Janus Henderson Global Technology And Innovation Fund Q1 2026 Commentary

May 18, 2026 - 11:02

Janus Henderson's Global Technology and Innovation Fund posted a loss of 7.02% in the first quarter of 2026, as the rapid spread of artificial intelligence tools created a wave of disruption across the software sector. The decline came after a strong 2025, when the fund benefited from surging demand for AI infrastructure and chipmakers.

According to the fund's quarterly commentary, the main drag on performance was a sharp rotation out of traditional software companies. Investors grew concerned that generative AI would eat into the pricing power and market share of established enterprise software firms. Instead, money flowed toward a narrow group of AI infrastructure providers and hardware makers.

The fund's managers noted that while AI-driven disruption hurt near-term returns, they see long-term opportunity in companies that can adapt and embed AI into their own products. They pointed to a few holdings in cybersecurity and data analytics that have already started to show improved growth from AI integration.

The commentary also highlighted that the selloff in software was not uniform. Some firms with strong recurring revenue and clear AI strategies held up better than others. The fund reduced its exposure to companies with heavy reliance on legacy licensing models and added to positions in firms with direct exposure to AI adoption.

Looking ahead, the managers expect continued volatility but remain optimistic about the technology sector's ability to generate above-average growth over the next several years. They cautioned that the market is still in the early stages of sorting winners from losers in the AI era.