Portfolio Commentary

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3Q17 Portfolio Commentary

Large Cap Value Fund Performance Review Consistent with Perkins’ philosophy of providing attractive returns over a full market cycle by mitigating losses in down markets while participating in up markets, the Fund delivered positive returns but underperformed its benchmark, the Russell 1000 Value Index, for the quarter. Stock selection in industrials, materials and health care was beneficial. Materials was the bestperforming sector in the index for the period and our overweight was also additive. Within financials, interest rates moved higher later in the quarter, paving the way for bank stocks to deliver strong performance, but our insurance stocks struggled after various natural disasters in North America. Consumer discretionary exposure to media coupled with a lack of exposure to stronger performing retail stocks was a headwind to performance in that sector. During the quarter, we pared back on consumer staples on strength and added to energy on weakness.

Tom Perkins Portfolio Manager

For detailed performance information, please visit janushenderson.com/performance.

Outlook and Positioning At Perkins, while we focus primarily on individual stocks, we believe it is important to pay careful attention to the big picture. Sometimes that is where the most important risks lurk. Key considerations at the macro level include trade-offs between relatively expensive “stable” companies and cheaper “cyclical” firms, potentially changing central bank behavior in the capital markets, the ability of China to continue with its asset- and debt-intensive growth model, and whether President Donald Trump and the U.S. Congress will enact corporate tax cut and/or growth-inducing legislation. We are also considering whether what has been will continue to be at the company and industry level. For example, much is changing in the consumer retail ecosystem and, while many related stocks are currently down-and-out, they may be value traps rather than true bargains. Similarly in media, technological change is having a big impact on many players and previously very profitable business models are experiencing significant threats. More generally, as we vet individual securities, we are especially attracted to strong balance sheets, entrenched competitive advantage, and reasonable valuations in what we believe is a high-price/high-risk stock market environment. We also increasingly prize stocks that are off the beaten path and are thus somewhat less exposed to passive investment flows, which may not always continue to be significantly positive, as they have been recently.

Highlights • The strategy underperformed the benchmark for the quarter. • While performance during the quarter was consistent with Perkins’ philosophy, stock selection in consumer discretionary and financials hindered performance. • We remain focused on stocks that we believe have healthy balance sheets, a strong competitive advantage and are trading at a reasonable valuation. Page 1 of 3

Kevin Preloger Portfolio Manager

3Q17 Portfolio Commentary In terms of positioning, we remain overweight in the materials, technology and consumer staples sectors. However, we did trim some of our holdings in staples as we believe that the valuations have become overextended in some of our stocks. The Fund remains underweighted in energy, consumer discretionary, real estate investment trusts (REITs), telecom and utilities. Energy was an area where we added some exposure as we became more constructive on the commodity outlook and the stocks

where trading near recent lows. Our bank weighting also increased during the period as we added to bank stocks given a favorable interest rate and regulatory backdrop. Thank you for your continued co-investment with us in the Large Cap Value Fund.

Top Contributors and Detractors for the Quarter Ended 9/30/17 Top Contributors

Ending Weight (%)

Contribution (%) Top Detractors

Ending Weight (%)

Contribution (%)

Westlake Chemical Corp

1.77

0.41

AmerisourceBergen Corp

1.01

-0.26

Affiliated Managers Group Inc

2.02

0.27

XL Group Ltd

2.35

-0.25

Citigroup Inc

3.02

0.26

Omnicom Group Inc

1.30

-0.15

Pfizer Inc

3.72

0.26

JM Smucker Co

1.08

-0.13

Total System Services Inc

1.69

0.23

Twenty-First Century Fox Inc

1.61

-0.13

The holdings identified in this table, in compliance with Janus Henderson policy, do not represent all of the securities purchased, held or sold during the period. To obtain a list showing every holding as a percentage of the portfolio at the end of the most recent publicly available disclosure period, contact 800.668.0434 or visit janushenderson.com/info.

Top Contributors

Top Detractors

Westlake Chemical Corp.: Westlake Chemical is a U.S.-based chemical company focused on ethylene, vinyls and chlor-alkali production that is 70% owned by management. The company has opportunistically used its balance sheet to drive above-average returns on invested capital through both organic and non-organic means. In 2016, Westlake purchased a weaker competitor, helping to rebalance its portfolio to decrease exposure to ethylene, a market that was turning down, and increase its exposure to chlor-alkali, a market that was improving. This has driven above-average earnings growth and strong free cash flow, which is being used to pay down debt. The shares benefited late in the quarter as many of its competitors ceased operations due to Hurricane Harvey while Westlake was able to maintain operations. Given the strength of the stock, we trimmed our position to reflect what we view as the lower reward-to-risk ratio.

AmerisourceBergen Corp.: AmerisourceBergen is one of the three national pharmaceutical distributors. The stock traded lower during the quarter largely on the company’s outlook. Although there was no specific financial guidance, the company stated branded drug price inflation is likely to be at, or below, the low end of its guidance range, and generic drug price deflation trends remain challenging. In addition, the company noted it will have higher operating expenses as it opens several new distribution centers and is evaluating IT system investments. We trimmed our position given the continuing difficult environment for drug pricing.

Affiliated Managers Group: Boutique investment management holding company Affiliated Managers Group outperformed in the quarter due to a strong earnings report that was driven by higher-than-expected client in-flows. In addition, a robust fundraising pipeline drove analysts to increase organic growth estimates for the remainder of 2017. Due to the expected recovery in organic growth and responsible capital management, the company has recovered what we view as a premium multiple. We trimmed some of our position on price strength. Citigroup Inc.: Citigroup outperformed in the quarter due to better-thanexpected performance under the Federal Reserve’s Dodd Frank Annual Stress Test (DFAST) as well as in the Comprehensive Capital Analysis and Review (CCAR). The capital deployment approved under the CCAR exam exceeded high Street expectations and led to positive earnings revisions. Additionally, Citigroup reported much better-than-expected

XL Group: XL Group operates in two segments: insurance and reinsurance. XL underperformed in the third quarter due to a series of major hurricanes making landfall in the United States and its territories, resulting in a large amount of insured losses. As a global reinsurer, XL has exposure to these loss events and will incur charges that will significantly impact its third quarter earnings. Although a significant earnings event for XL, we believe the balance sheet of the company is still well capitalized and able to withstand these natural disasters. We maintained our position during the quarter. Omnicom Group: Omnicom is the second-largest global advertising company. Shares underperformed in the quarter as global advertising budgets have come under pressure. While international growth was relatively solid, North American revenue was weaker than expected. The weakness in North American revenue is due to general marketing cuts across Omnicom’s client base. Large national brands are scrutinizing ad budgets more closely, resulting in spending cuts to marketing, branding and public relations strategies. Additionally, the market is also concerned about potential margin compression as digital solutions

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3Q17 Portfolio Commentary Top Contributors (continued)

Top Detractors (continued)

second quarter earnings results driven by improved investment banking and fixed income, currency and commodity trading revenues. We trimmed some of our holdings on price strength, but maintain an above-average-sized position.

continue to increase as a percentage of Omnicom’s total revenue. We maintained our position as we believe Omnicom continues to take market share from its competitors and the reward-to-risk ratio is favorable.

For more information, please visit janushenderson.com. Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information, please call Janus Henderson at 800.668.0434 or download the file from janushenderson.com/info. Read it carefully before you invest or send money. Past performance is no guarantee of future results. Call 800.668.0434 or visit janushenderson.com/performance for current month-end performance. Discussion is based on the performance of Class I Shares. As of 9/30/17 the top ten portfolio holdings of Janus Henderson Large Cap Value Fund are: US Bancorp (3.74%), Johnson & Johnson (3.67%), Pfizer Inc (3.58%), Wells Fargo & Co (3.19%), Citigroup Inc (2.92%), Crown Holdings Inc (2.89%), Berkshire Hathaway Inc (2.86%), Oracle Corp (2.74%), PPL Corp (2.72%) and Equity Residential (2.72%). There are no assurances that any portfolio currently holds these securities or other securities mentioned. The opinions are as of 9/30/17 and are subject to change at any time due to changes in market or economic conditions. Janus Henderson may have a business relationship with certain entities discussed. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity C-0917-12727 01-15-18

securities, such as private placements and some share classes of equity securities, are excluded. Performance may be affected by risks that include those associated with nondiversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and highrisk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details. Russell 1000® Value Index reflects the performance of U.S. large-cap equities with lower price-to-book ratios and lower expected growth values. Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment. Perkins Investment Management LLC is a subsidiary of Janus Henderson Group plc and serves as the sub-adviser on certain products. Janus Henderson and Perkins are trademarks or registered trademarks of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC. Funds distributed by Janus Henderson Distributors 188-42-16696 10/17

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