Janus Henderson Small-Cap Value Fund — Q3 2025 Portfolio Review & Outlook

Janus Henderson’s Small-Cap Value strategy navigated a mixed Q3 2025 market backdrop by emphasizing bottom-up stock selection and disciplined risk control. The portfolio leaned into sectors where valuations and earnings visibility converged, while trimming positions in names that had rerated on better macro signals. Management highlighted a continued preference for financially resilient small caps with improving free cash flow and stable margins.

Sector positioning shifted modestly during the quarter. The team increased exposure to industrials and select financials, reflecting confidence in cyclical recovery signs and attractive relative valuations. At the same time, exposure to higher-growth, valuation-sensitive names was reduced to lock in gains and lower portfolio risk. Healthcare holdings remained a meaningful component, chosen for idiosyncratic growth prospects and defensive characteristics.

Stock-level decisions were driven by fundamental research: the managers added to high-conviction ideas where balance-sheet strength and management execution offered downside protection. They also exited or scaled back positions where price appreciation outpaced the underlying fundamentals. This active turnover aimed to enhance the portfolio’s risk-adjusted return potential without deviating from the fund’s small-cap value mandate.

Performance attribution for the quarter reflected mixed contributions from sector rotation and individual securities. Positive attribution came from select industrials and financials that benefitted from improving demand and margin trends. Detractors included a handful of name-specific issues where revenues disappointed or sector headwinds intensified.

Looking ahead, Janus Henderson’s team expects continued dispersion among small caps, driven by company-specific fundamentals rather than broad macro moves. Their strategy remains focused on identifying undervalued companies with durable business models, prudent capital allocation, and catalysts for revaluation. The managers emphasize patience and active risk management, positioning the fund to capture upside as market sentiment normalizes.

Investors should view the Q3 adjustments as tactical rather than structural, reflecting the team’s effort to balance growth prospects with valuation discipline. As always, prospective and current investors are advised to review the fund’s full holdings, prospectus, and recent commentary to assess relevance to their individual objectives and risk tolerance.