Navigating Global Waters: A Human Look at Janus Henderson's Overseas Account in Q4 2025

Well, here we are, wrapping up 2025, and what a fascinating quarter it’s been for global markets, especially for those of us focused on opportunities beyond the U.S. shores. At Janus Henderson, we’ve always believed in the immense potential held by international companies, and Q4 2025 really put that conviction to the test, offering both intriguing challenges and, frankly, some compelling reasons to stay the course.

Let's talk numbers first, because, you know, they tell a story. For our Overseas ADR Managed Account, Q4 2025 delivered a solid, albeit perhaps not spectacular, positive return. We were quite pleased with how the portfolio held its own, navigating some pretty choppy global waters. While the 'Magnificent Seven' back home in the States continued to grab headlines and push U.S. indices to new heights – a truly remarkable run, by the way – our international selections, broadly speaking, quietly chipped away, showing resilience. We certainly kept pace with our international benchmark, the MSCI ACWI ex-US, and sometimes even edged it out, which is always a good feeling.

Looking back at the market backdrop, Q4 really felt like a period of cautious optimism, a sort of collective holding of breath. Inflation, which had been a relentless dragon for so long, seemed to be finally cooling its heels in many regions, giving central banks a bit more wiggle room. The big question, of course, was always: when will those interest rate cuts finally materialize? That uncertainty, that 'will they, won't they?' dynamic, certainly kept investors on edge. But what we observed, and what really encouraged us, was that despite this overarching macroeconomic fog, many high-quality international companies were demonstrating impressive underlying fundamental strength. They were innovating, expanding, and, importantly, trading at valuations that still looked mighty attractive compared to their U.S. counterparts.

So, what were we doing in the portfolio during this time? Our philosophy, as always, is rooted in a disciplined, bottom-up approach. We’re not chasing fads; we're hunting for businesses with strong balance sheets, sustainable competitive advantages, and management teams we trust. In Q4, we took the opportunity to judiciously trim a few positions that had run up significantly, feeling perhaps a tad ahead of themselves. Conversely, we selectively added to existing high-conviction names that we felt the market was still underappreciating, especially during any minor dips. Think global leaders in specific industrial niches, innovative healthcare providers outside the U.S., or consumer staples companies with robust emerging market exposure. We maintained a diversified exposure across developed markets like Europe and Japan, alongside a strategic allocation to certain emerging markets where we see long-term structural growth stories unfolding.

Now, peering into 2026 and beyond, we remain cautiously optimistic, leaning more towards optimistic, to be honest. The valuation gap between U.S. and international equities is still quite pronounced, and we believe that gap can't persist indefinitely, particularly if global economic growth continues to stabilize and central banks begin to ease monetary policy. There’s a lot of untapped potential out there, and we're convinced that a diversified portfolio, with a healthy allocation to well-managed international businesses, is crucial for long-term wealth creation. We’ll continue to stick to our core principles, focusing on quality and value, and frankly, we’re pretty excited about the opportunities we see on the horizon. It’s a big world out there, and it’s full of incredible companies just waiting to be discovered.