Pioneer Funds Q2 2024 Performance: A Comprehensive Analysis

Pioneer Mid Cap Value Q2 2024 Performance And Market Commentary

Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. Seeks to invest in higher-quality mid-cap value stocks, with a focus on valuation. The portfolio managers employ a high-conviction investment strategy, applying a disciplined and repeatable approach to fundamental analysis that seek to identify high-quality, mid-cap value companies that are trading at attractive valuations and feature improving or stable fundamental characteristics, in complement with deeper value companies to which managers allocate assets opportunistically. Typically, this quality-oriented investment approach results in a portfolio of 50 to 70 stocks, with the aim of limiting risk, while seeking to generate above-average total returns. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent Seven*. Six of the Magnificent Seven stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla) outperformed in the quarter, with only Meta Platforms (META) underperforming in the SPX. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of the Magnificent Seven caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.63%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.29%, with 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples, along with better than expected earnings (most notably, from Nvidia). The RLG outperformed the RLV, with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for AI. For the second quarter, mid-cap value stocks, as measured by the Portfolio's benchmark, the RLV, underperformed the SPX, returning -1.60% versus the SPX's 3.59%. Within this environment, the Portfolio underperformed, returning -1.95%, due to a combination of allocation effect and stock selection results. Despite the positive momentum produced from the industrials and information technology sectors, our healthcare and consumer staples drew stock selection results slightly lower for the quarter. Regarding allocation effect, our overweight to the poorly performing consumer staples sector and underweight the outperforming real estate sectors, detracted from the results. Turning to individual holdings, positions in Zimmer Biomet (ZBH) and Walgreens Boots Alliance (WBA) were among the largest detractors. Zimmer Biomet, a medical equipment provider, provided long-range guidance during their Analyst Day that already matched analyst estimates. We believe their plan has merit and the fundamentals are improving, along with the balance sheets and the management team. Walgreens Boots Alliance, a food and drug retailer, continued to experience pressure on its US retail business amidst a challenging consumer environment. We believe there are opportunities for better results as new management executes cost savings initiatives and seeks to optimize their portfolio. HP Inc (HPQ), a computer hardware company, was a top attributor for the period, as the company reported signs of recovery in commercial computer demand and highlighted opportunities related to the introduction of artificial intelligence technologies in their PC and printer product segments. The company remains committed to execute on its cost savings target by end of fiscal year 2025. Another contributor for the period was AerCap (AER), an aircraft leasing firm, that delivered strong results as it continues to benefit from a short supply of aircrafts and engines precipitated by OEM struggles. Consequently, the firm has exercised pricing power, cost and capital discipline. We think the stock remains attractive. There is a wide and increasing gap between the performance of the Cap Weighted Indices and the average stock (Equally Weighted Indices). A large part of this may be due to the attractive earning growth of the Magnificent Seven over the past 12 months, and most particularly year-to-date. This may in part be driven by what appears to be a slowing economy as the lagged impact of prior rate hikes takes effect despite the positive fiscal stimulus, while much of Magnificent Seven earnings growth has been driven by the AI theme and investments. The earnings outperformance gap is expected to decline in the second half of 2024 and during 2025 as year-over-year growth rates of the Magnificent Seven decline and broader market earnings increase. If current expectations for AI related earnings suffer any setbacks, we believe Cap Weighted Indices may struggle. Inflation has been moderating as of late, after a surprising upside earlier in the year. However, from our perspective, further progress may be slower than currently anticipated, as the stickier elements remain firm. The Federal Reserve (the Fed) may continue to delay lowering rates for longer than anticipated and disappoint the market, should it not start to ease in September. Still, the Fed could react with rate cuts if the economy weakens sooner than expected or there be some kind of negative shock, for example, an adverse geopolitical event. While it would be unusual for the economy to fall into a recession during an election year, we believe the risk remains and potentially may occur towards the end of the year, or the beginning of 2025 - no matter how the elections unfold. We remain cautious, as elevated valuations reflect an optimistic outcome with respect to the economy, interest rates, inflation, federal debt and the elections. Against this backdrop, we have maintained the Fund's overweight position in the financial and energy sectors. We are also overweight in consumer staples, where we believe we have identified good value ideas. Corporate profits in our view, lead to better share-price performance for the intrinsically undervalued stocks we favor. We remain overweight in banks with sticky deposit bases, footprints in growing geographies, and conservative underwriting cultures and believe we are buying these characteristics at attractive valuations. Our exposure to energy takes the form of stock specific investment cases with minimal reliance upon only the price of oil. The recent capital discipline on display across energy companies, in our view, is admirable and may lead to significant value creation. We are underweight in industrials and information technology, primarily based on valuations, which are elevated compared to the rest of the Index and historical levels. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Global Sustainable Equity Fund Q2 2024 Performance And Market Commentary

See glossary of frequently used terms for definitions. Diversification does not assure a profit or protect against loss. During the second quarter, the MSCI All Countries World Index and the MSCI World Index returned 2.87% and 2.63%, respectively. At a regional level, U.S. stocks returned 4.28%, Japan returned -4.27%, European stocks finished flat at 0.55% and Emerging Markets enjoyed strong returns at 5.00% (represented by the S&P 500, MSCI Japan, MSCI Europe and MSCI EM Indices, respectively). Market sentiment during this period was influenced by various factors, resulting in significant divergences across different investment styles, market breadth and geographical regions. Investors were closely monitoring global economic data, as the future direction of interest rates and inflation remained uncertain. Additionally, increasing geopolitical risks had a negative impact on stocks across many economic regions. In the U.S., there were surprises in both consumer and producer inflation indices, with inflation trending lower. However, concerns about the overall health of the economy began to emerge. Reduced growth and inflation expectations led to a decline in benchmark rates throughout the quarter, with the 10-year U.S. Treasury falling from a high of 4.70% in April to 4.36% by the end of June. Furthermore, the market saw a surge in enthusiasm for artificial intelligence, causing investors to overlook valuation concerns and favor select growth stocks, such as Nvidia (NVDA), which was the most highly valued stock, in terms of market capitalization, in the S&P 500 Index (SP500, SPX) for the quarter." This resulted in a narrow market breadth, with the market-weighted S&P outperforming the equal-weighted S&P by more than 6%. European equity performance was lackluster, as business activity unexpectedly declined, as indicated by both the services and manufacturing PMI indicators. Additionally, volatility in European markets was driven by President Macron's call for elections in response to European Union elections, which increased political uncertainty in the region. In Japan, investor enthusiasm waned due to speculation about the direction of the Bank of Japan's monetary policy normalization. Slowing economic data in the services sector, coupled with rising inflation and interest rates, further dampened demand for equities during the quarter. The best-performing sector in the quarter was information technology, benefiting from the strong performance of growth stocks. On the other hand, materials and real estate were among the underperforming sectors. During the quarter, Pioneer Global Sustainable Equity Fund Class Y shares returned -1.12%, underperforming the 2.63% return of the Funds primary benchmark - the MSCI World Index. Relative underperformance for the period was driven by both security selection and sector allocation decisions given the Portfolio's underweight to information technology. For example, a lack of exposure to Nvidia, which significantly outperformed during the quarter, led to relative weakness. The decision to not hold some mega-cap growth stocks, such as Nvidia, has been based on valuation concerns rather than the fundamentals of the stocks. Instead, the Portfolio holds companies that are believed to have the potential to outperform over the full market cycle, align with the quality and valuation criteria of the investment process, and can also benefit from the rapid growth in market trends including artificial intelligence and more efficient data storage. Another detractor included exposure to HENSOLDT (OTCPK:HAGHY), a German company that develops sensor technologies and other security electronics for the defense and aerospace sectors. During the quarter, the shares took a breath after three strong months of outperformance driven by continued optimism for higher defense spending in Europe. We continue to hold the stock given the company's massive order backlog and large business pipeline due to increased German defense spending, which we believe could fuel significant growth for the company in the medium- to long-term. We also find the valuation attractive, given this anticipated long-term growth. In terms of contributors to performance, security selection in the consumer discretionary and communication services sectors was positive. For example, Internet media giant Alphabet (GOOG,GOOGL) continues to be a strong contributor to the Portfolio. Alphabet has been leveraging its global search leadership position into an expanding AI capability for years, and in our view, is one of the most well rounded AI players. Investor interest in this technology continue to support the stock which was also boosted in the month by an exceptionally strong revenue and earnings report for the first quarter, coupled with the announcement of an additional share buyback. Given the company's strength in Internet advertising, attractive valuation, and momentum in other areas of its business, including the cloud, we continue to maintain a sizable position of the stock. Pure Storge (PSTG) is a leading provider of software-defined, all-flash-array storage solutions, and was another top contributor to performance in the period. During the quarter, the company delivered a Q1 FY25 beat for revenue and operating profit boosting returns during the period. We continue to hold the stock as we view them as one of the most innovative enterprise storage vendors and a winner in AI-driven data center growth. The outlook for 2024 shows a possible return to higher growth rates and Pure Storage is in the very early stages of what we believe will be meaningful sales to cloud service providers as a replacement for bulk Hard Disk Drive (potentially a $6-9 bn opportunity). Furthermore, Pure Storage remains very attractively valued, compared to a group of similarly high value-add, high-growth technology companies. From an economic perspective, we believe the global economy is currently in a better position compared to the consensus view from a year ago. In the U.S., there has been no recession, and in Europe, economic numbers have been quite strong after a period of weaker performance. In Asia and China, signs of a rebound have been more evident, and the outlook appears more favorable than it did a year ago. However, there has been a noticeable slowdown in economic data more recently, with a decline in inflation and GDP growth. In the U.S., the private sector of the economy is slowing down, and the consumer, who is a key driver of the U.S. economy, has been gradually weakening. For example, retail sales are indicating lower annualized growth in the economy. Additionally, the inverted yield curve between the 10-year Treasury and the 3-Month T-bill suggests that the market still perceives a risk of further economic slowdown. Overall, while there have been positive developments in the global economy, recent indicators point to a slowdown and potential risks ahead. Market volatility and divergences in equity performance have increased as expectations for interest rate cuts later in the year have consolidated across the world. Typical of late-cycle conditions, equity performance has shifted towards U.S. stocks, particularly those in less cyclical sectors. However, in our view, this may not be the appropriate reaction given the current valuations in the U.S. market. The valuation of the market is a fact, not a forecast, and the U.S. market is currently very expensive relative to its historical levels. Typically, when CPI and interest rates are at these levels, the market has traded at a Price to Earnings Ratio (P/E) of approximately 17x earnings. However, the current P/E of the S&P 500 is at historically high levels of more than 24x. This does not necessarily mean that the market cannot continue to rise, but it suggests that valuations have largely been driven by multiple expansion rather than earnings. We continue to pursue opportunities in high quality stocks that are attractively priced, and that we believe can perform across the market cycle. Overall, we seek to minimize risks from macro factors by identifying idiosyncratic risks. There were no material shifts in the Portfolio's sector or geographic positioning during the quarter as we remain focused on our "all weather" process that seeks to invest in quality stocks with attractive valuations. Buy and sell decisions that occurred during the period were largely focused on rebalancing towards ideas within the same sector, but with a more favorable risk/reward profile. For example, within materials we shifted the Portfolio allocation. Similar shifts occurred across other sectors including financials. In Europe, despite weaker economic output, we have invested in an array of companies that we believe have attractive valuations relative to their earnings power. This includes a higher weight to over-capitalized banks that focus on traditional banking services and reduced exposures to banks with credit concerns. Despite recent weakness in this sector, our view is these events do not represent a permanent impairment of capital, but instead represents a period of market noise that will normalize. Many of these companies are global leaders in their fields, and simply have lower valuation than their global peers because their headquarters and listing happen to be in Europe. We are happy to take advantage of the mis-pricing of these companies, given their potential ability to generate strong returns for investors, even as we maintain a less cyclical overall exposure to economic activity in Europe. In Japan, we remain overweight relative to the benchmark by investing in companies that we believe can benefit from the weaker Yen and an improved competitive position to export across the globe. With the weak Yen, producing in Japan has become much more competitive. We continue to look for opportunities in the nascent re-industrialization that is resulting from this newfound competitiveness, and in companies that are implementing reforms to boost returns and enhance shareholder returns. Given the richer valuations in U.S. mega-cap growth stocks and their concentration in major U.S. indices, the Portfolio remains underweight this segment of the market. Therefore, the largest sector underweight within the Portfolio is in the information technology sector. From a geographic positioning viewpoint, this has also resulted in an underweight relative to the Portfolio's benchmark to the U.S. On that note, the Portfolio maintains an investment theme of "less cyclicality", which is due to worries about where we are in the economic cycle. Given the positioning in banks, energy, and Japanese manufacturing, we have intentionally limited cyclicality in the remainder of the portfolio. This shows up more on a stock-by-stock analysis than in the overall sector weightings. Thus, we are underweight industrials, but more to the point the industrials we own tend to not have traditional cyclical exposure. Similarly, while we are overweight materials (a sector considered highly cyclical), our holdings tend to be far less cyclical than the sector. Finally, the same case can be made for our holdings in consumer discretionary (where we are moderately overweight) - the stocks we own tend to have less of a traditionally "discretionary" exposure than the sector. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Disciplined Value Fund Q2 2024 Performance And Market Commentary

Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. Pioneer Disciplined Value focuses on mispriced quality, sustainable US large-cap companies trading at attractive valuations with the goal of maximizing risk-adjusted returns over a full market cycle. Utilizing an extensive quantitative overlay combined with a disciplined portfolio construction and risk management framework, the investment team seeks to identify quality business models that can grow and/or sustain economic profitability beyond what the market is currently pricing into valuations. The portfolio managers draw upon the deep investment resources and expertise of the Amundi US Equity Research team of experienced career analysts, which provides fundamental and quantitative research on companies globally. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent Seven. Six of the Magnificent Seven* stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) outperformed in the quarter, with only Meta Platforms (META) underperforming the S&P 500 Index. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of Magnificent Seven caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.63%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.29%, with 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better than expected earnings (most notably, from Nvidia). The Russell 1000 Growth Index (RLG) outperformed the Russell 1000 Value Index (RLV), with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for artificial intelligence. For the quarter, the Portfolio's valuation sensitive approach and focus on higher-quality, large cap value stocks underperformed the -2.17% return of the Russell 1000 Value Index. At the sector level, the Portfolio's relative underperformance was led by weaker security selection in communication services, industrials and utilities. On the positive side, sector allocation results contributed to performance, driven mainly by our decision to overweight consumer staples and utilities and underweight consumer discretionary. Turning to individual holdings, the largest detractor to the Portfolio's relative performance was our overweight position in Walt Disney (DIS). Despite second quarter earnings that were in line or better than street estimates, the stock was negatively impacted by ongoing concerns about the decline in linear television. Another detractor was the Portfolio's overweight position in SLB, formerly known as Schlumberger. SLB is one of the largest oilfield services providers in the world. While the company posted first-quarter financial results that beat consensus expectations, it disappointed on its failure to fully capitalize on the recent spike in oil prices. We continue to view SLB's future growth and return profile favorably because, in our view, the core business is operating well, the digital business is performing as it should, and the company continues to improve its returns on capital as they have refocused their efforts on higher return, high intellectual property businesses. Additionally, the stock currently trades at multi-year lows on valuation. Conversely, our overweight positions in Coca-Cola (KO) and Air Products and Chemicals (APD) contributed to relative performance this quarter. Coca-Cola, which is a top operator within the staples universe, continues to perform strongly and navigate complicated international markets. We continue to view Air Products and Chemicals' long-term risk/reward, valuation and business mix profiles favorably, and the company continues to deploy their spare balance sheet capacity into large world scale projects in traditional industrial gas applications and hydrogen mobility, which we believe that they will develop more transparency on over time. There is a wide and increasing gap between the performance of the Cap Weighted Indices and the average stock (Equally Weighted Indices). A large part of this may be due to the attractive earning growth of the Magnificent Seven over the past 12 months, and most particularly year-to-date. This may in part be driven by what appears to be a slowing economy as the lagged impact of prior rate hikes takes effect despite the positive fiscal stimulus, while much of Magnificent Seven earnings growth has been driven by the AI theme and investments. This earnings outperformance gap is expected to decline in the second half, and during 2025 as year-over-year growth rates for the Magnificent 7 decline, and the earnings of the broader market increase somewhat. We believe if current expectations for AI related earnings suffer any kind of setback, then Cap Weighted Indices may struggle. Inflation has been moderating of late, after surprising to the upside earlier in the year. However, further progress may prove to be slower than currently anticipated, as the stickier elements remain quite firm. The Federal Reserve may continue its pause for longer than currently anticipated and disappoint the market should it not start to ease in September. Still, the Fed could react with potential cuts if the economy weakens faster than expected or if there is some kind of negative shock, for example an adverse geopolitical event. While it would be unusual for the economy to fall into recession during an election year, we believe the risks of recession toward year-end or early 2025 remain elevated, no matter how the elections unfold later this year. Overall, we remain cautious, as elevated valuations reflect an optimistic outcome with respect to the economy, interest rates, inflation, the federal debt, and the elections. While the valuation gap between the top and average stocks are still growing, albeit at a slower pace, we believe the fundamentals behind the top stocks do not support such a large valuation differential, and the market potentially could be set to normalize. Against this backdrop, we are focused on bottom-up, fundamental stock picking and we are seeking to take advantage of market volatility to pursue investments in what we believe are high-quality names whose valuations are meaningful, below where we think they should be, and that should offer a favorable risk/reward trade-off. At the sector level, the Portfolio's largest overweights at quarter end included consumer staples, materials and utilities. Conversely, the largest sector underweights industrials, financials and consumer discretionary. We continue to find relative value in the consumer staples sector and own some high conviction names within the space. In addition, we held stocks in the household and personal product segments, such as a personal care and consumer tissue company and a global leader in consumer products that we feel has room for operational improvement. In our view, the consumer staples sector is facing headwinds as price increases run their course, so we are looking to identify attractively valued companies with strong brands, pricing power and underlying operational improvement. We continue to have high conviction in the materials sector where our holdings, what we believe to be, structurally-advantaged endmarket providers. Well-positioned manufacturer and distributor of building materials, higher quality and attractively valued industrial gas supplier, and a mining company with good exposure to copper that should benefit from structurally higher commodity prices, electrification and EVs. The Portfolio remains underexposed to the consumer and we maintain an underweight to the industrials sector given recession risks and the fact that valuations are not low enough to meet our criteria. In terms of information technology, we do not own the growthier tech companies; instead, our focus is on companies that we believe represent solid, higher quality tech available at more favorable valuations. This focus on quality led us to reduce our overweight exposure in the semiconductor segment this quarter. In consumer staples, specifically within the household products segment, we selectively reduced exposure on valuation while adding to our existing overweight exposure within the beverage segment, which we felt exhibited better relative value. Separating the potential winners from the rest of the market will be key to the Portfolio's success over the next year and beyond. With so much uncertainty and variability across industries and companies, we believe it is essential today to actively manage portfolios as we find opportunities across markets and industries. As we look at the Portfolio today, we are pleased with our current positioning and we have strive to reduce risk given our concerns about potential economic volatility. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Balanced ESG Fund Q2 2024 Performance And Market Commentary

See glossary of frequently used terms for definitions. Diversification does not assure a profit or protect against loss. In equity markets, the S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent Seven*. Companies related to the AI theme performed exceptionally well, with a return of more than 14% in the quarter, while the rest of the market had a negative return (-1.2%), according to FactSet. Six of the Magnificent Seven stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla) outperformed in the quarter, with only Meta Platforms underperforming the SPX. Nvidia (NVDA) alone contributed more than 30% of the SPX return. The outperformance of the Magnificent Seven caused the SPX to outpace the returns of the average stock in the quarter. The S&P 500 Equal Weighted Index, which measures the performance of all stocks equally, returned -2.63%. Growth stocks continued to outperform value stocks, with the Russell 1000 Growth Index (RLG) returning 8.33%, compared to the -2.17% return of the Russell 1000 Value Index (RLV). Year-to-date, the SPX returned 15.29%, with 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better than expected earnings (most notably, from Nvidia). The RLG outperformed the RLV, with returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for AI. Within fixed income, after an initial pick-up in April, US economic data softened over the second quarter and has generally been coming in below consensus since early May. Despite this, the Federal Reserve (Fed) struck a hawkish tone at its June conference with all but one cut being removed from the 2024 projections. Chair Jerome Powell noted that inflation is taking longer than expected to reach the Fed's target. Consequently, investors revised their expectations, recognizing that the Fed is unlikely to start the rate cut cycle before September. Against this backdrop, investment grade fixed income markets were broadly flat for the quarter, with the Bloomberg US Aggregate Bond Index (the Bloomberg Index) returning 0.07%. This weakness affected high yield to a lesser extent. Treasury yields ended the quarter where they started. Other major markets' 10-year yields were also mostly unchanged, except Japan's, which rose 20 basis points (bps) to 1% for the first time in 11 years as the Bank of Japan (BOJ) gradually exits negative interest rates. Pioneer Balanced ESG Fund's Class Y shares returned 0.45% in the second quarter, underperforming the Fund's equity benchmark, the SPX, while outperforming its fixed income benchmark, the Bloomberg Index, which returned 4.28% and 0.07%, respectively. The Fund's performance this quarter was consistent with our expectations, as we believe our high quality, valuation sensitive approach will typically underperform during periods of sharply rising equity markets due to its meaningful allocation to fixed income. Over the long term, the Fund has outperformed its Morningstar peer group (Moderate Allocation Funds) for the past one, three, five and 10 years through June 30, 2024. The Morningstar peer group's average returns over that period were 12.61% (one-year), 2.83% (three-year), 7.05% (five-year), and 6.20% (10-year), while the Fund's Class Y shares have returned 14.72%, 4.11%, 8.21%, and 7.33%, respectively. The underperformance during the period was primarily due to security selection, while asset allocation was additive to relative returns, but not enough to offset the negative security selection. Security selection in the equity Portfolio was the primary detractor in the period and accounted for nearly all the underperformance. However, the Portfolio's overweight position in equities did contribute significantly given the strong returns in the period for equity securities. Additionally, within the fixed income portfolio overweights to collateralized mortgage obligations (CMO's), commercial mortgage-backed securities ('CMBS') and financials were relative contributors and helped this segment to outperform its benchmark. Within the equity Portfolio, security selection was the primary detractor from results, but asset allocation decisions also detracted. Security selection in information technology and consumer discretionary detracted the most from returns, along with an underweight to information technology. On the other hand, security selection in industrials and communication services contributed to relative returns. With respect to individual securities, the top two individual equity detractors to the Fund's relative performance in the period were the Fund's lack of exposure to Nvidia and Apple (AAPL). A lack of exposure to Nvidia was the largest drag on results in the period. While financial results for Nvidia this year have been impressive, the stock valuation in our opinion leaves little room for disappointment should the company fail to meet high investor expectations related to market share and revenue growth. On the competitive front, many of Nvidia's customers are trying to build their own graphics processing units (GPUs) and/or find other sources. We continue to not own the shares given this elevated valuation as we believe there are other stocks with more attractive risk/return potential. Another headwind in the second quarter was our lack of exposure to Apple, which rose sharply. Shares of Apple were under pressure earlier in the year due to concerns about sluggish growth and market share losses in China. The stock rebounded in the second quarter on the back of solid financial results and expectations that the company will launch an iPhone with AI capabilities in 2025. We continue to not own the shares. In terms of individual contributors to performance, the Portfolio's positions in Alphabet and Pure Storage (PSTG) added the most to returns. Internet media giant Alphabet (GOOG,GOOGL) continues to be a strong contributor to the Portfolio. Alphabet has been leveraging its global search leadership position into an expanding AI capability for years, and in our view, is one of the most well-rounded AI players. Investor interest in this technology continue to support the stock, which was also boosted in the month by an exceptionally strong revenue and earnings report for the first quarter, coupled with the announcement of an additional share buyback. In our view, given the company's strength in internet advertising, attractive valuation, and momentum in other areas of its business, including the cloud, we continue to maintain a sizable position of the stock. Pure Storge, a leading provider of software-defined, all-flash-array storage solutions, was another top contributor to performance in the period. During the quarter, the company delivered a Q1 FY25 beat for revenue and operating profit, boosting returns during the period. We continue to hold the stock as we view them as one of the most innovative enterprise storage vendors and a winner in AI driven data center growth. The outlook for 2024 shows a possible return to higher growth rates, and Pure Storage is in the very early stages of what we believe will be meaningful sales to cloud service providers as a replacement for bulk hard disk drive. Furthermore, we believe Pure Storage remains very attractively valued, compared to a group of similarly high value-add, high growth technology companies. In the fixed income portfolio, the Fund was helped by sector allocation. Sector allocation benefited from the outperformance of the 6% allocation to non-agency mortgage-backed securities ('MBS'), the 10% overweight to financials, the 3% overweight to CMBS and the 2% in convertibles, counterbalanced by the 19% underweight to U.S. Treasuries, as credit sectors generally outperformed riskfree assets over the quarter. Security section had a positive impact, helped by issue selection in industrials and agency MBS. The modestly longer relative duration position detracted as yields rose at the beginning of the period before declining near the close of the quarter. Top 10 Holdings (as of June 30, 2024) There is a wide and increasing gap between the performance of the Cap Weighted Indices and the average stock (Equally Weighted Indices). A large part of this, from our perspective, may be due to the superior earning growth of the Magnificent Seven over the past 12 months, and most notably year-to-date. We believe this may in part be driven by what appears to be a slowing economy as the lagged impact of prior rate hikes takes effect despite the positive fiscal stimulus, while much of the Magnificent Seven's earnings growth has been driven by the AI theme. This earnings outperformance gap is expected to decline in the second half of 2024 and during 2025 as year-over-year growth rates for the Magnificent 7 decline, and the earnings of the broader market increase somewhat. We believe if current expectations for AI related earnings suffer any kind of setback, then Cap Weighted indices may struggle. Inflation has been moderating of late, after surprising to the upside earlier in the year. However, further progress may prove to be slower than currently expected, as the stickier elements remain quite firm. The Fed may continue its pause for longer than currently anticipated and disappoint the market should it not start to ease in September. Still, the Fed could react with potential cuts if the economy weakens faster than expected or there is some kind of negative shock, such as an adverse geopolitical event. While it would be unusual for the economy to fall into recession during an election year, the risks remain elevated that a recession potentially could occur towards year-end, or in the beginning of 2025 no matter how the elections unfold later this year. Overall, we remain cautious, as elevated valuations reflect an optimistic outcome with respect to the economy, interest rates, inflation, the federal debt, and the elections. While the valuation gap between the top and average stocks is still growing, albeit at a slower pace, we believe the fundamentals behind the top stocks do not support such a large valuation differential, and the market could be set to normalize. Against this backdrop, we continue to believe the best investment approach is to maintain portfolio exposures to what we believe are stocks of high-quality, cyclical companies that may benefit as the economy grows, as well as to stocks of companies with defensive characteristics. We have generally maintained the Fund's allocations to what we believe are reasonably priced equities that could benefit from a broader, more cyclical industrial recovery, and we have de-emphasized some higher-priced, longer duration equities that may be vulnerable to rising interest rates, due to the potential negative effects of higher rates on future corporate earnings. Our long-term strategy of diversification means, however, that the portfolio will typically have significant exposures across the growth/value continuum. As of June 30, 2024, the Fund's equity sector positioning relative to the SPX are relatively unchanged. The Portfolio maintains overweights to health care, materials, industrials, energy and communication services. We slightly increased our position in information technology during the period with a focus on semiconductor and technology hardware stocks. The Portfolio's largest equity underweights are to the information technology, financials, utilities and the consumer sectors (staples and discretionary). We slightly reduced our health care position in the period through a reduction in health care equipment, offset partially by an increase in pharmaceuticals. From a fixed-income perspective, we expected continued slowing in real final sales as real income growth has softened, consumer sentiment has softened and labor demand has normalized. We believe the decrease in home sales during May highlights a new headwind to US economic growth in the short term, and May's pending home sales reaching an all-time low in the 23-year history of the series could portend further slowing in the homebuilding and housing finance sectors. The surge in new home construction post COVID is surpassing demand, leading to the highest inventory of new homes for sale since 2010. We believe builders are likely to reduce new construction significantly until the surplus inventory is reduced, negatively impacting GDP growth in at least Q2 and Q3. Additionally, uncertainties related to the upcoming US elections could potentially further hamper business investment in the immediate future. We maintain a preference for a slightly longer duration compared to the benchmark, focusing on short to intermediate maturities, and are prudently managing our exposure to Investment-Grade and High Yield Corporates, which currently have historically narrow spreads. We are more optimistic about the wider spreads available on Agency MBS, and we choose to concentrate credit exposure on well-collateralized residential securitized and asset-backed markets. The Fund continues to have a more cautious view on credit, relative to its history, although the Fund continues to hold an overweight to credit relative to its benchmark. In our view, this cautious view, which includes an up-in-quality bias, reflects the less attractive relative value and the likelihood that economic growth may slow in 2024. Investment grade and high yield corporate spreads continue to reside well below their historic long-term averages, and securitized spreads are also narrow. Within corporates, we favor financials, which we believe may offer more attractive value relative to industrials. We favor securitized over corporate credit, based on relative value. Agency MBS offer higher spreads relative to their history; the US housing market has stabilized and we believe multi-families offer value within the CMBS market. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer International Equity Fund Q2 2024 Performance And Market Commentary

*The MSCI information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the "MSCI Parties") expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. During the quarter, the MSCI EAFE returned -0.42%. At a regional level, Japan returned -4.27%, European stocks finished at 0.55% and emerging markets enjoyed strong returns at 5.00%. Market sentiment during this period was influenced by various factors, resulting in significant divergences across different investment styles, market breadth and geographical regions. Investors were closely monitoring global economic data, as the future direction of interest rates and inflation remained uncertain. Additionally, increasing geopolitical risks had a negative impact on stocks across many economic regions. In the U.S., there were surprises in both consumer and producer inflation Indices, with inflation trending lower. However, concerns about the overall health of the economy began to emerge. Reduced growth and inflation expectations led to a decline in benchmark rates throughout the quarter, with the 10-year U.S. Treasury (US10Y) falling from a high of 4.70% in April to 4.36% by the end of June. Furthermore, the market saw a surge in enthusiasm for artificial intelligence, causing investors to overlook valuation concerns and favor select growth stocks, such as Nvidia* (NVDA), which was the most highly valued stock, in terms of market capitalization, in the S&P 500 Index (SP500,SPX) for the quarter. This resulted in a narrow market breadth, with the market-weighted S&P outperforming the equal weighted S&P by more than 6%. European equity performance was lackluster, as business activity unexpectedly declined, as indicated by both the services and manufacturing PMI indicators. Additionally, volatility in European markets was driven by President Macron's call for elections in response to European Union elections, which increased political uncertainty in the region. In Japan, investor enthusiasm waned due to speculation about the direction of the Bank of Japan's monetary policy normalization. Slowing economic data in the services sector, coupled with rising inflation and interest rates, further dampened demand for equities during the quarter. In terms of sector performance, health care, financials and energy led the way in the MSCI EAFE, while consumer discretionary, real estate and materials were the laggards. During the quarter, Pioneer International Equity Fund Class Y shares returned -1.80% underperforming the -0.42% return of the Funds benchmark - the MSCI EAFE. The underperformance for the month was driven by security selection decisions as sector allocation decisions had a positive impact to relative performance, but not enough to offset the weaker relative security selection. At the sector level, security selection within financials, health care and industrials were the largest detractors. Conversely, security selection within consumer discretionary and an overweight to financials aided performance comparisons the most. From an individual security perspective, CRH and HENSOLDT (OTCPK:HAGHY) were among the largest detractors. Shares of CRH, a leading global manufacturer of building materials and products used in construction projects, underperformed in the period. The stock fell as after investors took some profits after strong performance over the previous several months, but also due to concerns over short-term demand for building materials in construction projects due to weather and other factors. We remain confident that U.S. infrastructure stimulus will drive a multi-year period of investment from which the company can benefit. In addition, we believe they remain committed to strong shareholder returns, along with a clear investment plan to drive further growth in high return businesses, in our view. Another detractor was exposure to HENSOLDT, a German company that develops sensor technologies and security electronics for the defense and aerospace sectors. During the quarter, the shares took a breath after three strong months of outperformance driven by continued optimism for higher defense spending in Europe. We continue to hold the stock given the company's massive order backlog and large business pipeline due to increased German defense spending, which we believe could fuel significant growth for the company in the medium- to long-term. We also find the valuation attractive, given this anticipated long-term growth. On the positive side, Taiwan Semiconductor (TSM) and KB Financial (KB) were the largest contributors to performance in the period from an individual security perspective. Taiwan Semiconductor, a global leader in semiconductor manufacturing and design, was the top contributor to performance in the period. Taiwan Semiconductor continues to rise on the back of increased demand for its chips due to the exuberance over AI and the critical nature of their chips in this technology. The company also posted a solid Q1 earnings report, though there were some signs of a slowdown that we are monitoring. We maintain our position in the shares given their leading competitive position and strong pricing power in the industry. Shares of KB Financial, a leading Korean financial services company, continued to rise after the company reported strong performance in CY 2023, achieving record profit growth across its key business segments. In addition, KB recently announced plans to further enhance shareholder returns through dividends and buybacks. The company is implementing a "value program" in line with the South Korean government's "Corporate Value-Up Program," which aims to promote the use of Korean equities for wealth and capital generation to retail investors through more shareholder friendly governance. These initiatives demonstrate KB Financials' commitment to prioritizing the interests of its shareholders. We continue to favor the shares and have added to our position given the bank is well capitalized, is increasingly focused on shareholder value, and continues to trade at what we consider to be very attractive valuation. From an economic perspective, we believe the global economy is currently in a better position compared to the consensus view from a year ago. In the U.S., there has been no recession, and in Europe, economic numbers have been quite strong after a period of weaker performance. In Asia and China, signs of a rebound have been more evident, and the outlook appears more favorable than it did a year ago. However, there has been a noticeable slowdown in economic data more recently, with a decline in inflation and GDP growth. In the U.S., the private sector of the economy is slowing down, and the consumer, who is a key driver of the U.S. economy, has been gradually weakening. For example, retail sales are indicating lower annualized growth in the economy. Additionally, the inverted yield curve between the 10-year Treasury and the 3-Month T-bill suggests that the market still perceives a risk of further economic slowdown. Overall, while there have been positive developments in the global economy, recent indicators point to a slowdown and potential risks ahead. In our view, if employment remains strong, and the global economy stays afloat, the pace at which the U.S. Federal Reserve can cut rates will be slowed, resulting in pressure from higher interest rates and constrained credit. We expect the Fed to remain vigilant on inflation. Rate cuts appear more likely in the Eurozone; however, the pace is less certain given inconsistent growth rates across the region. On that note, the Portfolio maintains an investment theme of "less cyclicality", which is due to worries about where we are in the economic cycle. Given the positioning in banks, energy and Japanese manufacturing, we have intentionally limited cyclicality in the remainder of the Portfolio. This shows up more on a stock-by-stock analysis than in the overall sector weightings. Thus, we are underweight industrials, but more to the point, the industrials we own tend to not have traditional cyclical exposure. Similarly, while we are overweight materials (a sector considered highly cyclical), our holdings tend to be far less cyclical than the sector overall. Finally, the same case can be made for our holdings in consumer discretionary (where we are moderately overweight) - the stocks we own tend to have less of a traditionally "discretionary" exposure than the broader sector. In Japan, we are overweight relative to the benchmark by investing in companies that we believe can benefit from the weaker Yen and an improved competitive position to export across the globe. With the weak Yen, producing in Japan has become much more competitive. We are finding great opportunities in the nascent re-industrialization that is resulting from this newfound competitiveness, and in companies that are implementing reforms designed to boost returns and enhance shareholder returns. In Europe, despite weaker economic output, we have invested in an array of companies that we believe have attractive valuations relative to their earnings power. This includes a higher weight to over-capitalized banks that focus on traditional banking services and reduced exposures to banks with credit concerns. Despite recent weakness in this sector, our view is these events do not represent a permanent impairment of capital, but instead represents a period of market noise that will normalize. Many of these companies are global leaders in their fields, and simply have lower valuation than their global peers because their headquarters and listing happen to be in Europe. We are happy to take advantage of the mis-pricing of these companies, given their potential ability to generate strong returns for investors, even as we maintain a less cyclical overall exposure to economic activity in Europe. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Guggenheim SMid Cap Value Fund Q2 2024 Commentary

The Board has approved the reorganization of this fund into the New Age Alpha SMid Cap Value Fund, on or about October 25, 2024, subject to shareholder approval. Please read the prospectus for further information. Our investment approach focuses on understanding how companies make money and how easily they can either improve returns, maintain existing high levels of profitability or benefit from change that occurs within the industries in which they operate. In today's rapid-fire environment marked by very sharp and quick, but constrained volatility, we believe our long-term orientation and discipline is a competitive advantage. This should become especially critical when the environment of indiscriminant valuation expansion subsides, and fundamentals once again become a more dominant factor in the market. For the quarter, the SMid Cap Value Fund outperformed the benchmark by declining 3.57 percent versus a -4.31 percent loss for the Russell 2500 Value Index. While stock selection and industry weightings helped the fund's performance versus the benchmark, the overall market continued to greatly favor large cap, growth-oriented technology companies as the AI theme garnered increasing attention. On the positive side for the SMid Cap Value Fund, stock selection was robust in the technology, financials, and industrial sectors. Technology holdings in the strategy gained 8.8 percent versus a decline of -0.4 percent for similar companies in the benchmark. Teradyne (TER) (+31.5 percent) and Amkor Technology (AMKR) (+29.5 percent) posted gains as increasing chip technology is boosting demand for sophisticated chip testing products. Coherent Corp (COHR) (+19.5 percent) gained as the market responded enthusiastically to the appointment of new CEO Jim Anderson, who was previously the CEO of Lattice Semiconductors. Technology selection added about 116 bps to overall performance. In the financials sector, the M&A environment picked up which provided earnings support and enthusiasm for the fund's holdings in the brokerage space with gains by Stifel Financial (SF) (+13.5 percent) and Jefferies (JEF) (+8.2 percent). Overall, the fund's financials holdings gained 1.0 percent versus a -2.6 percent decline for the benchmark's holdings in the sector. This success aided overall performance by 58 basis points. Lastly, selection in the industrials sector was favorable with this sector outperformed by declining -4.5 percent versus a -6.6 percent decline in the benchmark. The most notable successes were Kirby (KEX) (+25.6 percent) as inland barge transportation rates have been very strong. Leidos (LDOS) performed well (+11.5 percent) on the heels of a solid quarter. Industrials selection aided overall portfolio performance by 45 basis points. Negative contributors to relative performance in Q2 were primarily related to stock selection in the materials, consumer staples, and health care industries. Holdings in the materials sector declined -12.0 percent in value while the benchmark's holdings fell -6.5 percent. A small position in Ginkgo Bioworks (DNA) (-72 percent) hurt overall results by 18 basis points. The company continues to tinker with its business model in order to attract more large pharmaceuticals companies to use its cell engineering automation technology to aid in drug discovery. A larger position, Sonoco Products (SON) (-11.5 percent) also hurt overall portfolio performance by 18 basis points as the market reacted unenthusiastically to the announced acquisition of Eviosys from private equity which expands the company's presence in metal can packaging. Overall, selection in the materials sector penalized the fund's overall performance by 84 basis points. Stock selection in the consumer staples sector was unfavorable as holdings in this sector declined -8.6 percent versus a -2.4% decline in the benchmark sector holdings. The performance largely centered around a decline in MGP Ingredients (MGPI) (-13.4 percent). While the company continues to meet expectations, the sentiment about the company's prospects is being dampened by the continued underperformance of the spirits alcoholic beverage category. Selection in the staples sector hurt overall performance by 34 basis points. Lastly, health care selection was unfavorable as holdings fell - 10.5 percent versus a -7.7 percent decline in the benchmark. This hurt overall performance by 25 basis points. Enovis (ENOV) (-27.6 percent) declined as weaker than expected earnings caused the market to question the benefits of recent acquisitions. Evolent Health (EVH) (-41.7 percent) suffered as higher than anticipated utilization at large HMO clients caused the market to be concerned as to whether the firm's capitated fee structure would be able to offset the higher levels of expenses. Portfolio turnover in the quarter ran below the normal 40% - 80% typical range. Cash during the quarter increased by 1.4 percent to end the quarter at 2.1 percent. The active weight in the technology sector increased by 1.5 percent primarily reflecting the initiation of Amkor Technology. No other sector weightings increased by more than one percent. The largest active weighting decreases occurred in health care (- 1.2 percent) and financials (- 1.15 percent) as the position in Evolent Health was trimmed and several of the bank positions were trimmed. The market outlook continues to be murky. Of late, the inflation data continues to make progress and appears to be headed lower while the economy continues to perform as well or better than expected. The enthusiasm for potential rate cuts continues to support an upward bias to the market. However, the stronger the market becomes, the less inclined the Fed will likely be to pursue interest rate reductions aggressively. We still prefer our bias to quality names and our overall positioning. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Pioneer Equity Premium Income Fund Q2 2024 Performance And Market Commentary

Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The S&P 500 Index (SPX) returned 4.28% in the second quarter on the back of continued enthusiasm for artificial intelligence and the Magnificent 7***. Companies related to the AI theme performed exceptionally well, with a return of more than 14% in the quarter, while the rest of the market had a negative return (-1.2%), according to FactSet. Six of the seven Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) outperformed in the quarter, with only Meta Platforms (META) underperforming the S&P 500 Index. Nvidia (NVDA) alone contributed more than 30% of the SPX return. Year-to-date, the SPX returned 15.29%, with a 31 record closing highs during the period. The strong performance of the SPX was driven by a combination of rising stock valuations as measured by price-to-earnings (P/E) multiples along with better than expected earnings (most notably, from Nvidia). Growth stocks have outperformed value stocks for the year with the Russell 1000 Growth Index (RLG) and the Russell 1000 Value Index (RLV), having returns of 20.70% and 6.62% respectively, largely due to sustained enthusiasm for AI. Pioneer Equity Premium Income Fund Class Y shares returned 0.19% while the S&P 500 Index returned 4.28% during the quarter. Within the above-mentioned time period, the fund underperformed the S&P 500 given the narrow breadth of returns which came from mega-cap growth stocks. The equity complexion of our Portfolio is tilted towards higher dividend* paying stocks which lagged on a relative basis. To put this into context, the Russell 1000 Value Index underperformed the Russell 1000 Growth Index by over 10%. In addition, higher dividend paying stocks in the information technology and consumer discretionary sectors within the Portfolio detracted from returns. However, high dividend paying stocks in the energy, financials, and materials sector contributed to returns. The Portfolio's allocation to equity-linked notes (ELN) seeks to generate a high income and enhanced total return profile. During the quarter the overall volatility surface that has been observed has steadily declined markedly which appears to be creating resistance across the category. However, our identifiable selection of individual securities for overwriting has remained relatively immune from this phenomenon, and yields have persisted. Our equity-linked notes in the information technology, real estate, and materials sectors helped performance while notes in the financials, consumer staples, and communication services sectors detracted from performance. From an economic perspective, the global economy is currently in a better position compared to the consensus view from a year ago. In the US, there has been no recession, and in Europe, economic numbers have been quite strong after a period of weaker performance. In Asia and China, signs of a rebound have been more evident, and we believe the outlook appears more favorable than it did a year ago. However, there has been a noticeable slowdown in economic data more recently, with a decline in inflation and gross domestic product (GDP) growth. In the US, the private sector of the economy is slowing down, and the consumer, who is a key driver of the US economy, has been gradually weakening. For example, retail sales are indicating lower annualized growth in the economy. Additionally, the inverted yield curve between the 10-year Treasury and the 3-Month T-bill suggests that the market still perceives a risk of further economic slowdown. Market volatility and divergences in equity performance have increased as expectations for interest rate cuts later in the year have consolidated across the world. Typical of late-cycle conditions, equity performance has shifted towards US stocks, particularly those in less cyclical sectors. However, in our view, this may not be the appropriate reaction given the current valuations in the US market. The valuation of the market is a fact, not a forecast, and the US market is currently very expensive relative to its historical levels. With recent market performance in the "magnificent seven" these stocks account for over 30% of the weight of the S&P 500 but only 23% of the earnings. On the other hand, the financial sector represents 12% of the index, but generates over 17% of the earnings and represents a compelling opportunity in this environment. During the period the Portfolio's exposure to equity-linked notes has increased in the context of its objective to deliver an attractive total return, including high current income, and ended the period at 50% of NAV. The equity component of the Portfolio finished the quarter at 47% of fund assets and skews more defensively given the overall macro environment. The portfolio had 3% position in cash and cash equivalents at the end of the quarter. Over the course of the quarter, the Portfolio positioning adjustments have led to a shift towards US equity exposures with a higher dividend profile. We continue to favor companies that we believe are good stewards of capital including the payment of dividends favoring sectors within financials, utilities, energy and consumer staples. Equity exposures outside the US are comprised largely of European positions with a focus on banks and insurance companies that can benefit from higher interest rates and compelling relative valuations. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Small Cap Value Fund Q2 2024 Commentary

Not all Funds and Share classes may be available. Please consult your financial professional. Broader measures of the U.S. equity market, like the S&P 500® Index (SP500, SPX) , ended the second quarter higher as moderating inflation raised hopes for Federal Reserve (Fed) rate cuts in the second half of the year. Meanwhile, various other indices were lower in the period. Economic news generally was positive despite weakness in residential construction and strain on the consumer. The market advance was narrow, driven by large-cap growth stocks with exposure to artificial intelligence. Small- and mid-cap stocks underperformed their larger peers. Overall, value stocks lagged behind growth stocks. The Russell 2000® Value Index posted negative returns for the quarter, with the largest declines in the healthcare and consumer discretionary sectors. The utilities and financials sectors outperformed with smaller declines. Stock selection drove relative outperformance for the quarter, especially in the information technology sector. Fabrinet (FN), a top relative contributor that makes optical packaging and precision equipment used in semiconductor production, rose on strong AI-related customer sales and expectations that telecommunications spending gradually would improve. Kirby Corporation (KEX) was a notable performer in the industrials sector. As a leading U.S. tank barge operator, Kirby transports petroleum products and other bulk liquids. The company delivered better-than-expected earnings, supported by its strong competitive position, pricing power, and limited industry supply. Device manufacturer Globus Medical (GMED) was another contributor. The stock has faced headwinds in recent quarters because of uncertainty around its acquisition of device maker NuVasive. The integration with NuVasive proceeded better than expected, and the stock rebounded in the second quarter following strong earnings as investors became more optimistic regarding the synergies offered by the merger. Medical supplies company Owens & Minor (OMI) was a prominent detractor. The stock sold off after the company warned of lower free cash flow for the coming year. As a result, it also announced a change to its chief financial officer. We remain invested but are closely monitoring its execution. Macroeconomic uncertainty pressured several holdings, including sporting goods retailer Academy Sports + Outdoors (ASO). While we believe Academy has a strong franchise, it has faced headwinds due to slower consumer spending, especially on the low end. We continue to believe that the company has positive reward-to-risk given its discounted valuation and the actions it has taken to improve results. Heavy equipment rental company H&E Equipment Services (HEES) was another detractor, reporting weaker revenue growth because of lower rental and utilization rates. We continue to own shares of the company but have reduced other positions where we see increased economic sensitivity. The portfolio ended the quarter overweight in the industrials, information technology, materials, and consumer staples sectors. It was underweight in healthcare, utilities, communication services, real estate, consumer discretionary, financials, and energy. For several quarters we have cautioned about the prospects of higher-for-longer interest rates, especially as inflation has not moderated as quickly as policymakers would like. Economic growth has remained quite resilient in the face of higher interest rates but has started to show signs of cooling. We have seen more evidence that higher inflation is cutting into consumer spending, especially for lower-end households. While the job market has remained healthy, the unemployment rate has ticked higher over the past year. Signs of slower economic growth may persuade the Fed to reduce interest rates, with the market now pricing in one or two rate cuts by year-end. While investors may welcome this development, we caution that equities have historically struggled during periods of sharp Fed rate cuts, especially if the economy slows meaningfully, the unemployment rate rises, or there is some type of market-related mishap. Additionally, we see other sources of potential market volatility, including election uncertainty, geopolitical tensions, and weaker overseas economies. There are also risks related to the market's recent euphoria surrounding AI - related companies, as mega-cap AI-related stocks have overshadowed other compelling investments in the small- and mid-cap arena. As usual, we remain on the lookout for opportunities to use this environment to our advantage, as we seek compelling investments that may be missed by other investors. We remain committed to our core process of seeking out well-managed and attractively valued companies with proven earnings growth, strong free cash flow, and low debt levels that help them navigate potential economic challenges. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Mid Cap Value Fund Q2 2024 Commentary

The market advance was narrow, driven by large-cap growth stocks with exposure to artificial intelligence. Other market indices ended the quarter lower, while small- and mid-cap stocks underperformed their larger peers. Overall, value stocks lagged behind growth stocks. Stock selection in the healthcare sector lifted relative performance, due in part to an investment in device maker Globus Medical. The stock has faced headwinds in recent quarters because of uncertainty around its acquisition of NuVasive, another device maker. The integration with NuVasive proceeded better than expected, and the stock rebounded in the second quarter following strong earnings as investors became more optimistic regarding the synergies offered by the merger. Long-time holding Casey's was another top contributor. The consumer staples company owns an expanding network of gas stations and convenience stores. It delivered strong earnings growth over the quarter, supported by higher gasoline and convenience store sales as well as margin improvement. Information technology company Teradyne (TER), which supplies testing equipment used in semiconductor and electronics production, was another notable contributor. The stock rose on expectations that AI-related investments will drive more capital spending by semiconductor manufacturers. Our position in NICE, a provider of software-based technology solutions for call centers and data security, hindered relative performance. The stock declined after the company announced weaker-than-expected earnings, and its chief executive officer unexpectedly resigned. Given the increased uncertainty, we exited the position. Insurer Globe Life (GL) was another detractor, as shares fell after a short-seller report questioned its life insurance sales practices. After we learned that regulators were investigating these claims, we saw heightened risk for the core business and quickly eliminated the holding. Macroeconomic headwinds and the outlook for higher-for- longer interest rates pressured several industrials holdings with exposure to residential construction. These included Fortune Brands, a supplier of doors, plumbing fixtures, and other house-related accessories. During the quarter, we continued to be opportunistic, using volatility to our advantage as we identified new investment opportunities with attractive valuations. The portfolio ended the period overweight in the industrials, materials, energy, and consumer staples sectors. It was underweight in utilities, financials, communication services, real estate, consumer discretionary, healthcare, and information technology. For several quarters, we have cautioned about the prospects of higher-for-longer interest rates, especially as inflation has not moderated as quickly as policymakers would like. Economic growth has remained quite resilient in the face of higher interest rates but has started to show signs of cooling. We have seen more evidence that higher inflation is cutting into consumer spending, especially for lower-end households. While the job market has remained healthy, the unemployment rate has ticked higher over the past year. Signs of slower economic growth may persuade the Fed to reduce interest rates, with the market now pricing in one or two rate cuts by year-end. While investors may welcome this development, we caution that equities have historically struggled during periods of sharp Fed rate cuts, especially if the economy slows meaningfully, the unemployment rate rises, or there is some type of market-related mishap. Additionally, we see other sources of potential market volatility, including election uncertainty, geopolitical tensions, and weaker overseas economies. There are risks related to the market's recent euphoria surrounding AI-related companies, as mega-cap AI-related stocks have overshadowed other compelling investments in the small- and mid-cap arena. As usual, we remain on the lookout for opportunities to use this environment to our advantage, as we seek compelling investments that may be missed by other investors. We remain committed to our core process of investing in well-managed and attractively valued companies with proven earnings growth, strong free cash flow, and low debt levels that help them navigate potential economic challenges.

Janus Henderson Global Select Fund Q2 2024 Commentary

Not all Funds and Share classes may be available. Please consult your financial professional. Global equities rose in the second quarter, supported by signs of moderating inflation and stabilizing economic growth. The European Central Bank cut rates by 25 basis points in June. The Federal Reserve and Bank of England left rates unchanged as markets adjusted to the outlook for higher-for-longer rates. U.S. stocks were strong positive performers, supported by a rally in information technology stocks viewed as potential beneficiaries of artificial intelligence. Market performance was mixed in other parts of the world, as election results in France, Mexico, and India rattled investors. There were signs of cooling economic growth in many countries, including reports of slowing manufacturing activity and weaker consumer spending. Among individual holdings, Marathon Petroleum (MPC) was a notable detractor from relative performance, as shares of the integrated oil company declined after strong first-quarter performance. The company has faced uncertainty due to a weaker global economic outlook and the planned departure of its long-time, well-regarded chief executive officer. Despite this uncertainty, we remain constructive on Marathon's long- term prospects. We have welcomed the company's focus on reducing balance sheet leverage and returning more money to shareholders. We also see the potential for expanding profit margins in the energy refining market due to restrictions on new capacity. Shares of Samsonite International (OTCPK:SMSOF), another detractor, declined after the global luggage company reported lower- than-expected revenues and reduced guidance. While these results primarily reflected weaker trends for its North American business, luggage sales in India also slowed from their rapid pace in the previous quarter. On a positive note, revenue growth remained resilient in other Asian markets, and margins improved across geographic regions. Despite some near-term business uncertainty, we remain positive about Samsonite's efforts to drive profitability through cost-cutting and an increased focus on higher-margin premium brands. Taiwan Semiconductor Manufacturing Company (TSM) was a top positive contributor to relative performance. The world's largest contract chip manufacturer, TSMC is a major fabricator of graphic processing units that are integral to the deployment of generative AI. TSMC delivered strong revenue growth, reflecting both increased sales volumes and a business shift toward higher margin components. We believe the company is well positioned to benefit from growing investments in AI because of its competitive advantages in next-generation manufacturing and its business relationships with leading technology companies. Vistra Energy (VST) was also a contributor. This major U.S. independent power producer reported robust first-quarter earnings growth that exceeded investor expectations. It also raised guidance to reflect expectations for strong electricity usage and pricing, driven by secular trends such as the reshoring of manufacturing and the tremendous power requirements of AI workloads. Additionally, Vistra has become a major U.S. supplier of nuclear energy through its acquisition of Energy Harbor (OTC:ENGH). Given the scarcity of clean, sustainable electricity generation, we believe nuclear power assets may receive increased attention as data centers look to reduce their carbon footprints. We continue to like Vistra for its robust free cash flow growth and its commitment to returning cash to shareholders through dividends and stock repurchases. We have welcomed signs of stabilizing economic growth in many countries, even as we acknowledge signs of softening in some market sectors and regions. Inflation has moderated but not as quickly as policymakers would like. As a result, we expect central banks to take a gradual approach to rate cuts. We also see the potential for higher interest rates in Japan, where the Bank of Japan is under increased pressure to hike rates to combat rising inflation. The expectation for higher- for-longer interest rates could have implications for global economic growth and market performance. We recognize that geopolitical uncertainty and weak economic growth in China could add to market risks. On a positive note, we have been encouraged to see investors pay increased attention to individual company fundamentals in contrast to last year when macroeconomic concerns often drove market performance. We believe this return to fundamentals has created a favorable backdrop for our active, bottom-up stock selection. We continue to find compelling investment opportunities across sectors and geographies, as we seek companies with strong balance sheets, proven management teams, and durable competitive advantages. Above all, we remain on the lookout for superior free-cash-flow growth that we believe is undervalued by the market. We view this disciplined, fundamentals-driven approach will be key to delivering long-term capital appreciation for our investors. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Research Fund Q2 2024 Commentary

Not all Funds and Share classes may be available. Please consult your financial professional. Equity markets posted continued gains in the second quarter, following a very strong first quarter. Moderating inflation raised hopes for Federal Reserve (Fed) rate cuts in the second half of the year, even if policymakers continued to signal a gradual approach. While economic news was generally positive, there were signs that higher living costs were putting a strain on consumer spending. The equity market advance was narrow, driven by large- cap information technology and communication services stocks with exposure to artificial intelligence. An underweight position in Apple detracted from relative performance. Apple (AAPL) shares rose after the IT hardware and services company reported better-than-expected first-quarter financial results and held a successful launch of new AI features at its Worldwide Developers Conference. Investors were also reassured that iPhone sales in China held up better than feared despite a weaker macroeconomic backdrop. Additionally, Apple raised its dividend and announced a higher-than-anticipated target for stock buybacks. While we are constructive on Apple's ability to monetize its new AI features, we remain underweight in the stock given more favorable risk/reward offered by other holdings. CoStar Group (CSGP), another detractor, provides commercial real estate information and analytics to the residential and commercial property markets. The stock declined as the outlook for higher-for-longer interest rates led investors to sell stocks with perceived housing market exposure. On a positive note, CoStar reported solid first-quarter results and guidance. It has generated recurring revenue streams through a subscription-based commercial real estate database, which has been difficult for competitors to replicate. On the residential side of its business, it has been transitioning away from legacy products while it invests in new capabilities. It recently acquired Matterport, a global leader in immersive 3D imaging that allows prospective buyers to visualize property interiors. The company hopes this technology will help expand and differentiate its marketplace offerings. Nvidia (NVDA) was a top positive contributor. The data center infrastructure provider reported another quarter of very strong revenue and earnings growth, fueled by soaring demand for its graphics processing units (GPUs) to support the deployment of generative AI. The size and complexity of these AI-related buildouts has provided long-term contracts and increased earnings visibility. The company has signaled a very strong outlook for fiscal year 2025 and beyond, as it has seen indications of accelerating demand from a diverse and growing array of customers including data centers, cloud service providers, GPU startups, and internet and software companies. Nvidia also announced a substantial increase to its dividend. Relative performance benefited from an underweight position in Salesforce (CRM), a provider of cloud-based customer relationship management software. The stock sold off in the second quarter after Salesforce reported weaker-than- expected revenue growth and guidance, as company management warned of near-term macroeconomic headwinds for enterprise spending. On a positive note, the company believes it is well positioned to benefit from AI given its extensive data on customer interactions and outcomes. It also continued to deliver solid free-cash-flow growth, which has helped support its cash return to shareholders. Equity markets posted continued gains in the second quarter, following a very strong first quarter. Economic activity in the U.S. and globally has remained relatively solid, and earnings have continued to grow for many companies. However, we continue to monitor potential risks. We know that it takes time for central bank rate hikes to work their way through the economy, and we may not yet have seen the full impact of last year's rate increases. If inflation does not moderate as investors have hoped, then higher interest rates could act as a headwind for economic growth. Additionally, we continue to see pockets of weakness in economic activity, including in the construction sector, as well as in China. Geopolitical developments also continue to take a human toll and could potentially have a more significant economic impact while contributing to investment market volatility. We remain committed to our fundamentals-driven investment strategy. This strategy is driven by our strong and experienced analyst team members, who bring deep knowledge of their respective sectors. Their proprietary fundamental research helps identify opportunities that we believe are underappreciated by the market. Our analyst team is constantly on the lookout for companies with strong or improving business models, good management teams, and durable competitive advantages. We continue to find companies with compelling growth opportunities that arise from innovation, market share gains, and strong growth in their end markets. Through this disciplined investment approach, we will continue to pursue our goal of long-term growth in capital. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Global Research Fund Q2 2024 Commentary

Not all Funds and Share classes may be available. Please consult your financial professional. Global equities rose in the second quarter, supported by moderating inflation and stabilizing economic growth. The European Central Bank cut rates by 25 basis points in June. The Federal Reserve and Bank of England left rates unchanged as markets adjusted to the outlook for higher-for-longer interest rates. U.S. stocks were strong positive performers, supported by a rally in information technology stocks viewed as potential beneficiaries of artificial intelligence. There were signs of cooling economic growth in many countries, including reports of slowing manufacturing activity and weaker consumer spending. Vistra Energy (VST) was a top contributor to relative performance. This major U.S. independent power producer reported robust first-quarter earnings growth that exceeded investor expectations. It also raised guidance to reflect expectations for strong electricity usage and pricing, driven by secular trends such as the reshoring of manufacturing capacity and the tremendous power requirements of AI workloads. Additionally, Vistra has become a major U.S. supplier of nuclear energy through its acquisition of Energy Harbor (OTC:ENGH). Given the scarcity of clean, sustainable electricity generation, we believe nuclear power assets may receive increased attention as data centers look to reduce their carbon footprints. We continue to like Vistra for its robust free-cash- flow growth and commitment to returning cash to shareholders through dividends and stock repurchases. Relative performance once again benefited from our investment in Nvidia (NVDA). The data center infrastructure provider reported another quarter of very strong revenue and earnings growth, fueled by soaring demand for its graphics processing units (GPUs) to support the deployment of generative AI. The size and complexity of these AI-related buildouts has provided long-term contracts and increased earnings visibility. The company has signaled a very strong outlook for fiscal year 2025 and beyond, as it has seen indications of accelerating demand from a diverse and growing array of customers including data centers, cloud service providers, GPU startups, and internet and software companies. Nvidia also announced a substantial increase to its dividend. On a negative note, our investment in Porsche (OTCPK:POAHY) detracted from relative performance. The stock declined after the automaker reported disappointing revenue and earnings growth, partly due to weak sales trends in China. Porsche has been undergoing a transition as it prepares to roll out new models of many of its vehicles. This transition led to reduced availability and lost sales, while launch costs pressured margins. We see these as short-term issues, and the company has indicated that sales volumes and margins should improve in 2025 once new models reach the market and price increases are realized. Ferguson (FERG), another relative detractor, is a leading distributor of plumbing and other building products to the residential and commercial construction markets. The stock rose in the first quarter on hopes that declining interest rates would lead to increased housing demand. It then gave back some of these gains in the second quarter as expectations for higher- for-longer interest rates led investors to sell stocks with perceived housing market exposure. Ferguson's business has been relatively stable, however, despite the soft residential market. It reported better-than-expected first-quarter earnings, aided by demand from other market sectors such as data center construction. Company management also reported signs of incremental improvement in residential construction heading into the second half of the year. Equity markets posted continued gains in the second quarter, following a very strong first quarter. Economic activity in the U.S. and globally has remained relatively solid, and earnings have continued to grow for many companies. However, we continue to monitor potential risks. We know that it takes time for central bank rate hikes to work their way through the economy, and we may not yet have seen the full impact of last year's rate increases. If inflation does not moderate as investors have hoped, then higher interest rates could act as a headwind for economic growth. Additionally, we continue to see pockets of weakness in economic activity, including in the construction sector, as well as in China. Geopolitical developments also continue to take a human toll and could potentially have a more significant economic impact while contributing to investment market volatility. We remain committed to our fundamentals-driven investment strategy. This strategy is driven by our strong and experienced analyst team members, who bring deep knowledge of their respective sectors. Their proprietary fundamental research helps identify opportunities that we believe are underappreciated by the market. Our analyst team is constantly on the lookout for companies with strong or improving business models, good management teams, and durable competitive advantages. We continue to find companies with compelling growth opportunities that arise from innovation, market share gains, and strong growth in their end markets. Through this disciplined investment approach, we will continue to pursue our goal of long-term growth in capital. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Growth And Income Fund Q2 2024 Commentary

While economic news was generally positive, there were signs that higher living costs were putting a strain on consumer spending. In the second quarter, dividend stocks continued to lag the broader market. Our emphasis on high-quality, dividend-growth stocks hindered relative performance in a momentum-driven market, led by non- or lower-dividend- paying mega-cap technology stocks. Not owning a leading chip manufacturer, primarily because of its immaterial dividend did not align with our strategy's process, hurt relative performance since the stock was a significant contributor to benchmark performance. Similarly, Google parent Alphabet's gains occurred before it began paying dividends and before it aligned with our strategy. In terms of stock-specific performance attribution, semiconductor manufacturing equipment company KLA was a top contributor. The company delivered solid earnings results and an even more impressive outlook with growth set to accelerate through the remainder of 2024 and into 2025. Broadly, the outlook for wafer fabrication equipment is constructive, fueled by enthusiasm for the industry's role in enabling the AI ecosystem. KLA is viewed as a beneficiary of the demand for leading-edge chips, many of which require the company's process and controls services for production. Enterprise software company Oracle was also a top contributor. The company reported revenue and bottom line metrics that were in line to slightly below consensus; however, it also reported record bookings for new business. This accelerating revenue growth outlook is being driven by AI cloud infrastructure deals and boosted sentiment in the stock. Also, the company continues to do a good job returning capital back to shareholders through dividends and stock buybacks. Consulting firm Accenture was a top detractor from performance. The company's growth has slowed due to a shift in IT spending toward AI and away from legacy software projects. Although the company's effort to grow new generative AI consulting business has been successful, it hasn't offset declines elsewhere in the business. Starbucks was another top detractor. Broadly, the restaurant industry is facing challenges from reduced sales as consumer spending has weakened among certain household segments. More specifically, efforts to cover increased labor, food, and beverage costs through price hikes have met resistance with lower- and middle-income customers. Additionally, Starbucks has struggled to attract more customers due to internal problems, which factored into our decision to exit the position. As we enter the second half of the year, there is a lot to be positive about in the U.S. economy, with unemployment remaining low and solid job growth. Households are feeling the impact of inflation and are being more selective in their consumption, however, we still believe consumer balance sheets remain relatively healthy and should contribute to a strong overall economic backdrop. Equity markets have embraced this optimism, pricing in a soft landing scenario. Year-over-year S&P 500 earnings estimates are up over 10% for this year and next, which appear realistic based on our company interactions. However, we believe the realization of these estimates hinges on two critical factors: productivity and innovation. Recent gains in U.S. labor productivity are particularly encouraging. Nonfarm labor productivity has increased from 2.4% to 2.9% year over year in each of the past three quarters, significantly above the 1.5% 10-year average. This uptick bodes well for corporate margins and may help mitigate inflationary pressures. The productivity gains are particularly evident among tech and internet firms, many of which streamlined operations while maintaining or growing revenues. To capitalize on productivity trends, we're focused on two key areas: AI infrastructure providers, which offer enabling technologies like semiconductors and AI services, and large-scale companies leveraging these technologies to improve productivity, product development, and customer service. Companies across various sectors are finding new ways to leverage AI to improve efficiency and focus on growth potential. While AI dominates innovation discussions, we see breakthroughs extending beyond tech into sectors like health care. Innovations are emerging in gene editing, AI-based diagnostics, and genetic screening technologies. The continued investment in R&D within healthcare is expected to drive growth and differentiation among companies in the sector. Looking at other sectors, we see opportunities in consumer discretionary and capital markets. E-commerce continues to grow rapidly, and companies exposed to global travel trends remain favorable. We anticipate an improvement in capital market activity as interest rates stabilize, benefiting investment banks and companies facilitating these transactions. Key economic risks we are watching include consumer spending trends and the dampening effects that higher interest rates can have on long-cycle capital spending. Consumer spending, while still resilient, has shown signs of a slight slowdown in certain areas. High-income consumers with strong asset positions continue to spend, particularly on travel and experiences, while more leveraged consumers are being selective in their spending choices. The construction industry is another area of focus, with weakening data outside of data centers. This includes housing, multifamily homes, and manufacturing capacity. However, government and nonresidential spending has remained robust, due to data center and chip manufacturing plant buildouts. Our focus remains on companies providing attractive current income and growth potential. We believe our emphasis on companies with consistent cash flows and healthy balance sheets can help buffer shareholder returns in the event economic demand is weaker than anticipated.

Janus Henderson Responsible International Dividend Fund Q2 2024 Commentary

We remain optimistic that the companies held in the portfolio can navigate the current conditions well, aided by strong balance sheets and cash-generating abilities. Responsible International Dividend Fund Performance - USD (%) (as of 06/30/24) Global equity markets continued to rise during the second quarter, with numerous major indices hitting all-time highs. Investor sentiment remained optimistic as inflation continued to cool without a corresponding slowdown in economic activity. Countries that experienced technical recessions in the second half of 2023, such as the UK and Germany, showed a gradual recovery in economic activity. The results of the European parliamentary election late in the quarter drove volatility higher across Europe. The results indicated a change of status quo, and in the case of France, the new leadership may not support the economic reforms that have benefited the country's economy. Companies exposed to the explosive growth in artificial intelligence reported strong results, and their optimistic outlooks allowed share prices to outperform the broader market. Unlike the first quarter, where economically sensitive sectors outperformed, in the second quarter it was the shares in more stable sectors - e.g., utilities, communication services, and consumer staples - that outperformed. Leading indicators of economic activity delivered mixed signals, with certain sectors of the global economy slowing while others remained robust. Company earnings during the quarter generally were better than expected, and management teams maintained a tone of cautious optimism regarding outlooks for their businesses. Asian equities performed well. New measures from the Chinese government to support the housing market sent shares in Hong Kong higher. Meanwhile Japanese equities also rallied, although the Yen depreciated further due to a looser-than-expected monetary policy from the Bank of Japan. With inflation easing at a more gradual rate than expected, U.S. government bonds sold off during the quarter, while the U.S. Dollar rose versus other currencies. During the quarter, our holdings in the information technology sector performed particularly well on a relative basis. The optimism around the adoption of AI drove up the share price of chip manufacturer Taiwan Semiconductor (TSM), which has benefited from the capital investment deployed by its customers to develop the company's AI capabilities. MediaTek (OTCPK:MDTTF), another Taiwanese chip company, outperformed after sales inflected higher following a period of tepid growth. Holdings in UK bank NatWest (NWG) and information services company RELX, also in the UK, also bolstered relative performance. Both companies delivered solid results for their businesses - the former benefiting from the higher interest rate environment, and the latter from the deployment of AI. While the pace of macroeconomic activity has remained benign, many of the companies held in the portfolio have continued to deliver strong profit margins and generate a healthy amount of cash. Dividend cover and balance sheet strength both rank highly in our stock selection process, and these attributes have proven especially important during the period. Companies with high sensitivity to the economic cycle underperformed over the quarter and reversed some of the previous quarter's gains. Our holdings in German truck manufacturer Daimler AG (OTCPK:DTRUY) and Swedish industrial company Sandvik (OTCPK:SDVKF) were among these. The underlying business environment for both companies remains supportive with the potential for an acceleration of growth later this year. Some technology companies also reversed their previous gains, such as Samsung Electronics (OTCPK:SSNLF) in Korea and Tokyo Electron (OTCPK:TOELY) in Japan. We believe both businesses maintain leadership positions in their industries globally and benefit from structural growth trends in the industry such as AI and mobile communication. Falling inflation should allow central banks more maneuverability in the event of an economic slowdown, which is certainly good news. So far, the global economy has coped well, with interest rates higher than many commentators expected. Long-term structural trends, such as technological innovation, decarbonization, and supply- chain security, are driving an increase in capital spending across a range of industries, while the narrow breadth in the market presents opportunities for investors to identify those businesses with better earnings momentum than currently forecast. This is where we are focusing our attention in the second half of 2024. We remain confident that the companies held in the portfolio can navigate the current conditions well, aided by strong balance sheets and cash-generating abilities. Shareholder returns remain positive, both in terms of dividends and share buybacks, which suggests that management teams echo our confidence in the long-term outlooks for their companies. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Global Sustainable Equity (ADR) Managed Account Q2 2024 Commentary

We expect artificial intelligence (AI) to remain prominent but see evidence suggesting the potential for broadening growth following a period of growth concentrated in a few sectors. Global Sustainable Equity (ADR) Managed Account Performance - USD (%) (as of 06/30/24) The second quarter started tepidly for equities, with share price declines in many markets as stronger-than- expected inflation data (especially in the U.S.) raised the prospect of higher-for-longer interest rates. Inflation news improved as the quarter progressed. Coupled with continued strong corporate earnings growth, this led to renewed investor optimism, which was reflected in solid performance across most equity markets. European equities were the main laggards, as French President Macron's decision to call a snap election raised fears that the far-right National Rally party would leap ahead to a strong lead. Mega-cap information technology stocks drove a significant portion of market returns, as investor excitement over the potential economic impact of AI continued to build. This meant that growth stocks continued their outperformance against value stocks for the year, which was also reflected in sector performance, with IT and communication services leading by a significant margin. By contrast, the weakest sectors included materials, real estate, and consumer discretionary. Materials was negatively impacted by lower metal prices, and real estate by continued concerns regarding weakness in the property market. AI and electrification trends were exemplified again this quarter. Many of the hyperscaler companies - large cloud service providers such as Amazon (AMZN), Alphabet (GOOG, GOOGL) , and META - announced significant capital expenditure increases as they prepare for greater AI demand. Meanwhile, Apple (AAPL) finally announced its plans to integrate AI into its products. While AI promises to advance economic efficiency and quality of life in many areas, the challenges of powering AI and the greater intensity on the electric grid remain vital issues. There are key bottlenecks within this landscape, including the availability of graphics processing units (GPUs), labor, transformers, and permitting. As such, companies - including several within the portfolio - with electrification products and solutions continued their strong performance over the quarter. We remain focused on using our multidisciplinary approach to find durable trends and innovative companies that are deeply embedded in them. The recent share price gains in some AI stocks have been dramatic, but this phenomenon aligns with our thesis that innovation, sustainable development, and the compounding of capital are closely linked. We note the current political uncertainty related to the various elections around the world this year, and our bottom-up stock selection process aims to capitalize on such macro-related volatility. An overweight position in IT and an underweight in materials were beneficial to relative performance, helping to offset the drag on relative results from an overweight position in industrials and underweight in communication services. Stock selection was strong, mainly related to holdings in industrials and utilities. Within industrials, among the largest positive contributors to relative performance were locomotive manufacturer Wabtec and telecom cable manufacturer Prysmian (OTCPK:PRYMF). These contributions offset negative stock selection in IT, where the portfolio's zero weighting in one of the top hyperscaler companies detracted from relative returns, as did a position in Keysight Technologies (KEYS). At the stock level, the largest contributors to relative performance were GPU company Nvidia (NVDA) and Prysmian. Nvidia is a critical business within the AI value chain. With a new product cycle on the horizon and increased customer spending, in our view, the company is well placed to benefit from continued earnings upgrades. Nvidia's GPUs are significantly more energy efficient than alternative chip components, hence helping to reduce carbon emissions. In addition, these products play an essential role in AI and automation, both of which offer scope for improvements to quality of life. Prysmian reported improved margins in the first quarter while its management also reconfirmed previous earnings guidance for the full year. Cables are the backbone of electrification; they are essential for the further proliferation of renewables, including onshore/offshore wind and solar, data centers, and interconnectors for transmission grids. Given that renewable energy is intermittent, long-distance interconnectors allow higher utilization of renewable resources, leading to lower curtailments of such resources as well as reduced greenhouse gas emissions. Notable detractors included clinical research organization ('CRO') Icon (ICLR) and electronic design and testing firm Keysight Technologies. Despite reporting strong quarterly results and solid performance in the preceding 12-months, Icon shares weakened over the period. Its share price recovered after the company held its investor day, where it guided to accelerated medium-term revenue growth of 7-10% annually through to 2027 and committed to robust margin expansion. As a CRO, Icon helps pharmaceutical companies manage the human trial process that supports the development of new drugs and devices, helping to save lives and improve the quality of life. Keysight's shares also fell following the release of its first-quarter results. Although both revenue and earnings exceeded market expectations, the cautious outlook statement undermined investor sentiment. Keysight offers a range of design and testing solutions to customers, enabling them to accelerate innovations in telecommunications, Internet of Things (IoT), network security, and electric vehicles. While recent performance has been disappointing, due to customer destocking and macroeconomic headwinds, our long-term thesis is unchanged. The quarter marked a persistence of strong momentum in AI and its derivative themes, including electrification, which have been key drivers of portfolio performance. The increasing adoption of AI and the concomitant rise in demand for data centers is a powerful multiyear secular theme, leading to greater intensity on the electric grid as a result of higher power demand. We are mindful of the potential for rising carbon emissions due to the growth of AI, and we are paying close attention to the decarbonization commitments of companies such as Microsoft (MSFT). While we expect there will be upward pressure on emissions in the short term, we believe that AI will yield a net positive benefit to decarbonization goals (through innovation and productivity impacts), and we are confident the increased power demands will ultimately be met through greater investment in cleaner energy. Beyond AI and its derivative plays, we are judiciously managing correlated risks within our portfolio in order to position the strategy for continued outperformance. Over the last 12 months, we also have been focused on finding uncorrelated investment ideas that are beneficial to the diversification of our risk profile and maintained positions in several holdings that have underperformed and whose fundamental investment theses we believe have remained unchanged. We also have maintained our investments that are exposed to the electrification of transport. While the current picture for electric vehicles is somewhat mixed, we believe this is just a temporary lull. Furthermore, our investments are concentrated in the supply chain, where we see attractive valuations and where the companies are also benefiting from healthy demand in hybrids and plug-in hybrids. While this is a year of elevated political change across the world, we remain confident in our outlook. Inflationary pressures continue to subside, and monetary policy is on a more accommodative trajectory. Irrespective of political outcomes, the secular trends we are focused on continue to progress and unfold, and we believe that any market corrections will present opportunities to invest. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Janus Henderson Global Sustainable Equity Fund Q2 2024 Commentary

We remain focused on using our multidisciplinary approach to find durable trends and innovative companies that are deeply embedded in them. The recent share price gains in some AI stocks have been dramatic, but this phenomenon aligns with our thesis that innovation, sustainable development, and the compounding of capital are closely linked. We note the current political uncertainty related to the various elections around the world this year, and our bottom-up stock selection process aims to capitalize on such macro-related volatility. An overweight position in IT and underweight positions in consumer discretionary and materials were beneficial to relative performance, helping to offset the drag on relative results from an overweight position in industrials and underweight in communication services. Stock selection was strong, mainly related to holdings in industrials and utilities. Within industrials, the largest positive contributors to relative performance were locomotive manufacturer Wabtec and telecom cable manufacturer Prysmian. In utilities, the top contributor on a relative basis was renewable energy developer Boralex. These contributions offset negative stock selection in IT, where the portfolio's zero weighting in one of the top hyperscaler companies detracted from relative returns, as did positions in Keysight Technologies and Autodesk. At the stock level, the largest contributors to relative performance were GPU company NVIDIA and Prysmian. NVIDIA is a critical business within the AI value chain. With a new product cycle on the horizon and increased customer spending, in our view, the company is well placed to benefit from continued earnings upgrades. NVIDIA's GPUs are significantly more energy efficient than alternative chip components, hence helping to reduce carbon emissions. In addition, these products play an essential role in AI and automation, both of which offer scope for improvements to quality of life. Prysmian reported improved margins in the first quarter while its management also reconfirmed previous earnings guidance for the full year. Cables are the backbone of electrification; they are essential for the further proliferation of renewables, including onshore/offshore wind and solar, data centers, and interconnectors for transmission grids. Given that renewable energy is intermittent, long-distance interconnectors allow higher utilization of renewable resources, leading to lower curtailments of such resources as well as reduced greenhouse gas emissions. Notable detractors included clinical research organization (CRO) Icon and design software company Autodesk. Despite reporting strong quarterly results and solid performance in the preceding 12-months, Icon shares weakened over the period. Its share price recovered after the company held its investor day, where it guided to accelerated medium-term revenue growth of 7-10% annually through to 2027 and committed to robust margin expansion. As a CRO, Icon helps pharmaceutical companies manage the human trial process that supports the development of new drugs and devices, helping to save lives and improve the quality of life. Autodesk's share price fell following the company's announcement that it would not be able to file its annual results within the required time period. The share price staged a partial recovery after the company announced that no restatement of any financial statement was required, although it did reassign its chief financial officer to another role. Its quarterly results also exceeded market expectations. Autodesk's software is used by architects and engineers worldwide. The software enables customers to optimize designs and significantly reduces energy usage and materials waste. The quarter marked a persistence of strong momentum in AI and its derivative themes, including electrification, which have been key drivers of portfolio performance. The increasing adoption of AI and the concomitant rise in demand for data centers is a powerful multiyear secular theme, leading to greater intensity on the electric grid as a result of higher power demand. We are mindful of the potential for rising carbon emissions due to the growth of AI, and we are paying close attention to the decarbonization commitments of companies such as Microsoft. While we expect there will be upward pressure on emissions in the short term, we believe that AI will yield a net positive benefit to decarbonization goals (through innovation and productivity impacts), and we are confident the increased power demands will ultimately be met through greater investment in cleaner energy. Beyond AI and its derivative plays, we are judiciously managing correlated risks within our portfolio in order to position the strategy for continued outperformance. Over the last 12 months, we also have been focused on finding uncorrelated investment ideas that are beneficial to the diversification of our risk profile and maintained positions in several holdings that have underperformed and whose fundamental investment theses we believe have remained unchanged. We also have maintained our investments that are exposed to the electrification of transport. While the current picture for electric vehicles is somewhat mixed, we believe this is just a temporary lull. Furthermore, our investments are concentrated in the supply chain, where we see attractive valuations and where the companies are also benefiting from healthy demand in hybrids and plug-in hybrids. While this is a year of elevated political change across the world, we remain confident in our outlook. Inflationary pressures continue to subside, and monetary policy is on a more accommodative trajectory. Irrespective of political outcomes, the secular trends we are focused on continue to progress and unfold, and we believe that any market corrections will present opportunities to invest.

Janus Henderson Growth And Income Managed Account Q2 2024 Commentary

We are optimistic that artificial intelligence (AI) and innovation- driven productivity can help support economic growth and companies' bottom lines. Growth and Income Managed Account Performance - USD (%) (as of 06/30/24) Following a very strong first quarter, U.S. equities continued gains in the second quarter. Inflation moderated but remained above central bank target levels. This led to uncertainty over the timing of potential Federal Reserve (Fed) rate cuts. However, the 10-year Treasury bond yield retreated off April highs as investors grew more hopeful that slower economic growth and easing core inflation could lead the Fed to cut interest rates in the coming months. The market advance was relatively narrow, driven by mega-cap technology stocks with AI exposure. That said, first-quarter earnings and guidance for the second quarter were broadly solid and supportive of market gains. While economic news was generally positive, there were signs that higher living costs were putting a strain on consumer spending. In the second quarter, dividend stocks continued to lag the broader market. Our emphasis on high-quality, dividend-growth stocks hindered relative performance in a momentum-driven market, led by non- or lower-dividend- paying mega-cap technology stocks. Not owning a leading chip manufacturer, primarily because its immaterial dividend did not align with our strategy's process, hurt relative performance since the stock was a significant contributor to benchmark performance. Similarly, Google (GOOG,GOOGL) parent Alphabet's gains occurred before it began paying dividends and before it aligned with our strategy. In terms of stock-specific performance attribution, semiconductor manufacturing equipment company KLA (KLAC) was a top contributor. The company delivered solid earnings results and an even more impressive outlook with growth set to accelerate through the remainder of 2024 and into 2025. Broadly, the outlook for wafer fabrication equipment is constructive, fueled by enthusiasm for the industry's role in enabling the AI ecosystem. KLA is viewed as a beneficiary of the demand for leading-edge chips, many of which require the company's process and controls services for production. Enterprise software company Oracle (ORCL) was also a top contributor. The company reported revenue and bottom line metrics that were in line to slightly below consensus; however, it also reported record bookings for new business. This accelerating revenue growth outlook is being driven by AI cloud infrastructure deals and boosted sentiment in the stock. Also, the company continues to do a good job returning capital back to shareholders through dividends and stock buybacks. Consulting firm Accenture (ACN) was a top detractor from performance. The company's growth has slowed due to a shift in IT spending toward AI and away from legacy software projects. Although the company's effort to grow new generative AI consulting business has been successful, it hasn't offset declines elsewhere in the business. Starbucks (SBUX) was another top detractor. Broadly, the restaurant industry is facing challenges from reduced sales as consumer spending has weakened among certain household segments. More specifically, efforts to cover increased labor, food, and beverage costs through price hikes have met resistance with lower- and middle-income customers. Additionally, Starbucks has struggled to attract more customers due to internal problems, which factored into our decision to exit the position. As we enter the second half of the year, there is a lot to be positive about in the U.S. economy, with unemployment remaining low and solid job growth. Households are feeling the impact of inflation and are being more selective in their consumption, however, we still believe consumer balance sheets remain relatively healthy and should contribute to a strong overall economic backdrop. Equity markets have embraced this optimism, pricing in a soft landing scenario. Year-over-year S&P 500 (SP500, SPX) earnings estimates are up over 10% for this year and next, which appear realistic based on our company interactions. However, we believe the realization of these estimates hinges on two critical factors: productivity and innovation. Recent gains in U.S. labor productivity are particularly encouraging. Nonfarm labor productivity has increased from 2.4% to 2.9% year over year in each of the past three quarters, significantly above the 1.5% 10-year average. This uptick bodes well for corporate margins and may help mitigate inflationary pressures. The productivity gains are particularly evident among tech and internet firms, many of which streamlined operations while maintaining or growing revenues. To capitalize on productivity trends, we're focused on two key areas: AI infrastructure providers, which offer enabling technologies like semiconductors and AI services, and large-scale companies leveraging these technologies to improve productivity, product development, and customer service. Companies across various sectors are finding new ways to leverage AI to improve efficiency and focus on growth potential. While AI dominates innovation discussions, we see breakthroughs extending beyond tech into sectors like health care. Innovations are emerging in gene editing, AI-based diagnostics, and genetic screening technologies. The continued investment in R&D within healthcare is expected to drive growth and differentiation among companies in the sector. Looking at other sectors, we see opportunities in consumer discretionary and capital markets. E-commerce continues to grow rapidly, and companies exposed to global travel trends remain favorable. We anticipate an improvement in capital market activity as interest rates stabilize, benefiting investment banks and companies facilitating these transactions. Key economic risks we are watching include consumer spending trends and the dampening effects that higher interest rates can have on long-cycle capital spending. Consumer spending, while still resilient, has shown signs of a slight slowdown in certain areas. High-income consumers with strong asset positions continue to spend, particularly on travel and experiences, while more leveraged consumers are being selective in their spending choices. The construction industry is another area of focus, with weakening data outside of data centers. This includes housing, multifamily homes, and manufacturing capacity. However, government and nonresidential spending has remained robust, due to data center and chip manufacturing plant buildouts. Our focus remains on companies providing attractive current income and growth potential. We believe our emphasis on companies with consistent cash flows and healthy balance sheets can help buffer shareholder returns in the event economic demand is weaker than anticipated. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.