Janus Henderson Overseas Fund Q4 2025 Review
Performance Summary
The Janus Henderson Overseas Fund achieved a return of 4.65% during the fourth quarter of 2025, while its benchmark, the MSCI All Country World ex USA Index SM, posted a slightly higher return of 5.05%. This performance reflects the fund’s strategic positioning in a dynamic global market environment.
Key contributors to the fund’s relative performance included astute stock selection within the consumer discretionary and healthcare sectors. These areas demonstrated resilience and growth potential, allowing the portfolio to capture meaningful upside. Conversely, stock picks in the communication services and materials sectors underperformed relative to the benchmark, presenting areas for future refinement.
Looking ahead, the portfolio managers intend to capitalize on market volatility by identifying and pursuing investment opportunities where the potential for free cash flow generation appears significantly undervalued. This approach underscores a disciplined, value-oriented strategy aimed at long-term wealth creation for investors.
Portfolio Management Team
The fund is expertly managed by Julian McManus and Christopher O’Malley, CFA. Their combined expertise guides the fund’s investment decisions, drawing on deep market insights and rigorous analysis.
Investment Environment Overview
Non-U.S. equities experienced notable gains throughout the quarter, driven by several interconnected factors. Indicators of stable economic growth across key international markets provided a solid foundation for investor confidence. Positive corporate earnings reports from major companies further bolstered market sentiment, highlighting the underlying strength of global businesses outside the United States.
Additionally, growing expectations for interest rate reductions by central banks in regions beyond Japan played a pivotal role. These anticipated policy shifts are viewed as supportive of economic expansion and corporate profitability, fostering an environment conducive to equity appreciation. Market participants increasingly priced in these developments, contributing to the upward trajectory observed in international indices.
The quarter’s market dynamics were characterized by a blend of macroeconomic stability and microeconomic tailwinds. Steady growth trajectories in developed and emerging markets alike encouraged risk-taking among investors. Corporate balance sheets remained healthy, with many firms reporting earnings that exceeded analyst expectations, thereby reinforcing positive momentum.
Central bank actions, or the prospect thereof, added another layer of optimism. Policymakers in Europe, Asia, and other regions signaled a willingness to ease monetary policy in response to moderating inflation pressures and resilient growth data. This divergence from Japan’s more cautious stance highlighted varying global economic cycles, offering selective opportunities for international investors.
Strategic Positioning and Key Holdings
European financial institutions, such as BBVA, continue to hold a prominent place in the portfolio. These banks are selected for their impressive earnings profiles, superior asset quality, and attractive valuations that remain below intrinsic worth. Potential catalysts include regulatory easing and increased merger and acquisition activity, which could unlock substantial value.
AstraZeneca (AZN) remains a high-conviction holding, supported by robust recent performance, upward revisions to guidance, and a promising product pipeline. The company’s trajectory includes as many as 20 new product launches by 2030, elements of which are not yet fully reflected in current market pricing, suggesting considerable undervaluation.
In the defense sector, positions in companies like BAE Systems and Rheinmetall are maintained with optimism. Although short-term pressures from geopolitical de-escalation rumors have led to recent softness, the broader outlook points to a sustained multi-year increase in European defense expenditures. This structural shift positions these investments favorably for enduring gains.
Outlook and Approach
The fund’s management team, backed by Janus Henderson Investors’ shared knowledge philosophy, emphasizes active management to navigate complexities in international markets. Formed from the 2017 merger of Janus Capital Group and Henderson Global Investors, the firm prioritizes translating research-driven ideas into tangible results for clients.
This collaborative ethos permeates all aspects of the investment process, from idea generation to execution. Investment professionals operate with flexibility tailored to their specialized domains, yet function cohesively as a unified team. The commitment to empowering clients through superior insights remains central to the firm’s mission.
As market conditions evolve, the fund will remain vigilant, leveraging volatility to acquire positions in high-quality companies trading at discounts to their cash flow potential. This patient, opportunistic stance is designed to deliver superior risk-adjusted returns over the long horizon, aligning with the objectives of discerning investors seeking exposure to global opportunities beyond U.S. borders.
