JANUS ADVISER SERIES, N-1A/A, 2000-06-12

JANUS ADVISER SERIES
N-1A/A, 2000-06-12

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(No. 333-33978) [ ]

Pre-Effective Amendment No. 1 [ X ]

Post-Effective Amendment No. [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 (No. 811-9885) [ ]

AMENDMENT NO. 1 [ X ]

(Check appropriate box or boxes.)

JANUS ADVISER SERIES
(Exact Name of Registrant as Specified in Charter)

100 Fillmore Street, Denver, Colorado 80206-4928
Address of Principal Executive Offices (Zip Code)

Registrant's Telephone No., Including Area Code: 303-333-3863

Thomas A. Early - 100 Fillmore Street, Denver, Colorado 80206-4928
(Name and Address of Agent for Service)

Approximate Date of Proposed Offering: As soon as practicable after the
effective date of this Registration Statement and thereafter from day to day.

It is proposed that this filing will become effective (check appropriate box):

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.

The Registrant hereby amends the Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), shall
determine.

<PAGE>

JANUS ADVISER SERIES
Cross Reference Sheet
Between the Prospectuses and Statements of
Additional Information and Form N-1A Item

FORM N-1A ITEM CAPTION IN PROSPECTUSES

PART A

1. Front and Back Cover Pages Cover Pages

2. Risk/Return Summary: Risk/Return Summary
Investments, Risks, and
Performance

3. Risk/Return Summary: Fee Risk/Return Summary
Table

4. Investment Objectives, Investment Objectives, Principal
Principal Investment Investment Strategies, and Risks;
Strategies, and Related Risks Rating Categories

5. Management's Discussion of Not Applicable
Fund Performance

6. Management, Organization, and Management of the Funds
Capital Structure

7. Shareholder Information Shareholder's Guide; Other
Information; Distributions and
Taxes

8. Distribution Arrangements Distributions and Taxes

9. Financial Highlights Financial Highlights
Information

<PAGE>

FORM N-1A ITEM CAPTION IN STATEMENTS OF
ADDITIONAL INFORMATION

PART B

10. Cover Page and Table of Cover Page; Table of Contents
Contents

11. Fund History Miscellaneous Information

12. Description of the Fund and Classification, Portfolio Turnover,
Its Investments and Risks Investment Policies and Restrictions,
and Investment Strategies and Risks

13. Management of the Fund Investment Adviser; Trustees and
Officers

14. Control Persons and Principal Not Applicable
Holders of Securities

15. Investment Advisory and Other Investment Adviser; Custodian,
Services Transfer Agent, and Certain
Affiliations; Portfolio Transactions
and Brokerage; Trustees and Officers;
Miscellaneous Information

16. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage

17. Capital Stock and Other Purchases; Redemptions; Miscellaneous
Securities Information

18. Purchase, Redemption, and Purchases; Redemptions; Miscellaneous
Pricing of Shares Information

19. Taxation of the Fund Income Dividends, Capital Gains
Distributions and Tax Status

20. Underwriters Custodian, Transfer Agent, and
Certain Affiliations

21. Calculation of Performance Performance Information
Data

22. Financial Statements Financial Statements
<PAGE>

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER IS NOT PERMITTED.

[JANUS LOGO]

Subject to Completion

Preliminary Prospectus Dated June 12, 2000

Janus Adviser Series

PROSPECTUS

July 31, 2000

Janus Adviser Growth Fund
Janus Adviser Aggressive Growth Fund
Janus Adviser Capital Appreciation Fund
Janus Adviser Balanced Fund
Janus Adviser Equity Income Fund
Janus Adviser Growth and Income Fund
Janus Adviser Strategic Value Fund
Janus Adviser International Fund
Janus Adviser Worldwide Fund
Janus Adviser Flexible Income Fund
Janus Adviser Money Market Fund

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>

[JANUS LOGO]

This prospectus describes eleven mutual funds (the "Funds") with
a variety of investment objectives, including growth of capital,
current income and a combination of growth and income.
<PAGE>

Table of contents

<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Equity Funds............................................. 2
Flexible Income Fund..................................... 10
Money Market Fund........................................ 12
Fees and expenses........................................ 14
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
Equity Funds............................................. 16
Flexible Income Fund..................................... 20
General portfolio policies of the Funds other than Money
Market Fund.............................................. 21
Risks for Equity Funds................................... 24
Risks for Flexible Income Fund........................... 25
Risks common to all Non-Money Market Funds............... 25
Money Market Fund........................................ 27
MANAGEMENT OF THE FUNDS
Investment adviser....................................... 30
Management expenses and expense limits................... 31
Investment personnel..................................... 32
OTHER INFORMATION........................................... 36
DISTRIBUTIONS AND TAXES
Distributions............................................ 37
Funds other than Money Market Fund....................... 37
Money Market Fund........................................ 37
Taxes.................................................... 38
SHAREHOLDER'S GUIDE
Pricing of fund shares................................... 39
Purchases................................................ 39
Exchanges................................................ 39
Redemptions.............................................. 40
Frequent trading......................................... 40
Shareholder communications............................... 40
FINANCIAL HIGHLIGHTS........................................ 41
GLOSSARY
Glossary of investment terms............................. 47
RATING CATEGORIES
Explanation of rating categories......................... 51

</TABLE>

Table of contents 1
<PAGE>
Risk return summary

EQUITY FUNDS

The Equity Funds are designed for long-term investors who seek growth
of capital and who can tolerate the greater risks associated with
common stock investments. Balanced Fund, Equity Income Fund and Growth
and Income Fund are designed for investors who primarily seek growth
of capital with varying degrees of emphasis on income. Balanced Fund,
Equity Income Fund and Growth and Income Fund are not designed for
investors who desire a consistent level of income.

1. WHAT ARE THE INVESTMENT OBJECTIVES OF THE EQUITY FUNDS?

--------------------------------------------------------------------------------

DOMESTIC EQUITY FUNDS

- GROWTH FUND seeks long-term growth of capital in a manner
consistent with the preservation of capital.

- AGGRESSIVE GROWTH FUND, CAPITAL APPRECIATION FUND AND STRATEGIC
VALUE FUND seek long-term growth of capital.

- BALANCED FUND seeks long-term capital growth, consistent with
preservation of capital and balanced by current income.

- EQUITY INCOME FUND seeks current income and long-term growth of
capital.

- GROWTH AND INCOME FUND seeks long-term capital growth and current
income.

GLOBAL/INTERNATIONAL EQUITY FUNDS

- INTERNATIONAL FUND seeks long-term growth of capital.

- WORLDWIDE FUND seeks long-term growth of capital in a manner
consistent with the preservation of capital.

The Funds' Trustees may change these objectives without a shareholder
vote and the Funds will notify you of any changes that are material.
If there is a material change to a Fund's objective or policies, you
should consider whether that Fund remains an appropriate investment
for you. There is no guarantee that a Fund will meet its objective.

2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE EQUITY FUNDS?

The portfolio managers apply a "bottom up" approach in choosing
investments. In other words, the Funds' portfolio managers look for
companies with earnings growth potential one at a time, and in the
case of Strategic Value Fund, the Fund's portfolio manager looks for
undervalued companies one at a time. Balanced Fund's, Equity Income
Fund's and Growth and Income Fund's portfolio managers look mostly for
equity and income-producing securities that meet their investment
criteria. If a portfolio manager is unable to find such investments, a
significant portion of a Fund's assets may be in cash or similar
investments.

The Funds may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in high-yield/high risk
bonds.

GROWTH FUND invests primarily in common stocks selected for their
growth potential. Although the Fund can invest in companies of
any size, it generally invests in larger, more established companies.

2 Janus Adviser Series
<PAGE>

AGGRESSIVE GROWTH FUND invests primarily in common stocks selected for
their growth potential, and normally invests at least 50% of its
equity assets in medium-sized companies.

CAPITAL APPRECIATION FUND invests primarily in common stocks selected
for their growth potential. The Fund may invest in companies of any
size, from larger, well-established companies to smaller, emerging
companies.

BALANCED FUND normally invests 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of its assets
in securities selected primarily for their income potential. The Fund
will normally invest at least 25% of its assets in fixed-income
securities.

EQUITY INCOME FUND normally emphasizes investments in common stocks,
and growth potential is a significant investment consideration.
Normally, it invests at least 65% of its invested assets in income-
producing equity securities.

GROWTH AND INCOME FUND normally emphasizes investments in common
stocks. It will normally invest up to 75% of its assets in equity
securities selected primarily for their growth potential, and at least
25% of its assets in securities the portfolio manager believes have
income potential. Equity securities may make up part of this income
component if they currently pay dividends or the portfolio manager
believes they have potential for increasing or commencing dividend
payments.

STRATEGIC VALUE FUND invests primarily in common stocks with the
potential for long-term growth of capital using a "value" approach.
The "value" approach emphasizes investments in companies the portfolio
manager believes are undervalued relative to their intrinsic worth.

The portfolio manager measures value as a function of price/earnings
(P/E) ratios and price/free cash flow. A P/E ratio is the relationship
between the price of a stock and its earnings per share. This figure
is determined by dividing a stock's market price by the Company's
earnings per share amount. Price/free cash flow is the relationship
between the price of a stock and the company's available cash from
operations minus capital expenditures.

The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving their
returns on invested capital. These companies may also include special
situations companies that are experiencing management changes and/or
are temporarily out of favor.

INTERNATIONAL FUND normally invests at least 65% of its total assets
in securities of issuers from at least five different countries,
excluding the United States. Although the Fund intends to invest
substantially all of its assets in issuers located outside the United
States, it may invest in U.S. issuers and it may at times invest all
of its assets in fewer than five countries, or even a single country.

WORLDWIDE FUND invests primarily in common stocks of companies of any
size throughout the world. The Fund normally invests in issuers from
at least five different countries, including the United States. The
Fund may at times invest in fewer than five countries or even a single
country.

3. WHAT ARE THE MAIN RISKS OF INVESTING IN THE EQUITY FUNDS?

The biggest risk of investing in these Funds is that their returns may
vary, and you could lose money. If you are considering investing in
any of the Equity Funds, remember that they are each designed for
long-term investors who can accept the risks of investing in a
portfolio with significant common stock holdings. Common stocks tend
to be more volatile than other investment choices.

The value of a Fund's portfolio may decrease if the value of an
individual company in the portfolio decreases or, in the case of
Strategic Value Fund, if the portfolio manager's belief about a
company's

Risk return summary 3
<PAGE>

intrinsic worth is incorrect. The value of a Fund's portfolio could
also decrease if the stock market goes down. If the value of a Fund's
portfolio decreases, a Fund's net asset value (NAV) will also
decrease, which means if you sell your shares in a Fund you would get
back less money.

The income component of BALANCED FUND, EQUITY INCOME FUND AND GROWTH
AND INCOME FUND includes fixed-income securities. A fundamental risk
to the income component is that the value of these securities will
fall if interest rates rise. Generally, the value of a fixed-income
portfolio will decrease when interest rates rise, which means the
Fund's NAV may likewise decrease. Another fundamental risk associated
with fixed-income securities is credit risk, which is the risk that an
issuer of a bond will be unable to make principal and interest
payments when due.

INTERNATIONAL FUND AND WORLDWIDE FUND may have significant exposure to
foreign markets. As a result, their returns and NAV may be affected to
a large degree by fluctuations in currency exchange rates or political
or economic conditions in a particular country.

AGGRESSIVE GROWTH FUND, CAPITAL APPRECIATION FUND AND STRATEGIC VALUE
FUND are nondiversified. In other words, they may hold larger
positions in a smaller number of securities than a diversified fund.
As a result, a single security's increase or decrease in value may
have a greater impact on a Fund's NAV and total return.

An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.

4 Janus Adviser Series
<PAGE>

The following information provides some indication of the risks of
investing in the Equity Funds by showing how each of the Equity Funds'
performances have varied over time. These Funds (except Strategic
Value Fund) commenced operations on August 1, 2000, after the
reorganization of the Retirement Shares of Janus Aspen Series into the
Funds. (Strategic Value Fund is a newly organized Fund.) The returns
for the reorganized Funds reflect the performance of the Retirement
Shares of Janus Aspen Series prior to the reorganization. (The
performance of the Retirement Shares prior to May 1, 1997 reflects the
performance of a different class of Janus Aspen Series, restated to
reflect the fees and expenses of the Retirement Shares on May 1, 1997,
ignoring any fee and expense limitations.) The bar charts depict the
change in performance from year to year during the period indicated.
The tables compare each Fund's average annual returns for the periods
indicated to a broad-based securities market index.

GROWTH FUND

Annual returns for periods ended 12/31

2.31% 29.47% 17.64% 21.74% 34.99% 43.98%
1994 1995 1996 1997 1998 1999

Best Quarter 4th-1998 27.58% Worst Quarter 3rd-1998 (11.04%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Growth Fund 43.98% 29.25% 23.49%
S&P 500 Index* 21.03% 28.54% 22.68%
---------------------------------------------
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.

Risk return summary 5
<PAGE>

AGGRESSIVE GROWTH FUND

Annual returns for periods ended 12/31

16.03% 26.92% 7.19% 11.91% 33.58% 124.34%
1994 1995 1996 1997 1998 1999

Best Quarter 4th-1999 59.17% Worst Quarter 3rd-1998 (15.06%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Aggressive Growth Fund 124.34% 35.47% 33.53%
S&P MidCap 400 Index* 14.72% 23.05% 18.08%
----------------------------------------------
</TABLE>

* The S&P MidCap 400 Index is an unmanaged group of 400 domestic
stocks chosen for their market size, liquidity and industry group
representation.

CAPITAL APPRECIATION FUND

Annual returns for periods ended 12/31

57.37% 66.16%
1998 1999

Best Quarter 4th-1999 41.57% Worst Quarter 3rd-1998 (10.18%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year (5/1/97)
<S> <C> <C>
Capital Appreciation Fund 66.16% 56.43%
S&P 500 Index* 21.03% 27.40%
----------------------------------
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.

6 Janus Adviser Series
<PAGE>

BALANCED FUND

Annual returns for periods ended 12/31

0.84% 24.50% 15.39% 20.99% 33.59% 26.13%
1994 1995 1996 1997 1998 1999

Best Quarter 4th-1998 20.12% Worst Quarter 3rd-1998 (5.08%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Balanced Fund 26.13% 23.98% 19.82%
S&P 500 Index* 21.03% 28.54% 22.68%
Lehman Brothers Gov't/Corp Bond Index** (2.15%) 7.61% 5.40%
---------------------------------------------
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.
** Lehman Brothers Gov't/Corp Bond Index is composed of all bonds that
are of investment grade with at least one year until maturity.

EQUITY INCOME FUND

Annual returns for periods ended 12/31

45.55% 40.94%
1998 1999

Best Quarter 4th-1998 28.28% Worst Quarter 3rd-1998 (7.28%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year (5/1/97)
<S> <C> <C>
Equity Income Fund 40.94% 46.15%
S&P 500 Index* 21.03% 27.40%
----------------------------------
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.

Risk return summary 7
<PAGE>

GROWTH AND INCOME FUND

Annual returns for periods ended 12/31

73.20%
1999

Best Quarter 4th-1999 38.24% Worst Quarter 3rd-1999 4.18%

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year (5/1/98)
<S> <C> <C>
Growth and Income Fund 73.20% 54.57%
S&P 500 Index* 21.03% 19.85%
---------------------------------
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks,
a widely recognized, unmanaged index of common stock prices.

STRATEGIC VALUE FUND

Since Strategic Value Fund is a newly organized Fund, there is no
performance available as of the date of this Prospectus.

8 Janus Adviser Series
<PAGE>

INTERNATIONAL FUND

Annual returns for periods ended 12/31

22.92% 32.76% 16.15% 16.86% 81.32%
1995 1996 1997 1998 1999

Best Quarter: 4th-1999 58.25% Worst Quarter: 3rd-1998 (17.76%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (5/2/94)
<S> <C> <C> <C>
International Fund 81.32% 32.06% 27.11%
Morgan Stanley Capital International EAFE(R)
Index* 26.96% 12.83% 11.22%
--------------------------------------------
</TABLE>

* The Morgan Stanley Capital International EAFE(R) Index is a market
capitalization weighted index composed of companies representative
of the market structure of 20 developed market countries in Europe,
Australasia and the Far East.

WORLDWIDE FUND

Annual returns for periods ended 12/31

1.20% 26.82% 28.15% 20.96% 28.25% 63.66%
1994 1995 1996 1997 1998 1999

Best Quarter: 4th-1999 42.05% Worst Quarter: 3rd-1998 (16.16%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Worldwide Fund 63.66% 32.78% 28.77%
Morgan Stanley Capital International World Index* 24.93% 19.76% 16.41%
--------------------------------------------
</TABLE>

* The Morgan Stanley Capital International World Index is a market
capitalization weighted index composed of companies representative
of the market structure of 21 Developed Market countries in North
America, Europe and the Asia/Pacific Region.

The Equity Funds' past performance does not necessarily indicate how
they will perform in the future.

Risk return summary 9
<PAGE>

FLEXIBLE INCOME FUND

Flexible Income Fund is designed for long-term investors who primarily
seek current income.

1. WHAT IS THE INVESTMENT OBJECTIVE OF FLEXIBLE INCOME FUND?

--------------------------------------------------------------------------------

- FLEXIBLE INCOME FUND seeks to obtain maximum total return,
consistent with preservation of capital.

The Trustees may change this objective without a shareholder vote and
the Fund will notify you of any changes that are material. If there is
a material change to the Fund's objective or policies, you should
consider whether it remains an appropriate investment for you. There
is no guarantee that the Fund will meet its objective.

2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF FLEXIBLE INCOME FUND?

In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio managers apply
a "bottom up" approach in choosing investments. In other words, they
look mostly for income-producing securities that meet their investment
criteria one at a time. If a portfolio manager is unable to find such
investments, the Fund's assets may be in cash or similar investments.

The Fund invests primarily in a wide variety of income-producing
securities such as corporate bonds and notes, government securities
and preferred stock. As a fundamental policy, the Fund will invest at
least 80% of its assets in income-producing securities. The Fund may
own an unlimited amount of high-yield/ high-risk bonds, and these
securities may be a big part of the portfolio.

3. WHAT ARE THE MAIN RISKS OF INVESTING IN FLEXIBLE INCOME FUND?

Although the Fund may be less volatile than funds that invest most of
their assets in common stocks, the Fund's returns and yields will
vary, and you could lose money.

The Fund invests in a variety of fixed-income securities. A
fundamental risk is that the value of these securities will fall if
interest rates rise. Generally, the value of a fixed-income portfolio
will decrease when interest rates rise, which means the Fund's NAV
will likewise decrease. Another fundamental risk associated with
fixed-income funds is credit risk, which is the risk that an issuer
will be unable to make principal and interest payments when due.

The Fund may invest an unlimited amount of its assets in
high-yield/high-risk bonds, also known as "junk" bonds which may be
sensitive to economic changes, political changes, or adverse
developments specific to the company that issued the bond. These bonds
generally have a greater credit risk than other types of fixed-income
securities. Because of these factors, the performance and NAV of the
Fund may vary significantly, depending upon its holdings of junk
bonds.

The Fund may invest without limit in foreign debt and equity
securities.

An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

10 Janus Adviser Series
<PAGE>

The following information provides some indication of the risks of
investing in Flexible Income Fund by showing how Flexible Income
Fund's performance has varied over time. Flexible Income Fund
commenced operations on August 1, 2000, after the reorganization of
the Retirement Shares of Flexible Income Portfolio of Janus Aspen
Series into the Fund. The following returns reflect the performance of
the Retirement Shares of Janus Aspen Series prior to that date. (The
performance of the Retirement Shares prior to May 1, 1997 reflects the
performance of a different class of Janus Aspen Series, restated to
reflect the fees and expenses of the Retirement Shares on May 1, 1997,
ignoring any fee and expense limitations.) The bar chart depicts the
change in performance from year to year during the period indicated.
The table compares the average annual returns of the Fund for the
periods indicated to a broad-based securities market index.

FLEXIBLE INCOME FUND

Annual returns for periods ended 12/31

(1.25%) 23.47% 8.62% 10.77% 8.58% 0.90%
1994 1995 1996 1997 1998 1999

Best Quarter: 2nd-1995 6.61% Worst Quarter: 2nd-1999 (1.38%)

Average annual total return for periods ended 12/31/99
------------------------------------------------------

<TABLE>
<CAPTION>
Since Inception
of Predecessor Fund
1 year 5 years (9/13/93)
<S> <C> <C> <C>
Flexible Income Fund 0.90% 10.24% 7.89%
Lehman Brothers Gov't/Corp Bond Index* (2.15%) 7.61% 5.40%
----------------------------------------------
</TABLE>

* Lehman Brothers Gov't/Corp Bond Index is composed of all bonds that
are of investment grade with at least one year until maturity.

Flexible Income Fund's past performance does not necessarily indicate
how it will perform in the future.

Risk return summary 11
<PAGE>

MONEY MARKET FUND

Money Market Fund is designed for investors who seek current income.

1. WHAT IS THE INVESTMENT OBJECTIVE OF MONEY MARKET FUND?

--------------------------------------------------------------------------------

- MONEY MARKET FUND seeks maximum current income to the extent
consistent with stability of capital.

The Trustees may change this objective without a shareholder vote and
the Fund will notify you of any changes that are material. If there is
a material change in the Fund's objective or policies, you should
consider whether it remains an appropriate investment for you. There
is no guarantee that the Fund will meet its objective.

2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF MONEY MARKET FUND?

MONEY MARKET FUND will invest only in high-quality, short-term money
market instruments that present minimal credit risks, as determined by
Janus Capital. The Fund invests primarily in high quality debt
obligations and obligations of financial institutions. Debt
obligations may include commercial paper, notes and bonds, and
variable amount master demand notes. Obligations of financial
institutions include certificates of deposit and time deposits.

3. WHAT ARE THE MAIN RISKS OF INVESTING IN MONEY MARKET FUND?

The Fund's yields will vary as the short-term securities in the
portfolio mature and the proceeds are reinvested in securities with
different interest rates. Over time, the real value of the Fund's
yield may be eroded by inflation. Although Money Market Fund invests
only in high-quality, short-term money market instruments, there is a
risk that the value of the securities it holds will fall as a result
of changes in interest rates, an issuer's actual or perceived
credit-worthiness or an issuer's ability to meet its obligations.

An investment in Money Market Fund is not a deposit of a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the Fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to
lose money by investing in Money Market Fund.

12 Janus Adviser Series
<PAGE>

The following information provides some indication of the risks of
investing in Money Market Fund by showing how Money Market Fund's
performance has varied over time. Money Market Fund commenced
operations on August 1, 2000, after the reorganization of the
Retirement Shares of Money Market Portfolio of Janus Aspen Series into
the Fund. The following returns reflect the performance of the
Retirement Shares of Janus Aspen Series prior to that date. (The
performance of the Retirement Shares prior to May 1, 1997 reflects the
performance of a different class of Janus Aspen Series, restated to
reflect fees and expenses of the Retirement Shares on May 1, 1997,
ignoring any fee and expense limitations.) The bar chart depicts the
change in performance from year to year.

MONEY MARKET FUND

Annual returns for periods ended 12/31

4.24% 4.02% 4.85% 4.45%
1996 1997 1998 1999

Best Quarter: 4th-1999 1.29% Worst Quarter: 1st-1997 0.64%

For Money Market Fund's current yield, call the Janus XpressLine(TM)
at 1-888-979-7737.

Money Market Fund's past performance does not necessarily indicate how
it will perform in the future.

Risk return summary 13
<PAGE>

FEES AND EXPENSES

SHAREHOLDER FEES, such as sales loads, redemption fees or exchange
fees, are charged directly to an investor's account. The Funds are
no-load investments, so you will not pay any shareholder fees when you
buy or sell shares of the Funds.

ANNUAL FUND OPERATING EXPENSES are paid out of a Fund's assets and
include fees for portfolio management, maintenance of shareholder
accounts, shareholder servicing, accounting and other services. You do
not pay these fees directly but, as the example on the next page
shows, these costs are borne indirectly by all shareholders.

14 Janus Adviser Series
<PAGE>

This table describes the fees and expenses that you may pay if you buy
and hold shares of the Funds. The information shown is based upon
estimated annualized expenses the Funds expect to incur during their
initial fiscal year.

<TABLE>
<CAPTION>
Total Annual Fund Total Annual Fund
Distribution Operating Operating
Management (12b-1) Other Expenses Total Expenses
Fee Fees(1) Expenses Without Waivers(2) Waivers With Waivers(2)
<S> <C> <C> <C> <C> <C> <C>
Growth Fund 0.65% 0.25% 0.29% 1.19% 0.02% 1.17%
Aggressive Growth Fund 0.65% 0.25% 0.28% 1.18% 0.02% 1.16%
Capital Appreciation Fund 0.65% 0.25% 0.36% 1.26% 0.08% 1.18%
Balanced Fund 0.65% 0.25% 0.29% 1.19% 0.02% 1.17%
Equity Income Fund 0.65% 0.25% 6.14% 7.04% 5.29% 1.75%
Growth and Income Fund 0.65% 0.25% 0.97% 1.87% 0.35% 1.52%
Strategic Value Fund 0.65% 0.25% 5.14% 6.04% 4.29% 1.75%
International Fund 0.65% 0.25% 0.53% 1.43% 0.19% 1.24%
Worldwide Fund 0.65% 0.25% 0.32% 1.22% 0.02% 1.20%
Flexible Income Fund 0.65% 0.25% 7.22% 8.12% 6.92% 1.20%
Money Market Fund 0.25% 0.25% 2.28% 2.78% 1.92% 0.86%
</TABLE>

--------------------------------------------------------------------------------

(1) Long-term shareholders may pay more than the economic equivalent of
the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc.

(2) All expenses are stated both with and without contractual waivers by
Janus Capital. Janus Capital has contractually agreed to waive each
Fund's total operating expenses (excluding brokerage commissions,
interest, taxes and extraordinary expenses) to the levels indicated
until at least July 31, 2003. These waivers are first applied against
the Management Fee and then against Other Expenses.

--------------------------------------------------------------------------------

EXAMPLE:
THE FOLLOWING EXAMPLE IS BASED ON EXPENSES WITHOUT WAIVERS. This example
is intended to help you compare the cost of investing in the Funds with
the cost of investing in other mutual funds. The example assumes that
you invest $10,000 in each of the Funds for the time periods indicated,
and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, and
that the Funds' operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 Year 3 Years
--------------------
<S> <C> <C>
Growth Fund $121 $ 378
Aggressive Growth Fund $120 $ 375
Capital Appreciation Fund $128 $ 400
Balanced Fund $121 $ 378
Equity Income Fund $697 $2,048
Growth and Income Fund $190 $ 588
Strategic Value Fund $601 $1,784
International Fund $146 $ 452
Worldwide Fund $124 $ 387
Flexible Income Fund $799 $2,324
Money Market Fund $281 $ 862
</TABLE>

Risk return summary 15
<PAGE>
Investment objectives, principal investment
strategies and risks

EQUITY FUNDS

This section takes a closer look at the investment objectives of each
of the Equity Funds, their principal investment strategies and certain
risks of investing in the Equity Funds. Strategies and policies that
are noted as "fundamental" cannot be changed without a shareholder
vote.

Please carefully review the "Risks" section of this Prospectus on
pages 24-26 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.

INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

DOMESTIC EQUITY FUNDS

GROWTH FUND
Growth Fund seeks long-term growth of capital in a manner consistent
with the preservation of capital. It pursues its objective by
investing primarily in common stocks selected for their growth
potential. Although the Fund can invest in companies of any size, it
generally invests in larger, more established companies.

AGGRESSIVE GROWTH FUND
Aggressive Growth Fund seeks long-term growth of capital. It pursues
its objective by investing primarily in common stocks selected for
their growth potential, and normally invests at least 50% of its
equity assets in medium-sized companies. Medium-sized companies are
those whose market capitalization falls within the range of companies
in the S&P MidCap 400 Index. Market capitalization is a commonly used
measure of the size and value of a company. The market capitalization
within the Index will vary, but as of December 31, 1999, they ranged
from approximately $170 million to $37 billion.

CAPITAL APPRECIATION FUND

Capital Appreciation Fund seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks selected
for their growth potential. The Fund may invest in companies of any
size, from larger, well established companies to smaller, emerging
growth companies.

BALANCED FUND
Balanced Fund seeks long-term capital growth, consistent with
preservation of capital and balanced by current income. It pursues its
objective by normally investing 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of its assets
in securities selected primarily for their income potential. This Fund
normally invests at least 25% of its assets in fixed-income
securities.

EQUITY INCOME FUND
Equity Income Fund seeks current income and long-term growth of
capital. It pursues its objective by normally emphasizing investments
in common stocks, and growth potential is a significant investment
consideration. The Fund tries to provide a lower level of volatility
than the S&P 500 Index. Normally, it invests at least 65% of its
invested assets in income-producing equity securities including common
and preferred stocks, warrants and securities that are convertible to
common or preferred stocks.

16 Janus Adviser Series
<PAGE>

GROWTH AND INCOME FUND
Growth and Income Fund seeks long-term capital growth and current
income. It normally emphasizes investments in common stocks. It will
normally invest up to 75% of its assets in equity securities selected
primarily for their growth potential, and at least 25% of its assets
in securities the portfolio manager believes have income potential.
Because of this investment strategy, the Fund is not designed for
investors who need consistent income.

STRATEGIC VALUE FUND
Strategic Value Fund seeks long-term growth of capital. It pursues its
objective by investing primarily in common stocks with the potential
for long-term growth of capital using a "value" approach. The "value"
approach the portfolio manager uses emphasizes investments in
companies he believes are undervalued relative to their intrinsic
worth.

The portfolio manager measures value as a function of price/earnings
(P/E) ratios and price/free cash flow. A P/E ratio is the relationship
between the price of a stock and its earnings per share. This figure
is determined by dividing a stock's market price by the company's
earnings per share amount. Price/free cash flow is the relationship
between the price of a stock and its available cash from operations
minus capital expenditures.

GLOBAL/INTERNATIONAL EQUITY FUNDS

INTERNATIONAL FUND
International Fund seeks long-term growth of capital. Normally, the
Fund pursues its objective by investing at least 65% of its total
assets in securities of issuers from at least five different
countries, excluding the United States. Although the Fund intends to
invest substantially all of its assets in issuers located outside the
United States, it may at times invest in U.S. issuers and it may at
times invest all of its assets in fewer than five countries or even a
single country.

WORLDWIDE FUND
Worldwide Fund seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its objective
by investing primarily in common stocks of companies of any size
throughout the world. The Fund normally invests in issuers from at
least five different countries, including the United States. The Fund
may at times invest in fewer than five countries or even a single
country.

Investment objectives, principal investment strategies and risks 17
<PAGE>

The following questions and answers are designed to help you better understand
the Equity Funds' principal investment strategies.

1. HOW ARE COMMON STOCKS SELECTED?

Each of the Funds may invest substantially all of its assets in common
stocks if its portfolio manager believes that common stocks will
appreciate in value. The portfolio managers generally take a "bottom
up" approach to selecting companies. In other words, they seek to
identify individual companies with earnings growth potential that may
not be recognized by the market at large. They make this assessment by
looking at companies one at a time, regardless of size, country of
organization, place of principal business activity, or other similar
selection criteria. Except for Balanced Fund, Equity Income Fund and
Growth and Income Fund, realization of income is not a significant
consideration when choosing investments for the Funds. Income realized
on the Funds' investments will be incidental to their objectives. In
the case of Balanced Fund, Equity Income Fund and Growth and Income
Fund, a portfolio manager may consider dividend-paying characteristics
to a greater degree in selecting common stocks.

2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

Generally, yes. The portfolio managers seek companies that meet their
selection criteria, regardless of where a company is located. Foreign
securities are generally selected on a stock-by-stock basis without
regard to any defined allocation among countries or geographic
regions. However, certain factors such as expected levels of
inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth
among countries, regions or geographic areas may warrant greater
consideration in selecting foreign securities. There are no
limitations on the countries in which the Funds may invest and the
Funds may at times have significant foreign exposure.

3. WHAT IS A "SPECIAL SITUATION"?

Each Fund may invest in special situations. A special situation arises
when a portfolio manager believes that the securities of an issuer
will be recognized and appreciate in value due to a specific
development with respect to that issuer. Special situations may
include significant changes in a company's allocation of its existing
capital, a restructuring of assets, or a redirection of free cash
flows. For example, issuers undergoing significant capital changes may
include companies involved in spin-offs, sales of divisions, mergers
or acquisitions, companies emerging from bankruptcy, or companies
initiating large changes in their debt to equity ratio. Companies that
are redirecting cash flows may be reducing debt, repurchasing shares
or paying dividends. Special situations may also result from (i)
significant changes in industry structure through regulatory
developments or shifts in competition; (ii) a new or improved product,
service, operation or technological advance; (iii) changes in senior
management; or (iv) significant changes in cost structure.

4. WHAT DOES "MARKET CAPITALIZATION" MEAN?

Market capitalization is the most commonly used measure of the size
and value of a company. It is computed by multiplying the current
market price of a share of the company's stock by the total number of
its shares outstanding. As noted previously, market capitalization is
an important investment criteria for Aggressive Growth Fund. Although
the other Equity Funds offered by this Prospectus do not emphasize
companies of any particular size, Funds with a larger asset base are
more likely to invest in larger, more established issuers.

18 Janus Adviser Series
<PAGE>

5. HOW DO BALANCED FUND, EQUITY INCOME FUND AND GROWTH AND INCOME FUND DIFFER
FROM EACH OTHER?

Growth and Income Fund places a greater emphasis on aggressive growth
stocks and may derive a greater portion of its income from
dividend-paying common stocks. Because of these factors, its NAV can
be expected to fluctuate more than Balanced Fund or Equity Income
Fund. Although Equity Income Fund invests substantially all of its
assets in common stocks, it emphasizes investments in dividend-paying
common stocks and other equity securities characterized by relatively
greater price stability, and thus may be expected to be less volatile
than Growth and Income Fund, as discussed in more detail below.
Balanced Fund places a greater emphasis on the income component of its
portfolio and invests to a greater degree in securities selected
primarily for their income potential. As a result it is expected to be
less volatile than Equity Income Fund and Growth and Income Fund.

6. HOW DOES EQUITY INCOME FUND TRY TO LIMIT PORTFOLIO VOLATILITY?

Equity Income Fund seeks to provide a lower level of volatility than
the stock market at large, as measured by the S&P 500 Index. The lower
volatility sought by this Fund is expected to result primarily from
investments in dividend-paying common stocks and other equity
securities characterized by relatively greater price stability. The
greater price stability sought by Equity Income Fund may be
characteristic of companies that generate above average free cash
flows. A company may use free cash flows for a number of purposes
including commencing or increasing dividend payments, repurchasing its
own stock or retiring outstanding debt. The portfolio manager also
considers growth potential in selecting this Fund's securities and may
hold securities selected solely for their growth potential.

7. HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENTS OF BALANCED
FUND'S AND GROWTH AND INCOME FUND'S PORTFOLIOS?

Balanced Fund and Growth and Income Fund shift assets between the
growth and income components of their portfolios based on the
portfolio managers' analysis of relevant market, financial and
economic conditions. If a portfolio manager believes that growth
securities will provide better returns than the yields then available
or expected on income-producing securities, that Fund will place a
greater emphasis on the growth component.

8. WHAT TYPES OF SECURITIES MAKE UP THE GROWTH COMPONENT OF BALANCED FUND'S,
EQUITY INCOME FUND'S AND GROWTH AND INCOME FUND'S PORTFOLIOS?

The growth component of these Funds' portfolios is expected to consist
primarily of common stocks, but may also include warrants, preferred
stocks or convertible securities selected primarily for their growth
potential.

9. WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF BALANCED FUND'S AND
GROWTH AND INCOME FUND'S PORTFOLIOS?

The income component of Balanced Fund and Growth and Income Fund is
expected to consist of securities that a portfolio manager believes
have income potential. Such securities may include equity securities,
convertible securities and all types of debt securities. Equity
securities may be included in the income component of a Fund if they
currently pay dividends or the portfolio manager believes they have
the potential for either increasing their dividends or commencing
dividends, if none are currently paid.

10. HOW DOES STRATEGIC VALUE FUND'S PORTFOLIO MANAGER DETERMINE THAT A COMPANY
MAY BE UNDERVALUED?

A company may be undervalued when, in the opinion of the Fund's
portfolio manager, the company is selling for a price that is below
its intrinsic worth. A company may be undervalued due to market or

Investment objectives, principal investment strategies and risks 19
<PAGE>

economic conditions, temporary earnings declines, unfavorable
developments affecting the company or other factors. Such factors may
provide buying opportunities at attractive prices compared to
historical or market price-earnings ratios, price/free cash flow, book
value, or return on equity. The portfolio manager believes that buying
these securities at a price that is below its intrinsic worth may
generate greater returns for the Fund than those obtained by paying
premium prices for companies currently in favor in the market.

FLEXIBLE INCOME FUND

This section takes a closer look at the investment objective of
Flexible Income Fund, its principal investment strategies and certain
risks of investing in the Fund. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.

Please carefully review the "Risks" section of this Prospectus on
pages 25-26 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for income-producing securities that meet his
investment criteria one at a time. If the portfolio manager is unable
to find such investments, much of the Fund's assets may be in cash or
similar investments.

Flexible Income Fund seeks to obtain maximum total return, consistent
with preservation of capital. It pursues its objective by primarily
investing in a wide variety of income-producing securities such as
corporate bonds and notes, government securities and preferred stock.
As a fundamental policy, the Fund will invest at least 80% of its
assets in income-producing securities. The Fund may own an unlimited
amount of high-yield/high-risk bonds, and these may be a big part of
the portfolio. This Fund generates total return from a combination of
current income and capital appreciation, but income is usually the
dominant portion.

The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.

1. HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?

Generally, a fixed-income security will increase in value when
interest rates fall and decrease in value when interest rates rise.
Longer-term securities are generally more sensitive to interest rate
changes than shorter-term securities, but they generally offer higher
yields to compensate investors for the associated risks. High-yield
bond prices are generally less directly responsive to interest rate
changes than investment grade issues and may not always follow this
pattern. A bond fund's average-weighted effective maturity and its
duration are measures of how the fund may react to interest rate
changes.

2. HOW DOES THE FUND MANAGE INTEREST RATE RISK?

The Fund may vary the average-weighted effective maturity of its
assets to reflect its portfolio manager's analysis of interest rate
trends and other factors. The Fund's average-weighted effective
maturity will tend to be shorter when the portfolio manager expects
interest rates to rise and longer when its portfolio manager expects
interest rates to fall. The Fund may also use futures, options and
other derivatives to manage interest rate risks.

20 Janus Adviser Series
<PAGE>

3. WHAT IS MEANT BY THE FUND'S "AVERAGE-WEIGHTED EFFECTIVE MATURITY"?

The stated maturity of a bond is the date when the issuer must repay
the bond's entire principal value to an investor. Some types of bonds
may also have an "effective maturity" that is shorter than the stated
date due to prepayment or call provisions. Securities without
prepayment or call provisions generally have an effective maturity
equal to their stated maturity. Dollar-weighted effective maturity is
calculated by averaging the effective maturity of bonds held by the
Fund with each effective maturity "weighted" according to the
percentage of net assets that it represents.

4. WHAT IS MEANT BY THE FUND'S "DURATION"?

A bond's duration indicates the time it will take an investor to
recoup his investment. Unlike average maturity, duration reflects both
principal and interest payments. Generally, the higher the coupon rate
on a bond, the lower its duration will be. The duration of a bond
portfolio is calculated by averaging the duration of bonds held by a
fund with each duration "weighted" according to the percentage of net
assets that it represents. Because duration accounts for interest
payments, the Fund's duration is usually shorter than its average
maturity.

5. WHAT IS A HIGH-YIELD/HIGH-RISK BOND?

A high-yield/high-risk bond (also called a "junk" bond) is a bond
rated below investment grade by major rating agencies (i.e., BB or
lower by Standard & Poor's or Ba or lower by Moody's) or an unrated
bond of similar quality. It presents greater risk of default (the
failure to make timely interest and principal payments) than higher
quality bonds.

GENERAL PORTFOLIO POLICIES OF THE FUNDS OTHER THAN MONEY MARKET FUND

In investing its portfolio assets, a Fund will follow the general
policies listed below. Unless otherwise stated, each of the following
policies applies to all of the Funds other than Money Market Fund. The
percentage limitations included in these policies and elsewhere in
this Prospectus apply at the time of purchase of the security. So, for
example, if a Fund exceeds a limit as a result of market fluctuations
or the sale of other securities, it will not be required to dispose of
any securities.

CASH POSITION
When a portfolio manager believes that market conditions are
unfavorable for profitable investing, or when he or she is otherwise
unable to locate attractive investment opportunities, the Funds' cash
or similar investments may increase. In other words, the Funds do not
always stay fully invested in stocks and bonds. Cash or similar
investments generally are a residual - they represent the assets that
remain after a portfolio manager has committed available assets to
desirable investment opportunities. However, a portfolio manager may
also temporarily increase a Fund's cash position to protect its assets
or maintain liquidity. Partly because the portfolio managers act
independently of each other, the cash positions of the Funds may vary
significantly.

When a Fund's investments in cash or similar investments increase, it
may not participate in market advances or declines to the same extent
that it would if the Fund remained more fully invested in stocks or
bonds.

OTHER TYPES OF INVESTMENTS
The Equity Funds invest primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred stocks.
Balanced

Investment objectives, principal investment strategies and risks 21
<PAGE>

Fund, Equity Income Fund and Growth and Income Fund also invest in
domestic and foreign equity securities with varying degrees of
emphasis on income. The Funds may also invest to a lesser degree in
other types of securities. These securities (which are described in
the Glossary) may include:

- debt securities

- indexed/structured securities

- high-yield/high-risk bonds (less than 35% of each Fund's assets)

- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return

- securities purchased on a when-issued, delayed delivery or forward
commitment basis

Flexible Income Fund invests primarily in fixed-income securities
which may include corporate bonds and notes, government securities,
preferred stock, high-yield/high-risk bonds and municipal obligations.
Flexible Income Fund may also invest to a lesser degree in other types
of securities. These securities (which are described in the Glossary)
may include:

- common stocks

- mortgage- and asset-backed securities

- zero coupon, pay-in-kind and step coupon securities

- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return

- securities purchased on a when-issued, delayed delivery or forward
commitment basis

ILLIQUID INVESTMENTS
Each Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business.
For example, some securities are not registered under U.S. securities
laws and cannot be sold to the U.S. public because of SEC regulations
(these are known as "restricted securities"). Under procedures adopted
by the Funds' Trustees, certain restricted securities may be deemed
liquid, and will not be counted toward this 15% limit.

FOREIGN SECURITIES
The Funds may invest without limit in foreign equity and debt
securities. The Funds may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities include
depositary receipts or shares, and passive foreign investment
companies.

SPECIAL SITUATIONS
Each Fund may invest in special situations. A special situation arises
when, in the opinion of a Fund's portfolio manager, the securities of
a particular issuer will be recognized and appreciate in value due to
a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a new
product or process, a technological breakthrough, a management change
or other extraordinary corporate event, or differences in market
supply of and demand for the security. A Fund's

22 Janus Adviser Series
<PAGE>

performance could suffer if the anticipated development in a "special
situation" investment does not occur or does not attract the expected
attention.

PORTFOLIO TURNOVER
The Funds generally intend to purchase securities for long-term
investment although, to a limited extent, a Fund may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason of
economic or other developments not foreseen at the time of the
investment decision. A Fund may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or securities
prices. Changes are made in a Fund's portfolio whenever its portfolio
manager believes such changes are desirable. Portfolio turnover rates
are generally not a factor in making buy and sell decisions.

Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also
result in taxable capital gains. Higher costs associated with
increased portfolio turnover may offset gains in a Fund's performance.

Investment objectives, principal investment strategies and risks 23
<PAGE>

RISKS FOR EQUITY FUNDS

Because the Funds may invest substantially all of their assets in
common stocks, the main risk is the risk that the value of the stocks
they hold might decrease in response to the activities of an
individual company or in response to general market and/or economic
conditions. If this occurs, a Fund's share price may also decrease. A
Fund's performance may also be affected by risks specific to certain
types of investments, such as foreign securities, derivative
investments, non-investment grade debt securities, initial public
offerings (IPOs) or companies with relatively small market
capitalizations. IPOs and other investment techniques may have a
magnified performance impact on a fund with a small asset base. A fund
may not experience similar performance as its assets grow.

The following questions and answers are designed to help you better understand
some of the risks of investing in the Equity Funds.

1. THE FUNDS MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?

Many attractive investment opportunities may be smaller, start-up
companies offering emerging products or services. Smaller or newer
companies may suffer more significant losses as well as realize more
substantial growth than larger or more established issuers because
they may lack depth of management, be unable to generate funds
necessary for growth or potential development, or be developing or
marketing new products or services for which markets are not yet
established and may never become established. In addition, such
companies may be insignificant factors in their industries and may
become subject to intense competition from larger or more established
companies. Securities of smaller or newer companies may have more
limited trading markets than the markets for securities of larger or
more established issuers, and may be subject to wide price
fluctuations. Investments in such companies tend to be more volatile
and somewhat more speculative.

2. HOW DOES THE NONDIVERSIFIED STATUS OF AGGRESSIVE GROWTH FUND, CAPITAL
APPRECIATION FUND AND STRATEGIC VALUE FUND AFFECT THEIR RISK?

Diversification is a way to reduce risk by investing in a broad range
of stocks or other securities. A "nondiversified" portfolio has the
ability to take larger positions in a smaller number of issuers.
Because the appreciation or depreciation of a single stock may have a
greater impact on the NAV of a nondiversified fund, its share price
can be expected to fluctuate more than a comparable diversified fund.
This fluctuation, if significant, may affect the performance of a
Fund.

3. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?

If the portfolio manager's perception of a company's worth is not
realized in the time frame he expects, the overall performance of
Strategic Value Fund may suffer. In addition, if the market value of a
company declines Strategic Value Fund's performance could suffer. In
general, the portfolio manager believes these risks are mitigated by
investing in companies that are undervalued in the market in relation
to earnings, dividends and/or assets.

24 Janus Adviser Series
<PAGE>

RISKS FOR FLEXIBLE INCOME FUND

Because the Fund invests substantially all of its assets in
fixed-income securities, it is subject to risks such as credit or
default risks, and decreased value due to interest rate increases. The
Fund's performance may also be affected by risks to certain types of
investments, such as foreign securities and derivative instruments.

The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.

1. WHAT IS MEANT BY "CREDIT QUALITY" AND WHAT ARE THE RISKS ASSOCIATED WITH IT?

Credit quality measures the likelihood that the issuer will meet its
obligations on a bond. One of the fundamental risks associated with
all fixed-income funds is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments when
due. U.S. government securities are generally considered to be the
safest type of investment in terms of credit risk. Municipal
obligations generally rank between U.S. government securities and
corporate debt securities in terms of credit safety. Corporate debt
securities, particularly those rated below investment grade, present
the highest credit risk.

2. HOW IS CREDIT QUALITY MEASURED?

Ratings published by nationally recognized statistical rating agencies
such as Standard & Poor's Ratings Service and Moody's Investors
Service, Inc. are widely accepted measures of credit risk. The lower a
bond issue is rated by an agency, the more credit risk it is
considered to represent. Lower rated bonds generally pay higher yields
to compensate investors for the associated risk. Please refer to
"Explanation of Rating Categories" on pages 51-52 for a description of
rating categories.

RISKS COMMON TO ALL NON-MONEY MARKET FUNDS

The following questions and answers discuss risks that apply to all Funds other
than Money Market Fund.

1. HOW COULD THE FUNDS' INVESTMENTS IN FOREIGN SECURITIES AFFECT THEIR
PERFORMANCE?

The Funds may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets.
Investments in foreign securities, including those of foreign
governments, may involve greater risks than investing in domestic
securities because the Funds' performance may depend on issues other
than the performance of a particular company. These issues include:

- CURRENCY RISK. As long as a Fund holds a foreign security, its value
will be affected by the value of the local currency relative to the
U.S. dollar. When a Fund sells a foreign denominated security, its
value may be worth less in U.S. dollars even if the security
increases in value in its home country. U.S. dollar denominated
securities of foreign issuers may also be affected by currency risk.

- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to
heightened political and economic risks, particularly in emerging
markets which may have relatively unstable governments, immature
economic structures, national policies restricting investments by
foreigners, different legal systems, and economies based on only a
few industries. In some countries, there is the risk that the
government may take over the assets or operations of a company or
that the government may impose taxes or limits on the removal of a
Fund's assets from that country.

- REGULATORY RISK. There may be less government supervision of foreign
markets. As a result, foreign issuers may not be subject to the
uniform accounting, auditing and financial reporting standards and

Investment objectives, principal investment strategies and risks 25
<PAGE>

practices applicable to domestic issuers and there may be less
publicly available information about foreign issuers.

- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile than
domestic markets. Certain markets may require payment for securities
before delivery and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection
against failure by other parties to complete transactions.

- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.

2. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?

High-yield/high-risk bonds (or "junk" bonds) are bonds rated below
investment grade by the primary rating agencies such as Standard &
Poor's and Moody's. The value of lower quality bonds generally is more
dependent on credit risk, or the ability of the issuer to meet
interest and principal payments, than investment grade bonds. Issuers
of high-yield bonds may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real or
perceived economic changes, political changes or adverse developments
specific to the issuer.

The junk bond market can experience sudden and sharp price swings.
Because Flexible Income Fund may invest a significant portion of its
assets in high-yield/high-risk bonds, investors should be willing to
tolerate a corresponding increase in the risk of significant and
sudden changes in NAV.

Please refer to "Explanation of Rating Categories" on pages 51-52 for
a description of bond rating categories.

3. HOW DO THE FUNDS TRY TO REDUCE RISK?

The Funds may use futures, options, swaps and other derivative
instruments to "hedge" or protect their portfolios from adverse
movements in securities prices and interest rates. The Funds may also
use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk. The portfolio
managers believe the use of these instruments will benefit the Funds.
However, a Fund's performance could be worse than if the Fund had not
used such instruments if a portfolio manager's judgement proves
incorrect. Risks associated with the use of derivative instruments are
described in the SAI.

26 Janus Adviser Series
<PAGE>

MONEY MARKET FUND

This section takes a closer look at the investment objective of Money
Market Fund, its principal investment strategies and certain risks of
investing in the Fund. Strategies and policies that are noted as
"fundamental" cannot be changed without a shareholder vote.

Money Market Fund is subject to certain specific SEC rule
requirements. Among other things, the Fund is limited to investing in
U.S. dollar-denominated instruments with a remaining maturity of 397
days or less (as calculated pursuant to Rule 2a-7 under the 1940 Act).

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

Money Market Fund seeks maximum current income to the extent
consistent with stability of capital. It pursues its objective by
investing primarily in high quality debt obligations and obligations
of financial institutions. Debt obligations may include commercial
paper, notes and bonds, and variable amount master demand notes.
Obligations of financial institutions include certificates of deposit
and time deposits.

Money Market Fund will:

- invest in high quality, short-term money market instruments that
present minimal credit risks, as determined by Janus Capital

- invest only in U.S. dollar-denominated instruments that have a
remaining maturity of 397 days or less (as calculated pursuant to
Rule 2a-7 under the 1940 Act)

- maintain a dollar-weighted average portfolio maturity of 90 days or
less

TYPES OF INVESTMENTS

Money Market Fund invests primarily in:

- high quality debt obligations

- obligations of financial institutions

The Fund may also invest (to a lesser degree) in:

- U.S. Government Securities (securities issued or guaranteed by the
U.S. government, its agencies and instrumentalities)

- municipal securities

DEBT OBLIGATIONS

The Fund may invest in U.S. dollar denominated debt obligations. Debt
obligations include:

- commercial paper

- notes and bonds

- variable amount master demand notes (the payment obligations on
these instruments may be backed by securities, swap agreements or
other assets, by a guarantee of a third party or solely by the
unsecured promise of the issuer to make payments when due)

- privately issued commercial paper or other securities that are
restricted as to disposition under the federal securities laws

Investment objectives, principal investment strategies and risks 27
<PAGE>

OBLIGATIONS OF FINANCIAL INSTITUTIONS

Examples of obligations of financial institutions include:

- negotiable certificates of deposit, bankers' acceptances, time
deposits and other obligations of U.S. banks (including savings and
loan associations) having total assets in excess of one billion
dollars and U.S. branches of foreign banks having total assets in
excess of ten billion dollars

- Eurodollar and Yankee bank obligations (Eurodollar bank obligations
are dollar-denominated certificates of deposit or time deposits
issued outside the U.S. capital markets by foreign branches of U.S.
banks and by foreign banks. Yankee bank obligations are
dollar-denominated obligations issued in the U.S. capital markets by
foreign banks)

- other U.S. dollar-denominated obligations of foreign banks having
total assets in excess of ten billion dollars that Janus Capital
believes are of an investment quality comparable to obligations of
U.S. banks in which the Fund may invest

Foreign, Eurodollar (and to a limited extent, Yankee) bank obligations
are subject to certain sovereign risks. One such risk is the
possibility that a foreign government might prevent dollar-denominated
funds from flowing across its borders. Other risks include: adverse
political and economic developments in a foreign country; the extent
and quality of government regulation of financial markets and
institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers.

INVESTMENT TECHNIQUES

The following is a description of other investment techniques that
Money Market Fund may use:

PARTICIPATION INTERESTS
A participation interest gives Money Market Fund a proportionate,
undivided interest in underlying debt securities and sometimes carries
a demand feature.

DEMAND FEATURES
Demand features give Money Market Fund the right to resell securities
at specified periods prior to their maturity dates. Demand features
may shorten the life of a variable or floating rate security, enhance
the instrument's credit quality and provide a source of liquidity.

Demand features are often issued by third party financial
institutions, generally domestic and foreign banks. Accordingly, the
credit quality and liquidity of Money Market Fund's investments may be
dependent in part on the credit quality of the banks supporting Money
Market Fund's investments. This will result in exposure to risks
pertaining to the banking industry, including the foreign banking
industry. Brokerage firms and insurance companies also provide certain
liquidity and credit support.

VARIABLE AND FLOATING RATE SECURITIES
Money Market Fund may invest in securities which have variable or
floating rates of interest. These securities pay interest at rates
that are adjusted periodically according to a specified formula,
usually with reference to an interest rate index or market interest
rate. Variable and floating rate securities are subject to changes in
value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness.

28 Janus Adviser Series
<PAGE>

MORTGAGE- AND ASSET-BACKED SECURITIES

Money Market Fund may purchase fixed or variable rate mortgage-backed
securities issued by Ginnie Mae, Fannie Mae, Freddie Mac, or other
governmental or government-related entity. The Fund may purchase other
mortgage- and asset-backed securities including securities backed by
automobile loans, equipment leases or credit card receivables.

Unlike traditional debt instruments, payments on these securities
include both interest and a partial payment of principal. Prepayments
of the principal of underlying loans may shorten the effective
maturities of these securities and may result in the Fund having to
reinvest proceeds at a lower interest rate.

REPURCHASE AGREEMENTS
Money Market Fund may enter into collateralized repurchase agreements.
Repurchase agreements are transactions in which the Fund purchases
securities and simultaneously commits to resell those securities to
the seller at an agreed-upon price on an agreed-upon future date. The
repurchase price reflects a market rate of interest and is
collateralized by cash or securities.

If the seller of the securities underlying a repurchase agreement
fails to pay the agreed resale price on the agreed delivery date,
Money Market Fund may incur costs in disposing of the collateral and
may experience losses if there is any delay in its ability to do so.

Investment objectives, principal investment strategies and risks 29
<PAGE>
Management of the Funds

INVESTMENT ADVISER

Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is
the investment adviser to each of the Funds and is responsible for the
day-to-day management of the investment portfolios and other business
affairs of the Funds.

Janus Capital began serving as investment adviser to Janus Fund in
1970 and currently serves as investment adviser to all of the Janus
retail funds, acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisory services for
institutional accounts.

Janus Capital furnishes continuous advice and recommendations
concerning each Fund's investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for the
Funds, and may be reimbursed by the Funds for its costs in providing
those services. In addition, Janus Capital employees serve as officers
of the Trust and Janus Capital provides office space for the Funds and
pays the salaries, fees and expenses of all Fund officers and those
Trustees who are affiliated with Janus Capital.

Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
for providing recordkeeping, subaccounting and other administrative
services to their customers in connection with investment in the
Funds.

30 Janus Adviser Series
<PAGE>

MANAGEMENT EXPENSES AND EXPENSE LIMITS

Each Fund pays Janus Capital a management fee which is calculated
daily and paid monthly. Each Fund's advisory agreement spells out the
management fee and other expenses that the Funds must pay. Each of the
Funds is subject to the following management fee schedule (expressed
as an annual rate). In addition, each Fund incurs expenses not assumed
by Janus Capital, including the administrative services fee,
distribution fee, transfer agent and custodian fees and expenses,
legal and auditing fees, printing and mailing costs of sending reports
and other information to existing shareholders, and independent
Trustees' fees and expenses.

<TABLE>
<CAPTION>
Average Daily
Net Assets Annual Rate Expense Limit
Fee Schedule of Fund Percentage (%) Percentage (%)(1)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Fund All Asset Levels 0.65 0.67
Aggressive Growth Fund 0.66
Capital Appreciation Fund 0.68
Balanced Fund 0.67
Equity Income Fund 1.25
Growth and Income Fund 1.02
Strategic Value Fund 1.25
International Fund 0.74
Worldwide Fund 0.70
--------------------------------------------------------------------------------------------------------------
Flexible Income Fund First $300 Million 0.65 0.70
Over $300 Million 0.55
--------------------------------------------------------------------------------------------------------------
Money Market Fund All Asset Levels 0.25 0.36
--------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Janus Capital has agreed to limit the Funds' total operating expenses
(excluding the distribution fee, administrative services fee, brokerage
commissions, interest, taxes and extraordinary expenses) as indicated until
at least July 31, 2003 for each Fund except Strategic Value Fund. For
Strategic Value Fund, Janus Capital has agreed to limit the Fund's total
operating expenses (excluding the distribution fee, administrative services
fee, brokerage commissions, interest, taxes and extraordinary expenses) as
indicated until at least the next annual renewal of the advisory agreement.

Management of the Funds 31
<PAGE>

INVESTMENT PERSONNEL

PORTFOLIO MANAGERS

LAURENCE J. CHANG
--------------------------------------------------------------------------------
is Executive Vice President and co-manager of Janus Adviser
International Fund and Janus Adviser Worldwide Fund, each of
which he has co-managed since inception. He has also co-managed
Janus Aspen Worldwide Growth Portfolio, Janus Worldwide Fund,
Janus Aspen International Growth Portfolio and Janus Overseas
Fund since December 1999, September 1999, May 1998 and April
1998, respectively. He served as assistant portfolio manager for
Janus Aspen International Growth Portfolio and Janus Overseas
Fund since 1996. Mr. Chang joined Janus Capital in 1993 as a
research analyst. He received an undergraduate degree with honors
in Religion with a concentration in Philosophy from Dartmouth
College and a Masters Degree in Political Science from Stanford
University. Mr. Chang has earned the right to use the Chartered
Financial Analyst designation.

DAVID J. CORKINS
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Growth and Income Fund and Janus Aspen Growth and Income
Portfolio, each of which he has managed since their inceptions.
He is Executive Vice President and portfolio manager of Janus
Growth and Income Fund which he has managed since August 1997. He
is an assistant portfolio manager of Janus Mercury Fund. He
joined Janus Capital in 1995 as a research analyst specializing
in domestic financial services companies and a variety of foreign
industries. Prior to joining Janus, he was the Chief Financial
Officer of Chase U.S. Consumer Services, Inc., a Chase Manhattan
mortgage business. He holds a Bachelor of Arts in English and
Russian from Dartmouth and received his Master of Business
Administration from Columbia University in 1993.

DAVID C. DECKER
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Strategic Value Fund, Janus Aspen Strategic Value
Portfolio, Janus Special Situations Fund and Janus Strategic
Value Fund, which he has managed since inception, and an
assistant portfolio manager of Janus Adviser Growth Fund, Janus
Aspen Growth Portfolio and Janus Fund. He joined Janus Capital in
1992 as a research analyst and focused on companies in the
automotive and defense industries prior to managing Janus Special
Situations Fund. He obtained his Master of Business
Administration in Finance from the Fuqua School of Business at
Duke University and a Bachelor of Arts in Economics and Political
Science from Tufts University. Mr. Decker has earned the right to
use the Chartered Financial Analyst designation.

JAMES P. GOFF
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Aggressive Growth Fund and Janus Aspen Aggressive Growth
Portfolio, both of which he has managed since inception. Mr. Goff
joined Janus Capital in 1988 and has managed Janus Enterprise
Fund since its inception. Mr. Goff managed or co-managed Janus
Venture Fund from December 1993 to February 1997. He holds a
Bachelor of Arts in Economics from Yale University. Mr. Goff has
earned the right to use the Chartered Financial Analyst
designation.

32 Janus Adviser Series
<PAGE>

HELEN YOUNG HAYES
--------------------------------------------------------------------------------
is Executive Vice President and co-manager of Janus Adviser
Worldwide Fund and Janus Adviser International Fund, each of
which she has co-managed since inception. She also co-manages
Janus Aspen Worldwide Growth Portfolio, Janus Aspen International
Growth Portfolio, Janus Worldwide Fund and Janus Overseas Fund,
all of which she has managed or co-managed since their
inceptions. Ms. Hayes joined Janus Capital in 1987. She holds a
Bachelor of Arts in Economics from Yale University. Ms. Hayes has
earned the right to use the Chartered Financial Analyst
designation.

SHARON S. PICHLER
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Money Market Fund, Janus Money Market Fund, Janus
Tax-Exempt Money Market Fund and Janus Aspen Money Market Fund
which she has managed since their inceptions. She previously
served as portfolio manager of Janus Government Money Market Fund
from inception to February 1999. She holds a Bachelor of Arts in
Economics from Michigan State University and a Master of Business
Administration from the University of Texas at San Antonio. Ms.
Pichler has earned the right to use the Chartered Financial
Analyst designation.

KAREN L. REIDY
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Balanced Fund, and Janus Adviser Equity Income Fund,
which she has managed since inception. She is also Executive Vice
President and portfolio manager of Janus Aspen Balanced
Portfolio, Janus Aspen Equity Income Portfolio, Janus Balanced
Fund and Janus Equity Income Fund as of January 2000. She is also
an assistant portfolio manager of Janus Adviser Growth Fund,
Janus Aspen Growth Portfolio and Janus Fund. Prior to joining
Janus Capital in 1995, she worked for Price Waterhouse as a
manager in both the Mergers and Acquisitions and Audit business
units. In this capacity, Ms. Reidy performed due diligence work
for corporate clients and oversaw audit engagements. She received
an undergraduate degree in Accounting from the University of
Colorado in 1989 and passed the CPA exam in 1992. Ms. Reidy has
earned the right to use the Chartered Financial Analyst
designation.

BLAINE P. ROLLINS
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Growth Fund, which he has managed since inception. He
previously managed Janus Aspen Balanced Portfolio from May 1996
to December 1999 and Janus Aspen Equity Income Portfolio from its
inception to December 1999. Mr. Rollins joined Janus Capital in
1990 and has managed Janus Fund since January 2000, Janus
Balanced Fund from January 1996 through December 1999 and Janus
Equity Income Fund from inception until December 1999. He was an
assistant portfolio manager of Janus Fund from January 1994
through December 1999. Mr. Rollins joined Janus Capital in 1990
and gained experience as a fixed-income trader and equity
research analyst prior to managing Janus Balanced Fund and Janus
Aspen Balanced Portfolio. He holds a Bachelor of Science in
Finance from the University of Colorado and he has earned the
right to use the Chartered Financial Analyst designation.

Management of the Funds 33
<PAGE>

SCOTT W. SCHOELZEL
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Capital Appreciation Fund and Janus Aspen Capital
Appreciation Portfolio, which he has managed since their
inception. He is portfolio manager of Janus Twenty Fund, which he
has managed since August 1997. He previously managed Janus
Olympus Fund from its inception to August 1997. Mr. Schoelzel
joined Janus Capital in January 1994. He holds a Bachelor of Arts
in Business from Colorado College.

RONALD V. SPEAKER
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Adviser Flexible Income Fund and Janus Aspen Flexible Income
Portfolio which he has managed or co-managed since their
inceptions. He previously served as co-manager of Janus Aspen
High-Yield Portfolio, from its inception to May 1998. He managed
Janus Aspen Short-Term Bond Portfolio from its inception through
April 1996. Mr. Speaker joined Janus Capital in 1986. He has
managed or co-managed Janus Flexible Income Fund since December
1991 and previously managed both Janus Short-Term Bond Fund and
Janus Federal Tax-Exempt Fund from their inceptions through
December 1995. He previously served as co-manager of Janus
High-Yield Fund from its inception to February 1998. He holds a
Bachelor of Arts in Finance from the University of Colorado and
he has earned the right to use the Chartered Financial Analyst
designation.

In January 1997, Mr. Speaker settled an SEC administrative action
involving two personal trades made by him in January of 1993.
Without admitting or denying the allegations, Mr. Speaker agreed
to civil money penalty, disgorgement, and interest payments
totaling $37,199 and to a 90-day suspension which ended on April
25, 1997.

ASSISTANT PORTFOLIO MANAGERS

MATTHEW A. ANKRUM
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Aggressive
Growth Fund, Janus Aspen Aggressive Growth Portfolio and Janus
Enterprise Fund. Mr. Ankrum joined Janus Capital as an intern in
June 1996, and became an equity research analyst in August 1997.
Prior to joining Janus, Mr. Ankrum worked as a corporate finance
analyst at William Blair and Company from 1993-1995. He was also
a fixed-income research analyst at Conseco Capital Management.
Mr. Ankrum has an undergraduate degree in Business Administration
from the University of Wisconsin and a Master of Business
Administration from the University of Chicago. Mr. Ankrum has
earned the right to use the Chartered Financial Analyst
designation.

34 Janus Adviser Series
<PAGE>

RON SACHS
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Aggressive
Growth Fund, Janus Aspen Aggressive Growth Portfolio and Janus
Enterprise Fund. He is portfolio manager of Janus Orion Fund,
which he has managed since inception. Mr. Sachs joined Janus
Capital in 1996 as a research analyst. Prior to coming to Janus,
he worked as a consultant for Bain & Company and as an attorney
for Willkie, Farr & Gallagher. Mr. Sachs graduated from Princeton
cum laude with an undergraduate degree in Economics. He obtained
his law degree from the University of Michigan. Mr. Sachs has
earned the right to use the Chartered Financial Analyst
designation.

DANIEL D. SCHOEN
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Money Market
Fund and Janus Aspen Money Market Portfolio. He joined Janus
Capital in July 1993 and has worked as a trader or credit analyst
on Janus Money Market Funds since July 1995. He holds a Bachelor
of Arts in Economics from the University of Colorado.

JOHN H. SCHREIBER
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Adviser Growth Fund,
Janus Aspen Growth Portfolio and Janus Fund. Mr. Schreiber joined
Janus Capital in 1997 as an equity research analyst. Prior to
joining Janus, he was an equity analyst with Fidelity
Investments. Mr. Schreiber holds a Bachelor of Science degree in
Mechanical Engineering from the University of Washington and a
Master of Business Administration from Harvard University. He has
earned the right to use the Chartered Financial Analyst
designation.

Management of the Funds 35
<PAGE>
Other information

ADMINISTRATIVE SERVICES FEE

Janus Service Corporation, the Trust's transfer agent, receives an
administrative services fee at an annual rate of up to 0.25% of the
average daily net assets of each Fund for providing or procuring
recordkeeping, subaccounting and other administrative services to
investors in the shares. Janus Service expects to use a significant
portion of this fee to compensate retirement plan service providers,
brokers, bank trust departments, financial advisers and other
financial intermediaries for providing these services to their
customers.

DISTRIBUTION FEE

Under a distribution and service plan adopted in accordance with Rule
12b-1 under the 1940 Act, the Funds may pay Janus Distributors, Inc.,
the Trust's distributor, a fee at an annual rate of up to 0.25% of the
average daily net assets of a Fund. Under the terms of the Plan, the
Trust is authorized to make payments to Janus Distributors for
remittance to retirement plan service providers, brokers, bank trust
departments, financial advisers and other financial intermediaries, as
compensation for distribution and shareholder servicing performed by
such entities. Because 12b-1 fees are paid out of the Funds' assets on
an ongoing basis, they will increase the cost of your investment and
may cost you more than paying other types of sales charges.

DISTRIBUTION OF FUNDS

The Funds are distributed by Janus Distributors, Inc., a member of the
National Association of Securities Dealers, Inc. ("NASD"). To obtain
information about NASD member firms and their associated persons, you
may contact NASD Regulation, Inc. at www.nasdr.com, or the Public
Disclosure Hotline at 800-289-9999. An investor brochure containing
information describing the Public Disclosure Program is available from
NASD Regulation, Inc.

36 Janus Adviser Series
<PAGE>
Distributions and taxes

DISTRIBUTIONS

To avoid taxation of the Funds, the Internal Revenue Code requires
each Fund to distribute net income and any net capital gains realized
on its investments annually. A Fund's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.

FUNDS OTHER THAN MONEY MARKET FUND

DISTRIBUTION SCHEDULE

<TABLE>
<CAPTION>
Dividends Capital Gains
<S> <C> <C>
Balanced Fund, Normally declared and paid in Normally declared and paid in
Equity Income Fund March, June, September and December
and Growth and Income Fund December
-----------------------------------------------------------------------------------------------------------------
All other Equity Funds Normally declared and paid in Normally declared and paid in
December December
-----------------------------------------------------------------------------------------------------------------
Flexible Income Fund Normally declared daily, Normally declared and paid in
Saturdays, Sundays & holidays December
included and paid monthly
</TABLE>

HOW DISTRIBUTIONS AFFECT NAV

Distributions, other than daily income dividends, are paid to
shareholders as of the record date of the distribution of a Fund,
regardless of how long the shares have been held. Undistributed income
and realized gains are included in each Fund's daily NAV. The share
price of a Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December
31, Growth Fund declared a dividend in the amount of $0.25 per share.
If Growth Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions from a
taxable mutual fund are not value-enhancing and may create income tax
obligations.

"BUYING A DIVIDEND"

If you purchase shares of a Fund just before the distribution, you
will pay the full price for the shares and receive a portion of the
purchase price back as a taxable distribution. This is referred to as
"buying a dividend." In the above example, if you bought shares on
December 30, you would have paid $10.00 per share. On December 31, the
Fund would pay you $0.25 per share as a dividend and your shares would
now be worth $9.75 per share. Unless your account is set up as a
tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have
participated in the increase in NAV of the Fund, whether or not you
reinvested the dividends.

For your convenience, Fund distributions of dividends and capital
gains are automatically reinvested in the Fund. To receive
distributions in cash, contact your financial intermediary. Either
way, the distributions may be subject to taxes, unless your shares are
held in a qualified tax-deferred plan or account.

MONEY MARKET FUND

For the Money Market Fund, dividends representing substantially all of
the net investment income and any net realized gains on sales of
securities are declared daily, Saturdays, Sundays and holidays
included, and distributed on the last business day of each month. If a
month begins on a Saturday, Sunday or holiday, dividends for those
days are declared at the end of the preceding month and distributed on
the first business day of the month.

Distributions and taxes 37
<PAGE>

TAXES

As with any investment, you should consider the tax consequences of
investing in the Funds. Any time you sell or exchange shares of a fund
in a taxable account, it is considered a taxable event. Depending on
the purchase price and the sale price, you may have a gain or loss on
the transaction. Any tax liabilities generated by your transactions
are your responsibility.

The following discussion is not a complete analysis of the federal tax
implications of investing in the Funds. You may wish to consult your
own tax adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.

TAXES ON DISTRIBUTIONS

Dividends and distributions of the Funds are subject to federal income
tax, regardless of whether the distribution is made in cash or
reinvested in additional shares of a Fund. Distributions may be
taxable at different rates depending on the length of time a Fund
holds a security. In certain states, a portion of the dividends and
distributions (depending on the sources of a Fund's income) may be
exempt from state and local taxes. Information regarding the tax
status of income dividends and capital gains distributions will be
mailed to shareholders on or before January 31st of each year. Your
financial intermediary will provide this information to you. Account
tax information will also be sent to the IRS.

Income dividends or capital gains distributions made by a Fund
purchased through a qualified retirement plan will generally be exempt
from current taxation if left to accumulate within the qualified plan.
Generally, withdrawals from qualified plans may be subject to ordinary
income tax and, if made before age 59 1/2, a 10% penalty tax. The tax
status of your investment depends on the features of your qualified
plan. For further information, please contact your plan sponsor.

TAXATION OF THE FUNDS

Dividends, interest and some gains received by the Funds on foreign
securities may be subject to tax withholding or other foreign taxes.
The Funds may from year to year make the election permitted under
Section 853 of the Internal Revenue Code to pass through such taxes to
shareholders as a foreign tax credit. If such election is not made,
any foreign taxes paid or accrued will represent an expense to the
Funds which will reduce their investment income.

The Funds do not expect to pay any federal income or excise taxes
because they intend to meet certain requirements of the Internal
Revenue Code.

38 Janus Adviser Series
<PAGE>
Shareholder's guide

INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE FUNDS DIRECTLY.
SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH RETIREMENT PLANS,
BROKERS, BANK TRUST DEPARTMENTS, FINANCIAL ADVISERS OR OTHER FINANCIAL
INTERMEDIARIES. CERTAIN FUNDS MAY NOT BE AVAILABLE THROUGH CERTAIN OF
THESE INTERMEDIARIES. CONTACT YOUR BROKER OR OTHER FINANCIAL
INTERMEDIARY OR REFER TO YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON HOW
TO PURCHASE, REDEEM OR EXCHANGE SHARES.

PRICING OF FUND SHARES

Investments will be processed at the NAV next determined after an
order is received and accepted by a Fund or its agent. In order to
receive a day's price, your order must be received by the close of the
regular trading session of the New York Stock Exchange any day that
the NYSE is open. Securities of the Funds are valued at market value
or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and
under the supervision of the Trustees. Short-term instruments maturing
within 60 days are valued at amortized cost, which approximates market
value. See the SAI for more detailed information.

To the extent a Fund holds securities that are primarily listed on
foreign exchanges that trade on weekends or other days when the Funds
do not price their shares, the NAV of a Fund's shares may change on
days when shareholders will not be able to purchase or redeem the
Fund's shares.

Money Market Fund's securities are valued at their amortized cost.
Amortized cost valuation involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity (or such
other date as permitted by Rule 2a-7) of any discount or premium. If
fluctuating interest rates cause the market value of the portfolio to
deviate more than 1/2 of 1% from the value determined on the basis of
amortized cost, the Trustees will consider whether any action, such as
adjusting the share's NAV to reflect current market conditions, should
be initiated to prevent any material dilutive effect on shareholders.

PURCHASES

Purchases of Fund shares may be made only through institutional
channels such as retirement plans, brokers, bank trust departments,
financial advisers or other financial intermediaries. Contact your
broker (or other financial intermediary) or refer to your plan
documents for information on how to invest in each Fund. Only certain
financial intermediaries are authorized to receive purchase orders on
the Funds' behalf. The account minimum is $100,000 per account except
for defined contribution plans.

The Funds do not permit frequent trading or market timing. Excessive
purchases of Fund shares disrupt portfolio management and drive Fund
expenses higher. Each Fund reserves the right to reject any specific
purchase order. Purchase orders may be refused if, in Janus Capital's
opinion, they are of a size that would disrupt the management of a
Fund. Although there is no present intention to do so, the Funds may
discontinue sales of their shares if management and the Trustees
believe that continued sales may adversely affect a Fund's ability to
achieve its investment objective. If sales of a Fund's shares are
discontinued, it is expected that existing plan participants and other
shareholders invested in that Fund would be permitted to continue to
authorize investments in that Fund and to reinvest any dividends or
capital gains distributions, absent highly unusual circumstances.

EXCHANGES

Contact your broker (or other financial intermediary) or consult your
plan documents to exchange into other Funds in Janus Adviser Series.
Be sure to read the prospectus of the Fund you are exchanging into. An
exchange is a taxable transaction (except for qualified plan
accounts).

Shareholder's guide 39
<PAGE>

- You may exchange shares of a Fund only for shares of another Fund in
Janus Adviser Series offered through your broker (or other financial
intermediary) or qualified plan.

- You must meet the minimum investment amount for each Fund.

- The exchange privilege is not intended as a vehicle for short-term
or excessive trading. The Funds do not permit frequent trading or
market timing. Excessive exchanges of Fund shares disrupt portfolio
management and drive Fund expenses higher. The Fund may suspend or
terminate your exchange privilege if you engage in an excessive
pattern of exchanges.

REDEMPTIONS

Redemptions, like purchases, may be effected only through retirement
plans, brokers, bank trust departments, financial advisers and similar
financial intermediaries. Please contact your broker (or other
financial intermediary) or refer to the appropriate plan documents for
details.

Shares of any Fund may be redeemed on any business day. Redemptions
are processed at the NAV next calculated after receipt and acceptance
of the redemption order by the Fund or its agent. Redemption proceeds
will normally be wired the business day following receipt of the
redemption order, but in no event later than seven days after receipt
of such order.

FREQUENT TRADING

Frequent trading of Fund shares in response in short-term fluctuations
in the market -- also known as "market timing" -- may make it very
difficult to manage the Fund's investments. The Funds do not permit
frequent trading or market timing. When market timing occurs, the Fund
may have to sell portfolio securities to have the cash necessary to
redeem the market timer's shares. This can happen at a time when it is
not advantageous to sell any securities, which may harm a Fund's
performance. When large dollar amounts are involved, market timing can
also make it difficult to use long-term investment strategies because
the portfolio manager cannot predict how much cash the Fund will have
to invest. When in Janus Capital's opinion such activity would have a
disruptive effect on portfolio management, the Funds reserve the right
to refuse purchase orders and exchanges into a Fund by any person,
group or commonly controlled account. The Funds may notify a market
timer of rejection of a purchase or exchange order after the day the
order is placed. If a Fund allows a market timer to trade Fund shares,
it may require the market timer to enter into a written agreement to
follow certain procedures and limitations.

SHAREHOLDER COMMUNICATIONS

Shareholders will receive annual and semiannual reports including the
financial statements of the Funds that they have authorized for
investment. Each report from their financial intermediaries will show
the investments owned by each Fund and the market values thereof, as
well as other information about the Funds and their operations. The
Trust's fiscal year ends July 31.

40 Janus Adviser Series
<PAGE>

Financial highlights

Janus Adviser Series commenced operations on August 1, 2000, after the
reorganization of the Retirement Shares of Janus Aspen Series into the
Funds. For each Fund of Janus Adviser Series (except Strategic Value
Fund) financial highlights are presented below for the Retirement
Shares of the predecessor fund of Janus Aspen Series (from inception
of the Retirement Shares through December 31st of each fiscal period
shown). Financial highlights are not presented for Strategic Value
Fund because it is a newly organized Fund. Items 1 through 9 reflect
financial results for a single Share. The total returns in the tables
represent the rate that an investor would have earned (or lost) on an
investment in the Retirement Shares of each of the predecessor funds
(assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose
report, along with the Janus Aspen Series' financial statements, are
included in the Annual Report, which is available upon request and
incorporated by reference into the SAI.

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH
PORTFOLIO - PORTFOLIO -
RETIREMENT RETIREMENT
SHARES SHARES
----------------------------------------------------------------------------------------------------------------------------------
Periods ending Periods ending
December 31 December 31
1999 1998 1997(1) 1999 1998 1997(1)
<S> <C> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $23.45 $18.46 $16.18 $27.42 $20.49 $16.12
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.07 (0.03) 0.04 0.19 (0.12) (0.06)
3. Net gains or losses on securities
(both realized and unrealized) 10.25 6.32 2.71 32.70 7.05 4.43
4. Total from investment operations 10.32 6.29 2.75 32.89 6.93 4.37
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) -- -- (0.10) -- -- --
6. Tax return of capital
distributions -- -- -- -- -- --
7. Distributions (from capital gains) (0.14) (1.30) (0.37) (1.40) -- --
8. Total distributions (0.14) (1.30) (0.47) (1.40) -- --
9. NET ASSET VALUE, END OF PERIOD $33.63 $23.45 $18.46 $58.91 $27.42 $20.49
10. Total return* 43.98% 34.99% 17.22% 124.34% 33.58% 27.11%
11. Net assets, end of period (in
thousands) $59,334 $18 $12 $47,928 $17 $13
12. Average net assets for the period
(in thousands) $12,209 $13 $11 $9,786 $14 $11
13. Ratio of gross expenses to average
net assets** 1.17%(2) 1.18%(2) 1.20%(2) 1.19%(3) 1.26%(3) 1.32%(3)
14. Ratio of net expenses to average
net assets** 1.17% 1.18% 1.20% 1.19% 1.26% 1.32%
15. Ratio of net investment income to
average net assets** (0.25%) (0.23%) 0.29% (1.00%) (0.86%) (0.62%)
16. Portfolio turnover rate** 53% 73% 122% 105% 132% 130%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) The ratio was 1.19% in 1999, 1.25% in 1998 and 1.28% in 1997 before
reduction of the management fees to the effective rate of Janus Fund.

(3) The ratio was 1.19% in 1999, 1.26% in 1998 and 1.34% in 1997 before
reduction of the management fees to the effective rate of Janus Enterprise
Fund.

Financial highlights 41
<PAGE>

<TABLE>
<CAPTION>
CAPITAL APPRECIATION BALANCED PORTFOLIO -
PORTFOLIO - RETIREMENT SHARES RETIREMENT SHARES
---------------------------------------------------------------------------------------------------------------------------------
Periods ending December 31 Periods ending December 31
1999 1998 1997(1) 1999 1998 1997(1)
<S> <C> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $19.86 $12.62 $10.00 $22.59 $17.47 $15.38
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (0.08) (0.04) 0.12 0.46 0.21 0.27
3. Net gains or losses on securities
(both realized and unrealized) 13.22 7.28 2.50 5.41 5.58 2.30
4. Total from investment operations 13.14 7.24 2.62 5.87 5.79 2.57
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) -- -- -- (0.42) (0.18) (0.30)
6. Tax return of capital
distributions -- -- -- -- -- --
7. Distributions (from capital gains) -- -- -- -- (0.49) (0.18)
8. Total distributions -- -- -- (0.42) (0.67) (0.48)
9. NET ASSET VALUE, END OF PERIOD $33.00 $19.86 $12.62 $28.04 $22.59 $17.47
10. Total return* 66.16% 57.37% 26.20% 26.13% 33.59% 16.92%
11. Net assets, end of period (in
thousands) $23,529 $20 $13 $53,598 $17,262 $12
12. Average net assets for the period
(in thousands) $4,402 $15 $12 $28,498 $3,650 $11
13. Ratio of gross expenses to average
net assets** 1.19%(2) 1.44%(2) 1.73%(2) 1.19%(3) 1.24%(3) 1.32%(3)
14. Ratio of net expenses to average
net assets** 1.19% 1.44% 1.73% 1.19% 1.24% 1.32%
15. Ratio of net investment income to
average net assets** 0.23% (0.25%) 1.55% 2.36% 2.04% 2.38%
16. Portfolio turnover rate** 52% 91% 101% 92% 70% 139%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) The ratio was 1.28% in 1999, 1.49% in 1998 and 2.66% in 1997 before
reduction of the management fees to the effective rate of Janus Olympus Fund
until May 1, 1999, Janus Twenty Fund thereafter.

(3) The ratio was 1.19% in 1999, 1.26% in 1998 and 1.33% in 1997 before
reduction of the management fees to the effective rate of Janus Balanced
Fund.

42 Janus Adviser Series

<PAGE>

<TABLE>
<CAPTION>
GROWTH AND
INCOME
PORTFOLIO -
EQUITY INCOME PORTFOLIO - RETIREMENT
RETIREMENT SHARES SHARES
---------------------------------------------------------------------------------------------------------------------------------
Periods ending
Periods ending December 31 December 31
1999 1998 1997(1) 1999 1998(2)
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $19.28 $13.42 $10.00 $11.94 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.03 (0.05) 0.01 (0.01) 0.01
3. Net gains (or losses) on securities (both
realized and unrealized) 7.85 6.12 3.41 8.75 1.93
4. Total from investment operations 7.88 6.07 3.42 8.74 1.94
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- -- -- -- --
6. Tax return of capital distributions -- -- -- -- --
7. Distributions (from capital gains) (0.09) (0.21) -- -- --
8. Total distributions (0.09) (0.21) -- -- --
9. NET ASSET VALUE, END OF PERIOD $27.07 $19.28 $13.42 $20.68 $11.94
10. Total return* 40.94% 45.55% 34.20% 73.20% 19.40%
11. Net assets, end of period (in thousands) $464 $20 $13 $6,982 $12
12. Average net assets for the period (in thousands) $128 $16 $12 $1,826 $10
13. Ratio of gross expenses to average net assets** 1.78%(3) 1.75%(3) 1.74%(3) 1.53%(4) 1.72%(4)
14. Ratio of net expenses to average net assets** 1.77% 1.75% 1.74% 1.53% 1.72%
15. Ratio of net investment income to average net
assets** (0.04%) (0.33%) 0.07% 0.11% 0.21%
16. Portfolio turnover rate** 114% 79% 128% 59% 62%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) May 1, 1998 (inception) to December 31, 1998.

(3) The ratio was 1.91% in 1999, 2.36% in 1998 and 6.19% in 1997 before
reduction of the management fee to the effective rate of Janus Equity Income
Fund.

(4) The ratio was 1.62% in 1999 and 3.53% in 1998 before reduction of the
management fees to the effective rate of Janus Growth and Income Fund.

Financial highlights 43
<PAGE>

<TABLE>
<CAPTION>
INTERNATIONAL GROWTH WORLDWIDE GROWTH PORTFOLIO -
PORTFOLIO - RETIREMENT SHARES RETIREMENT SHARES
---------------------------------------------------------------------------------------------------------------------------------
Periods ending December 31 Periods ending December 31
1999 1998 1997(1) 1999 1998 1997(1)
<S> <C> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $21.27 $18.44 $16.80 $29.06 $23.36 $20.72
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income -- 0.05 0.04 (0.04) 0.02 0.14
3. Net gains or losses on securities
(both realized and unrealized) 17.30 3.07 1.73 18.54 6.57 2.80
4. Total from investment operations 17.30 3.12 1.77 18.50 6.59 2.94
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.01) (0.01) (0.09) -- (0.02) (0.14)
6. Tax return of capital
distributions -- -- -- -- -- --
7. Distributions (from capital gains) -- (0.28) (0.04) -- (0.87) (0.16)
8. Total distributions (0.01) (0.29) (0.13) -- (0.89) (0.30)
9. NET ASSET VALUE, END OF PERIOD $38.56 $21.27 $18.44 $47.56 $29.06 $23.36
10. Total return* 81.32% 16.86% 10.53% 63.66% 28.25% 14.22%
11. Net assets, end of period (in
thousands) $16,986 $17 $11 $174,399 $5,837 $403
12. Average net assets for the period
(in thousands) $3,738 $13 $11 $49,424 $1,742 $11
13. Ratio of gross expenses to average
net assets** 1.25%(2) 1.35%(2) 1.45%(2) 1.21%(3) 1.22%(3) 1.26%(3)
14. Ratio of net expenses to average
net assets** 1.24% 1.35% 1.45% 1.21% 1.22% 1.26%
15. Ratio of net investment income to
average net assets** (0.29%) 0.26% 0.26% (0.34%) (0.02%) 0.16%
16. Portfolio turnover rate** 80% 93% 86% 67% 77% 80%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) The ratio was 1.32% in 1999, 1.44% in 1998 and 1.57% in 1997 before
reduction of the management fees to the effective rate of Janus Overseas
Fund.

(3) The ratio was 1.21% in 1999, 1.24% in 1998 and 1.32% in 1997 before
reduction of the management fees to the effective rate of Janus Worldwide
Fund.

44 Janus Adviser Series

<PAGE>

<TABLE>
<CAPTION>
FLEXIBLE INCOME PORTFOLIO -
RETIREMENT SHARES
----------------------------------------------------------------------------------------------------
Periods ending December 31
1999 1998 1997(1)
<S> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $12.05 $11.77 $11.41
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.37 0.73 0.50
3. Net gains or losses on securities (both realized and
unrealized) (0.27) 0.27 0.58
4. Total from investment operations 0.10 1.00 1.08
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.36) (0.61) (0.61)
6. Tax return of capital distributions -- -- --
7. Distributions (from capital gains) (0.07) (0.11) (0.11)
8. Total distributions (0.43) (0.72) (0.72)
9. NET ASSET VALUE, END OF PERIOD $11.72 $12.05 $11.77
10. Total return* 0.90% 8.58% 9.73%
11. Net assets, end of period (in thousands) $842 $12 $11
12. Average net assets for the period (in thousands) $250 $11 $10
13. Ratio of gross expenses to average net assets** 1.20%(2) 1.24%(2) 1.23%(2)
14. Ratio of net expenses to average net assets** 1.20% 1.23% 1.23%
15. Ratio of net investment income to average net assets** 6.80% 5.92% 6.39%
16. Portfolio turnover rate** 116% 145% 119%
----------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) The ratio was 1.20% in 1999, 1.24% in 1998 and 1.23% in 1997 before waiver
of certain fees incurred by Flexible Income Portfolio.

Financial highlights 45
<PAGE>

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO -
RETIREMENT SHARES
---------------------------------------------------------------------------------------------------------
Periods ending December 31
1999 1998 1997(1)
<S> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.04 0.05 0.03
3. Net gains or losses on securities (both realized and
unrealized) -- -- --
4. Total from investment operations 0.04 0.05 0.03
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.04) (0.05) (0.03)
6. Tax return of capital distributions -- -- --
7. Distributions (from capital gains) -- -- --
8. Total distributions (0.04) (0.05) (0.03)
9. NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
10. Total return* 4.45% 4.85% 3.13%
11. Net assets, end of period (in thousands) $1,153 $11 $10
12. Average net assets for the period (in thousands) $150 $10 $10
13. Ratio of gross expenses to average net assets** 0.86%(2) 0.84%(2) 1.00%
14. Ratio of net expenses to average net assets** 0.86% 0.84% 1.00%(2)
15. Ratio of net investment income to average net assets** 5.18% 4.74% 4.66%
---------------------------------------------------------------------------------------------------------
</TABLE>

* Total return not annualized for periods of less than one year.

** Annualized for periods of less than one full year.

(1) May 1, 1997 (inception) to December 31, 1997.

(2) The ratio was 0.86% in 1999, 0.84% in 1998 and 1.10% in 1997 before waiver
of certain fees incurred by Money Market Portfolio.

46 Janus Adviser Series

<PAGE>
Glossary of investment terms

This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Funds may
invest. The Funds may invest in these instruments to the extent
permitted by their investment objectives and policies. The Funds are
not limited by this discussion and may invest in any other types of
instruments not precluded by the policies discussed elsewhere in this
Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.

I. EQUITY AND DEBT SECURITIES

BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required to
pay the holder the amount of the loan (or par value of the bond) at a
specified maturity and to make scheduled interest payments.

COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other
borrowers to investors seeking to invest idle cash. The Funds may
purchase commercial paper issued in private placements under Section
4(2) of the Securities Act of 1933.

COMMON STOCKS are equity securities representing shares of ownership
in a company and usually carry voting rights and earns dividends.
Unlike preferred stock, dividends on common stock are not fixed but
are declared at the discretion of the issuer's board of directors.

CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a fixed
dividend or interest payment and are convertible into common stock at
a specified price or conversion ratio.

DEBT SECURITIES are securities representing money borrowed that must
be repaid at a later date. Such securities have specific maturities
and usually a specific rate of interest or an original purchase
discount.

DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital gains on
the underlying security. Receipts include those issued by domestic
banks (American Depositary Receipts), foreign banks (Global or
European Depositary Receipts) and broker-dealers (depositary shares).

FIXED-INCOME SECURITIES are securities that pay a specified rate of
return. The term generally includes short-and long-term government,
corporate and municipal obligations that pay a specified rate of
interest or coupons for a specified period of time, and preferred
stock, which pays fixed dividends. Coupon and dividend rates may be
fixed for the life of the issue or, in the case of adjustable and
floating rate securities, for a shorter period.

HIGH-YIELD/HIGH-RISK BONDS are bonds that are rated below investment
grade by the primary rating agencies (e.g., BB or lower by Standard &
Poor's and Ba or lower by Moody's). Other terms commonly used to
describe such bonds include "lower rated bonds," "noninvestment grade
bonds" and "junk bonds."

MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-through
securities, which means that principal and interest payments on the
underlying securities (less servicing fees) are passed through to
shareholders on a pro rata basis. These securities involve prepayment
risk, which is the risk that the underlying mortgages or other debt
may be refinanced or paid off prior to their maturities during periods
of declining interest rates. In that case, a portfolio manager may
have to reinvest the proceeds from the securities at a lower rate.
Potential market gains on a security subject to prepayment risk may be
more limited than potential market gains on a comparable security that
is not subject to prepayment risk.

PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the

Glossary of investment terms 47
<PAGE>

Funds must pay if these investments are profitable, the Funds may make
various elections permitted by the tax laws. These elections could
require that the Funds recognize taxable income, which in turn must be
distributed, before the securities are sold and before cash is
received to pay the distributions.

PAY-IN-KIND BONDS are debt securities that normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value
equal to the amount of the coupon payment that would have been made.

PREFERRED STOCKS are equity securities that generally pay dividends at
a specified rate and have preference over common stock in the payment
of dividends and liquidation. Preferred stock generally does not carry
voting rights.

REPURCHASE AGREEMENTS involve the purchase of a security by a Fund and
a simultaneous agreement by the seller (generally a bank or dealer) to
repurchase the security from the Fund at a specified date or upon
demand. This technique offers a method of earning income on idle cash.
These securities involve the risk that the seller will fail to
repurchase the security, as agreed. In that case, a Fund will bear the
risk of market value fluctuations until the security can be sold and
may encounter delays and incur costs in liquidating the security.

REVERSE REPURCHASE AGREEMENTS involve the sale of a security by a Fund
to another party (generally a bank or dealer) in return for cash and
an agreement by the Fund to buy the security back at a specified price
and time. This technique will be used primarily to provide cash to
satisfy unusually high redemption requests, or for other temporary or
emergency purposes.

RULE 144A SECURITIES are securities that are not registered for sale
to the general public under the Securities Act of 1933, but that may
be resold to certain institutional investors.

STANDBY COMMITMENTS are obligations purchased by a Fund from a dealer
that give the Fund the option to sell a security to the dealer at a
specified price.

STEP COUPON BONDS are debt securities that trade at a discount from
their face value and pay coupon interest. The discount from the face
value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer.

STRIP BONDS are debt securities that are stripped of their interest
(usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in
response to changes in interest rates than interest-paying securities
of comparable maturity.

TENDER OPTION BONDS are generally long-term securities that are
coupled with an option to tender the securities to a bank,
broker-dealer or other financial institution at periodic intervals and
receive the face value of the bond. This type of security is commonly
used as a means of enhancing the security's liquidity.

U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit. Treasury
bills have initial maturities of less than one year, Treasury notes
have initial maturities of one to ten years and Treasury bonds may be
issued with any maturity but generally have maturities of at least ten
years. U.S. government securities also include indirect obligations of
the U.S. government that are issued by federal agencies and government
sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S.
government. Some agency securities are supported by the right of the
issuer to borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit of
the sponsoring agency.

48 Janus Adviser Series
<PAGE>

VARIABLE AND FLOATING RATE SECURITIES have variable or floating rates
of interest and, under certain limited circumstances, may have varying
principal amounts. These securities pay interest at rates that are
adjusted periodically according to a specified formula, usually with
reference to some interest rate index or market interest rate. The
floating rate tends to decrease the security's price sensitivity to
changes in interest rates.

WARRANTS are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of
common stock at a specified price, usually at a price that is higher
than the market price at the time of issuance of the warrant. The
right may last for a period of years or indefinitely.

WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at some
time in the future - i.e., beyond normal settlement. The Funds do not
earn interest on such securities until settlement and bear the risk of
market value fluctuations in between the purchase and settlement
dates. New issues of stocks and bonds, private placements and U.S.
government securities may be sold in this manner.

ZERO COUPON BONDS are debt securities that do not pay regular interest
at regular intervals, but are issued at a discount from face value.
The discount approximates the total amount of interest the security
will accrue from the date of issuance to maturity. The market value of
these securities generally fluctuates more in response to changes in
interest rates than interest-paying securities.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

FORWARD CONTRACTS are contracts to purchase or sell a specified amount
of a financial instrument for an agreed upon price at a specified
time. Forward contracts are not currently exchange traded and are
typically negotiated on an individual basis. The Funds may enter into
forward currency contracts to hedge against declines in the value of
securities denominated in, or whose value is tied to, a currency other
than the U.S. dollar or to reduce the impact of currency appreciation
on purchases of such securities. They may also enter into forward
contracts to purchase or sell securities or other financial indices.

FUTURES CONTRACTS are contracts that obligate the buyer to receive and
the seller to deliver an instrument or money at a specified price on a
specified date. The Funds may buy and sell futures contracts on
foreign currencies, securities and financial indices including
interest rates or an index of U.S. government, foreign government,
equity or fixed-income securities. The Funds may also buy options on
futures contracts. An option on a futures contract gives the buyer the
right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and
options on futures are standardized and traded on designated
exchanges.

INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or interest
rate is linked to currencies, interest rates, equity securities,
indices, commodity prices or other financial indicators. Such
securities may be positively or negatively indexed (i.e. their value
may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return
characteristics similar to direct investments in the underlying
instruments and may be more volatile than the underlying instruments.
A Fund bears the market risk of an investment in the underlying
instruments, as well as the credit risk of the issuer.

INTEREST RATE SWAPS involve the exchange by two parties of their
respective commitments to pay or receive interest (e.g., an exchange
of floating rate payments for fixed rate payments).

INVERSE FLOATERS are debt instruments whose interest rate bears an
inverse relationship to the interest rate on another instrument or
index. For example, upon reset the interest rate payable on a security
may go down when the underlying index has risen. Certain inverse
floaters may have an interest rate reset

Glossary of investment terms 49
<PAGE>

mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the security's
market value.

OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a fixed
date at a predetermined price. The Funds may purchase and write put
and call options on securities, securities indices and foreign
currencies.

50 Janus Adviser Series
<PAGE>
Explanation of rating categories

The following is a description of credit ratings issued by two of the
major credit ratings agencies. Credit ratings evaluate only the safety
of principal and interest payments, not the market value risk of lower
quality securities. Credit rating agencies may fail to change credit
ratings to reflect subsequent events on a timely basis. Although Janus
Capital considers security ratings when making investment decisions,
it also performs its own investment analysis and does not rely solely
on the ratings assigned by credit agencies.

STANDARD & POOR'S
RATINGS SERVICES

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB - lowest degree of speculation; C - the highest degree of
speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>

Explanation of rating categories 51
<PAGE>

MOODY'S INVESTORS SERVICE, INC.

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of investment risk.
Aa.......................... High quality; together with Aaa bonds, they compose the
high-grade bond group.
A........................... Upper-medium grade obligations; many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B........................... Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa......................... Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca.......................... Speculative in a high degree; could be in default or have
other marked shortcomings.
C........................... Lowest-rated; extremely poor prospects of ever attaining
investment standing.
</TABLE>

Unrated securities will be treated as noninvestment grade securities
unless a portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.

52 Janus Adviser Series
<PAGE>

This page intentionally left blank
<PAGE>

[JANUS LOGO]

1-800-525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com

You can request other information, including a Statement of
Additional Information for Janus Adviser Series, or an
Annual Report or Semiannual Report of Janus Aspen Series,
free of charge, by contacting your plan sponsor, broker or
financial institution or visiting our Web site at janus.com.
In the Annual Report, you will find a discussion of the
market conditions and investment strategies that
significantly affected the performance of Janus Aspen Series
during the last fiscal year. Other information is also
available from financial intermediaries that sell shares of
the Funds.

The Statement of Additional Information provides detailed
information about the Funds and is incorporated into this
Prospectus by reference. You may review and copy information
about the Funds (including the Funds' Statement of
Additional Information) at the Public Reference Room of the
SEC or get text only copies, after paying a duplicating fee,
by sending an electronic request by e-mail to
[email protected] or by writing to or calling the Public
Reference Room, Washington, D.C. 20549-0102
(1-202-942-8090). You may also obtain reports and other
information about the Funds from the Electronic Data
Gathering Analysis and Retrieval (EDGAR) Database on the
SEC's Web site at http://www.sec.gov.

Investment Company Act File No. 811-9885

<PAGE>

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
IS NOT PERMITTED.

JANUS LOGO

Subject to Completion

Preliminary Statement of Additional Information Dated June 12, 2000

Janus Adviser Series

100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020

Statement of Additional Information

July 31, 2000

This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the funds listed above, each of which is a separate series
of Janus Adviser Series, a Delaware business trust. Each of
these series of the Trust represents shares of beneficial
interest in a separate portfolio of securities and other assets
with its own objective and policies. Each Fund is managed
separately by Janus Capital Corporation.

The shares of the Funds may be purchased only through
institutional channels such as qualified and non-qualified
retirement and pension plans, bank trust departments, brokers,
financial advisers and other financial intermediaries.

This SAI is not a Prospectus and should be read in conjunction
with the Fund's Prospectus dated July 31, 2000, which is
incorporated by reference into this SAI and may be obtained
from your plan sponsor, broker or other financial intermediary.
This SAI contains additional and more detailed information
about the Funds' operations and activities than the Prospectus.

<PAGE>

LOGO
<PAGE>

Table of contents

<TABLE>
<S> <C>
Classification, Portfolio Turnover, Investment Policies and
Restrictions, and Investment Strategies and Risks........... 2
Investment Adviser.......................................... 21
Custodian, Transfer Agent and Certain Affiliations.......... 24
Portfolio Transactions and Brokerage........................ 25
Trustees and Officers....................................... 27
Shares of the Trust......................................... 32
Net Asset Value Determination............................ 32
Purchases................................................ 32
Distribution Plan........................................ 33
Redemptions.............................................. 33
Income Dividends, Capital Gains Distributions and Tax
Status...................................................... 35
Miscellaneous Information................................... 36
Shares of the Trust...................................... 36
Shareholder Meetings..................................... 36
Voting Rights............................................ 36
Independent Accountants.................................. 36
Registration Statement................................... 37
Performance Information..................................... 38
Financial Statements........................................ 40
Appendix A.................................................. 41
Explanation of Rating Categories......................... 41
</TABLE>

1
<PAGE>
Classification, portfolio turnover, investment policies and restrictions, and
investment strategies and risks

CLASSIFICATION

Each Fund is a series of the Trust, an open-end, management investment
company. The Investment Company Act of 1940 ("1940 Act") classifies
mutual funds as either diversified or nondiversified. Aggressive
Growth Fund, Capital Appreciation Fund and Strategic Value Fund are
nondiversified funds. Each of these Funds reserves the right to become
a diversified fund by limiting the investments in which more than 5%
of its total assets are invested. Growth Fund, Balanced Fund, Equity
Income Fund, Growth and Income Fund, and International Fund, Worldwide
Fund and Flexible Income Fund are diversified funds.

PORTFOLIO TURNOVER

The Prospectus includes a discussion of portfolio turnover policies.
Portfolio turnover is calculated by dividing total purchases or sales,
whichever is less, by the average monthly value of a Fund's
securities. These are new funds and, therefore, have no portfolio
turnover history. However, several of the Funds resulted from the
reorganization of corresponding portfolios of Janus Aspen Series
Retirement Shares into the Funds. The portfolio turnover rates listed
below are those of the predecessor funds to each of those Funds and
give an indication of the expected portfolio turnover percentages of
those Funds.

<TABLE>
<CAPTION>
Fund Name 1999
------------------------------------------------------------------
<S> <C>
Growth Fund................................................. 53%
Aggressive Growth Fund...................................... 105%
Capital Appreciation Fund................................... 52%
Balanced Fund............................................... 92%
Equity Income Fund.......................................... 114%
Growth and Income Fund...................................... 59%
International Fund.......................................... 80%
Worldwide Fund.............................................. 67%
Flexible Income Fund........................................ 116%
</TABLE>

INVESTMENT POLICIES AND RESTRICTIONS APPLICABLE TO ALL FUNDS

The Funds are subject to certain fundamental policies and restrictions
that may not be changed without shareholder approval. Shareholder
approval means approval by the lesser of (i) more than 50% of the
outstanding voting securities of the Trust (or a particular Fund or
particular class of shares if a matter affects just that Fund or that
class of shares), or (ii) 67% or more of the voting securities present
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Trust (or a particular Fund or class of shares) are
present or represented by proxy. As fundamental policies, each of the
Funds may not:

(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to fifty percent (50%) of the value of the total assets
of Aggressive Growth Fund, Capital Appreciation Fund and Strategic
Value Fund and as to seventy-five percent (75%) of the value of the
total assets of the other Funds, purchase the securities of any one
issuer (except cash items and "government securities" as defined under
the Investment Company Act of 1940, as amended, if immediately after
and as a result of such purchase, the value of the holdings of a Fund
in the securities of such issuer exceeds 5% of the value of such
Fund's total assets. With respect to the other 50% of the value of its
total assets, Aggressive Growth Fund, Capital Appreciation Fund and
Strategic Value Fund may invest in the securities of as few as two
issuers.

(2) Invest 25% or more of the value of their respective total assets
in any particular industry (other than U.S. government securities).

2
<PAGE>

(3) Invest directly in real estate or interests in real estate;
however, the Funds may own debt or equity securities issued by
companies engaged in those businesses.

(4) Purchase or sell physical commodities other than foreign
currencies unless acquired as a result of ownership of securities (but
this limitation shall not prevent the Funds from purchasing or selling
options, futures, swaps and forward contracts or from investing in
securities or other instruments backed by physical commodities).

(5) Lend any security or make any other loan if, as a result, more
than 25% of a Fund's total assets would be lent to other parties (but
this limitation does not apply to purchases of commercial paper, debt
securities or repurchase agreements).

(6) Act as an underwriter of securities issued by others, except to
the extent that a Fund may be deemed an underwriter in connection with
the disposition of its portfolio securities.

As a fundamental policy, each Fund may, notwithstanding any other
investment policy or limitation (whether or not fundamental), invest
all of its assets in the securities of a single open-end management
investment company with substantially the same fundamental investment
objective, policies and limitations as such Fund.

The Trustees have adopted additional investment restrictions for the
Funds. These restrictions are operating policies of the Funds and may
be changed by the Trustees without shareholder approval. The
additional investment restrictions adopted by the Trustees to date
include the following:

(a) A Fund will not (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission ("CFTC")
regulations if the aggregate initial margin and premiums required to
establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions will
exceed 5% of the fair market value of a Fund's net assets, after
taking into account unrealized profits and unrealized losses on any
such contracts it has entered into; and (ii) enter into any futures
contracts if the aggregate amount of such Fund's commitments under
outstanding futures contracts positions would exceed the market value
of its total assets.

(b) The Funds do not currently intend to sell securities short, unless
they own or have the right to obtain securities equivalent in kind and
amount to the securities sold short without the payment of any
additional consideration therefor, and provided that transactions in
futures, options, swaps and forward contracts are not deemed to
constitute selling securities short.

(c) The Funds do not currently intend to purchase securities on
margin, except that the Funds may obtain such short-term credits as
are necessary for the clearance of transactions, and provided that
margin payments and other deposits in connection with transactions in
futures, options, swaps and forward contracts shall not be deemed to
constitute purchasing securities on margin.

(d) A Fund may not mortgage or pledge any securities owned or held by
such Fund in amounts that exceed, in the aggregate, 15% of that Fund's
net asset value, provided that this limitation does not apply to
reverse repurchase agreements, deposits of assets to margin, guarantee
positions in futures, options, swaps or forward contracts, or the
segregation of assets in connection with such contracts.

(e) The Funds may borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of
the value of their respective total assets (including the amount
borrowed) less liabilities (other than borrowings). If borrowings
exceed 25% of the value of a Fund's total

3
<PAGE>

assets by reason of a decline in net assets, the Fund will reduce its
borrowings within three business days to the extent necessary to
comply with the 25% limitation. This policy shall not prohibit reverse
repurchase agreements, deposits of assets to margin or guarantee
positions in futures, options, swaps or forward contracts, or the
segregation of assets in connection with such contracts.

(f) The Funds do not currently intend to purchase any security or
enter into a repurchase agreement, if as a result, more than 15% of
their respective net assets would be invested in repurchase agreements
not entitling the holder to payment of principal and interest within
seven days and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily
available market. The Trustees, or the Funds' investment adviser
acting pursuant to authority delegated by the Trustees, may determine
that a readily available market exists for securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 ("Rule
144A Securities"), or any successor to such rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation.

(g) The Funds may not invest in companies for the purpose of
exercising control of management.

Under the terms of an exemptive order received from the Securities and
Exchange Commission ("SEC"), each of the Funds may borrow money from
or lend money to other funds that permit such transactions and for
which Janus Capital serves as investment adviser. All such borrowing
and lending will be subject to the above limits. A Fund will borrow
money through the program only when the costs are equal to or lower
than the cost of bank loans. Interfund loans and borrowings normally
extend overnight, but can have a maximum duration of seven days. A
Fund will lend through the program only when the returns are higher
than those available from other short-term instruments (such as
repurchase agreements). A Fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending Fund could result in a lost
investment opportunity or additional borrowing costs.

For the purposes of these investment restrictions, the identification
of the issuer of a municipal obligation depends on the terms and
conditions of the security. When assets and revenues of a political
subdivision are separate from those of the government that created the
subdivision and the security is backed only by the assets and revenues
of the subdivision, the subdivision is deemed to be the sole issuer.
Similarly, in the case of an industrial development bond, if the bond
is backed only by assets and revenues of a nongovernmental user, then
the nongovernmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other entity
guarantees the security, the guarantee would be considered a separate
security that would be treated as an issue of the guaranteeing entity.

For purposes of the Funds' restriction on investing in a particular
industry, the Funds will rely primarily on industry classifications as
published by Bloomberg L.P. To the extent that Bloomberg L.P.
classifications are so broad that the primary economic characteristics
in a single class are materially different, the Funds may further
classify issuers in accordance with industry classifications as
published by the SEC.

INVESTMENT POLICIES APPLICABLE TO CERTAIN FUNDS

BALANCED FUND. As an operational policy, at least 25% of the assets of
Balanced Fund normally will be invested in fixed-income securities.

FLEXIBLE INCOME FUND. As a fundamental policy, this Fund may not
purchase a non-income-producing security if, after such purchase, less
than 80% of the Fund's total assets would be invested in income-
producing securities. Income-producing securities include securities
that make periodic interest payments

4
<PAGE>

as well as those that make interest payments on a deferred basis or
pay interest only at maturity (e.g., Treasury bills or zero coupon
bonds).

INVESTMENT STRATEGIES AND RISKS

Cash Position

As discussed in the Prospectus, when a portfolio manager believes that
market conditions are unfavorable for profitable investing, or when he
is otherwise unable to locate attractive investment opportunities, the
Fund's investment in cash and similar investments may increase.
Securities that the Funds may invest in as a means of receiving a
return on idle cash include commercial paper, certificates of deposit,
repurchase agreements or other short-term debt obligations. The Funds
may also invest in money market funds, including funds managed by
Janus Capital. (See "Investment Company Securities" on page 8).

Illiquid Investments

Each Fund may invest up to 15% of its net assets in illiquid
investments (i.e., securities that are not readily marketable). The
Trustees have authorized Janus Capital to make liquidity
determinations with respect to certain securities, including Rule 144A
Securities, commercial paper and municipal lease obligations purchased
by the Funds. Under the guidelines established by the Trustees, Janus
Capital will consider the following factors: (1) the frequency of
trades and quoted prices for the obligation; (2) the number of dealers
willing to purchase or sell the security and the number of other
potential purchasers; (3) the willingness of dealers to undertake to
make a market in the security; and (4) the nature of the security and
the nature of the marketplace trades, including the time needed to
dispose of the security, the method of soliciting offers and the
mechanics of the transfer. In the case of commercial paper, Janus
Capital will also consider whether the paper is traded flat or in
default as to principal and interest and any ratings of the paper by a
nationally recognized statistical rating organization ("NRSRO"). A
foreign security that may be freely traded on or through the
facilities of an offshore exchange or other established offshore
securities market is not deemed to be a restricted security subject to
these procedures.

If illiquid securities exceed 15% of a Fund's net assets after the
time of purchase the Fund will take steps to reduce in an orderly
fashion its holdings of illiquid securities. Because illiquid
securities may not be readily marketable, a portfolio manager may not
be able to dispose of them in a timely manner. As a result, a Fund may
be forced to hold illiquid securities while their price depreciates.
Depreciation in the price of illiquid securities may cause the net
asset value of a Fund to decline.

Securities Lending

The Funds may lend securities to qualified parties (typically brokers
or other financial institutions) who need to borrow securities in
order to complete certain transactions such as covering short sales,
avoiding failures to deliver securities or completing arbitrage
activities. The Funds may seek to earn additional income through
securities lending. Since there is the risk of delay in recovering a
loaned security or the risk of loss in collateral rights if the
borrower fails financially, securities lending will only be made to
parties that Janus Capital deems creditworthy and in good standing. In
addition, such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Funds will
not have the right to vote on securities while they are being lent,
but they will call a loan in anticipation of any important vote. All
loans will be continuously secured by collateral which consists of
cash, U.S. government securities, letters of credit and such other
collateral permitted by the Securities and Exchange Commission and
policies approved by the Trustees. Cash collateral may be invested in
money

5
<PAGE>

market funds advised by Janus Capital to the extent consistent with
exemptive relief obtained from the SEC.

Short Sales

Each Fund may engage in "short sales against the box." This technique
involves selling either a security that a Fund owns, or a security
equivalent in kind and amount to the security sold short that the Fund
has the right to obtain, for delivery at a specified date in the
future. A Fund may enter into a short sale against the box to hedge
against anticipated declines in the market price of portfolio
securities. If the value of the securities sold short increases prior
to the scheduled delivery date, a Fund loses the opportunity to
participate in the gain.

Zero Coupon, Step Coupon and Pay-In-Kind Securities

Each Fund may invest up to 10% (without limit for Flexible Income
Fund) of its assets in zero coupon, pay-in-kind and step coupon
securities. Zero coupon bonds are issued and traded at a discount from
their face value. They do not entitle the holder to any periodic
payment of interest prior to maturity. Step coupon bonds trade at a
discount from their face value and pay coupon interest. The coupon
rate is low for an initial period and then increases to a higher
coupon rate thereafter. The discount from the face amount or par value
depends on the time remaining until cash payments begin, prevailing
interest rates, liquidity of the security and the perceived credit
quality of the issuer. Pay-in-kind bonds normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value
equal to the amount of the coupon payment that would have been made.
For the purposes of any Fund's restriction on investing in
income-producing securities, income-producing securities include
securities that make periodic interest payments as well as those that
make interest payments on a deferred basis or pay interest only at
maturity (e.g., Treasury bills or zero coupon bonds).

Current federal income tax law requires holders of zero coupon
securities and step coupon securities to report the portion of the
original issue discount on such securities that accrues during a given
year as interest income, even though the holders receive no cash
payments of interest during the year. In order to qualify as a
"regulated investment company" under the Internal Revenue Code of 1986
and the regulations thereunder (the "Code"), a Fund must distribute
its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds. Because a Fund
will not receive cash payments on a current basis in respect of
accrued original-issue discount on zero coupon bonds or step coupon
bonds during the period before interest payments begin, in some years
that Fund may have to distribute cash obtained from other sources in
order to satisfy the distribution requirements under the Code. A Fund
might obtain such cash from selling other portfolio holdings which
might cause that Fund to incur capital gains or losses on the sale.
Additionally, these actions are likely to reduce the assets to which
Fund expenses could be allocated and to reduce the rate of return for
that Fund. In some circumstances, such sales might be necessary in
order to satisfy cash distribution requirements even though investment
considerations might otherwise make it undesirable for a Fund to sell
the securities at the time.

Generally, the market prices of zero coupon, step coupon and
pay-in-kind securities are more volatile than the prices of securities
that pay interest periodically and in cash and are likely to respond
to changes in interest rates to a greater degree than other types of
debt securities having similar maturities and credit quality.

6
<PAGE>

Pass-Through Securities

The Funds may invest in various types of pass-through securities, such
as mortgage-backed securities, asset-backed securities and
participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that have been
repackaged by an intermediary, such as a bank or broker-dealer. The
purchaser of a pass-through security receives an undivided interest in
the underlying pool of securities. The issuers of the underlying
securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the Funds. The most
common type of pass-through securities are mortgage-backed securities.
Ginnie Mae Certificates are mortgage-backed securities that evidence
an undivided interest in a pool of mortgage loans. Ginnie Mae
Certificates differ from bonds in that principal is paid back monthly
by the borrowers over the term of the loan rather than returned in a
lump sum at maturity. A Fund will generally purchase "modified
pass-through" Ginnie Mae Certificates, which entitle the holder to
receive a share of all interest and principal payments paid and owned
on the mortgage pool, net of fees paid to the "issuer" and Ginnie Mae,
regardless of whether or not the mortgagor actually makes the payment.
Ginnie Mae Certificates are backed as to the timely payment of
principal and interest by the full faith and credit of the U.S.
government.

Freddie Mac issues two types of mortgage pass-through securities:
mortgage participation certificates ("PCs") and guaranteed mortgage
certificates ("GMCs"). PCs resemble Ginnie Mae Certificates in that
each PC represents a pro rata share of all interest and principal
payments made and owned on the underlying pool. Freddie Mac guarantees
timely payments of interest on PCs and the full return of principal.
GMCs also represent a pro rata interest in a pool of mortgages.
However, these instruments pay interest semiannually and return
principal once a year in guaranteed minimum payments. This type of
security is guaranteed by Freddie Mac as to timely payment of
principal and interest but it is not guaranteed by the full faith and
credit of the U.S. government.

Fannie Mae issues guaranteed mortgage pass-through certificates.
Fannie Mae Certificates resemble Ginnie Mae Certificates in that each
Fannie Mae Certificate represents a pro rata share of all interest and
principal payments made and owned on the underlying pool. This type of
security is guaranteed by Fannie Mae as to timely payment of principal
and interest but it is not guaranteed by the full faith and credit of
the U.S. government.

Except for GMCs, each of the mortgage-backed securities described
above is characterized by monthly payments to the holder, reflecting
the monthly payments made by the borrowers who received the underlying
mortgage loans. The payments to the security holders (such as the
Funds), like the payments on the underlying loans, represent both
principal and interest. Although the underlying mortgage loans are for
specified periods of time, such as 20 or 30 years, the borrowers can,
and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the
principal that is part of the regular monthly payments. A portfolio
manager will consider estimated prepayment rates in calculating the
average-weighted maturity of a Fund. A borrower is more likely to
prepay a mortgage that bears a relatively high rate of interest. This
means that in times of declining interest rates, higher yielding
mortgage-backed securities held by a Fund might be converted to cash
and that Fund will be forced to accept lower interest rates when that
cash is used to purchase additional securities in the mortgage-backed
securities sector or in other investment sectors. Additionally,
prepayments during such periods will limit a Fund's ability to
participate in as large a market gain as may be experienced with a
comparable security not subject to prepayment.

7
<PAGE>

Asset-backed securities represent interests in pools of consumer loans
and are backed by paper or accounts receivables originated by banks,
credit card companies or other providers of credit. Generally, the
originating bank or credit provider is neither the obligor nor the
guarantor of the security, and interest and principal payments
ultimately depend upon payment of the underlying loans by individuals.
Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales
agreements that may be created when a municipality enters into an
installment purchase contract or lease with a vendor. Such securities
may be secured by the assets purchased or leased by the municipality;
however, if the municipality stops making payments, there generally
will be no recourse against the vendor. The market for tax-exempt
asset-backed securities is still relatively new. These obligations are
likely to involve unscheduled prepayments of principal.

Investment Company Securities

From time to time, the Funds may invest in securities of other
investment companies, subject to the provisions of Section 12(d)(1) of
the 1940 Act. The Funds may invest in securities of money market funds
managed by Janus Capital in excess of the limitations of Section
12(d)(1) under the terms of an SEC exemptive order obtained by Janus
Capital and the Janus funds.

Depositary Receipts

The Funds may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), which are receipts issued by an American bank or
trust company evidencing ownership of underlying securities issued by
a foreign issuer. ADRs, in registered form, are designed for use in
U.S. securities markets. Unsponsored ADRs may be created without the
participation of the foreign issuer. Holders of these ADRs generally
bear all the costs of the ADR facility, whereas foreign issuers
typically bear certain costs in a sponsored ADR. The bank or trust
company depositary of an unsponsored ADR may be under no obligation to
distribute shareholder communications received from the foreign issuer
or to pass through voting rights. The Funds may also invest in
European Depositary Receipts ("EDRs"), Global Depositary Receipts
("GDRs") and in other similar instruments representing securities of
foreign companies. EDRs and GDRs are securities that are typically
issued by foreign banks or foreign trust companies, although U.S.
banks or U.S. trust companies may issue them. EDRs and GDRs are
structured similar to the arrangements of ADRs. EDRs, in bearer form,
are designed for use in European securities markets.

Depositary Receipts are generally subject to the same sort of risks as
direct investments in a foreign country, such as, currency risk,
political and economic risk, and market risk, because their values
depend on the performance of a foreign security denominated in its
home currency. The risks of foreign investing are addressed in some
detail in the Funds' prospectus.

Municipal Obligations

The Funds may invest in municipal obligations issued by states,
territories and possessions of the United States and the District of
Columbia. The value of municipal obligations can be affected by
changes in their actual or perceived credit quality. The credit
quality of municipal obligations can be affected by, among other
things, the financial condition of the issuer or guarantor, the
issuer's future borrowing plans and sources of revenue, the economic
feasibility of the revenue bond project or general borrowing purpose,
political or economic developments in the region where the security is
issued, and the liquidity of the security. Because municipal
securities are generally traded over-the-counter, the liquidity of a
particular issue often depends on the willingness of dealers to make a
market in the security. The liquidity of some municipal obligations
may be enhanced by demand features, which would enable a Fund to
demand payment on short notice from the issuer or a financial
intermediary.

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<PAGE>

Other Income-Producing Securities

Other types of income producing securities that the Funds may purchase
include, but are not limited to, the following types of securities:

VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities have
variable or floating rates of interest and, under certain limited
circumstances, may have varying principal amounts. These securities
pay interest at rates that are adjusted periodically according to a
specified formula, usually with reference to some interest rate index
or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates. These types
of securities are relatively long-term instruments that often carry
demand features permitting the holder to demand payment of principal
at any time or at specified intervals prior to maturity.

In order to most effectively use these investments, a portfolio
manager must correctly assess probable movements in interest rates.
This involves different skills than those used to select most
portfolio securities. If the portfolio manager incorrectly forecasts
such movements, a Fund could be adversely affected by the use of
variable or floating rate obligations.

STANDBY COMMITMENTS. These instruments, which are similar to a put,
give a Fund the option to obligate a broker, dealer or bank to
repurchase a security held by that Fund at a specified price.

TENDER OPTION BONDS. Tender option bonds are relatively long-term
bonds that are coupled with the agreement of a third party (such as a
broker, dealer or bank) to grant the holders of such securities the
option to tender the securities to the institution at periodic
intervals.

INVERSE FLOATERS. Inverse floaters are debt instruments whose interest
bears an inverse relationship to the interest rate on another
security. No Fund will invest more than 5% of its assets in inverse
floaters. Similar to variable and floating rate obligations, effective
use of inverse floaters requires skills different from those needed to
select most portfolio securities. If movements in interest rates are
incorrectly anticipated, a fund could lose money or its NAV could
decline by the use of inverse floaters.

STRIP BONDS. Strip bonds are debt securities that are stripped of
their interest (usually by a financial intermediary) after the
securities are issued. The market value of these securities generally
fluctuates more in response to changes in interest rates than
interest-paying securities of comparable maturity.

The Funds will purchase standby commitments, tender option bonds and
instruments with demand features primarily for the purpose of
increasing the liquidity of their holdings.

Repurchase and Reverse Repurchase Agreements

In a repurchase agreement, a Fund purchases a security and
simultaneously commits to resell that security to the seller at an
agreed upon price on an agreed upon date within a number of days
(usually not more than seven) from the date of purchase. The resale
price consists of the purchase price plus an agreed upon incremental
amount that is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of
the seller to pay the agreed upon price, which obligation is in effect
secured by the value (at least equal to the amount of the agreed upon
resale price and marked-to-market daily) of the underlying security or
"collateral." A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which
may cause a Fund to suffer a loss if the market value of such
securities declines before they can be liquidated on the open market.
In the event of bankruptcy or insolvency of the seller, a Fund may
encounter delays and incur costs in liquidating the underlying
security. Repurchase agreements that mature in more than seven days
are subject to the 15%

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<PAGE>

limit on illiquid investments. While it is not possible to eliminate
all risks from these transactions, it is the policy of the Funds to
limit repurchase agreements to those parties whose creditworthiness
has been reviewed and found satisfactory by Janus Capital.

A Fund may use reverse repurchase agreements to obtain cash to satisfy
unusually heavy redemption requests or for other temporary or
emergency purposes without the necessity of selling portfolio
securities, or to earn additional income on portfolio securities, such
as Treasury bills or notes. In a reverse repurchase agreement, a Fund
sells a portfolio security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, a Fund will maintain cash and appropriate
liquid assets in a segregated custodial account to cover its
obligation under the agreement. The Funds will enter into reverse
repurchase agreements only with parties that Janus Capital deems
creditworthy. Using reverse repurchase agreements to earn additional
income involves the risk that the interest earned on the invested
proceeds is less than the expense of the reverse repurchase agreement
transaction. This technique may also have a leveraging effect on the
Fund, although the Fund's intent to segregate assets in the amount of
the reverse repurchase agreement minimizes this effect.

High-Yield/High-Risk Bonds

Flexible Income Fund may invest without limit in bonds that are rated
below investment grade (e.g., bonds rated BB or lower by Standard &
Poor's Ratings Services or Ba or lower by Moody's Investors Service,
Inc.). No other Fund intends to invest 35% or more of its net assets
in such bonds. Lower rated bonds involve a higher degree of credit
risk, which is the risk that the issuer will not make interest or
principal payments when due. In the event of an unanticipated default,
a Fund would experience a reduction in its income, and could expect a
decline in the market value of the bonds so affected.

Any Fund may also invest in unrated bonds of foreign and domestic
issuers. Unrated bonds, while not necessarily of lower quality than
rated bonds, may not have as broad a market. Because of the size and
perceived demand of the issue, among other factors, certain
municipalities may not incur the costs of obtaining a rating. A Fund's
manager will analyze the creditworthiness of the issuer, as well as
any financial institution or other party responsible for payments on
the bond, in determining whether to purchase unrated municipal bonds.
Unrated bonds will be included in the 35% limit of each Fund unless
its manager deems such securities to be the equivalent of investment
grade bonds.

Subject to the above limits, each Fund may purchase defaulted
securities only when its portfolio manager believes, based upon
analysis of the financial condition, results of operations and
economic outlook of an issuer, that there is potential for resumption
of income payments and that the securities offer an unusual
opportunity for capital appreciation. Notwithstanding the portfolio
manager's belief about the resumption of income, however, the purchase
of any security on which payment of interest or dividends is suspended
involves a high degree of risk. Such risk includes, among other
things, the following:

FINANCIAL AND MARKET RISKS. Investments in securities that are in
default involve a high degree of financial and market risks that can
result in substantial or, at times, even total losses. Issuers of
defaulted securities may have substantial capital needs and may become
involved in bankruptcy or reorganization proceedings. Among the
problems involved in investments in such issuers is the fact that it
may be difficult to obtain information about the condition of such
issuers. The market prices of such securities also are subject to
abrupt and erratic movements and above average price volatility, and
the spread between the bid and asked prices of such securities may be
greater than normally expected.

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<PAGE>

DISPOSITION OF PORTFOLIO SECURITIES. Although these Funds generally
will purchase securities for which their portfolio managers expect an
active market to be maintained, defaulted securities may be less
actively traded than other securities and it may be difficult to
dispose of substantial holdings of such securities at prevailing
market prices. The Funds will limit holdings of any such securities to
amounts that the portfolio managers believe could be readily sold, and
holdings of such securities would, in any event, be limited so as not
to limit the Funds' ability to readily dispose of securities to meet
redemptions.

OTHER. Defaulted securities require active monitoring and may, at
times, require participation in bankruptcy or receivership proceedings
on behalf of the Funds.

Futures, Options and Other Derivative Instruments

FUTURES CONTRACTS. The Funds may enter into contracts for the purchase
or sale for future delivery of fixed-income securities, foreign
currencies or contracts based on financial indices, including indices
of U.S. government securities, foreign government securities, equity
or fixed-income securities. U.S. futures contracts are traded on
exchanges which have been designated "contract markets" by the CFTC
and must be executed through a futures commission merchant ("FCM"), or
brokerage firm, which is a member of the relevant contract market.
Through their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members of the
exchange.

The buyer or seller of a futures contract is not required to deliver
or pay for the underlying instrument unless the contract is held until
the delivery date. However, both the buyer and seller are required to
deposit "initial margin" for the benefit of the FCM when the contract
is entered into. Initial margin deposits are equal to a percentage of
the contract's value, as set by the exchange on which the contract is
traded, and may be maintained in cash or certain other liquid assets
by the Funds' custodian or subcustodian for the benefit of the FCM.
Initial margin payments are similar to good faith deposits or
performance bonds. Unlike margin extended by a securities broker,
initial margin payments do not constitute purchasing securities on
margin for purposes of the Fund's investment limitations. If the value
of either party's position declines, that party will be required to
make additional "variation margin" payments for the benefit of the FCM
to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. In
the event of the bankruptcy of the FCM that holds margin on behalf of
a Fund, that Fund may be entitled to return of margin owed to such
Fund only in proportion to the amount received by the FCM's other
customers. Janus Capital will attempt to minimize the risk by careful
monitoring of the creditworthiness of the FCMs with which the Funds do
business and by depositing margin payments in a segregated account
with the Funds' custodian.

The Funds intend to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator"
adopted by the CFTC and the National Futures Association, which
regulate trading in the futures markets. The Funds will use futures
contracts and related options primarily for bona fide hedging purposes
within the meaning of CFTC regulations. To the extent that the Funds
hold positions in futures contracts and related options that do not
fall within the definition of bona fide hedging transactions, the
aggregate initial margin and premiums required to establish such
positions will not exceed 5% of the fair market value of a Fund's net
assets, after taking into account unrealized profits and unrealized
losses on any such contracts it has entered into.

Although a Fund will segregate cash and liquid assets in an amount
sufficient to cover its open futures obligations, the segregated
assets would be available to that Fund immediately upon closing out
the futures position, while settlement of securities transactions
could take several days. However, because a Fund's cash that may
otherwise be invested would be held uninvested or invested in other
liquid assets so long as

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<PAGE>

the futures position remains open, such Fund's return could be
diminished due to the opportunity losses of foregoing other potential
investments.

A Fund's primary purpose in entering into futures contracts is to
protect that Fund from fluctuations in the value of securities or
interest rates without actually buying or selling the underlying debt
or equity security. For example, if the Fund anticipates an increase
in the price of stocks, and it intends to purchase stocks at a later
time, that Fund could enter into a futures contract to purchase a
stock index as a temporary substitute for stock purchases. If an
increase in the market occurs that influences the stock index as
anticipated, the value of the futures contracts will increase, thereby
serving as a hedge against that Fund not participating in a market
advance. This technique is sometimes known as an anticipatory hedge.
To the extent a Fund enters into futures contracts for this purpose,
the segregated assets maintained to cover such Fund's obligations with
respect to the futures contracts will consist of liquid assets from
its portfolio in an amount equal to the difference between the
contract price and the aggregate value of the initial and variation
margin payments made by that Fund with respect to the futures
contracts. Conversely, if a Fund holds stocks and seeks to protect
itself from a decrease in stock prices, the Fund might sell stock
index futures contracts, thereby hoping to offset the potential
decline in the value of its portfolio securities by a corresponding
increase in the value of the futures contract position. A Fund could
protect against a decline in stock prices by selling portfolio
securities and investing in money market instruments, but the use of
futures contracts enables it to maintain a defensive position without
having to sell portfolio securities.

If a Fund owns bonds and the portfolio manager expects interest rates
to increase, that Fund may take a short position in interest rate
futures contracts. Taking such a position would have much the same
effect as that Fund selling bonds in its portfolio. If interest rates
increase as anticipated, the value of the bonds would decline, but the
value of that Fund's interest rate futures contract will increase,
thereby keeping the net asset value of that Fund from declining as
much as it may have otherwise. If, on the other hand, a portfolio
manager expects interest rates to decline, that Fund may take a long
position in interest rate futures contracts in anticipation of later
closing out the futures position and purchasing the bonds. Although a
Fund can accomplish similar results by buying securities with long
maturities and selling securities with short maturities, given the
greater liquidity of the futures market than the cash market, it may
be possible to accomplish the same result more easily and more quickly
by using futures contracts as an investment tool to reduce risk.

The ordinary spreads between prices in the cash and futures markets,
due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject
to initial margin and variation margin requirements. Rather than
meeting additional variation margin requirements, investors may close
out futures contracts through offsetting transactions which could
distort the normal price relationship between the cash and futures
markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making
or taking delivery of the instrument underlying a futures contract. To
the extent participants decide to make or take delivery, liquidity in
the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin
deposit requirements in the futures market are less onerous than
margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may cause temporary
price distortions. Due to the possibility of the foregoing
distortions, a correct forecast of general price trends by a portfolio
manager still may not result in a successful use of futures.

Futures contracts entail risks. Although the Funds believe that use of
such contracts will benefit the Funds, a Fund's overall performance
could be worse than if such Fund had not entered into futures
contracts if

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<PAGE>

the portfolio manager's investment judgement proves incorrect. For
example, if a Fund has hedged against the effects of a possible
decrease in prices of securities held in its portfolio and prices
increase instead, that Fund will lose part or all of the benefit of
the increased value of these securities because of offsetting losses
in its futures positions. In addition, if a Fund has insufficient
cash, it may have to sell securities from its portfolio to meet daily
variation margin requirements. Those sales may be, but will not
necessarily be, at increased prices which reflect the rising market
and may occur at a time when the sales are disadvantageous to such
Fund.

The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures
contracts available to a Fund will not match exactly such Fund's
current or potential investments. A Fund may buy and sell futures
contracts based on underlying instruments with different
characteristics from the securities in which it typically
invests - for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities - which
involves a risk that the futures position will not correlate precisely
with the performance of such Fund's investments.

Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with
a Fund's investments. Futures prices are affected by factors such as
current and anticipated short-term interest rates, changes in
volatility of the underlying instruments and the time remaining until
expiration of the contract. Those factors may affect securities prices
differently from futures prices. Imperfect correlations between a
Fund's investments and its futures positions also may result from
differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are
traded, and from imposition of daily price fluctuation limits for
futures contracts. A Fund may buy or sell futures contracts with a
greater or lesser value than the securities it wishes to hedge or is
considering purchasing in order to attempt to compensate for
differences in historical volatility between the futures contract and
the securities, although this may not be successful in all cases. If
price changes in a Fund's futures positions are poorly correlated with
its other investments, its futures positions may fail to produce
desired gains or result in losses that are not offset by the gains in
that Fund's other investments.

Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of three
days for some types of securities, the futures markets can provide
superior liquidity to the securities markets. Nevertheless, there is
no assurance that a liquid secondary market will exist for any
particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves
upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached, it may be
impossible for a Fund to enter into new positions or close out
existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, a Fund
may not be able to promptly liquidate unfavorable futures positions
and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value.
As a result, such Fund's access to other assets held to cover its
futures positions also could be impaired.

OPTIONS ON FUTURES CONTRACTS. The Funds may buy and write put and call
options on futures contracts. An option on a future gives a Fund the
right (but not the obligation) to buy or sell a futures contract at a
specified price on or before a specified date. The purchase of a call
option on a futures contract is similar in some respects to the
purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the

13
<PAGE>

underlying instrument, ownership of the option may or may not be less
risky than ownership of the futures contract or the underlying
instrument. As with the purchase of futures contracts, when a Fund is
not fully invested it may buy a call option on a futures contract to
hedge against a market advance.

The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign
currency which is deliverable under, or of the index comprising, the
futures contract. If the futures price at the expiration of the option
is below the exercise price, a Fund will retain the full amount of the
option premium which provides a partial hedge against any decline that
may have occurred in that Fund's holdings. The writing of a put option
on a futures contract constitutes a partial hedge against increasing
prices of the security or foreign currency which is deliverable under,
or of the index comprising, the futures contract. If the futures price
at expiration of the option is higher than the exercise price, a Fund
will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which
that Fund is considering buying. If a call or put option a Fund has
written is exercised, such Fund will incur a loss which will be
reduced by the amount of the premium it received. Depending on the
degree of correlation between the change in the value of its portfolio
securities and changes in the value of the futures positions, a Fund's
losses from existing options on futures may to some extent be reduced
or increased by changes in the value of portfolio securities.

The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio
securities. For example, a Fund may buy a put option on a futures
contract to hedge its portfolio against the risk of falling prices or
rising interest rates.

The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the
purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the
value of the options bought.

FORWARD CONTRACTS. A forward contract is an agreement between two
parties in which one party is obligated to deliver a stated amount of
a stated asset at a specified time in the future and the other party
is obligated to pay a specified amount for the assets at the time of
delivery. The Funds may enter into forward contracts to purchase and
sell government securities, equity or income securities, foreign
currencies or other financial instruments. Forward contracts generally
are traded in an interbank market conducted directly between traders
(usually large commercial banks) and their customers. Unlike futures
contracts, which are standardized contracts, forward contracts can be
specifically drawn to meet the needs of the parties that enter into
them. The parties to a forward contract may agree to offset or
terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated exchange.

The following discussion summarizes the Funds' principal uses of
forward foreign currency exchange contracts ("forward currency
contracts"). A Fund may enter into forward currency contracts with
stated contract values of up to the value of that Fund's assets. A
forward currency contract is an obligation to buy or sell an amount of
a specified currency for an agreed price (which may be in U.S. dollars
or a foreign currency). A Fund will exchange foreign currencies for
U.S. dollars and for other foreign currencies in the normal course of
business and may buy and sell currencies through forward currency
contracts in order to fix a price for securities it has agreed to buy
or sell ("transaction hedge"). A Fund also may hedge some or all of
its investments denominated in a foreign currency or exposed to
foreign currency fluctuations against a decline in the value of that
currency relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency (or a proxy currency
whose performance is expected to replicate or exceed the performance
of that currency relative to the U.S. dollar) approximating

14
<PAGE>

the value of some or all of its portfolio securities denominated in
that currency ("position hedge") or by participating in options or
futures contracts with respect to the currency. A Fund also may enter
into a forward currency contract with respect to a currency where the
Fund is considering the purchase or sale of investments denominated in
that currency but has not yet selected the specific investments
("anticipatory hedge"). In any of these circumstances a Fund may,
alternatively, enter into a forward currency contract to purchase or
sell one foreign currency for a second currency that is expected to
perform more favorably relative to the U.S. dollar if the portfolio
manager believes there is a reasonable degree of correlation between
movements in the two currencies ("cross-hedge").

These types of hedging minimize the effect of currency appreciation as
well as depreciation, but do not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of
return on a Fund's foreign currency denominated portfolio securities.
The matching of the increase in value of a forward contract and the
decline in the U.S. dollar equivalent value of the foreign currency
denominated asset that is the subject of the hedge generally will not
be precise. Shifting a Fund's currency exposure from one foreign
currency to another removes that Fund's opportunity to profit from
increases in the value of the original currency and involves a risk of
increased losses to such Fund if its portfolio manager's projection of
future exchange rates is inaccurate. Proxy hedges and cross-hedges may
result in losses if the currency used to hedge does not perform
similarly to the currency in which hedged securities are denominated.
Unforeseen changes in currency prices may result in poorer overall
performance for a Fund than if it had not entered into such contracts.

The Funds will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or whose value
is tied to the currency underlying the forward contract or the
currency being hedged. To the extent that a Fund is not able to cover
its forward currency positions with underlying portfolio securities,
the Funds' custodian will segregate cash or other liquid assets having
a value equal to the aggregate amount of such Fund's commitments under
forward contracts entered into with respect to position hedges,
cross-hedges and anticipatory hedges. If the value of the securities
used to cover a position or the value of segregated assets declines, a
Fund will find alternative cover or segregate additional cash or other
liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of such Fund's
commitments with respect to such contracts. As an alternative to
segregating assets, a Fund may buy call options permitting such Fund
to buy the amount of foreign currency being hedged by a forward sale
contract or a Fund may buy put options permitting it to sell the
amount of foreign currency subject to a forward buy contract.

While forward contracts are not currently regulated by the CFTC, the
CFTC may in the future assert authority to regulate forward contracts.
In such event, the Funds' ability to utilize forward contracts may be
restricted. In addition, a Fund may not always be able to enter into
forward contracts at attractive prices and may be limited in its
ability to use these contracts to hedge Fund assets.

OPTIONS ON FOREIGN CURRENCIES. The Funds may buy and write options on
foreign currencies in a manner similar to that in which futures or
forward contracts on foreign currencies will be utilized. For example,
a decline in the U.S. dollar value of a foreign currency in which
portfolio securities are denominated will reduce the U.S. dollar value
of such securities, even if their value in the foreign currency
remains constant. In order to protect against such diminutions in the
value of portfolio securities, a Fund may buy put options on the
foreign currency. If the value of the currency declines, such Fund
will have the right to sell such currency for a fixed amount in U.S.
dollars, thereby offsetting, in whole or in part, the adverse effect
on its portfolio.

15
<PAGE>

Conversely, when a rise in the U.S. dollar value of a currency in
which securities to be acquired are denominated is projected, thereby
increasing the cost of such securities, a Fund may buy call options on
the foreign currency. The purchase of such options could offset, at
least partially, the effects of the adverse movements in exchange
rates. As in the case of other types of options, however, the benefit
to a Fund from purchases of foreign currency options will be reduced
by the amount of the premium and related transaction costs. In
addition, if currency exchange rates do not move in the direction or
to the extent projected, a Fund could sustain losses on transactions
in foreign currency options that would require such Fund to forego a
portion or all of the benefits of advantageous changes in those rates.

The Funds may also write options on foreign currencies. For example,
to hedge against a potential decline in the U.S. dollar value of
foreign currency denominated securities due to adverse fluctuations in
exchange rates, a Fund could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline
occurs, the option will most likely not be exercised and the decline
in value of portfolio securities will be offset by the amount of the
premium received.

Similarly, instead of purchasing a call option to hedge against a
potential increase in the U.S. dollar cost of securities to be
acquired, a Fund could write a put option on the relevant currency
which, if rates move in the manner projected, should expire
unexercised and allow that Fund to hedge the increased cost up to the
amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium. If exchange rates do
not move in the expected direction, the option may be exercised and a
Fund would be required to buy or sell the underlying currency at a
loss which may not be offset by the amount of the premium. Through the
writing of options on foreign currencies, a Fund also may lose all or
a portion of the benefits which might otherwise have been obtained
from favorable movements in exchange rates.

The Funds may write covered call options on foreign currencies. A call
option written on a foreign currency by a Fund is "covered" if that
Fund owns the foreign currency underlying the call or has an absolute
and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration
held in a segregated account by its custodian) upon conversion or
exchange of other foreign currencies held in its portfolio. A call
option is also covered if a Fund has a call on the same foreign
currency in the same principal amount as the call written if the
exercise price of the call held (i) is equal to or less than the
exercise price of the call written or (ii) is greater than the
exercise price of the call written, if the difference is maintained by
such Fund in cash or other liquid assets in a segregated account with
the Funds' custodian.

The Funds also may write call options on foreign currencies for
cross-hedging purposes. A call option on a foreign currency is for
cross-hedging purposes if it is designed to provide a hedge against a
decline due to an adverse change in the exchange rate in the U.S.
dollar value of a security which a Fund owns or has the right to
acquire and which is denominated in the currency underlying the
option. Call options on foreign currencies which are entered into for
cross-hedging purposes are not covered. However, in such
circumstances, a Fund will collateralize the option by segregating
cash or other liquid assets in an amount not less than the value of
the underlying foreign currency in U.S. dollars marked-to-market
daily.

OPTIONS ON SECURITIES. In an effort to increase current income and to
reduce fluctuations in net asset value, the Funds may write covered
put and call options and buy put and call options on securities that
are traded on United States and foreign securities exchanges and
over-the-counter. The Funds may write and buy options on the same
types of securities that the Funds may purchase directly.

A put option written by a Fund is "covered" if that Fund (i)
segregates cash not available for investment or other liquid assets
with a value equal to the exercise price of the put with the Funds'
custodian or

16
<PAGE>

(ii) holds a put on the same security and in the same principal amount
as the put written and the exercise price of the put held is equal to
or greater than the exercise price of the put written. The premium
paid by the buyer of an option will reflect, among other things, the
relationship of the exercise price to the market price and the
volatility of the underlying security, the remaining term of the
option, supply and demand and interest rates.

A call option written by a Fund is "covered" if that Fund owns the
underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash
consideration (or for additional cash consideration held in a
segregated account by the Funds' custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is
also deemed to be covered if a Fund holds a call on the same security
and in the same principal amount as the call written and the exercise
price of the call held (i) is equal to or less than the exercise price
of the call written or (ii) is greater than the exercise price of the
call written if the difference is maintained by that Fund in cash and
other liquid assets in a segregated account with its custodian.

The Funds also may write call options that are not covered for
cross-hedging purposes. A Fund collateralizes its obligation under a
written call option for cross-hedging purposes by segregating cash or
other liquid assets in an amount not less than the market value of the
underlying security, marked-to-market daily. A Fund would write a call
option for cross-hedging purposes, instead of writing a covered call
option, when the premium to be received from the cross-hedge
transaction would exceed that which would be received from writing a
covered call option and its portfolio manager believes that writing
the option would achieve the desired hedge.

The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or bought, in
the case of a put option, since with regard to certain options, the
writer may be assigned an exercise notice at any time prior to the
termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This
amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security
during the option period. If a call option is exercised, the writer
experiences a profit or loss from the sale of the underlying security.
If a put option is exercised, the writer must fulfill the obligation
to buy the underlying security at the exercise price, which will
usually exceed the then market value of the underlying security.

The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written.
The effect of the purchase is that the writer's position will be
canceled by the clearing corporation. However, a writer may not effect
a closing purchase transaction after being notified of the exercise of
an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This
is accomplished by selling an option of the same series as the option
previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.

In the case of a written call option, effecting a closing transaction
will permit a Fund to write another call option on the underlying
security with either a different exercise price or expiration date or
both. In the case of a written put option, such transaction will
permit a Fund to write another put option to the extent that the
exercise price is secured by deposited liquid assets. Effecting a
closing transaction also will permit a Fund to use the cash or
proceeds from the concurrent sale of any securities subject to the
option for other investments. If a Fund desires to sell a particular
security from its portfolio on which it has written a call option,
such Fund will effect a closing transaction prior to or concurrent
with the sale of the security.

17
<PAGE>

A Fund will realize a profit from a closing transaction if the price
of the purchase transaction is less than the premium received from
writing the option or the price received from a sale transaction is
more than the premium paid to buy the option. A Fund will realize a
loss from a closing transaction if the price of the purchase
transaction is more than the premium received from writing the option
or the price received from a sale transaction is less than the premium
paid to buy the option. Because increases in the market of a call
option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call
option is likely to be offset in whole or in part by appreciation of
the underlying security owned by a Fund.

An option position may be closed out only where a secondary market for
an option of the same series exists. If a secondary market does not
exist, the Fund may not be able to effect closing transactions in
particular options and the Fund would have to exercise the options in
order to realize any profit. If a Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able to
sell the underlying security until the option expires or it delivers
the underlying security upon exercise. The absence of a liquid
secondary market may be due to the following: (i) insufficient trading
interest in certain options, (ii) restrictions imposed by a national
securities exchange ("Exchange") on which the option is traded on
opening or closing transactions or both, (iii) trading halts,
suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities, (iv) unusual or
unforeseen circumstances that interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current
trading volume, or (vi) one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to
discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although
outstanding options on that Exchange that had been issued by the OCC
as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.

A Fund may write options in connection with buy-and-write
transactions. In other words, a Fund may buy a security and then write
a call option against that security. The exercise price of such call
will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above
("out-of-the-money") the current value of the underlying security at
the time the option is written. Buy-and-write transactions using
in-the-money call options may be used when it is expected that the
price of the underlying security will remain flat or decline
moderately during the option period. Buy-and-write transactions using
at-the-money call options may be used when it is expected that the
price of the underlying security will remain fixed or advance
moderately during the option period. Buy-and-write transactions using
out-of-the-money call options may be used when it is expected that the
premiums received from writing the call option plus the appreciation
in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, a Fund's maximum gain will be the premium received by it
for writing the option, adjusted upwards or downwards by the
difference between that Fund's purchase price of the security and the
exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be
offset by the amount of premium received.

The writing of covered put options is similar in terms of risk and
return characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and a Fund's gain
will be limited to the premium received. If the market price of the
underlying security declines or otherwise is below the exercise price,
a Fund may elect

18
<PAGE>

to close the position or take delivery of the security at the exercise
price and that Fund's return will be the premium received from the put
options minus the amount by which the market price of the security is
below the exercise price.

A Fund may buy put options to hedge against a decline in the value of
its portfolio. By using put options in this way, a Fund will reduce
any profit it might otherwise have realized in the underlying security
by the amount of the premium paid for the put option and by
transaction costs.

A Fund may buy call options to hedge against an increase in the price
of securities that it may buy in the future. The premium paid for the
call option plus any transaction costs will reduce the benefit, if
any, realized by such Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option
may expire worthless to that Fund.

EURODOLLAR INSTRUMENTS. A Fund may make investments in Eurodollar
instruments. Eurodollar instruments are U.S. dollar-denominated
futures contracts or options thereon which are linked to the London
Interbank Offered Rate ("LIBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate
for the lending of funds and sellers to obtain a fixed rate for
borrowings. A Fund might use Eurodollar futures contracts and options
thereon to hedge against changes in LIBOR, to which many interest rate
swaps and fixed-income instruments are linked.

SWAPS AND SWAP-RELATED PRODUCTS. A Fund may enter into interest rate
swaps, caps and floors on either an asset-based or liability-based
basis, depending upon whether it is hedging its assets or its
liabilities, and will usually enter into interest rate swaps on a net
basis (i.e., the two payment streams are netted out, with a Fund
receiving or paying, as the case may be, only the net amount of the
two payments). The net amount of the excess, if any, of a Fund's
obligations over its entitlement with respect to each interest rate
swap will be calculated on a daily basis and an amount of cash or
other liquid assets having an aggregate net asset value at least equal
to the accrued excess will be maintained in a segregated account by
the Funds' custodian. If a Fund enters into an interest rate swap on
other than a net basis, it would maintain a segregated account in the
full amount accrued on a daily basis of its obligations with respect
to the swap. A Fund will not enter into any interest rate swap, cap or
floor transaction unless the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in one of
the three highest rating categories of at least one NRSRO at the time
of entering into such transaction. Janus Capital will monitor the
creditworthiness of all counterparties on an ongoing basis. If there
is a default by the other party to such a transaction, a Fund will
have contractual remedies pursuant to the agreements related to the
transaction.

The swap market has grown substantially in recent years with a large
number of banks and investment banking firms acting both as principals
and as agents utilizing standardized swap documentation. Janus Capital
has determined that, as a result, the swap market has become
relatively liquid. Caps and floors are more recent innovations for
which standardized documentation has not yet been developed and,
accordingly, they are less liquid than swaps. To the extent a Fund
sells (i.e., writes) caps and floors, it will segregate cash or other
liquid assets having an aggregate net asset value at least equal to
the full amount, accrued on a daily basis, of its obligations with
respect to any caps or floors.

There is no limit on the amount of interest rate swap transactions
that may be entered into by a Fund. These transactions may in some
instances involve the delivery of securities or other underlying
assets by a Fund or its counterparty to collateralize obligations
under the swap. Under the documentation currently used in those
markets, the risk of loss with respect to interest rate swaps is
limited to the net amount of the payments that a Fund is contractually
obligated to make. If the other party to an interest rate swap

19
<PAGE>

that is not collateralized defaults, a Fund would risk the loss of the
net amount of the payments that it contractually is entitled to
receive. A Fund may buy and sell (i.e., write) caps and floors without
limitation, subject to the segregation requirement described above.

ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS
AND FOREIGN INSTRUMENTS. Unlike transactions entered into by the Funds
in futures contracts, options on foreign currencies and forward
contracts are not traded on contract markets regulated by the CFTC or
(with the exception of certain foreign currency options) by the SEC.
To the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency
options are also traded on certain Exchanges, such as the Philadelphia
Stock Exchange and the Chicago Board Options Exchange, subject to SEC
regulation. Similarly, options on currencies may be traded
over-the-counter. In an over-the-counter trading environment, many of
the protections afforded to Exchange participants will not be
available. For example, there are no daily price fluctuation limits,
and adverse market movements could therefore continue to an unlimited
extent over a period of time. Although the buyer of an option cannot
lose more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, an option writer
and a buyer or seller of futures or forward contracts could lose
amounts substantially in excess of any premium received or initial
margin or collateral posted due to the potential additional margin and
collateral requirements associated with such positions.

Options on foreign currencies traded on Exchanges are within the
jurisdiction of the SEC, as are other securities traded on Exchanges.
As a result, many of the protections provided to traders on organized
Exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on an
Exchange are cleared and guaranteed by the OCC, thereby reducing the
risk of counterparty default. Further, a liquid secondary market in
options traded on an Exchange may be more readily available than in
the over-the-counter market, potentially permitting a Fund to
liquidate open positions at a profit prior to exercise or expiration,
or to limit losses in the event of adverse market movements.

The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature of
the foreign currency market, possible intervention by governmental
authorities and the effects of other political and economic events. In
addition, exchange-traded options on foreign currencies involve
certain risks not presented by the over-the-counter market. For
example, exercise and settlement of such options must be made
exclusively through the OCC, which has established banking
relationships in applicable foreign countries for this purpose. As a
result, the OCC may, if it determines that foreign governmental
restrictions or taxes would prevent the orderly settlement of foreign
currency option exercises, or would result in undue burdens on the OCC
or its clearing member, impose special procedures on exercise and
settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions on
exercise.

In addition, options on U.S. government securities, futures contracts,
options on futures contracts, forward contracts and options on foreign
currencies may be traded on foreign exchanges and over-the-counter in
foreign countries. Such transactions are subject to the risk of
governmental actions affecting trading in or the prices of foreign
currencies or securities. The value of such positions also could be
adversely affected by (i) other complex foreign political and economic
factors, (ii) lesser availability than in the United States of data on
which to make trading decisions, (iii) delays in a Fund's ability to
act upon economic events occurring in foreign markets during
non-business hours in the United States, (iv) the imposition of
different exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) low trading volume.

20
<PAGE>
Investment adviser

As stated in the Prospectus, each Fund has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado
80206-4928. Each Advisory Agreement provides that Janus Capital will
furnish continuous advice and recommendations concerning the Funds'
investments, provide office space for the Funds, and pay the salaries,
fees and expenses of all Fund officers and of those Trustees who are
affiliated with Janus Capital. Janus Capital also may make payments to
selected broker-dealer firms or institutions which were instrumental
in the acquisition of shareholders for the Funds or other Janus Funds
or which perform recordkeeping or other services with respect to
shareholder accounts. The minimum aggregate size required for
eligibility for such payments, and the factors in selecting the
broker-dealer firms and institutions to which they will be made, are
determined from time to time by Janus Capital. Janus Capital is also
authorized to perform the management and administrative services
necessary for the operation of the Funds.

Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
from the Funds' service providers for providing recordkeeping,
subaccounting and other administrative services to their customers in
connection with investment in the Funds.

The Funds pay custodian and transfer agent fees and expenses,
brokerage commissions and dealer spreads and other expenses in
connection with the execution of portfolio transactions, legal and
accounting expenses, interest and taxes, registration fees, expenses
of shareholders' meetings and reports to shareholders, fees and
expenses of Fund Trustees who are not affiliated with Janus Capital
and other costs of complying with applicable laws regulating the sale
of Fund shares. Pursuant to the Advisory Agreements, Janus Capital
furnishes certain other services, including net asset value
determination, portfolio accounting and recordkeeping, for which the
Funds may reimburse Janus Capital for its costs.

Growth Fund, Aggressive Growth Fund, Capital Appreciation Fund,
Balanced Fund, Equity Income Fund, Growth and Income Fund, Strategic
Value Fund, International Fund and Worldwide Fund have each agreed to
compensate Janus Capital for its services by the monthly payment of a
fee at the annual rate of 0.65% of the average daily net assets of
each Fund. Flexible Income Fund has agreed to compensate Janus Capital
for its services by the monthly payment of a fee at the annual rate of
0.65% of the first $300 million of the average daily net assets of the
Fund, plus 0.55% of the average daily net assets of the Fund in excess
of $300 million. The advisory fee is calculated daily and paid
monthly.

21
<PAGE>

Until, at least, July 31, 2003, provided that Janus Capital remains
investment adviser to the Funds, Janus Capital has agreed to reimburse
each Fund by the amount, if any, that such Fund's normal operating
expenses in any fiscal year, including the investment advisory fee,
but excluding the distribution fee, administrative services fee,
brokerage commissions, interest, taxes and extraordinary expenses,
exceed the following annual rates:

<TABLE>
<CAPTION>
Expense Limit
Percentage
Fund Name (%)
---------------------------------------------
<S> <C>
Growth Fund 0.67
Aggressive Growth Fund 0.66
Capital Appreciation Fund 0.68
Balanced Fund 0.67
Equity Income Fund 1.25
Growth and Income Fund 1.02
International Fund 0.74
Worldwide Fund 0.70
Flexible Income Fund 0.70
</TABLE>

In addition, Janus Capital has agreed to reimburse Strategic Value
Fund by the amount, if any, that the Fund's normal operating expenses
in any fiscal year, including the investment advisory fee, but
excluding the distribution fee, administrative services fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed an
annual rate of 1.25% of the average daily net assets of the Fund until
at least the next annual renewal of the advisory agreement.

The Advisory Agreement for each of the Funds is dated April 3, 2000
and will continue in effect until July 1, 2001, and thereafter from
year to year so long as such continuance is approved annually by a
majority of the Funds' Trustees who are not parties to the Advisory
Agreements or interested persons of any such party, and by either a
majority of the outstanding voting shares or the Trustees of the
Funds. Each Advisory Agreement (i) may be terminated without the
payment of any penalty by any Fund or Janus Capital on 60 days'
written notice; (ii) terminates automatically in the event of its
assignment; and (iii) generally, may not be amended without the
approval by vote of a majority of the Trustees of the affected Fund,
including the Trustees who are not interested persons of that Fund or
Janus Capital and, to the extent required by the 1940 Act, the vote of
a majority of the outstanding voting securities of that Fund.

Janus Capital acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisor services for institutional
accounts. Investment decisions for each account managed by Janus
Capital, including the Funds, are made independently from those for
any other account that is or may in the future become managed by Janus
Capital or its affiliates. If, however, a number of accounts managed
by Janus Capital are contemporaneously engaged in the purchase or sale
of the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably to
each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position
obtained or liquidated for an account. Pursuant to an exemptive order
granted by the SEC, the Funds and other funds advised by Janus Capital
may also transfer daily uninvested cash balances into one or more
joint trading accounts. Assets in the joint trading accounts are
invested in money market instruments and the proceeds are allocated to
the participating funds on a pro rata basis.

22
<PAGE>

Kansas City Southern Industries, Inc. ("KCSI"), indirectly through its
wholly owned subsidiary, Stilwell Financial Inc., owns approximately
82% of the outstanding voting stock of Janus Capital. KCSI is a
publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services.
Thomas H. Bailey, President and Chairman of the Board of Janus
Capital, owns approximately 12% of Janus Capital's voting stock and,
by agreement with KCSI, selects at least a majority of Janus Capital's
Board, subject to the approval of Stilwell Financial, which cannot be
unreasonably withheld.

KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in 2000.

Each account managed by Janus Capital has its own investment objective
and policies and is managed accordingly by a particular portfolio
manager or team of portfolio managers. As a result, from time to time
two or more different managed accounts may pursue divergent investment
strategies with respect to investments or categories of investments.

The Funds' portfolio managers are not permitted to purchase and sell
securities for their own accounts except under the limited exceptions
contained in the Funds' Code of Ethics. The Funds' Code of Ethics is
on file with and available from the SEC through the SEC Web site at
www.sec.gov. The Code of Ethics applies to Directors/Trustees of Janus
Capital and the Funds, and employees of Janus Capital and the Trust
and requires investment personnel and officers of Janus Capital,
inside Directors/Trustees of Janus Capital and the Funds and certain
other designated employees deemed to have access to current trading
information to pre-clear all transactions in securities not otherwise
exempt under the Code of Ethics. Requests for trading authorization
will be denied when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the Code of Ethics
or would be deemed to adversely affect any transaction known to be
under consideration for or to have been effected on behalf of any
client account, including the Funds.

In addition to the pre-clearance requirement described above, the Code
of Ethics subjects such personnel to various trading restrictions and
reporting obligations. All reportable transactions are required to be
reviewed for compliance with the Code of Ethics. Those persons also
may be required under certain circumstances to forfeit their profits
made from personal trading.

The provisions of the Code of Ethics are administered by and subject
to exceptions authorized by Janus Capital.

23
<PAGE>
Custodian, transfer agent and certain affiliations

State Street Bank and Trust Company, P.O. Box 0351, Boston,
Massachusetts 02117-0351 is the custodian of the domestic securities
and cash of the Funds. State Street and the foreign subcustodians it
selects have custody of the assets of the Funds held outside the U.S.
and cash incidental thereto. The custodians and subcustodians hold the
Funds' assets in safekeeping and collect and remit the income thereon,
subject to the instructions of each Fund.

Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the Funds'
transfer agent. In addition, Janus Service provides certain other
administrative, recordkeeping and shareholder relations services for
the Funds. Janus Service Corporation receives an administrative
services fee at an annual rate of up to 0.25% of the average daily net
assets of the initial class of each Fund for providing or procuring
recordkeeping, subaccounting and other administrative services to
investors in the Funds. Janus Service expects to use a significant
portion of this fee to compensate retirement plan service providers,
brokers, bank trust departments, financial advisers and other
financial intermediaries for providing these services (at an annual
rate of up to 0.25% of the average daily net assets of the shares
attributable to their customers). Services provided by these financial
intermediaries may include but are not limited to recordkeeping,
processing and aggregating purchase and redemption transactions,
providing periodic statements, forwarding prospectuses, shareholder
reports and other materials to existing customers, and other
administrative services.

The Funds will pay DST Systems, Inc., a minority owned subsidiary of
KCSI, license fees at the annual rate of $3.06 per shareholder account
for the equity funds and $3.98 per shareholder account for the
fixed-income funds for the use of DST's shareholder accounting system.
The Funds also pay DST $1.10 per closed shareholder account. The Funds
also pay DST for the use of its portfolio and fund accounting system,
a monthly fee of $250 to $1,250, based on the number of Janus funds
using the system and an asset charge of $1 per million dollars of net
assets (not to exceed $500 per month).

The Trustees have authorized the Funds to use another affiliate of DST
as introducing broker for certain Fund transactions as a means to
reduce Fund expenses through credits against the charges of DST and
its affiliates with regard to commissions earned by such affiliate.
DST charges shown above are net of such credits. See "Portfolio
Transactions and Brokerage."

Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado
80206-4928, a wholly-owned subsidiary of Janus Capital, is the Trust's
distributor. Janus Distributors is registered as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc.

24
<PAGE>
Portfolio transactions and brokerage

Decisions as to the assignment of portfolio business for the Funds and
negotiation of its commission rates are made by Janus Capital whose
policy is to obtain the "best execution" (prompt and reliable
execution at the most favorable security price) of all portfolio
transactions. The Funds may trade foreign securities in foreign
countries because the best available market for these securities is
often on foreign exchanges. In transactions on foreign stock
exchanges, brokers' commissions are frequently fixed and are often
higher than in the United States, where commissions are negotiated.

In selecting brokers and dealers and in negotiating commissions, Janus
Capital considers a number of factors, including but not limited to:
Janus Capital's knowledge of currently available negotiated commission
rates or prices of securities currently available and other current
transaction costs; the nature of the security being traded; the size
and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker
or dealer; the existence of actual or apparent operational problems of
any broker or dealer; rebates of commissions by a broker to a Fund or
to a third party service provider to the Fund to pay Fund expenses;
and research products or services provided. In recognition of the
value of the foregoing factors, Janus Capital may place portfolio
transactions with a broker or dealer with whom it has negotiated a
commission that is in excess of the commission another broker or
dealer would have charged for effecting that transaction if Janus
Capital determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
provided by such broker or dealer viewed in terms of either that
particular transaction or of the overall responsibilities of Janus
Capital. Research may include furnishing advice, either directly or
through publications or writings, as to the value of securities, the
advisability of purchasing or selling specific securities and the
availability of securities or purchasers or sellers of securities;
furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods,
legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research
analysts, corporate management personnel, industry experts, economists
and government officials; comparative performance evaluation and
technical measurement services and quotation services, and products
and other services (such as third party publications, reports and
analyses, and computer and electronic access, equipment, software,
information and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist Janus
Capital in carrying out its responsibilities. Research received from
brokers or dealers is supplemental to Janus Capital's own research
efforts. Most brokers and dealers used by Janus Capital provide
research and other services described above.

Brokerage commissions will be paid by the Funds to brokers and dealers
in transactions identified for execution primarily on the basis of
research and other services provided to the Funds.

Janus Capital may use research products and services in servicing
other accounts in addition to the Funds. If Janus Capital determines
that any research product or service has a mixed use, such that it
also serves functions that do not assist in the investment
decision-making process, Janus Capital may allocate the costs of such
service or product accordingly. Only that portion of the product or
service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus
Capital.

Janus Capital does not enter into agreements with any brokers
regarding the placement of securities transactions because of the
research services they provide. It does, however, have an internal
procedure for allocating transactions in a manner consistent with its
execution policy to brokers that it has identified as providing
superior executions and research, research-related products or
services which benefit its advisory

25
<PAGE>

clients, including the Funds. Research products and services
incidental to effecting securities transactions furnished by brokers
or dealers may be used in servicing any or all of Janus Capital's
clients and such research may not necessarily be used by Janus Capital
in connection with the accounts which paid commissions to the
broker-dealer providing such research products and services.

Janus Capital may consider sales of Fund Shares or shares of other
Janus funds by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase Fund Shares as a
factor in the selection of broker-dealers to execute Fund
transactions. Janus Capital may also consider payments made by brokers
effecting transactions for a Fund (i) to the Fund or (ii) to other
persons on behalf of the Fund for services provided to the Fund for
which it would be obligated to pay. In placing Fund business with such
broker-dealers, Janus Capital will seek the best execution of each
transaction.

When the Funds purchase or sell a security in the over-the-counter
market, the transaction takes place directly with a principal
market-maker, without the use of a broker, except in those
circumstances where in the opinion of Janus Capital better prices and
executions will be achieved through the use of a broker.

The Funds' Trustees have authorized Janus Capital to place
transactions with DST Securities, Inc. ("DSTS"), a wholly-owned
broker-dealer subsidiary of DST. Janus Capital may do so if it
reasonably believes that the quality of the transaction and the
associated commission are fair and reasonable and if, overall, the
associated transaction costs, net of any credits described above under
"Custodian, Transfer Agent and Certain Affiliations," are lower than
those that would otherwise be incurred.

26
<PAGE>
Trustees and officers

The following are the names of the Trustees and officers of the Trust,
together with a brief description of their principal occupations
during the last five years.

Thomas H. Bailey, Age 63 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928

--------------------------------------------------------------------------------
Trustee, Chairman and President of Janus Investment Fund and Janus
Aspen Series. Chairman, Chief Executive Officer, President and
Director of Janus Capital. Director of Janus Distributors, Inc.

James P. Craig, III, Age 44 - Trustee and Vice President*#
100 Fillmore Street

Denver, CO 80206-4928
--------------------------------------------------------------------------------
Trustee and Vice President of Janus Investment Fund and Janus Aspen
Series. Chief Investment Officer, Director of Research, Vice Chairman
and Director of Janus Capital. Formerly Executive Vice President and
Portfolio Manager of Janus Aspen Growth Portfolio and Janus Fund.
Formerly Executive Vice President and Co-Manager of Janus Venture Fund
(from inception until December 1999).

Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President and
Director of High Valley Group, Inc., Colorado Springs, CO
(investments).

Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Investor. Formerly (1997-1998), Chief Financial Officer-Boston Market
Concepts, Boston Chicken, Inc., Golden, CO (restaurant chain); (1993-
1997), President and Chief Executive Officer of BC Northwest, L.P., a
franchise of Boston Chicken, Inc., Bellevue, WA (restaurant chain).

James T. Rothe, Age 56 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Professor of
Business, University of Colorado, Colorado Springs, CO. Principal,
Phillips-Smith Retail Group, Colorado Springs, CO (a venture capital
firm).

--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.

27
<PAGE>

William D. Stewart, Age 56 - Trustee#
5330 Sterling Drive

Boulder, CO 80302
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President of
HPS Division of MKS Instruments, Boulder, CO (manufacturer of vacuum
fittings and valves).

Martin H. Waldinger, Age 62 - Trustee

4940 Sandshore Court
San Diego, CA 92130
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Consultant. Formerly (1993-1996), Director of Run Technologies, Inc.,
a software development firm, San Carlos, CA.

Laurence J. Chang, Age 35 - Executive Vice President, Co-Portfolio Manager Janus
100 Fillmore Street Adviser International Fund and Janus Adviser
Denver, CO 80206-4928 Worldwide Fund*

--------------------------------------------------------------------------------
Executive Vice President and Co-Manager of Janus Investment Fund and
Janus Aspen Series. Formerly, an assistant portfolio manager at Janus
Capital (1998-1999). Formerly, a research analyst at Janus Capital
(1993-1998).

David J. Corkins, Age 33 - Executive Vice President, Portfolio Manager Janus
100 Fillmore Street Adviser Growth and Income Fund*
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Executive Vice President of Janus Investment Fund and Janus Aspen
Series. Vice President of Janus Capital. Formerly, (1995-1997),
research analyst and assistant portfolio manager at Janus Capital and
(1993-1995), Chief Financial Officer of Chase U.S. Consumer Services,
Inc., a Chase Manhattan mortgage business.

David C. Decker, Age 34 - Executive Vice President, Portfolio Manager of Janus
100 Fillmore Street Adviser Strategic Value Fund
Denver, CO 80206-4928

--------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.
Formerly, research analyst at Janus Capital (1992-1996).

--------------------------------------------------------------------------------
#Member of the Trust's Executive Committee.
*Interested person of the Trust and of Janus Capital.

28
<PAGE>

James P. Goff, Age 36 - Executive Vice President, Portfolio Manager of Janus
100 Fillmore Street Adviser Aggressive Growth Fund*
Denver, CO 80206-4928

Helen Young Hayes, Age 38 - Executive Vice President, Co-Manager of Janus
100 Fillmore Street Adviser Worldwide Fund and Janus Adviser
Denver, CO 80206-4928 International Fund*

--------------------------------------------------------------------------------
Executive Vice President, Co-Manager of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital.

Karen L. Reidy, Age 33 - Executive Vice President, Portfolio Manager of Janus
100 Fillmore Street Adviser Balanced Fund and Janus Adviser Equity Income
Denver, CO 80206-4928 Fund*

--------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager or Assistant Portfolio
Manager of Janus Investment Fund and Janus Aspen Series. Vice
President of Janus Capital. Formerly, equity analyst at Janus Capital
(1995-1999).

Blaine P. Rollins, Age 33 - Executive Vice President, Portfolio Manager of Janus
100 Fillmore Street Adviser Growth Portfolio*
Denver, CO 80206-4928

Scott W. Schoelzel, Age 41 - Executive Vice President, Portfolio Manager of
100 Fillmore Street Janus Adviser Capital Appreciation Fund*
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.

--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

29
<PAGE>

Ronald V. Speaker, Age 35 - Executive Vice President, Portfolio Manager of Janus
100 Fillmore Street Adviser Flexible Income Fund*
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.

Thomas A. Early, Age 45 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Vice President and General Counsel of Janus Investment Fund and Janus
Aspen Series. Vice President, General Counsel and Secretary of Janus
Capital. Vice President and General Counsel of Janus Service
Corporation, Janus Distributors, Inc., Janus Capital International,
Ltd. and Janus International (UK) Limited. Director of Janus World
Funds Plc. Formerly (1997 to 1998), Executive Vice President and
General Counsel of Prudential Investments Fund Management LLC, Newark,
NJ. Formerly (1994 to 1997), Vice President and General Counsel of
Prudential Retirement Services, Newark, NJ.

Steven R. Goodbarn, Age 43 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928

--------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Investment Fund
and Janus Aspen Series. Vice President of Finance, Treasurer and Chief
Financial Officer of Janus Capital, Janus Service Corporation, and
Janus Distributors, Inc. Director of Janus Service Corporation, Janus
Distributors, Inc. and Janus World Funds Plc. Director, Treasurer and
Vice President of Finance of Janus Capital International Ltd. and
Janus International (UK) Limited. Formerly (1992-1996), Treasurer of
Janus Investment Fund and Janus Aspen Series.

Kelley Abbott Howes, Age 35 - Secretary*

100 Fillmore Street
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund and Janus Aspen
Series. Vice President and Assistant General Counsel of Janus Capital.
Vice President of Janus Distributors, Inc. Assistant Vice President of
Janus Service Corporation.

Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street, Suite 300
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital. Formerly
(1991-1997), Director of Fund Accounting, Janus Capital.

--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

30
<PAGE>

The Trustees are responsible for major decisions relating to each
Fund's objective, policies and techniques. The Trustees also supervise
the operation of the Funds by their officers and review the investment
decisions of the officers although they do not actively participate on
a regular basis in making such decisions.

The Trust's Executive Committee shall have and may exercise all the
powers and authority of the Trustees except for matters requiring
action by all Trustees pursuant to the Trust's Bylaws or Trust
Instrument, Delaware law or the 1940 Act.

Because these Funds had not commenced operations as of the date of
this prospectus, the Trustees have not received compensation from the
Funds yet. The following table shows the aggregate compensation that
the Funds are expected to receive and the aggregate compensation paid
to each Trustee by other funds advised and sponsored by Janus Capital
(collectively, the "Janus Funds") for the periods indicated. None of
the Trustees receives pension or retirement benefits from the Funds or
the Janus Funds.

<TABLE>
<CAPTION>
Aggregate Compensation Aggregate Compensation
from the Funds for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position July 31, 2001** December 31, 1999***
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman and Trustee* $ 0 $ 0
James P. Craig, III, Trustee* $ 0 $ 0
William D. Stewart, Trustee $633 $107,333
Gary O. Loo, Trustee $633 $107,333
Dennis B. Mullen, Trustee $633 $107,333
Martin H. Waldinger, Trustee $633 $107,333
James T. Rothe, Trustee $633 $107,333
</TABLE>

* An interested person of the Funds and of Janus Capital. Compensated by Janus
Capital and not the Funds.

** The aggregate compensation for the Funds is estimated for the fiscal year
ending July 31, 2001.

*** As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.

31
<PAGE>
Shares of the trust

NET ASSET VALUE DETERMINATION

As stated in the Prospectus, the net asset value ("NAV") of each Fund
is determined once each day on which the NYSE is open, at the close of
its regular trading session (normally 4:00 p.m., New York time, Monday
through Friday). The NAV of the Shares of each Fund is not determined
on days the NYSE is closed (generally, New Year's Day, Martin Luther
King Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas). The per share NAV of each
Fund is determined by dividing the total value of a Fund's securities
and other assets, less liabilities, attributable to the Fund, by the
total number of shares outstanding. In determining NAV, securities
listed on an Exchange, the NASDAQ National Market and foreign markets
are valued at the closing prices on such markets, or if such price is
lacking for the trading period immediately preceding the time of
determination, such securities are valued at their current bid price.
Municipal securities held by the Funds are traded primarily in the
over-the-counter market. Valuations of such securities are furnished
by one or more pricing services employed by the Funds and are based
upon last trade or closing sales prices or a computerized matrix
system or appraisals obtained by a pricing service, in each case in
reliance upon information concerning market transactions and
quotations from recognized municipal securities dealers. Other
securities that are traded on the over-the-counter market are valued
at their closing bid prices. Foreign securities and currencies are
converted to U.S. dollars using the exchange rate in effect at the
close of the NYSE. Each Fund will determine the market value of
individual securities held by it, by using prices provided by one or
more professional pricing services which may provide market prices to
other funds, or, as needed, by obtaining market quotations from
independent broker-dealers. Short-term securities maturing within 60
days are valued on an amortized cost basis. Securities for which
quotations are not readily available, and other assets, are valued at
fair values determined in good faith under procedures established by
and under the supervision of the Trustees.

Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed well before the
close of business on each business day in New York (i.e., a day on
which the NYSE is open). In addition, European or Far Eastern
securities trading generally or in a particular country or countries
may not take place on all business days in New York. Furthermore,
trading takes place in Japanese markets on certain Saturdays and in
various foreign markets on days which are not business days in New
York and on which a Fund's NAV is not calculated. A Fund calculates
its NAV per share, and therefore effects sales, redemptions and
repurchases of its shares, as of the close of the NYSE once on each
day on which the NYSE is open. Such calculation may not take place
contemporaneously with the determination of the prices of the foreign
portfolio securities used in such calculation.

PURCHASES

Shares of the Funds can be purchased only through retirement plans,
brokers, bank trust departments, financial advisers or similar
financial intermediaries. Certain designated organizations are
authorized to receive purchase orders on the Funds' behalf and those
organizations are authorized to designate their agents and affiliates
as intermediaries to receive purchase orders. Purchase orders are
deemed received by a Fund when authorized organizations, their agents
or affiliates receive the order. The Funds are not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares of the Funds are
purchased at the NAV per share as determined at the close of the
regular trading session of the NYSE next occurring after a purchase
order is received and accepted by a Fund or its authorized agent. In
order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE as described above in
"Net Asset Value Determination." Your plan documents contain detailed
information about investing in the different Funds.

32
<PAGE>

DISTRIBUTION PLAN

Under a distribution plan ("Plan") adopted in accordance with Rule
12b-1 under the 1940 Act, the initial class of the Funds may pay Janus
Distributors, Inc., the Trust's distributor, a fee at an annual rate
of up to 0.25% of the average daily net assets of the class of the
Fund. Under the terms of the Plan, the Trust is authorized to make
payments to Janus Distributors for remittance to retirement and
pension plan service providers, bank trust departments, brokers,
financial advisers and other financial intermediaries as compensation
for distribution and shareholder servicing performed by such service
providers. The Plan is a compensation type plan and permits the
payment at an annual rate of up to 0.25% of the average daily net
assets of the class of a Fund for activities which are primarily
intended to result in sales of the shares of the Fund, including but
not limited to preparing, printing and distributing prospectuses,
statements of additional information, shareholder reports, and
educational materials to prospective and existing investors;
responding to inquiries by investors; receiving and answering
correspondence and similar activities. Payments under the Plan are not
tied exclusively to actual distribution and service expenses, and the
payments may exceed distribution and service expenses actually
incurred. On April 3, 2000, Trustees unanimously approved the Plan
which became effective on that date. The Plan and any Rule 12b-1
related agreement that is entered into by the Funds or Janus
Distributors in connection with the Plan will continue in effect for a
period of more than one year only so long as continuance is
specifically approved at least annually by a vote of a majority of the
Trustees, and of a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or
any related agreements ("12b-1 Trustees"). All material amendments to
the Plan must be approved by a majority vote of the Trustees,
including a majority of the 12b-1 Trustees, at a meeting called for
that purpose. In addition, the Plan may be terminated at any time,
without penalty, by vote of a majority of the outstanding shares of
the class of a Fund or by vote of a majority of 12b-1 Trustees.

REDEMPTIONS

Redemptions, like purchases, may only be effected through retirement
plans, brokers, bank trust departments, financial advisers and other
financial intermediaries. Certain designated organizations are
authorized to receive redemption orders on the Funds' behalf and those
organizations are authorized to designate their agents and affiliates
as intermediaries to receive redemption orders. Redemption orders are
deemed received by a Fund when authorized organizations, their agents
or affiliates receive the order. The Funds are not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares normally will be
redeemed for cash, although each Fund retains the right to redeem some
or all its shares in kind under unusual circumstances, in order to
protect the interests of remaining shareholders, or to accommodate a
request by a particular shareholder that does not adversely affect the
interest of the remaining shareholders by delivery of securities
selected from its assets at its discretion. However, the Funds are
governed by Rule 18f-1 under the 1940 Act, which requires each Fund to
redeem shares solely in cash up to the lesser of $250,000 or 1% of the
NAV of that Fund during any 90-day period for any one shareholder.
Should redemptions by any shareholder exceed such limitation, a Fund
will have the option of redeeming the excess in cash or in kind. If
shares are redeemed in kind, the redeeming shareholder might incur
brokerage costs in converting the assets to cash. The method of
valuing securities used to make redemptions in kind will be the same
as the method of valuing portfolio securities described under "Shares
of the Trust - Net Asset Value Determination" and such valuation will
be made as of the same time the redemption price is determined.

33
<PAGE>

The right to require the Funds to redeem their shares may be
suspended, or the date of payment may be postponed, whenever (1)
trading on the NYSE is restricted, as determined by the SEC, or the
NYSE is closed except for holidays and weekends, (2) the SEC permits
such suspension and so orders, or (3) an emergency exists as
determined by the SEC so that disposal of securities or determination
of NAV is not reasonably practicable.

34
<PAGE>
Income dividends, capital gains distributions and tax status

It is a policy of the Funds to make distributions of substantially all
of their investment income and any net realized capital gains. Any
capital gains realized during each fiscal year ended July 31, as
defined by the Code, are normally declared and payable to shareholders
in December. Growth Fund, Aggressive Growth Fund, Capital Appreciation
Fund, Strategic Value Fund, International Fund and Worldwide Fund
declare and make annual distributions of income (if any); Balanced
Fund, Equity Income Fund and Growth and Income Fund declare and make
quarterly distributions of income; and Flexible Income Fund declares
dividends daily and make monthly distributions of income. If a month
begins on a Saturday, Sunday or holiday, dividends for daily dividend
Funds for those days are declared at the end of the preceding month.
The Funds intend to qualify as regulated investment companies by
satisfying certain requirements prescribed by Subchapter M of the
Internal Revenue Code ("Code").

All income dividends and capital gains distributions, if any, on a
Fund's shares are reinvested automatically in additional shares of
that Fund at the NAV determined on the first business day following
the record date.

The Funds may purchase securities of certain foreign corporations
considered to be passive foreign investment companies by the IRS. In
order to avoid taxes and interest that must be paid by the Funds if
these instruments appreciate in value, the Funds may make various
elections permitted by the tax laws. However, these elections could
require that the Funds recognize taxable income, which in turn must be
distributed.

Some foreign securities purchased by the Funds may be subject to
foreign taxes which could reduce the yield on such securities. The
amount of such foreign taxes is expected to be insignificant. The
Funds may from year to year make the election permitted under Section
853 of the Code to pass through such taxes to shareholders. If such
election is not made, any foreign taxes paid or accrued will represent
an expense to each Fund which will reduce its investment company
taxable income.

Income dividends or capital gains distributions made by the shares of
a Fund purchased through a qualified retirement plan will generally be
exempt from current taxation if left to accumulate within the
qualified plan. Generally, withdrawals from qualified plans may be
subject to ordinary income tax and, if made before age 59 1/2, a 10%
penalty tax. The tax status of your investment depends on the features
of your qualified plan. For further information, please contact your
plan sponsor.

35
<PAGE>
Miscellaneous information

Each Fund is a series of the Trust, an open-end management investment
company registered under the 1940 Act and organized as a Delaware
business trust on March 22, 2000. As of the date of this SAI, the
Trust is offering eleven series of shares, known as "Funds," each of
which consists of one class of shares. Additional series and/or
classes may be created from time to time.

Ten of the Funds (listed below) were formed from the reorganization of
the Retirement Shares of corresponding Portfolios of Janus Aspen
Series into the Funds on July 31, 2000. Strategic Value Fund is a
newly organized fund.

<TABLE>
<CAPTION>
PREDECESSOR FUND (EACH A PORTFOLIO OF JANUS ASPEN SERIES) FUND
--------------------------------------------------------- ----
<S> <C>
Growth Portfolio - Retirement Shares Janus Adviser Growth Fund
Aggressive Growth Portfolio - Retirement Shares Janus Adviser Aggressive Growth Fund
Capital Appreciation Portfolio - Retirement Shares Janus Adviser Capital Appreciation Fund
Balanced Portfolio - Retirement Shares Janus Adviser Balanced Fund
Equity Income Portfolio - Retirement Shares Janus Adviser Equity Income Fund
Growth and Income Portfolio - Retirement Shares Janus Adviser Growth and Income Fund
International Growth Portfolio - Retirement Shares Janus Adviser International Fund
Worldwide Growth Portfolio - Retirement Shares Janus Adviser Worldwide Fund
Flexible Income Portfolio - Retirement Shares Janus Adviser Flexible Income Fund
Money Market Portfolio - Retirement Shares Janus Adviser Money Market Fund
</TABLE>

SHARES OF THE TRUST

The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $.001 per share for each
series of the Trust. Shares of each Fund are fully paid and
nonassessable when issued. Shares of a Fund participate equally in
dividends and other distributions by the shares of such Fund, and in
residual assets of that Fund in the event of liquidation. Shares of
each Fund have no preemptive, conversion or subscription rights.

SHAREHOLDER MEETINGS

The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for a specific Fund or for the
Trust as a whole for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies,
or for any other purpose requiring a shareholder vote under the 1940
Act. Separate votes are taken by each Fund or class only if a matter
affects or requires the vote of only that Fund or class or that Fund's
or class' interest in the matter differs from the interest of other
Funds of the Trust. A shareholder is entitled to one vote for each
share owned.

VOTING RIGHTS

The Trustees are responsible for major decisions relating to each
Fund's policies and objectives; the Trustees oversee the operation of
each Fund by its officers and review the investment decisions of the
officers.

The present Trustees were elected by the initial trustee of the Trust
on April 3, 2000, and were approved by the initial shareholder on
July 31, 2000. Under the Trust Instrument, each Trustee will continue
in office until the termination of the Trust or his earlier death,
retirement, resignation, bankruptcy, incapacity or removal. Vacancies
will be filled by a majority of the remaining Trustees, subject to the
1940 Act. Therefore, no annual or regular meetings of shareholders
normally will be held, unless otherwise required by the Trust
Instrument or the 1940 Act. Subject to the foregoing, shareholders
have the power to vote to elect or remove Trustees, to terminate or
reorganize their Fund, to amend the Trust Instrument, to bring

36
<PAGE>

certain derivative actions and on any other matters on which a
shareholder vote is required by the 1940 Act, the Trust Instrument,
the Trust's Bylaws or the Trustees.

As mentioned above in "Shareholder Meetings," each share of each
series of the Trust has one vote (and fractional votes for fractional
shares). Shares of all series of the Trust have noncumulative voting
rights, which means that the holders of more than 50% of the shares of
all series of the Trust voting for the election of Trustees can elect
100% of the Trustees if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any
Trustees.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 1670 Broadway, Suite 1000, Denver,
Colorado 80202, independent accountants for the Funds, audit the
Funds' annual financial statements and prepare their tax returns.

REGISTRATION STATEMENT

The Trust has filed with the SEC, Washington, D.C., a Registration
Statement under the Securities Act of 1933, as amended, with respect
to the securities to which this SAI relates. If further information is
desired with respect to the Funds or such securities, reference is
made to the Registration Statement and the exhibits filed as a part
thereof.

37
<PAGE>
Performance information

Quotations of average annual total return for the shares of a Fund
will be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the shares of such Fund over
periods of 1, 5, and 10 years (up to the life of the Fund). These are
the annual total rates of return that would equate the initial amount
invested to the ending redeemable value. These rates of return are
calculated pursuant to the following formula: P(1 + T)(n) = ERV (where
P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the
period). All total return figures reflect the deduction of a
proportional share of expenses of the shares of a Fund on an annual
basis, and assume that all dividends and distributions are reinvested
when paid.

These Funds commenced operations on August 1, 2000, after the
reorganization of the Retirement Shares of corresponding portfolios of
Janus Aspen Series ("predecessor funds") into the Funds. The following
returns reflect the performance of the Retirement Shares of the
predecessor funds prior to that date. The performance of the
Retirement Shares prior to May 1, 1997 reflects the performance of a
different class of the predecessor funds restated to reflect the fees
and expenses of the Retirement Shares on May 1, 1997, ignoring any fee
and expense limitations.

<TABLE>
<CAPTION>
Average Annual Total Return
--------------------------------------------
Life of
Inception Number Fund
Date of Months One Five Ten (including
Fund Name (of predecessor fund) in Lifetime Year Years Years predecessor fund)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Fund 9/13/93 75.5 43.98% 29.25% N/A 23.49%
Aggressive Growth Fund 9/13/93 75.5 124.34% 35.47% N/A 33.53%
Capital Appreciation Fund 5/1/97 32 66.16% N/A N/A 56.43%
Balanced Fund 9/13/93 75.5 26.13% 23.98% N/A 19.82%
Equity Income Fund 5/1/97 32 40.94% N/A N/A 46.15%
Growth and Income Fund 5/1/98 20 73.20% N/A N/A 54.57%
International Fund 5/2/94 68 81.32% 32.06% N/A 27.11%
Worldwide Fund 9/13/93 75.5 63.66% 32.78% N/A 28.77%
Flexible Income Fund 9/13/93 75.5 0.90% 10.24% N/A 7.89%
</TABLE>

Yield quotations for a Fund are based on the investment income per
share earned during a particular 30-day period (including dividends,
if any, and interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net investment
income by the net asset value per share on the last day of the period,
according to the following formula:

YIELD = 2[(a - b + 1)(6) - 1]
-----
cd

where a = dividend and interest income
b = expenses accrued for the period (net of reimbursements)
c = average daily number of shares outstanding during the period
that were entitled to receive dividends
d = maximum net asset value per share on the last day of the
period

The yield for the 30-day period ending December 31, 1999, for the
predecessor fund of Flexible Income Fund is shown below:

<TABLE>
<S> <C>
Flexible Income Fund 7.56%
</TABLE>

From time to time in advertisements or sales material, the Funds may
discuss their performance ratings or other information as published by
recognized mutual fund statistical rating services, including, but not

38
<PAGE>

limited to, Lipper Analytical Services, Inc. ("Lipper"), Ibbotson
Associates, Micropal or Morningstar, Inc. ("Morningstar") or by
publications of general interest such as Forbes, Money, The Wall
Street Journal, Mutual Funds Magazine, Kiplinger's or Smart Money. The
Funds may also compare their performance to that of other selected
mutual funds (for example, peer groups created by Lipper or
Morningstar), mutual fund averages or recognized stock market
indicators, including, but not limited to, the Standard & Poor's 500
Composite Stock Price Index, the Standard & Poor's MidCap 400 Index,
the Dow Jones Industrial Average, the Lehman Brothers
Government/Corporate Bond Index, the Lehman Brothers
Government/Corporate 1-3 Year Bond Index, the Lehman Brothers Long
Government/Corporate Bond Index, the Lehman Brothers Intermediate
Government Bond Index, the Lehman Brothers Municipal Bond Index, the
Russell 2000 Index and the NASDAQ composite. In addition, the Funds
may compare their total return or yield to the yield on U.S. Treasury
obligations and to the percentage change in the Consumer Price Index.
Worldwide Fund and International Fund may also compare their
performance to the record of global market indicators, such as the
Morgan Stanley Capital International World Index. Such performance
ratings or comparisons may be made with funds that may have different
investment restrictions, objectives, policies or techniques than the
Funds and such other funds or market indicators may be comprised of
securities that differ significantly from the Funds' investments.

39
<PAGE>

Financial statements

The Janus Adviser Series commenced operations on August 1, 2000, after
the reorganization of the Retirement Shares of Janus Aspen Series into
the Funds. The following audited financial statements for Janus Aspen
Series for the period ended December 31, 1999 are hereby incorporated
into this Statement of Additional Information by reference to the
Annual Report dated December 31, 1999. Financial statements are not
presented for Strategic Value Fund because it is a newly organized
Fund.

DOCUMENTS INCORPORATED BY REFERENCE TO THE ANNUAL REPORT

Schedules of Investments as of December 31, 1999

Statements of Operations for the period ended December 31, 1999

Statements of Assets and Liabilities as of December 31, 1999

Statements of Changes in Net Assets for the periods ended December 31,
1999 and 1998

Financial Highlights for each of the periods indicated

Notes to Financial Statements

Report of Independent Accountants

The portions of the Annual Report that are not specifically listed
above are not incorporated by reference into this Statement of
Additional Information and are not part of the Registration Statement.

40
<PAGE>
Appendix A

EXPLANATION OF RATING CATEGORIES

STANDARD & POOR'S
RATINGS SERVICES

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB -- lowest degree of speculation; C -- the highest degree
of speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>

MOODY'S INVESTORS SERVICE, INC.

41
<PAGE>

Unrated securities will be treated as noninvestment grade securities
unless the portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.

42
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This page intentionally left blank.
<PAGE>

LOGO

1-800-525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
<PAGE>

The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
is not permitted.

[JANUS LOGO]

Subject to Completion

Preliminary Statement of Additional Information Dated June 12, 2000

Janus Adviser Series

Money Market Fund

100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020

Statement of Additional Information

July 31, 2000

This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the Money Market Fund. The Fund is a separate series of
Janus Adviser Series, a Delaware trust.

The shares of the Fund may be purchased only through
institutional channels such as qualified and non-qualified
retirement and pension plans, bank trust departments, brokers,
financial advisers and other financial intermediaries.

This SAI is not a Prospectus and should be read in conjunction
with the Prospectus dated July 31, 2000, which is incorporated
by reference into this SAI and may be obtained from your plan
sponsor, broker or other financial intermediary. This SAI
contains additional and more detailed information about the
Fund's operations and activities than the Prospectus.

<PAGE>

[JANUS LOGO]
<PAGE>

Table of contents

<TABLE>
<S> <C>
Investment Restrictions and
Investment Strategies....................................... 2
Performance Data............................................ 10
Determination of Net Asset Value............................ 12
Investment Adviser.......................................... 13
Custodian, Transfer Agent
and Certain Affiliations.................................... 15
Portfolio Transactions and Brokerage........................ 16
Trustees and Officers....................................... 17
Purchase of Shares.......................................... 21
Distribution Plan........................................... 22
Redemption of Shares........................................ 23
Dividends and Tax Status.................................... 24
Miscellaneous Information................................... 25
Shares of the Trust...................................... 25
Shareholder Meetings..................................... 25
Voting Rights............................................ 25
Independent Accountants.................................. 25
Registration Statement................................... 26
Financial Statements........................................ 27
Appendix A.................................................. 28
Description of Securities Ratings........................ 28
Appendix B.................................................. 30
Description of Municipal Securities...................... 30
</TABLE>

1
<PAGE>
Investment restrictions and investment strategies

INVESTMENT RESTRICTIONS

The Fund has adopted certain fundamental investment restrictions that
cannot be changed without shareholder approval. Shareholder approval
means approval by the lesser of (i) more than 50% of the outstanding
voting securities of the Trust (or the Fund or class of shares if a
matter affects just the Fund or class of shares), or (ii) 67% or more
of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Trust (or the
Fund or class of shares) are present or represented by proxy.

As used in the restrictions set forth below and as used elsewhere in
this SAI, the term "U.S. Government Securities" shall have the meaning
set forth in the Investment Company Act of 1940, as amended (the "1940
Act"). The 1940 Act defines U.S. Government Securities as securities
issued or guaranteed by the United States government, its agencies or
instrumentalities. U.S. Government Securities may also include
repurchase agreements collateralized and municipal securities escrowed
with or refunded with escrowed U.S. government securities.

The Fund has adopted the following fundamental policies:

(1) With respect to 75% of its assets, the Fund may not purchase a
security other than a U.S. Government Security, if, as a result, more
than 5% of its total assets would be invested in the securities of a
single issuer or the Fund would own more than 10% of the outstanding
voting securities of any single issuer. (As noted in the Prospectus,
the Fund is currently subject to the greater diversification standards
of Rule 2a-7, which are not fundamental.)

(2) The Fund may not purchase securities if 25% or more of the value
of its total assets would be invested in the securities of issuers
conducting their principal business activities in the same industry;
provided that: (i) there is no limit on investments in U.S. Government
Securities or in obligations of domestic commercial banks (including
U.S. branches of foreign banks subject to regulations under U.S. laws
applicable to domestic banks and, to the extent that its parent is
unconditionally liable for the obligation, foreign branches of U.S.
banks); (ii) this limitation shall not apply to the Fund's investments
in municipal securities; (iii) there is no limit on investment in
issuers domiciled in a single country; (iv) financial service
companies are classified according to the end users of their services
(for example, automobile finance, bank finance and diversified finance
are each considered to be a separate industry); and (v) utility
companies are classified according to their services (for example,
gas, gas transmission, electric, and telephone are each considered to
be a separate industry).

(3) The Fund may not act as an underwriter of securities issued by
others, except to the extent that it may be deemed an underwriter in
connection with the disposition of its portfolio securities.

(4) The Fund may not lend any security or make any other loan if, as a
result, more than 25% of its total assets would be lent to other
parties (but this limitation does not apply to purchases of commercial
paper, debt securities or repurchase agreements).

(5) The Fund may not purchase or sell real estate or any interest
therein, except that the Fund may invest in debt obligations secured
by real estate or interests therein or securities issued by companies
that invest in real estate or interests therein.

(6) The Fund may borrow money for temporary or emergency purposes (not
for leveraging) in an amount not exceeding 25% of the value of its
total assets (including the amount borrowed) less liabilities (other
than borrowings). If borrowings exceed 25% of the value of the Fund's
total assets by reason of a decline in net assets, it will reduce its
borrowings within three business days to the extent necessary to
comply with the 25% limitation. Reverse repurchase agreements or the
segregation of assets in connection with such agreements shall not be
considered borrowing for the purposes of this limit.

2
<PAGE>

(7) The Fund may, notwithstanding any other investment policy or
restriction (whether or not fundamental), invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
restrictions as the Fund.

Investment restriction (1) is intended to reflect the requirements
under Section 5(b)(1) of the 1940 Act for a diversified fund. Rule
2a-7 provides that money market funds that comply with the
diversification limits of Rule 2a-7 are deemed to comply with the
diversification limits of Section 5(b)(1). Thus, the Fund interprets
restriction (1) in accordance with Rule 2a-7. Accordingly, if
securities are subject to a guarantee provided by a non-controlled
person, the Rule 2a-7 diversification tests apply to the guarantor,
and the diversification test in restriction (1) does not apply to the
issuer.

The Fund has adopted the following nonfundamental investment
restrictions that may be changed by the Trustees without shareholder
approval:

(1) The Fund may not invest in securities or enter into repurchase
agreements with respect to any securities if, as a result, more than
10% of its net assets would be invested in repurchase agreements not
entitling the holder to payment of principal within seven days and in
other securities that are not readily marketable ("illiquid
securities"). The Trustees, or the Fund's investment adviser acting
pursuant to authority delegated by the Trustees, may determine that a
readily available market exists for certain securities such as
securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, or any successor to such rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation.

(2) The Fund may not purchase securities on margin, or make short
sales of securities, except for short sales against the box and the
use of short-term credit necessary for the clearance of purchases and
sales of portfolio securities.

(3) The Fund may not pledge, mortgage, hypothecate or encumber any of
its assets except to secure permitted borrowings or in connection with
permitted short sales.

(4) The Fund may not invest in companies for the purpose of exercising
control of management.

Under the terms of an exemptive order received from the Securities and
Exchange Commission ("SEC"), the Fund may borrow money from or lend
money to other funds that permit such transactions and for which Janus
Capital serves as investment adviser. All such borrowing and lending
will be subject to the above limits. The Fund will borrow money
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. The Fund
will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements). The Fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay
in repayment to a lending Fund could result in a lost investment
opportunity or additional borrowing costs.

For purposes of the Fund's policies on investing in particular
industries, the Fund will rely primarily on industry or industry group
classifications as published by Bloomberg L.P. To the extent that
Bloomberg L.P. industry classifications are so broad that the primary
economic characteristics in a single industry are materially
different, the Fund may further classify issuers in accordance with
industry classifications as published by the SEC.

3
<PAGE>

INVESTMENT STRATEGIES

The Fund may invest only in "eligible securities" as defined in Rule
2a-7 adopted under the 1940 Act. Generally, an eligible security is a
security that (i) is denominated in U.S. dollars and has a remaining
maturity of 397 days or less (as calculated pursuant to Rule 2a-7);
(ii) is rated, or is issued by an issuer with short-term debt
outstanding that is rated, in one of the two highest rating categories
by any two nationally recognized statistical rating organizations
("NRSROs") or, if only one NRSRO has issued a rating, by that NRSRO
(the "Requisite NRSROs") or is unrated and of comparable quality to a
rated security, as determined by Janus Capital; and (iii) has been
determined by Janus Capital to present minimal credit risks pursuant
to procedures approved by the Trustees. In addition, the Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or
less. A description of the ratings of some NRSROs appears in Appendix
A.

Under Rule 2a-7, the Fund may not invest more than five percent of its
total assets in the securities of any one issuer other than U.S.
Government Securities, provided that in certain cases it may invest
more than 5% of its assets in a single issuer for a period of up to
three business days. Investment in demand features, guarantees and
other types of instruments or features are subject to the
diversification limits under Rule 2a-7.

Pursuant to Rule 2a-7, the Fund will invest at least 95% of its total
assets in "first-tier" securities. First-tier securities are eligible
securities that are rated, or are issued by an issuer with short-term
debt outstanding that is rated, in the highest rating category by the
Requisite NRSROs or are unrated and of comparable quality to a rated
security. In addition, the Fund may invest in "second-tier" securities
which are eligible securities that are not first-tier securities.
However, the Fund may not invest in a second-tier security if
immediately after the acquisition thereof it would have invested more
than (i) the greater of one percent of its total assets or one million
dollars in second-tier securities issued by that issuer, or (ii) five
percent of its total assets in second-tier securities.

The following discussion of types of securities in which the Fund may
invest supplements and should be read in conjunction with the
Prospectus.

Participation Interests

The Fund may purchase participation interests in loans or securities
in which it may invest directly. Participation interests are generally
sponsored or issued by banks or other financial institutions. A
participation interest gives the Fund an undivided interest in the
underlying loans or securities in the proportion that the Fund's
interest bears to the total principal amount of the underlying loans
or securities. Participation interests, which may have fixed, floating
or variable rates, may carry a demand feature backed by a letter of
credit or guarantee of a bank or institution permitting the holder to
tender them back to the bank or other institution. For certain
participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or a part of the
Fund's participation interest. The Fund intends to exercise any demand
rights it may have upon default under the terms of the loan or
security, to provide liquidity or to maintain or improve the quality
of the Fund's investment portfolio. The Fund will only purchase
participation interests that Janus Capital determines present minimal
credit risks.

Variable and Floating Rate Notes

The Fund also may purchase variable and floating rate demand notes of
corporations, which are unsecured obligations redeemable upon not more
than 30 days' notice. These obligations include master demand notes
that permit investment of fluctuating amounts at varying rates of
interest pursuant to direct arrangements with the issuer of the
instrument. The issuer of these obligations often has the right, after
a

4
<PAGE>

given period, to prepay the outstanding principal amount of the
obligations upon a specified number of days' notice. These obligations
generally are not traded, nor generally is there an established
secondary market for these obligations. To the extent a demand note
does not have a seven day or shorter demand feature and there is no
readily available market for the obligation, it is treated as an
illiquid investment.

Securities with ultimate maturities of greater than 397 days may be
purchased only pursuant to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features which comply with
certain requirements and certain variable rate U.S. Government
Securities may be purchased. The rate of interest on securities
purchased by the Fund may be tied to short-term Treasury or other
government securities or indices on securities that are permissible
investments of the Fund, as well as other money market rates of
interest. The Fund will not purchase securities whose values are tied
to interest rates or indices that are not appropriate for the duration
and volatility standards of a money market fund.

Mortgage- and Asset-Backed Securities

The Fund may invest in mortgage-backed securities, which represent an
interest in a pool of mortgages made by lenders such as commercial
banks, savings and loan institutions, mortgage bankers, mortgage
brokers and savings banks. Mortgage-backed securities may be issued by
governmental or government-related entities or by non-governmental
entities such as banks, savings and loan institutions, private
mortgage insurance companies, mortgage bankers and other secondary
market issuers.

Interests in pools of mortgage-backed securities differ from other
forms of debt securities which normally provide for periodic payment
of interest in fixed amounts with principal payments at maturity or
specified call dates. In contrast, mortgage-backed securities provide
periodic payments which consist of interest and, in most cases,
principal. In effect, these payments are a "pass-through" of the
periodic payments and optional prepayments made by the individual
borrowers on their mortgage loans, net of any fees paid to the issuer
or guarantor of such securities. Additional payments to holders of
mortgage-backed securities are caused by prepayments resulting from
the sale of the underlying residential property, refinancing or
foreclosure, net of fees or costs which may be incurred.

As prepayment rates of individual pools of mortgage loans vary widely,
it is not possible to predict accurately the average life of a
particular security. Although mortgage-backed securities are issued
with stated maturities of up to forty years, unscheduled or early
payments of principal and interest on the underlying mortgages may
shorten considerably the effective maturities. Mortgage-backed
securities may have varying assumptions for average life. The volume
of prepayments of principal on a pool of mortgages underlying a
particular security will influence the yield of that security, and the
principal returned to the Fund may be reinvested in instruments whose
yield may be higher or lower than that which might have been obtained
had the prepayments not occurred. When interest rates are declining,
prepayments usually increase, with the result that reinvestment of
principal prepayments will be at a lower rate than the rate applicable
to the original mortgage-backed security.

The Fund may invest in mortgage-backed securities that are issued by
agencies or instrumentalities of the U.S. government. Ginnie Mae is
the principal federal government guarantor of mortgage-backed
securities. Ginnie Mae is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. Ginnie Mae
Certificates are debt securities which represent an interest in one
mortgage or a pool of mortgages which are insured by the Federal
Housing Administration or the Farmers Home Administration or are
guaranteed by the Veterans Administration. The Fund may also invest in
pools of conventional mortgages which are issued or guaranteed by
agencies of the U.S. government. Ginnie Mae pass-through securities
are considered to be riskless with respect to default in that (i) the
underlying

5
<PAGE>

mortgage loan portfolio is comprised entirely of government-backed
loans and (ii) the timely payment of both principal and interest on
the securities is guaranteed by the full faith and credit of the U.S.
government, regardless of whether or not payments have been made on
the underlying mortgages. Ginnie Mae pass-through securities are,
however, subject to the same market risk as comparable debt
securities. Therefore, the market value of the Fund's Ginnie Mae
securities can be expected to fluctuate in response to changes in
prevailing interest rate levels.

Residential mortgage loans are pooled also by Freddie Mac. Freddie Mac
is a privately managed, publicly chartered agency created by Congress
in 1970 for the purpose of increasing the availability of mortgage
credit for residential housing. Freddie Mac issues participation
certificates ("PCs") which represent interests in mortgages from
Freddie Mac's national portfolio. The mortgage loans in Freddie Mac's
portfolio are not U.S. government backed; rather, the loans are either
uninsured with loan-to-value ratios of 80% or less, or privately
insured if the loan-to-value ratio exceeds 80%. Freddie Mac guarantees
the timely payment of interest and ultimate collection of principal on
Freddie Mac PCs; the U.S. government does not guarantee any aspect of
Freddie Mac PCs.

Fannie Mae is a government-sponsored corporation owned entirely by
private shareholders. It is subject to general regulation by the
Secretary of Housing and Urban Development. Fannie Mae purchases
residential mortgages from a list of approved seller/servicers which
include savings and loan associations, savings banks, commercial
banks, credit unions and mortgage bankers. Fannie Mae guarantees the
timely payment of principal and interest on the pass-through
securities issued by Fannie Mae; the U.S. government does not
guarantee any aspect of the Fannie Mae pass-through securities.

The Fund may also invest in privately-issued mortgage-backed
securities to the extent permitted by their investment restrictions.
Mortgage-backed securities offered by private issuers include
pass-through securities comprised of pools of conventional residential
mortgage loans; mortgage-backed bonds which are considered to be debt
obligations of the institution issuing the bonds and which are
collateralized by mortgage loans; and collateralized mortgage
obligations ("CMOs") which are collateralized by mortgage-backed
securities issued by Ginnie Mae, Freddie Mac or Fannie Mae or by pools
of conventional mortgages.

Asset-backed securities represent direct or indirect participation in,
or are secured by and payable from, assets other than mortgage-backed
assets such as motor vehicle installment sales contracts, installment
loan contracts, leases of various types of real and personal property
and receivables from revolving credit agreements (credit cards).
Asset-backed securities have yield characteristics similar to those of
mortgage-backed securities and, accordingly, are subject to many of
the same risks.

Securities Lending

The Fund may lend securities to qualified parties (typically brokers
or other financial institutions) who need to borrow securities in
order to complete certain transactions such as covering short sales,
avoiding failures to deliver securities or completing arbitrage
activities. The Fund may seek to earn additional income through
securities lending. Since there is the risk of delay in recovering a
loaned security or the risk of loss in collateral rights if the
borrower fails financially, securities lending will only be made to
parties that Janus Capital deems creditworthy and in good standing. In
addition, such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Fund will not
have the right to vote on securities while they are being lent, but it
will call a loan in anticipation of any important vote. All loans will
be continuously secured by collateral which consists of cash, U.S.
government securities, letters of credit and such other collateral
permitted by the Securities and Exchange

6
<PAGE>

Commission and policies approved by the Trustees. Cash collateral may
be invested in money market funds advised by Janus to the extent
consistent with exemptive relief obtained from the SEC.

Reverse Repurchase Agreements

Reverse repurchase agreements are transactions in which the Fund sells
a security and simultaneously commits to repurchase that security from
the buyer at an agreed upon price on an agreed upon future date. The
resale price in a reverse repurchase agreement reflects a market rate
of interest that is not related to the coupon rate or maturity of the
sold security. For certain demand agreements, there is no agreed upon
repurchase date and interest payments are calculated daily, often
based upon the prevailing overnight repurchase rate. The Fund will use
the proceeds of reverse repurchase agreements only to satisfy
unusually heavy redemption requests or for other temporary or
emergency purposes without the necessity of selling portfolio
securities.

Generally, a reverse repurchase agreement enables the Fund to recover
for the term of the reverse repurchase agreement all or most of the
cash invested in the portfolio securities sold and to keep the
interest income associated with those portfolio securities. Such
transactions are only advantageous if the interest cost to the Fund of
the reverse repurchase transaction is less than the cost of obtaining
the cash otherwise. In addition, interest costs on the money received
in a reverse repurchase agreement may exceed the return received on
the investments made by the Fund with those monies.

When Issued and Delayed Delivery Securities

The Fund may purchase securities on a when-issued or delayed delivery
basis. The Fund will enter into such transactions only when it has the
intention of actually acquiring the securities. To facilitate such
acquisitions, the Fund's custodian will segregate cash or high quality
liquid assets in an amount at least equal to such commitments. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities, sales of the segregated securities or
from other available sources of cash. If it chooses to dispose of the
right to acquire a when-issued security prior to its acquisition, the
Fund could, as with the disposition of any other portfolio obligation,
incur a gain or loss due to market fluctuation. At the time Fund will
record the transaction as a purchase and thereafter reflect the value
of such securities in determining its net asset value.

Investment Company Securities

From time to time, the Fund may invest in securities of other
investment companies. The Fund is subject to the provisions of Section
12(d)(1) of the 1940 Act. The Fund may invest in securities of money
market funds managed by Janus Capital in excess of the limitations of
Section 12(d)(1) under the terms of an SEC exemptive order obtained by
Janus Capital and the Janus Funds.

Debt Obligations

Money Market Fund may invest in U.S. dollar denominated debt
obligations. In general, sales of these securities may not be made
absent registration under the Securities Act of 1933 or the
availability of an appropriate exemption. Pursuant to Section 4(2) of
the 1933 Act or Rule 144A adopted under the 1933 Act, however, some of
these securities are eligible for resale to institutional investors,
and accordingly, Janus Capital may determine that a liquid market
exists for such a security pursuant to guidelines adopted by the
Trustees.

7
<PAGE>

Obligations of Financial Institutions

The Fund may invest in obligations of financial institutions. Examples
of obligations in which the Fund may invest include negotiable
certificates of deposit, bankers' acceptances, time deposits and other
obligations of U.S. banks (including savings and loan associations)
having total assets in excess of one billion dollars and U.S. branches
of foreign banks having total assets in excess of ten billion dollars.
The Fund may also invest in Eurodollar and Yankee bank obligations as
discussed below and other U.S. dollar-denominated obligations of
foreign banks having total assets in excess of ten billion dollars
that Janus Capital believes are of an investment quality comparable to
obligations of U.S. banks in which the Fund may invest.

Certificates of deposit represent an institution's obligation to repay
funds deposited with it that earn a specified interest rate over a
given period. Bankers' acceptances are negotiable obligations of a
bank to pay a draft which has been drawn by a customer and are usually
backed by goods in international trade. Time deposits are
non-negotiable deposits with a banking institution that earn a
specified interest rate over a given period. Fixed time deposits,
which are payable at a stated maturity date and bear a fixed rate of
interest, generally may be withdrawn on demand by the Fund but may be
subject to early withdrawal penalties and that could reduce the Fund's
yield. Unless there is a readily available market for them, time
deposits that are subject to early withdrawal penalties and that
mature in more than seven days will be treated as illiquid securities.

Eurodollar bank obligations are dollar-denominated certificates of
deposit or time deposits issued outside the U.S. capital markets by
foreign branches of U.S. banks and by foreign banks. Yankee bank
obligations are dollar-denominated obligations issued in the U.S.
capital markets by foreign banks.

U.S. Government Securities

Money Market Fund may invest in U.S. Government Securities. U.S.
Government Securities shall have the meaning set forth in the 1940
Act. The 1940 Act defines U.S. Government Securities to include
securities issued or guaranteed by the U.S. Government, its agencies
and instrumentalities. U.S. Government Securities may also include
repurchase agreements collateralized by and municipal securities
escrowed with or refunded with U.S. government securities. U.S.
Government Securities in which the Fund may invest include U.S.
Treasury securities and obligations issued or guaranteed by U.S.
government agencies and instrumentalities that are backed by the full
faith and credit of the U.S. government, such as those guaranteed by
the Small Business Administration or issued by the Government National
Mortgage Association. In addition, U.S. Government Securities in which
the Fund may invest include securities supported primarily or solely
by the creditworthiness of the issuer, such as securities of the
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation and the Tennessee Valley Authority. There is no guarantee
that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to
maturity, they may involve more risk than securities backed by the
full faith and credit of the U.S. government.

8
<PAGE>

Municipal Leases

The Fund may invest in municipal leases. Municipal leases frequently
have special risks not normally associated with general obligation or
revenue bonds. Municipal leases are municipal securities which may
take the form of a lease or an installment purchase or conditional
sales contract. Municipal leases are issued by state and local
governments and authorities to acquire a wide variety of equipment and
facilities. Leases and installment purchase or conditional sale
contracts (which normally provide for title to the leased asset to
pass eventually to the government issuer) have evolved as a means for
governmental issuers to acquire property and equipment without meeting
the constitutional and statutory requirements for the issuance of
debt. The debt-issuance limitations of many state constitutions and
statutes are deemed to be inapplicable because of the inclusion in
many leases or contracts of "non-appropriation" clauses that provide
that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such
purpose by the appropriate legislative body on a yearly or other
periodic basis. The Fund will only purchase municipal leases subject
to a non-appropriation clause when the payment of principal and
accrued interest is backed by an unconditional irrevocable letter of
credit, or guarantee of a bank or other entity that meets the criteria
described in the Prospectus under "Taxable Investments."

In evaluating municipal lease obligations, Janus Capital will consider
such factors as it deems appropriate, including: (a) whether the lease
can be canceled; (b) the ability of the lease obligee to direct the
sale of the underlying assets; (c) the general creditworthiness of the
lease obligor; (d) the likelihood that the municipality will
discontinue appropriating funding for the leased property in the event
such property is no longer considered essential by the municipality;
(e) the legal recourse of the lease obligee in the event of such a
failure to appropriate funding; (f) whether the security is backed by
a credit enhancement such as insurance; and (g) any limitations which
are imposed on the lease obligor's ability to utilize substitute
property or services other than those covered by the lease obligation.
If a lease is backed by an unconditional letter of credit or other
unconditional credit enhancement, then Janus Capital may determine
that a lease is an eligible security solely on the basis of its
evaluation of the credit enhancement.

Municipal leases, like other municipal debt obligations, are subject
to the risk of non-payment. The ability of issuers of municipal leases
to make timely lease payments may be adversely impacted in general
economic downturns and as relative governmental cost burdens are
allocated and reallocated among federal, state and local governmental
units. Such non-payment would result in a reduction of income to the
Fund, and could result in a reduction in the value of the municipal
lease experiencing non-payment and a potential decrease in the net
asset value of the Fund.

9
<PAGE>
Performance data

The Fund may provide current annualized and effective annualized yield
quotations of the Fund based on the Fund's daily dividends. These
quotations may from time to time be used in advertisements,
shareholder reports or other communications to shareholders. All
performance information supplied by the Fund in advertising is
historical and is not intended to indicate future returns.

In performance advertising, the Fund may compare any of its
performance information with data published by independent evaluators
such as Morningstar, Inc., Lipper Analytical Services, Inc., or
CDC/Wiesenberger, Donoghue's Money Fund Report or other companies
which track the investment performance of investment companies ("Fund
Tracking Companies"). The Fund may also compare its performance
information with the performance of recognized stock, bond and other
indices, including but not limited to the Municipal Bond Buyers
Indices, the Salomon Brothers Bond Index, the Lehman Brothers Bond
Index, the Standard & Poor's 500 Composite Stock Price Index, the Dow
Jones Industrial Average, U.S. Treasury bonds, bills or notes and
changes in the Consumer Price Index as published by the U.S.
Department of Commerce. The Fund may refer to general market
performance over past time periods such as those published by Ibbotson
Associates (for instance, its "Stocks, Bonds, Bills and Inflation
Yearbook"). The Fund may also refer in such materials to mutual fund
performance rankings and other data published by Fund Tracking
Companies. Performance advertising may also refer to discussions of
the Fund and comparative mutual fund data and ratings reported in
independent periodicals, such as newspapers and financial magazines.

Any current yield quotation of the Fund's shares which is used in such
a manner as to be subject to the provisions of Rule 482(d) under the
Securities Act of 1933, as amended, shall consist of an annualized
historical yield, carried at least to the nearest hundredth of one
percent, based on a specific seven calendar day period. The current
yield of the Fund's shares shall be calculated by (a) determining the
net change during a seven calendar day period in the value of a
hypothetical account having a balance of one share at the beginning of
the period, (b) dividing the net change by the value of the account at
the beginning of the period to obtain a base period return, and (c)
multiplying the quotient by 365/7 (i.e., annualizing). For this
purpose, the net change in account value will reflect the value of
additional shares purchased with dividends declared on the original
share and dividends declared on both the original share and any such
additional shares, but will not reflect any realized gains or losses
from the sale of securities or any unrealized appreciation or
depreciation on portfolio securities. In addition, the Fund may
advertise effective yield quotations. Effective yield quotations are
calculated by adding 1 to the base period return, raising the sum to a
power equal to 365/7, and subtracting 1 from the result (i.e.,
compounding).

Income calculated for the purpose of determining the yield of the
Fund's shares differs from income as determined for other accounting
purposes. Because of the different accounting methods used, and
because of the compounding assumed in yield calculations, the yield
quoted for the Fund's shares may differ from the rate of distribution
the Fund paid over the same period or the rate of income reported in
the Fund's financial statements.

10
<PAGE>

Although published yield information is useful to investors in
reviewing the performance of the Fund's shares, investors should be
aware that the yield fluctuates from day to day and that the Fund's
yield for any given period is not an indication or representation by
the Fund of future yields or rates of return on the Fund's shares. The
Fund's yield is not fixed or guaranteed, and an investment in the Fund
is not insured. Accordingly, the Fund's yield information may not
necessarily be used to compare Fund shares with investment
alternatives which, like money market instruments or bank accounts,
may provide a fixed rate of interest. In addition, because investments
in the Fund are not insured or guaranteed, the yield information may
not necessarily be used to compare the Fund with investment
alternatives which are insured or guaranteed.

The Fund commenced operations on August 1, 2000 after the
reorganization of the Retirement Shares of Janus Aspen Series Money
Market Portfolio into the Fund. The following yields reflect the
performance of Janus Aspen Series Money Market Portfolio Retirement
Shares prior to that date. The current yield and effective yield for
the seven day period ended December 31, 1999, were 5.20% and 5.33%,
respectively.

11
<PAGE>
Determination of net asset value

Pursuant to the rules of the SEC, the Trustees have established
procedures to stabilize the Fund's net asset value at $1.00 per share.
These procedures include a review of the extent of any deviation of
net asset value per share as a result of fluctuating interest rates,
based on available market rates, from the Fund's $1.00 amortized cost
price per share. Should that deviation exceed 1/2 of 1%, the Trustees
will consider whether any action should be initiated to eliminate or
reduce material dilution or other unfair results to shareholders. Such
action may include redemption of shares in kind, selling portfolio
securities prior to maturity, reducing or withholding dividends and
utilizing a net asset value per share as determined by using available
market quotations. The Fund i) will maintain a dollar-weighted average
portfolio maturity of 90 days or less; ii) will not purchase any
instrument with a remaining maturity greater than 397 days or subject
to a repurchase agreement having a duration of greater than 397 days;
iii) will limit portfolio investments, including repurchase
agreements, to those U.S. dollar-denominated instruments that Janus
Capital has determined present minimal credit risks pursuant to
procedures established by the Trustees; and iv) will comply with
certain reporting and recordkeeping procedures. The Trust has also
established procedures to ensure that portfolio securities meet the
Fund's high quality criteria.

12
<PAGE>
Investment adviser

As stated in the Prospectus, the Fund has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado
80206-4928. The Advisory Agreement provides that Janus Capital will
furnish continuous advice and recommendations concerning the Fund's
investments, provide office space for the Fund and pay the salaries,
fees and expenses of all Fund officers and of those Trustees who are
affiliated with Janus Capital. Janus Capital also may make payments to
selected broker-dealer firms or institutions which were instrumental
in the acquisition of shareholders for the Fund or which performed
services with respect to shareholder accounts. The minimum aggregate
size required for eligibility for such payments, and the factors in
selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital. Janus
Capital is also authorized to perform the management and
administrative services necessary for the operation of the Fund.

Retirement plan service providers, brokers, bank trust departments,
financial advisers and other financial intermediaries may receive fees
from the Fund's service providers for providing recordkeeping,
subaccounting and other administrative services to their customers in
connection with investment in the Fund.

The Fund pays custodian agent fees and expenses, brokerage commissions
and dealer spreads and other expenses in connection with the execution
of portfolio transactions, legal and accounting expenses, interest and
taxes, registration fees, expenses of shareholders' meetings, and
reports to shareholders, fees and expenses of Trustees who are not
affiliated with Janus Capital, and other costs of complying with
applicable laws regulating the sale of Fund shares. Pursuant to the
Advisory Agreement, Janus Capital furnishes certain other services,
including net asset value determination, portfolio accounting and
record keeping for which the Fund may reimburse Janus Capital for its
costs.

The Fund has agreed to compensate Janus Capital for its advisory
services by the monthly payment of a fee at the annual rate of 0.25%
of the Fund's average daily net assets. The advisory fee is calculated
daily and paid monthly.

Until, at least, July 31, 2003, provided Janus Capital remains
investment adviser to the Fund, Janus Capital has agreed to reimburse
the Fund by the amount, if any, that such Fund's normal operating
expenses in any fiscal year, including the investment advisory fee,
but excluding the distribution fee, administration fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed 0.36%
of average daily net assets.

The Advisory Agreement is dated April 3, 2000 and will continue in
effect until July 1, 2001, and thereafter from year to year so long as
such continuance is approved annually by a majority of the Fund's
Trustees who are not parties to the Advisory Agreement or interested
persons of any such party, and by either a majority of the outstanding
voting shares or the Trustees. The Advisory Agreement i) may be
terminated without the payment of any penalty by the Fund or Janus
Capital on 60 days' written notice; ii) terminates automatically in
the event of its assignment; and iii) generally, may not be amended
without the approval by vote of a majority of the Trustees, including
the Trustees who are not interested persons of the Fund or Janus
Capital and, to the extent required by the 1940 Act, the vote of a
majority of the outstanding voting securities of the Fund.

Janus Capital also acts as sub-advisor for a number of private-label
mutual funds and provides separate account advisory services for
institutional accounts. Investment decisions for each account managed
by Janus Capital, including the Fund, are made independently from
those for any other account that is or may in the future become
managed by Janus Capital or its affiliates. If, however, a number of
accounts managed by Janus Capital are contemporaneously engaged in the
purchase or sale of the same security, the orders may be aggregated
and/or the transactions may be averaged as to price and allocated
equitably to

13
<PAGE>

each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position
obtained or liquidated for an account. Pursuant to an exemptive order
granted by the SEC, the Funds and other funds advised by Janus Capital
may also transfer daily uninvested cash balances into one or more
joint trading accounts. Assets in the joint trading accounts are
invested in money market instruments and the proceeds are allocated to
the participating funds on a pro rata basis.

KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in 2000.

Each account managed by Janus Capital has its own investment objective
and is managed in accordance with that objective by a particular
portfolio manager or team of portfolio managers. As a result, from
time to time two or more different managed accounts may pursue
divergent investment strategies with respect to investments or
categories of investments.

The portfolio manager is not permitted to purchase and sell securities
for his own accounts except under the limited exceptions contained in
the Fund's Code of Ethics. The Fund's Code of Ethics is on file with
and available from the SEC through the SEC Web site at www.sec.gov.
The Code of Ethics applies to Directors/Trustees of Janus Capital and
the Fund, and employees of Janus Capital and the Trust and requires
investment personnel and officers of Janus Capital, inside
Directors/Trustees of Janus Capital and the Fund and certain other
designated employees deemed to have access to current trading
information to pre-clear all transactions in securities not otherwise
exempt under the Code of Ethics. Requests for trading authorization
will be denied when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the Code of Ethics
or would be deemed to adversely affect any transaction known to be
under consideration for or to have been effected on behalf of any
client account, including the Fund.

The provisions of the Code of Ethics are administered by and subject
to exceptions authorized by Janus Capital.

14
<PAGE>
Custodian, transfer agent and certain affiliations

Citibank, N.A., 111 Wall Street, 24th Floor, Zone 5, New York, NY
10043, is the Fund's custodian. The custodian holds the Fund's assets
in safekeeping and collects and remits the income thereon, subject to
the instructions of the Fund.

Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the Fund's
transfer agent. In addition, Janus Service provides certain other
administrative, recordkeeping and shareholder relations services for
the Fund. Janus Service receives an administrative services fee at an
annual rate of up to 0.25% of the average daily net assets of the
initial class of the Fund for providing or procuring recordkeeping,
subaccounting and other administrative services to investors in the
shares of the Fund. Janus Service expects to use a significant portion
of this fee to compensate retirement plan service providers, brokers,
bank trust departments, financial advisers and other financial
intermediaries for providing these services (at an annual rate of up
to 0.25% of the average daily net assets of the shares attributable to
their customers). Services provided by these financial intermediaries
may include but are not limited to recordkeeping, processing and
aggregating purchase and redemption transactions, providing periodic
statements, forwarding prospectuses, shareholder reports and other
materials to existing customers, and other administrative services.

The Fund pays DST Systems, Inc., a minority owned subsidiary of KCSI,
license fees at the annual rate of $3.98 per shareholder account for
the use of DST's shareholder accounting system. The Fund also pays DST
$1.10 per closed shareholder account. The Fund pays DST for the use of
its portfolio and fund accounting system, a monthly fee of $250 to
$1,250, based on the number of Janus funds using the system and an
asset charge of $1 per million dollars of net assets (not to exceed
$500 per month).

The Trustees have authorized the Fund to use another affiliate of DST
as introducing broker for certain Fund transactions as a means to
reduce Fund expenses through credits against the charges of DST and
its affiliates with regard to commissions earned by such affiliate.
See "Portfolio Transactions and Brokerage."

Janus Distributors, Inc. ("Janus Distributors"), 100 Fillmore Street,
Denver, Colorado 80206-4928, a wholly-owned subsidiary of Janus
Capital, is a distributor of the Fund. Janus Distributors is
registered as a broker-dealer under the Securities Exchange Act of
1934 (the "Exchange Act") and is a member of the National Association
of Securities Dealers, Inc.

15
<PAGE>
Portfolio transactions and brokerage

Decisions as to the assignment of portfolio business for the Fund and
negotiation of its commission rates are made by Janus Capital whose
policy is to obtain the "best execution" (prompt and reliable
execution at the most favorable security price) of all portfolio
transactions.

The Fund generally buys and sells securities in principal and agency
transactions in which no commissions are paid. However, the Fund may
engage an agent and pay commissions for such transactions if Janus
Capital believes that the net result of the transaction to the Fund
will be no less favorable than that of contemporaneously available
principal transactions.

Janus Capital may use research products and services in servicing
other accounts in addition to the Fund. If Janus Capital determines
that any research product or service has a mixed use, such that it
also serves functions that do not assist in the investment
decision-making process, Janus Capital may allocate the costs of such
service or product accordingly. Only that portion of the product or
service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus
Capital.

Janus Capital may consider sales of Fund shares or shares of other
Janus funds by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase such shares as a
factor in the selection of broker-dealers to execute Fund
transactions. Janus Capital may also consider payments made by brokers
effecting transactions for a Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for
which it would be obligated to pay. In placing portfolio business with
such broker-dealers, Janus Capital will seek the best execution of
each transaction.

When the Fund purchases or sells a security in the over-the-counter
market, the transaction takes place directly with a principal
market-maker, without the use of a broker, except in those
circumstances where in the opinion of Janus Capital better prices and
executions will be achieved through the use of a broker.

16
<PAGE>
Trustees and officers

The following are the names of the Trustees and officers of Janus
Adviser Series, a Delaware business trust of which the Fund is a
series, together with a brief description of their principal
occupations during the last five years.

Thomas H. Bailey, Age 63 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928

James P. Craig, III, Age 44 - Trustee and Vice President*#
100 Fillmore Street

Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. President and
a Director of High Valley Group, Inc., Colorado Springs, CO
(investments).

Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Investor. Formerly (1997-1998), Chief Financial Officer - Boston
Market Concepts, Boston Chicken, Inc., Golden, CO (restaurant chain);
(1993-1997), President and Chief Executive Officer of BC Northwest,
L.P., a franchise of Boston Chicken, Inc., Bellevue, WA (restaurant
chain).

--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Executive Committee.

17
<PAGE>

William D. Stewart, Age 56 - Trustee#
5330 Sterling Drive

Martin H. Waldinger, Age 62 - Trustee

4940 Sandshore Court
San Diego, CA 92130
--------------------------------------------------------------------------------
Trustee of Janus Investment Fund and Janus Aspen Series. Private
Consultant. Formerly (1993 to 1996), Director of Run Technologies,
Inc., a software development firm, San Carlos, CA.

Sharon S. Pichler, Age 51 - Executive Vice President and Portfolio Manager*

100 Fillmore Street
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund and Janus Aspen Series. Vice President of Janus Capital.

--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

18
<PAGE>

Steven R. Goodbarn, Age 43 - Vice President and Chief Financial Officer*

100 Fillmore Street
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Investment Fund
and Janus Aspen Series. Vice President of Finance, Treasurer and Chief
Financial Officer of Janus Capital, Janus Service Corporation, and
Janus Distributors, Inc. Director of Janus Service Corporation and
Janus Distributors, Inc. and Janus World Funds Plc. Director,
Treasurer and Vice President of Finance of Janus Capital International
Ltd. and Janus International (UK) Limited. Formerly (1992-1996),
Treasurer of Janus Investment Fund and Janus Aspen Series.

Kelly Abbott Howes, Age 35 - Secretary*
100 Fillmore Street

Denver, CO 80206-4928
--------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund and Janus Aspen
Series. Vice President and Assistant General Counsel of Janus Capital.
Vice President of Janus Distributors, Inc. Assistant Vice President of
Janus Service Corporation.

Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street
Denver, CO 80206-4928
--------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund and
Janus Aspen Series. Vice President of Janus Capital. Formerly
(1991-1997), Director of Fund Accounting, Janus Capital.
--------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

19
<PAGE>

The Trustees are responsible for major decisions relating to the
Fund's objective, policies and techniques. The Trustees also supervise
the operation of the Fund by its officers and review the investment
decisions of the officers although they do not actively participate on
a regular basis in making such decisions.

The Money Market Funds Committee, consisting of Messrs. Loo, Mullen
and Rothe, monitors the compliance with policies and procedures
adopted particularly for money market funds.

Because the Fund has not commenced operations as of the date of this
prospectus, the Trustees have not received compensation from the Fund
yet. The following table shows the aggregate compensation that the
Funds are expected to receive and the aggregate compensation paid to
each Trustee by other funds advised and sponsored by Janus Capital
(collectively, the "Janus Funds") for the periods indicated. None of
the Trustees receive pension or retirement benefits from the Fund or
the Janus Funds.

<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
from the Fund for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position July 31, 2001** December 31, 1999***
<S> <C> <C>
----------------------------------------------------------------------------------------------------------------
Thomas H. Bailey, Chairman and Trustee* $ 0 $ 0
James P. Craig, III, Trustee* $ 0 $ 0
William D. Stewart, Trustee $43 $107,333
Gary O. Loo, Trustee $88 $107,333
Dennis B. Mullen, Trustee $88 $107,333
Martin H. Waldinger, Trustee $43 $107,333
James T. Rothe, Trustee $88 $107,333
</TABLE>

* An interested person of the Fund and of Janus Capital. Compensated by Janus
Capital and not the Fund.

** The aggregate compensation for the Fund is estimated for the fiscal year
ending July 31, 2001.

*** As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.

20
<PAGE>
Purchase of Shares

Shares of the Fund can be purchased only through institutional
channels such as retirement plans, brokers, bank trust departments,
financial advisers or similar financial intermediaries. Certain
designated organizations are authorized to receive purchase orders on
the Fund's behalf, and those organizations are authorized to designate
their agents and affiliates as intermediaries to receive purchase
orders. Purchase orders are deemed received by the Fund when
authorized organizations, their agents or affiliates receive the
order. The Fund is not responsible for the failure of any designated
organization or its agents or affiliates to carry out its obligations
to its customers. Shares of the Fund are purchased at the NAV per
share as determined at the close of regular trading session of the New
York Stock Exchange next occurring after a purchase order is received
and accepted by the Fund or its authorized agent. In order to receive
a day's dividend, your order must be received by the close of the
regular trading session of the NYSE. Your plan documents contain
detailed information about investing in the Fund.

21
<PAGE>
Distribution plan

Under a distribution plan ("Plan") adopted in accordance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act"), the
Fund may pay Janus Distributors, Inc., the Trust's distributor, a fee
at an annual rate of up to 0.25% of the average daily net assets of
the initial class of the Fund. Under the terms of the Plan, the Trust
is authorized to make payments to Janus Distributors for remittance to
retirement and pension plan service providers, bank trust departments,
brokers, financial advisers and other financial intermediaries as
compensation for distribution and shareholder servicing performed by
such service providers. The Plan is a compensation type plan and
permits the payment at an annual rate of up to 0.25% of the average
daily net assets of the initial class of the Fund for activities which
are primarily intended to result in sales of the Fund, including but
not limited to preparing, printing and distributing prospectuses,
statements of additional information, shareholder reports, and
educational materials to prospective and existing investors;
responding to inquiries by investors; receiving and answering
correspondence and similar activities. Payments under the Plan are not
tied exclusively to actual distribution and service expenses, and the
payments may exceed distribution and service expenses actually
incurred. On April 3, 2000, Trustees unanimously approved the Plan
which became effective on that date. The Plan and any Rule 12b-1
related agreement that is entered into by the Fund or Janus
Distributors in connection with the Plan will continue in effect for a
period of more than one year only so long as continuance is
specifically approved at least annually by a vote of a majority of the
Trustees, and of a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or
any related agreements ("12b-1 Trustees"). All material amendments to
the Plan must be approved by a majority vote of the Trustees,
including a majority of the 12b-1 Trustees, at a meeting called for
that purpose. In addition, the Plan may be terminated at any time,
without penalty, by vote of a majority of the outstanding shares of
the class of the Fund or by vote of a majority of 12b-1 Trustees.

22
<PAGE>
Redemption of Shares

Redemptions, like purchases, may only be effected through
institutional channels such as retirement plans, brokers, bank trust
departments, financial advisers and other financial intermediaries.
Certain designated organizations are authorized to receive redemption
orders on the Fund's behalf and those organizations are authorized to
designate their agents and affiliates as intermediaries to receive
redemption orders. Redemption orders are deemed received by the Fund
when authorized organizations, their agents or affiliates receive the
order. The Fund is not responsible for the failure of any designated
organization or its agents or affiliates to carry out its obligations
to its customers. Shares normally will be redeemed for cash, although
the Fund retains the right to redeem some or all of the shares in kind
under unusual circumstances, in order to protect the interests of
remaining shareholders, or to accommodate a request by a particular
shareholder that does not adversely affect the interest of the
remaining shareholders, by delivery of securities selected from its
assets at its discretion. However, the Fund is governed by Rule 18f-1
under the 1940 Act, which requires the Fund to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the
Fund during any 90-day period for any one shareholder. Should
redemptions by any shareholder exceed such limitation, the Fund will
have the option of redeeming the excess in cash or in kind. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage
costs in converting the assets to cash. The method of valuing
securities used to make redemptions in kind will be the same as the
method of valuing portfolio securities described under "Determination
of Net Asset Value" and such valuation will be made as of the same
time the redemption price is determined.

The right to require the Fund to redeem its shares may be suspended,
or the date of payment may be postponed, whenever (1) trading on the
NYSE is restricted, as determined by the SEC, or the NYSE is closed
except for holidays and weekends, (2) the SEC permits such suspension
and so orders, or (3) an emergency exists as determined by the SEC so
that disposal of securities or determination of NAV is not reasonably
practicable.

23
<PAGE>
Dividends and tax status

Dividends representing substantially all of the net investment income
and any net realized gains on sales of securities are declared daily,
Saturdays, Sundays and holidays included, and distributed on the last
business day of each month. If a month begins on a Saturday, Sunday,
or holiday, dividends for those days are declared at the end of the
preceding month and distributed on the first business day of the
month. The Fund intends to qualify as a regulated investment company
by satisfying certain requirements prescribed by Subchapter M of the
Internal Revenue Code. Accordingly, the Fund will invest no more than
25% of its total assets in a single issuer (other than U.S. government
securities).

All income dividends on the Fund's shares are reinvested automatically
in additional shares of the Fund at the NAV determined on the first
business day following the record date.

Some money market securities employ a trust or other similar structure
to modify the maturity, price characteristics, or quality of financial
assets. For example, put features can be used to modify the maturity
of a security, or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as
intended, adverse tax or investment consequences may result. Neither
the Internal Revenue Service nor any other regulatory authority has
ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by a Fund.

Income dividends or capital gains distributions made by the shares of
the Fund purchased through a qualified retirement plan will generally
be exempt from current taxation if left to accumulate within the
qualified plan. Generally, withdrawals from qualified plans may be
subject to ordinary income tax and, if made before age 59 1/2, a 10%
penalty tax. The tax status of your investment depends on the features
of your qualified plan. For further information, please contact your
plan sponsor.

24
<PAGE>
Miscellaneous information

The Fund is an open-end management investment company registered under
the 1940 Act as a series of the Trust, which was organized as a
Delaware business trust on March 22, 2000. The Trust Instrument
permits the Trustees to issue an unlimited number of shares of
beneficial interest from an unlimited number of series and classes of
shares. As of the date of this SAI, the Trust consists of eleven
series of shares, known as "Funds," each of which consists of one
class of shares. Additional series and/or classes may be created from
time to time.

SHARES OF THE TRUST

The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 per share for each
series of the Trust. Shares of each series of the Trust are fully paid
and nonassessable when issued. The shares of the Fund participate
equally in dividends and other distributions by the Fund, and in
residual assets of the Fund in the event of liquidation. Shares of the
Fund have no preemptive, conversion or subscription rights.

SHAREHOLDER MEETINGS

The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for the Fund or for the Trust
as a whole for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies,
or for any other purpose requiring a shareholder vote under the 1940
Act. Separate votes are taken by each Fund or class only if a matter
affects or requires the vote of only that Fund or class or that Fund's
or class' interest in the matter differs from the interest of the
other Funds or class of the Trust. A shareholder is entitled to one
vote for each share owned.

VOTING RIGHTS

The Trustees are responsible for major decisions relating to the
Fund's policies and objectives; the Trustees oversee the operation of
the Fund by its officers.

25
<PAGE>

elect or remove Trustees, to terminate or reorganize the Fund, to
amend the Trust Instrument, to bring certain derivative actions and on
any other matters on which a shareholder vote is required by the 1940
Act, the Trust Instrument, the Trust's Bylaws or the Trustees.

As mentioned in "Shareholder Meetings", each share of each series of
the Trust has one vote (and fractional votes for fractional shares).
Shares of all series of the Trust have noncumulative voting rights,
which means that the holders of more than 50% of the shares of all
series of the Trust voting for the election of Trustees can elect 100%
of the Trustees if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any
Trustees. Each Fund or class of the Trust will vote separately only
with respect to those matters that affect only that Fund or class or
if an interest of the Fund or class in the matter differs from the
interests of other Funds or classes of the Trust.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 1670 Broadway, Suite 1000, Denver,
Colorado 80202, independent accountants for the Fund, audit the Fund's
annual financial statements and prepare its tax returns.

REGISTRATION STATEMENT

The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of
1933, as amended, with respect to the securities to which this SAI
relates. If further information is desired with respect to the Fund or
such securities, reference is made to the Registration Statement and
the exhibits filed as a part thereof.

26
<PAGE>

Financial statements

DOCUMENTS INCORPORATED BY REFERENCE TO THE ANNUAL REPORT

Schedules of Investments as of December 31, 1999

Statements of Operations for the period ended December 31, 1999

Statements of Assets and Liabilities as of December 31, 1999

Statements of Changes in Net Assets for the periods ended December 31,
1999 and 1998

Financial Highlights for each of the periods indicated

Notes to Financial Statements

Report of Independent Accountants

27
<PAGE>
Appendix A

DESCRIPTION OF SECURITIES RATINGS

Moody's and Standard & Poor's

MUNICIPAL AND CORPORATE BONDS AND MUNICIPAL LOANS

The two highest ratings of Standard & Poor's Ratings Services ("S&P")
for municipal and corporate bonds are AAA and AA. Bonds rated AAA have
the highest rating assigned by S&P to a debt obligation. Capacity to
pay interest and repay principal is extremely strong. Bonds rated AA
have a very strong capacity to pay interest and repay principal and
differ from the highest rated issues only in a small degree. The AA
rating may be modified by the addition of a plus (+) or minus (-) sign
to show relative standing within that rating category.

The two highest ratings of Moody's Investors Service, Inc. ("Moody's")
for municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are
judged by Moody's to be of the best quality. Bonds rated Aa are judged
to be of high quality by all standards. Together with the Aaa group,
they comprise what are generally known as high-grade bonds. Moody's
states that Aa bonds are rated lower than the best bonds because
margins of protection or other elements make long-term risks appear
somewhat larger than Aaa securities. The generic rating Aa may be
modified by the addition of the numerals 1, 2 or 3. The modifier 1
indicates that the security ranks in the higher end of the Aa rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of such
rating category.

SHORT TERM MUNICIPAL LOANS

S&P's highest rating for short-term municipal loans is SP-1. S&P
states that short-term municipal securities bearing the SP-1
designation have a strong capacity to pay principal and interest.
Those issues rated SP-1 which are determined to possess a very strong
capacity to pay debt service will be given a plus (+) designation.
Issues rated SP-2 have satisfactory capacity to pay principal and
interest with some vulnerability to adverse financial and economic
changes over the term of the notes.

Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1
are of the best quality, enjoying strong protection from established
cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both. Loans
bearing the MIG-2/VMIG-2 designation are of high quality, with margins
of protection ample although not so large as in the MIG-1/VMIG-1
group.

OTHER SHORT-TERM DEBT SECURITIES

Prime-1 and Prime-2 are the two highest ratings assigned by Moody's
for other short-term debt securities and commercial paper, and A-1 and
A-2 are the two highest ratings for commercial paper assigned by S&P.
Moody's uses the numbers 1, 2 and 3 to denote relative strength within
its highest classification of Prime, while S&P uses the numbers 1, 2
and 3 to denote relative strength within its highest classification of
A. Issuers rated Prime-1 by Moody's have a superior ability for
repayment of senior short-term debt obligations and have many of the
following characteristics: leading market positions in
well-established industries, high rates of return on funds employed,
conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of
fixed financial charges and high internal cash generation, and well
established access to a range of financial markets and assured sources
of alternate liquidity. Issuers rated Prime-2 by Moody's have a strong
ability for repayment of senior short-term debt obligations and
display many of the same characteristics displayed by issuers rated
Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a
strong degree of safety regarding timely repayment. Those issues
determined to possess extremely strong safety characteristics are
denoted with a

28
<PAGE>

plus (+) designation. Issuers rated A-2 by S&P carry a satisfactory
degree of safety regarding timely repayment.

FITCH IBCA

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
F-1+........................ Exceptionally strong credit quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1......................... Very strong credit quality. Issues assigned this rating
reflect an assurance for timely payment only slightly less
in degree than issues rated F-1+.
F-2......................... Good credit quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payments, but
the margin of safety is not as great as the F-1+ and F-1
ratings.
</TABLE>

DUFF & PHELPS INC.

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Duff 1+..................... Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or ready access to
alternative sources of funds, is clearly outstanding, and
safety is just below risk-free U.S. Treasury short-term
obligations.
Duff 1...................... Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1-..................... High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2...................... Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
</TABLE>

THOMSON BANKWATCH, INC.

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
TBW-1....................... The highest category; indicates a very high degree of
likelihood that principal and interest will be paid on a
timely basis.
TBW-2....................... The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated TBW-1.
TBW-3....................... The lowest investment grade category; indicates that while
more susceptible to adverse developments (both internal and
external) than obligations with higher ratings, capacity to
service principal and interest in a timely fashion is
considered adequate.
TBW-4....................... The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
</TABLE>

29
<PAGE>
Appendix B

DESCRIPTION OF MUNICIPAL SECURITIES

MUNICIPAL NOTES generally are used to provide for short-term capital
needs and usually have maturities of one year or less. They include
the following:

1. Project Notes, which carry a U.S. government guarantee, are issued
by public bodies (called "local issuing agencies") created under the
laws of a state, territory, or U.S. possession. They have maturities
that range up to one year from the date of issuance. Project Notes are
backed by an agreement between the local issuing agency and the
Federal Department of Housing and Urban Development. These Notes
provide financing for a wide range of financial assistance programs
for housing, redevelopment, and related needs (such as low-income
housing programs and renewal programs).

2. Tax Anticipation Notes are issued to finance working capital needs
of municipalities. Generally, they are issued in anticipation of
various seasonal tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.

3. Revenue Anticipation Notes are issued in expectation of receipt of
other types of revenues, such as Federal revenues available under the
Federal Revenue Sharing Programs.

4. Bond Anticipation Notes are issued to provide interim financing
until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the Notes.

5. Construction Loan Notes are sold to provide construction financing.
After successful completion and acceptance, many projects receive
permanent financing through the Federal Housing Administration under
Fannie Mae or Ginnie Mae.

6. Tax-Exempt Commercial Paper is a short-term obligation with a
stated maturity of 365 days or less. It is issued by agencies of state
and local governments to finance seasonal working capital needs or as
short-term financing in anticipation of longer term financing.

MUNICIPAL BONDS, which meet longer term capital needs and generally
have maturities of more than one year when issued, have three
principal classifications:

1. General Obligation Bonds are issued by such entities as states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects,
including construction or improvement of schools, highways and roads,
and water and sewer systems. The basic security behind General
Obligation Bonds is the issuer's pledge of its full faith and credit
and taxing power for the payment of principal and interest. The taxes
that can be levied for the payment of debt service may be limited or
unlimited as to the rate or amount of special assessments.

2. Revenue Bonds in recent years have come to include an increasingly
wide variety of types of municipal obligations. As with other kinds of
municipal obligations, the issuers of revenue bonds may consist of
virtually any form of state or local governmental entity, including
states, state agencies, cities, counties, authorities of various
kinds, such as public housing or redevelopment authorities, and
special districts, such as water, sewer or sanitary districts.
Generally, revenue bonds are secured by the revenues or net revenues
derived from a particular facility, group of facilities, or, in some
cases, the proceeds of a special excise or other specific revenue
source. Revenue bonds are issued to finance a wide variety of capital
projects including electric, gas, water and sewer systems; highways,
bridges, and tunnels; port and airport facilities; colleges and
universities; and hospitals. Many of these bonds provide additional
security in the form of a debt service reserve fund to be used to make
principal and interest payments. Various forms of credit enhancement,
such as a bank letter of credit or municipal bond insurance, may also
be employed in revenue bond issues. Housing authorities have a wide
range of security, including partially or fully insured mortgages,
rent subsidized and/or collateralized mortgages, and/or the net
revenues from housing or other

30
<PAGE>

public projects. Some authorities provide further security in the form
of a state's ability (without obligation) to make up deficiencies in
the debt service reserve fund.

In recent years, revenue bonds have been issued in large volumes for
projects that are privately owned and operated (see 3 below).

3. Private Activity Bonds are considered municipal bonds if the
interest paid thereon is exempt from Federal income tax and are issued
by or on behalf of public authorities to raise money to finance
various privately operated facilities for business and manufacturing,
housing and health. These bonds are also used to finance public
facilities such as airports, mass transit systems and ports. The
payment of the principal and interest on such bonds is dependent
solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property as
security for such payment.

While, at one time, the pertinent provisions of the Internal Revenue
Code permitted private activity bonds to bear tax-exempt interest in
connection with virtually any type of commercial or industrial project
(subject to various restrictions as to authorized costs, size
limitations, state per capita volume restrictions, and other matters),
the types of qualifying projects under the Code have become
increasingly limited, particularly since the enactment of the Tax
Reform Act of 1986. Under current provisions of the Code, tax-exempt
financing remains available, under prescribed conditions, for certain
privately owned and operated rental multi-family housing facilities,
nonprofit hospital and nursing home projects, airports, docks and
wharves, mass commuting facilities and solid waste disposal projects,
among others, and for the refunding (that is, the tax-exempt
refinancing) of various kinds of other private commercial projects
originally financed with tax-exempt bonds. In future years, the types
of projects qualifying under the Code for tax-exempt financing are
expected to become increasingly limited.

Because of terminology formerly used in the Internal Revenue Code,
virtually any form of private activity bond may still be referred to
as an "industrial development bond," but more and more frequently
revenue bonds have become classified according to the particular type
of facility being financed, such as hospital revenue bonds, nursing
home revenue bonds, multi-family housing revenues bonds, single family
housing revenue bonds, industrial development revenue bonds, solid
waste resource recovery revenue bonds, and so on.

OTHER MUNICIPAL OBLIGATIONS, incurred for a variety of financing
purposes, include: municipal leases, which may take the form of a
lease or an installment purchase or conditional sale contract, are
issued by state and local governments and authorities to acquire a
wide variety of equipment and facilities such as fire and sanitation
vehicles, telecommunications equipment and other capital assets.
Municipal leases frequently have special risks not normally associated
with general obligation or revenue bonds. Leases and installment
purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the government issuer)
have evolved as a means for governmental issuers to acquire property
and equipment without meeting the constitutional and statutory
requirements for the issuance of debt. The debt-issuance limitations
of many state constitutions and statutes are deemed to be inapplicable
because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purpose by the appropriate
legislative body on a yearly or other periodic basis. To reduce this
risk, the Fund will only purchase municipal leases subject to a
non-appropriation clause when the payment of principal and accrued
interest is backed by an unconditional irrevocable letter of credit,
or guarantee of a bank or other entity that meets the criteria
described in the Prospectus.

31
<PAGE>

Tax-exempt bonds are also categorized according to whether the
interest is or is not includible in the calculation of alternative
minimum taxes imposed on individuals, according to whether the costs
of acquiring or carrying the bonds are or are not deductible in part
by banks and other financial institutions, and according to other
criteria relevant for Federal income tax purposes. Due to the
increasing complexity of Internal Revenue Code and related
requirements governing the issuance of tax-exempt bonds, industry
practice has uniformly required, as a condition to the issuance of
such bonds, but particularly for revenue bonds, an opinion of
nationally recognized bond counsel as to the tax-exempt status of
interest on the bonds.

32
<PAGE>

This page intentionally left blank.
<PAGE>

[JANUS LOGO]

(800) 525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
<PAGE>
JANUS ADVISER SERIES

PART C - OTHER INFORMATION

ITEM 23 EXHIBITS

Exhibit 1 Trust Instrument dated March 22, 2000, is
incorporated herein by reference to Registrant's
Registration Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

Exhibit 2 Bylaws are incorporated herein by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

Exhibit 3 Not Applicable

Exhibit 4 (a) Form of Investment Advisory Agreement for Growth
Fund is incorporated by reference to Registrant's
Registration Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

(b) Form of Investment Advisory Agreement for
Aggressive Growth Fund is incorporated by
reference to Registrant's Registration Statement
(Reg. No. 333-33978) on Form N-1A filed with the
Securities and Exchange Commission on April 4,
2000.

(c) Form of Investment Advisory Agreement for Capital
Appreciation Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(d) Form of Investment Advisory Agreement for Balanced
Fund is incorporated by reference to Registrant's
Registration Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

<PAGE>

(e) Form of Investment Advisory Agreement for Equity
Income Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(f) Form of Investment Advisory Agreement for Growth
and Income Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(g) Form of Investment Advisory Agreement for
Strategic Value Fund is incorporated by reference
to Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(h) Form of Investment Advisory Agreement for
International Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(i) Form of Investment Advisory Agreement for
Worldwide Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(j) Form of Investment Advisory Agreement Flexible
Income Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(k) Form of Investment Advisory Agreement for Money
Market Fund is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

<PAGE>

Exhibit 5 Form of Distribution Agreement between Janus
Adviser Series and Janus Distributors, Inc. is
incorporated by reference to Registrant's
Registration Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

Exhibit 6 Not Applicable

Exhibit 7 (a) Form of Custodian Agreement between Janus Adviser
Series and State Street Bank and Trust Company is
filed herein as Exhibit 7(a).

(b) Form of Global Custody Services Agreement between
Janus Adviser Series, on behalf of Janus Adviser
Money Market Fund and Citibank, N.A is filed
herein as Exhibit 7(b).

Exhibit 8 (a) Form of Transfer Agency Agreement with Janus
Service Corporation is incorporated by reference
to Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

(b) Form of Administrative Services Agreement with
Janus Service Corporation is incorporated by
reference to Registrant's Registration Statement
(Reg. No. 333-33978) on Form N-1A filed with the
Securities and Exchange Commission on April 4,
2000.

Exhibit 9 Opinion and Consent of Fund Counsel with respect
to shares of the Trust is filed herein as Exhibit
9.

Exhibit 10 Consent of PricewaterhouseCoopers LLP is filed
herein as Exhibit 10.

Exhibit 11 Not Applicable

Exhibit 12 Not Applicable

Exhibit 13 Form of Distribution and Shareholder Servicing
Plan is incorporated by reference to Registrant's
Registration

<PAGE>

Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

Exhibit 14 Code of Ethics is incorporated by reference to
Registrant's Registration Statement (Reg. No.
333-33978) on Form N-1A filed with the Securities
and Exchange Commission on April 4, 2000.

Exhibit 15 Powers of Attorney dated April 3, 2000 are
incorporated herein by reference to Registrant's
Registration Statement (Reg. No. 333-33978) on
Form N-1A filed with the Securities and Exchange
Commission on April 4, 2000.

ITEM 24 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None

ITEM 25. INDEMNIFICATION

Article IX of Janus Adviser Series' Trust Instrument provides for
indemnification of certain persons acting on behalf of the Funds. In general,
Trustees and officers will be indemnified against liability and against all
expenses of litigation incurred by them in connection with any claim, action,
suit or proceeding (or settlement of the same) in which they become involved by
virtue of their office in connection with the Funds, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
the best interests of the Funds. A determination that a person covered by the
indemnification provisions is entitled to indemnification may be made by the
court or other body before which the proceeding is brought, or by either a vote
of a majority of a quorum of Trustees who are neither "interested persons" of
the Trust nor parties to the proceeding or by an independent legal counsel in a
written opinion. The Funds also may advance money for these expenses, provided
that the Trustee or officer undertakes to repay the Funds if his conduct is
later determined to preclude indemnification, and that either he provide
security for the undertaking, the Trust be insured against losses resulting from
lawful advances or a majority of a quorum of disinterested Trustees, or
independent counsel in a written opinion, determines that he ultimately will be
found to be entitled to indemnification. The Trust also maintains a liability
insurance policy covering its Trustees and officers.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The only business of Janus Capital Corporation is to serve as the
investment adviser of the Registrant and as investment adviser or subadviser to
several other mutual funds, and for individual, charitable, corporate, private
and retirement accounts. Business backgrounds of the

<PAGE>

principal executive officers and directors of the adviser that also hold
positions with the Registrant are included under "Officers and Trustees" in the
Statements of Additional Information included in this Registration Statement.
The remaining principal executive officers of the investment adviser and their
positions with the adviser and affiliated entities are: Mark B. Whiston, Vice
President and Chief Marketing Officer of Janus Capital Corporation, Director and
President of Janus Capital International Ltd., Director of Janus World Funds
Plc; Marjorie G. Hurd, Vice President and Chief Operations Officer of Janus
Capital Corporation, Director and President of Janus Service Corporation;
Stephen L. Stieneker, Vice President, Public Affairs of Janus Capital
Corporation; and David Kowalski, Vice President and Chief Compliance Officer of
Janus Capital Corporation. Mr. Michael E. Herman, a director of Janus Capital
Corporation, is Chairman of the Finance Committee (1990 to present) of Ewing
Marion Kauffman Foundation, 4900 Oak, Kansas City, Missouri 64112. Mr. Michael
N. Stolper, a director of Janus Capital Corporation, is President of Stolper &
Company, Inc., 600 West Broadway, Suite 1010, San Diego, California 92101, an
investment performance consultant. Mr. Thomas A. McDonnell, a director of Janus
Capital Corporation, is President, Chief Executive Officer and a Director of DST
Systems, Inc., 333 West 11th Street, 5th Floor, Kansas City, Missouri 64105,
provider of data processing and recordkeeping services for various mutual funds,
and is Executive Vice President and a director of Kansas City Southern
Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105, a publicly
traded holding company whose primary subsidiaries are engaged in transportation
and financial services. Mr. Landon H. Rowland, a director of Janus Capital
Corporation, is President and Chief Executive Officer of Kansas City Southern
Industries, Inc.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Janus Distributors, Inc. ("Janus Distributors") serves as
principal underwriter for the Registrant, Janus Aspen Series
and Janus Investment Fund.

(b) The principal business address, positions with Janus
Distributors and positions with Registrant of Thomas A.
Early, Kelley Abbott Howes and Steven R. Goodbarn, officers
and directors of Janus Distributors, are described under
"Officers and Trustees" in the Statement of Additional
Information included in this Registration Statement. The
remaining principal executive officer of Janus Distributors
is Marjorie G. Hurd, Director and President. Ms. Hurd does
not hold any positions with the Registrant. Ms. Hurd's
principal business address is 100 Fillmore Street, Denver,
Colorado 80206-4928

<PAGE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado
80206-4928 and by State Street Bank and Trust Company, P.O. Box 0351, Boston,
Massachusetts 02117-0351 and Citibank, N.A., 111 Wall Street, 24th Floor, Zone
5, New York, NY 10043.

ITEM 29. MANAGEMENT SERVICES

The Registrant has no management-related service contract which is not
discussed in Part A or Part B of this form.

ITEM 30. UNDERTAKINGS

Not Applicable

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Pre-Effective Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Denver, and State of
Colorado, on the 12th of June, 2000.

JANUS ADVISER SERIES

By: /s/ Thomas H. Bailey
Thomas H. Bailey, President

Janus Adviser Series is organized under a Trust Instrument dated March 22,
2000. The obligations of the Registrant hereunder are not binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Registrant personally, but bind only the trust property of the Registrant, as
provided in the Trust Instrument. The execution of this Registration Statement
has been authorized by the Trustees of the Registrant and this Registration
Statement has been signed by an authorized officer of the Registrant, acting as
such, and neither such authorization by such Trustees nor such execution by such
officer shall be deemed to have been made by any of them personally, but shall
bind only the trust property of the Registrant as provided in its Trust
Instrument.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Thomas H. Bailey President June 12, 2000
Thomas H. Bailey (Principal Executive
Officer) and Trustee

/s/ Steven R. Goodbarn Vice President and June 12, 2000
Steven R. Goodbarn Chief Financial Officer
(Principal Financial Officer)

/s/ Glenn P. O'Flaherty Treasurer and Chief June 12, 2000
Glenn P. O'Flaherty Accounting Officer
(Principal Accounting Officer)

/s/ James P. Craig, III Trustee June 12, 2000
James P. Craig, III

<PAGE>

GARY O. LOO* Trustee June 12, 2000
Gary O. Loo

Dennis B. Mullen* Trustee June 12, 2000
Dennis B. Mullen

James T. Rothe* Trustee June 12, 2000
James T. Rothe

William D. Stewart* Trustee June 12, 2000
William D. Stewart

Martin H. Waldinger* Trustee June 12, 2000
Martin H. Waldinger

/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact

<PAGE>

INDEX OF EXHIBITS

EXHIBIT NUMBER EXHIBIT TITLE

Exhibit 7(a) Form of Custodian Agreement between
Janus Adviser Series and Citibank, N.A.

Exhibit 7(b) Form of Custodian Agreement between
Janus Adviser Series and State Street
Bank and Trust Company

Exhibit 9 Opinion and Consent of Fund Counsel with
respect to shares of the Trust

Exhibit 10 Consent of PricewaterhouseCoopers LLP