovery and growth in the upcoming periods. The fund management's assessment suggests that underlying value exists in its current holdings, and adjustments will be made to navigate evolving market dynamics and capitalize on emerging trends.