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Janus Henderson Forty Fund Reports 12.25% Loss in Q1 2026 Amid Market Volatility
On June 30, Janus Henderson Investors released the Forty Fund’s first‑quarter 2026 investor letter, revealing a 12.25 % decline for the concentrated large‑cap growth portfolio. The drop eclipsed the 9.78 % slide of the Russell 1000 Growth Index over the same period.
The letter attributes the quarterly loss to heightened market volatility and a weak consumer discretionary sector. While the fund’s 10‑year annualized return sits near 15 %, the management team frames the downturn as a short‑term setback rather than a long‑term reversal.
Early‑2026 optimism was initially buoyed by strong macro‑economic data, but a combination of Middle East tensions and rising inflationary pressures began to dampen investor sentiment. "The consumer discretionary sector has been a key drag on the portfolio," the letter notes, citing the sector’s exposure and the broader market sell‑off as primary contributors to the decline.
Despite the loss, the management team maintains a positive outlook on the economy, emphasizing continued investment in artificial intelligence (AI) as a growth catalyst. AI remains a central theme for the Forty Fund, with the letter highlighting share‑price gains among AI supply‑chain companies and noting that several AI‑focused names feature among the top five holdings for 2026.
DraftKings Inc. (NASDAQ:DKNG) is a prominent holding. On June 16, the stock closed at $28.51, reflecting a 13.25 % return over the month but a 28.47 % decline over the past year. The letter describes DraftKings as a "leading online sports‑betting and iGaming company" that has faced weaker 2026 guidance. Management attributes the guidance shortfall to higher operating costs and slower customer growth, raising concerns that traditional sports betting may be losing ground to sports prediction markets.
"DraftKings is taking steps to bolster its competitive position through expansion into the predictions market," the letter states, adding that the company’s brand strength and economies of scale could provide long‑term upside. The team also highlights DraftKings’ commitment to innovation and the use of AI to enhance customer engagement.
While DraftKings is not listed among the 40 most popular stocks among hedge funds heading into 2026, the letter reports that 61 hedge‑fund portfolios held the stock at the end of the quarter, down from 72 in the previous quarter. The commentary suggests that certain AI stocks may offer greater upside potential and lower downside risk compared to DraftKings.
The investor letter concludes that the fund remains focused on high‑quality growth companies, with a particular emphasis on AI and technology themes. Management stresses that the current market volatility is a temporary challenge and that the long‑term strategy is designed to capture value as the broader economy stabilizes.
In summary, the Janus Henderson Forty Fund suffered a 12.25 % loss in Q1 2026, underperforming its Russell 1000 Growth benchmark. The decline was driven by consumer discretionary weakness, market volatility, and geopolitical and inflationary pressures. Despite the setback, the fund’s 10‑year performance remains robust, and its management maintains a positive view on AI and technology sectors, with DraftKings positioned as a key holding amid evolving betting and prediction markets.
The letter attributes the quarterly loss to heightened market volatility and a weak consumer discretionary sector. While the fund’s 10‑year annualized return sits near 15 %, the management team frames the downturn as a short‑term setback rather than a long‑term reversal.
Early‑2026 optimism was initially buoyed by strong macro‑economic data, but a combination of Middle East tensions and rising inflationary pressures began to dampen investor sentiment. "The consumer discretionary sector has been a key drag on the portfolio," the letter notes, citing the sector’s exposure and the broader market sell‑off as primary contributors to the decline.
Despite the loss, the management team maintains a positive outlook on the economy, emphasizing continued investment in artificial intelligence (AI) as a growth catalyst. AI remains a central theme for the Forty Fund, with the letter highlighting share‑price gains among AI supply‑chain companies and noting that several AI‑focused names feature among the top five holdings for 2026.
DraftKings Inc. (NASDAQ:DKNG) is a prominent holding. On June 16, the stock closed at $28.51, reflecting a 13.25 % return over the month but a 28.47 % decline over the past year. The letter describes DraftKings as a "leading online sports‑betting and iGaming company" that has faced weaker 2026 guidance. Management attributes the guidance shortfall to higher operating costs and slower customer growth, raising concerns that traditional sports betting may be losing ground to sports prediction markets.
"DraftKings is taking steps to bolster its competitive position through expansion into the predictions market," the letter states, adding that the company’s brand strength and economies of scale could provide long‑term upside. The team also highlights DraftKings’ commitment to innovation and the use of AI to enhance customer engagement.
While DraftKings is not listed among the 40 most popular stocks among hedge funds heading into 2026, the letter reports that 61 hedge‑fund portfolios held the stock at the end of the quarter, down from 72 in the previous quarter. The commentary suggests that certain AI stocks may offer greater upside potential and lower downside risk compared to DraftKings.
The investor letter concludes that the fund remains focused on high‑quality growth companies, with a particular emphasis on AI and technology themes. Management stresses that the current market volatility is a temporary challenge and that the long‑term strategy is designed to capture value as the broader economy stabilizes.
In summary, the Janus Henderson Forty Fund suffered a 12.25 % loss in Q1 2026, underperforming its Russell 1000 Growth benchmark. The decline was driven by consumer discretionary weakness, market volatility, and geopolitical and inflationary pressures. Despite the setback, the fund’s 10‑year performance remains robust, and its management maintains a positive view on AI and technology sectors, with DraftKings positioned as a key holding amid evolving betting and prediction markets.
