Portfolio Commentary

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3Q17 Portfolio Commentary

Global Value Fund Performance Review For the quarter, the Global Value Fund underperformed its primary benchmark, the MSCI World Index, and its secondary benchmark, the MSCI All Country World Index. Stocks continued their ascent, with our primary benchmark rising 4.84%. Our defensive positioning led us to lag despite strong stock selection. We remain cautious and skeptical amid such an ebullient price environment. Stock selection in consumer staples and industrials aided relative performance. From a geographic perspective, stock selection in the UK and Japan contributed to results. Our stock selection in technology and materials hurt results. Stock selection in the U.S. and South Korea detracted. Our cash weighting was a relative detractor in the period.

Gregory Kolb, CFA Portfolio Manager

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

Outlook and Positioning Economically sensitive stocks delivered stronger relative performance in the third quarter, led by the commodities complex as well as technology and industrials. Specifically, more defensive sectors such as consumer staples and health care were notable laggards. As one might expect, our underperformance in the period was largely explained by our more defensive positioning, despite favorable stock selection. Given our significant emphasis on quality as we construct our portfolios, we monitor potential bifurcations in the market very carefully and regularly analyze our positioning. We continue to regard the reward-to-risk relationship as more favorable in highly cashgenerative business models with enduring brands or intellectual property as well as strong balance sheets. This is most evident in our overweight holdings in areas such as consumer goods and pharmaceuticals, and we would anticipate these stocks to perform better in an economic downturn. We contrast this with more economically sensitive exposures, especially commoditysensitive sectors such as energy and materials, where we believe risks are skewed to the downside. The quarter was marked with significantly escalating global tensions around the Korean peninsula and increased confusion around the UK political landscape and Brexit negotiations. Domestically, repeated efforts to repeal the Affordable Care Act have failed, and the Trump legislative agenda appears in turmoil as it attempts to take on an even greater challenge in tax reform. We readily acknowledge potential positive economic impact from tax reform, regulatory relief, or fiscal

Highlights • Global equity markets continued to grind higher despite increasing global tensions. • Europe outperformed the U.S. and Japan. • Lower quality sectors such as energy and materials were the strongest performers while more defensive areas like staples and health care lagged. • We maintain our cautious stance given high valuations and significant uncertainty. Page 1 of 3

George Maglares Portfolio Manager

3Q17 Portfolio Commentary stimulus. Nevertheless, we believe a more cautious approach is warranted at this phase in the cycle. At Perkins, downside scenario analysis is crucial to our investment process and philosophy. As security prices continue to rise, we are increasingly challenged to identify incremental positive catalysts that could fuel further appreciation. Additionally, security prices clearly have further to fall amid increasingly plausible down cases. We have repeatedly written and continue to believe that our rigorous approach to downside analysis helps minimize potential drawdowns such that we can compound higher returns than our benchmark over complete (and inevitable) market cycles.

Four new positions were established in the quarter: a Japanese clinical testing business, a Korean cosmetics company, a Japanese pharmaceutical and consumer health business, and a UK-based distributor of building products. We exited our holdings in AS ONE Corporation and BWX Technologies. We continue to see elevated valuations in the market, and we believe investor optimism has made identifying bargain securities with acceptable downside risk increasingly challenging. We continue to hold a portion of the portfolio in cash, as we seek to exercise sell discipline with stocks that reach our price targets and amid a dearth of what we believe to be bargain securities in the market. Thank you for your investment and continued confidence in Perkins.

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

Ending Weight (%)

Contribution (%) Top Detractors

Ending Weight (%)

Contribution (%)

Stock Spirits Group PLC

0.93

0.31

Oracle Corp

4.18

-0.14

Pfizer Inc

3.98

0.28

Foxtons Group PLC

0.32

-0.12

Ally Financial Inc

1.50

0.23

Hyundai Motor Co

1.48

-0.09

America Movil SAB de CV

1.75

0.19

PepsiCo Inc

2.61

-0.08

Intel Corp

1.47

0.19

Tikkurila Oyj

0.43

-0.07

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

Stock Spirits Group: Stock Spirits is the number two player in the Polish vodka market (the third-largest vodka market in the world) as well as a niche player in other European spirits markets. The company had been under pressure in recent years due to aggressive price competition from a Russian competitor. During the period, the company announced improving market share, better earnings and an improving pricing environment. Despite significant share price appreciation, we believe Stock Spirits has a compelling market share recovery opportunity in Poland as well as potential to redeploy its strong cash flow in adjacent markets so we continue to hold our position.

Oracle: Shares of Oracle underperformed after the company reduced guidance following the most recent earnings report. The cut to guidance was because of a moderation in the growth rate in cloud-based software sales from approximately 60% this quarter to approximately 40% expected growth next quarter. The decline in growth is because of both the size of the current cloud business, which is currently expected to be over the $4 billion annual run rate, and because of fewer total cloudbased software deals. Despite the decline in the shares, we believe the company continues to transition the majority of its customer base to its various cloud offerings. We believe it remains very difficult to transition away from Oracle software solutions and think the company enjoys a strong competitive position. The reward-to-risk ratio is attractive, in our view, and we continue to hold shares of the company.

Pfizer: Pfizer is a global pharmaceutical company with operations structured as two distinct businesses – Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). The stock was a strong contributor during the quarter after the company outlined potential benefits from tax reform, pipeline development and continued assessment of mergers and acquisitions to maximize shareholder value. Although patent expirations will continue to pressure the top line, the company expects to more than offset the declines with 15 blockbusters by 2022, with nearly half coming by 2020. We continue to hold a position in the company based on what we view as a relatively attractive risk reward versus peers. Ally Financial: Ally outperformed in the third quarter due to an improvement in anticipated auto industry credit trends, which had driven underperformance in 2016. Also, better-than-expected net interest income in the second quarter and the flattening yield curve drove

Foxtons Group: Foxtons is one of the largest real estate agencies in London. During the period, the stock disappointed investors with lower estimates in the properties sales business. However, resilient performance in the letting business combined with management costsaving initiatives has allowed Foxtons to remain a highly cash generative business. Together with its strong single brand and net cash balance sheet, we believe the reward-to-risk ratio is compelling. We continue to hold the position. Hyundai Motor Company: Hyundai Motor Company, the world’s fifthlargest auto producer, continued to face near-term operating headwinds in the most recent quarter as Chinese demand fell in retaliation against Korean businesses after South Korea installed advanced American

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3Q17 Portfolio Commentary Top Contributors (continued)

Top Detractors (continued)

outperformance of Ally compared to peer financial stocks due to Ally’s liability sensitive balance sheet.

missile defense technology. China is Hyundai’s largest market (approximately 23%). We believe these tensions will normalize, and we are encouraged by management’s efforts to improve Hyundai’s stale product lineup. We believe significant industrial net cash and a very low trading multiple of tangible book value offer meaningful downside protection.

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 Global Value Fund are: Oracle Corp (4.17%), Pfizer Inc (3.98%), Wells Fargo & Co (3.75%), Johnson & Johnson (3.65%), Alphabet Inc (3.64%), Procter & Gamble Co (3.56%), Coca-Cola Co (2.89%), PepsiCo Inc (2.61%), Sanofi (2.38%) and Novartis AG (2.18%). 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 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 highC-0917-12746 01-15-18

risk 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. Foreign securities are subject to additional risks including currency fluctuations, political and economic uncertainty, increased volatility, lower liquidity and differing financial and information reporting standards, all of which are magnified in emerging markets. Holding a meaningful portion of assets in cash or cash equivalents may negatively affect performance. MSCI World IndexSM reflects the equity market performance of global developed markets. MSCI All Country World IndexSM reflects the equity market performance of global developed and emerging markets. 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

188-42-16687 10/17

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