Overview

The Pace of Change Is Greater
than Ever Before

Disruption is rippling through the global economy, and the pace of change is accelerating. To take one example, when the human genome was first sequenced in 2000, it took 13 years and cost $3 billion. Now, sequencing can be done in one day for $1,000. Such dramatic change is being felt across industries and geographies, and potentially shaping the long-term performance of investors’ portfolios.
To stay on the right side of disruption, we use fundamental analysis. As part of that research, we are focusing on widespread technology disruption as well as health care innovation and old world vs. new economies and industries. Together, these drivers could have a dramatic impact on companies – and their stocks – in the years ahead.
Evidence of the pace of disruption
Sequencing the Human Genome
In less than two decades, the cost of genetic sequencing has fallen dramatically, leading to the creation of advanced treatment disciplines such as immuno-oncology, gene therapy and, potentially, personalized vaccines.
Source: National Human Genome Research Institute. Data reflect sequencing cost per genome from September 2001 to February 2019.
Worldwide Enterprise Spend on 'Digital Transformation'
Companies globally are investing heavily to keep up with the digital economy.
Estimated
Source: IDC, "Digital Transformation (DX): Understanding the Business Case - Market Spend & Trend Outlook," June 2018.
Disruption is rippling through the global economy, and the pace of change is accelerating. To take one example, when the human genome was first sequenced in 2000, it took 13 years and cost $3 billion. Now, sequencing can be done in one day for $1,000. Such dramatic change is being felt across industries and geographies, and potentially shaping the long-term performance of investors’ portfolios.

That’s why, at Janus Henderson, we are using fundamental analysis to stay on the right side of disruption. As part of that research, we are focusing on widespread 

technology disruption

as well as 

health care innovation

 and 

old world vs. new economies and industries.

Together, these drivers could have a dramatic impact on companies – and their stocks – in the years ahead. What does that mean for investors, and how can Janus Henderson provide solutions? Read on.

Evidence of the pace of disruption
Sequencing the Human Genome
In less than two decades, the cost of genetic sequencing has fallen dramatically, leading to the creation of advanced treatment disciplines such as immuno-oncology, gene therapy and, potentially, personalized vaccines.
Source: National Human Genome Research Institute. Data reflect sequencing cost per genome from September 2001 to February 2019.
Worldwide Enterprise Spend on 'Digital Transformation'
Companies globally are investing heavily to keep up with the digital economy.
Estimated
Source: IDC, "Digital Transformation (DX): Understanding the Business Case - Market Spend & Trend Outlook," June 2018.

Disruption in Context

Why Today Is Different

Change and innovation are always present in the global economy but do not necessarily turn out well from an investment perspective. The tech-driven revolution of the 1990s and resulting Internet bubble led to sharp falls in equity markets. However, we believe today’s disruption is more enduring:

  • Leading technology companies are building large networks of data and users, providing these firms with sizable competitive advantages and strong earnings growth potential.

  • New and transformative technologies, such as artificial intelligence, the Internet of Things and cloud computing, have become pervasive, impacting business models across industries and regions.

  • Rising living standards in emerging economies are helping drive demand for these new tools and services. So, too, is the coming of age of “digital natives,” and a growing and aging global population.

S&P 500 Technology Sector
Although tech stocks have soared in recent years, strong earnings growth has helped to keep valuations in check.
Source: Bloomberg. Data are quarterly from 12/30/94 to 9/30/19. EPS reflects trailing 12-month earnings. P/Es are based on forward 12-month consensus estimates.
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.

Change and innovation are always present in the global economy but do not necessarily turn out well from an investment perspective. The tech-driven revolution of the 1990s and resulting Internet bubble led to sharp falls in equity markets. However, we believe today’s disruption is more enduring:

  • Leading technology companies are building large networks of data and users, providing these firms with sizable competitive advantages and strong earnings growth potential.

  • New and transformative technologies, such as artificial intelligence, the Internet of Things and cloud computing, have become pervasive, impacting business models across industries and regions.

  • Rising living standards in emerging economies are helping drive demand for these new tools and services. So, too, is the coming of age of “digital natives,” and a growing and aging global population.

S&P 500 Technology Sector
Although tech stocks have soared in recent years, strong earnings growth has helped to keep valuations in check.
Source: Bloomberg. Data are quarterly from 12/30/94 to 9/30/19. EPS reflects trailing 12-month earnings. P/Es are based on forward 12-month consensus estimates.
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus or, if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

Past performance is no guarantee of future results.

Investing involves risk, including the possible loss of principal and fluctuation of value.

Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.

Definitions

Janus Henderson Distributors

Terms of Use

Janus Henderson Investors ©

C-1019-26912 10-15-20

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus or, if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

Past performance is no guarantee of future results.

Investing involves risk, including the possible loss of principal and fluctuation of value.

Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.

Definitions

Janus Henderson Distributors

Terms of Use

Janus Henderson Investors ©

C-1019-26912 10-15-20