In the second quarter of 2025, the Short-Term Income Managed Account managed by Janus Henderson Investors achieved a commendable gross return of 1.47%. This performance surpassed its benchmark, the Bloomberg 1-3 Year US Gov/Credit Index, which recorded a return of 1.27% for the same period. This positive outcome underscores the effectiveness of the portfolio's strategic allocation decisions, particularly its emphasis on spread risk, which proved to be the main driver of its relative outperformance.
Despite this overall strong showing, certain exposures within the portfolio acted as a drag on returns. Specifically, investments in agency mortgage-backed securities were identified as a detractor, highlighting the dynamic nature of fixed-income markets and the varied performance of different asset classes. Nevertheless, the investment team maintained its tactical position at the short end of the yield curve. This decision was based on an expectation that this segment of the curve would likely experience a rally if the labor market or the broader economy were to show signs of weakening, demonstrating a forward-looking and adaptive investment approach.
Beyond the immediate portfolio dynamics, the broader economic landscape presented a more favorable outlook. A notable development was the de-escalation of global trade tensions. This reduction in geopolitical friction contributed to a decrease in the probabilities and magnitude of potential downside scenarios for the global economy. Such an environment can foster greater stability and predictability, which are generally conducive to positive investment outcomes, particularly in fixed-income markets.
The successful navigation of diverse market conditions and the strategic positioning of assets underscore the importance of informed decision-making and a comprehensive understanding of both macro-economic trends and specific market segments. Janus Henderson Investors' performance in this quarter reflects a diligent management of risk and a proactive stance in anticipating market movements, ultimately aiming to achieve favorable returns for its clients.