JANUS INVESTMENT FUND, 485A24E, 1995-09-14

JANUS INVESTMENT FUND
485A24E, 1995-09-14

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Registration No. 2-34393

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. /_/

Post-Effective Amendment No. 68 /X/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940

Amendment No. 51 /X/

(Check appropriate box or boxes.)

JANUS INVESTMENT FUND
(Exact Name of Registrant as Specified in Charter)

Suite 300, 100 Fillmore Street, Denver, Colorado 80206-4923
Address of Principal Executive Offices (Zip Code)

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

David C. Tucker - Suite 300, 100 Fillmore Street, Denver, Colorado 80206-4923
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: December 29, 1995

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

_____ 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.
__X__ 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
_____ on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following line:

_____ this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Cover Page continued

<PAGE>

CALCULATION OF REGISTRATION FEE

<TABLE>

------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<CAPTION>
Title of Securities Amount of Shares Proposed Maximum Proposed Maximum Amount of
Being Registered Being Registered Offering Per Unit Aggregate Offering Registration Fee
Price
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Shares of Beneficial Indefinite* N/A N/A N/A
Interest ($.01 par
value)
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Flexible Income 5,074,924** $9.34 $47,399,790 $100 (for all funds
Fund combined)
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Growth and 693,071** $17.53 $12,149,534
Income Fund
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Intermediate 4,926,943** $4.94 $24,339,098
Government Securities
Fund
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Short-Term Bond 6,294,340** $2.83 $17,812,982
Fund
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Twenty Fund 31,851,848** $29.56 $941,540,626
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Janus Venture Fund 5,161,841** $60.14 $310,433,117
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
</TABLE>

* Registrant continues its election to register an indefinite number of
shares under Rule 24f-2 and filed its Rule 24f-2 Notice for the fiscal year
ended October 31, 1994 on December 29, 1994.

** This calculation has been made pursuant to Rule 24e-2 under the Investment
Company Act of 1940. The following table sets forth: (1) the number of
shares of the listed funds redeemed during the fiscal year ended October
31, 1994; (2) the number of shares of each such fund used for reduction
pursuant to Rule 24f-2(c) during the current fiscal year; and (3) the
number of shares used for reduction in this Amendment pursuant to Rule
24e-2. Pursuant to Rule 457(d) under the Securities Act of 1933, the
offering price for each fund was calculated on August 31, 1995. The
Registrant has elected to register, for the minimum fee of $100 required
under Rule 24e-2, an additional $290,000 worth of shares (approximately
$48,333 shares for each fund).

<TABLE>

------------------------------ ---------------------------- --------------------------- ----------------------------
<CAPTION>
(1) (2) (3)
Name of Fund Number of Shares Redeemed Number of Shares Used for Number of Shares Used for
During Last Fiscal Year Reduction Under 24f-2(c) Reduction in This
Amendment Under 24e-2(2)
------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Janus Flexible Income Fund 35,552,282 30,482,532 5,069,750
------------------------------ ---------------------------- --------------------------- ----------------------------
Janus Growth and Income Fund 12,846,041 12,155,727 690,314
------------------------------ ---------------------------- --------------------------- ----------------------------
Janus Intermediate 9,138,997 4,221,838 4,917,159
Government Securities Fund
------------------------------ ---------------------------- --------------------------- ----------------------------
Janus Short-Term Bond Fund 32,730,076 26,452,814 6,277,262
------------------------------ ---------------------------- --------------------------- ----------------------------
Janus Twenty Fund 54,668,789 22,818,576 31,850,213
------------------------------ ---------------------------- --------------------------- ----------------------------
Janus Venture Fund 11,776,526 6,615,488 5,161,038
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>

Cover Page continued

<PAGE>

Registrant has registered an indefinite number of shares of beneficial interest
under the Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule
24f-2 Notice on December 29, 1994, for the fiscal year ended October 31, 1994,
with respect to all of its series in existence as of October 31, 1994.

<PAGE>

JANUS INVESTMENT FUND
(Janus High-Yield Fund
and Janus Olympus Fund)

Cross Reference Sheet
Between each Prospectus and Statement of
Additional Information and Form N-1A Item
(Cross Reference Sheets for other series of Janus Investment Fund
are included in previous post-effective amendments
related to those series)

FORM N-1A ITEM CAPTION IN PROSPECTUS

PART A

1. Cover Page Cover Page

2. Synopsis Cover Page; The Fund at a Glance; Expense
Information

3. Condensed Financial Performance Terms
Information

4. General Description of The Fund in Detail -- The Fund's Investment
Registrant Objective and Policies; The Fund in Detail --
General Portfolio Policies; The Fund in Detail
-- Additional Risk Factors

5. Management of the Fund Management of the Fund

6. Capital Stock and Other Distributions and Taxes; Shareholder's Manual
Securities

7. Purchase of Securities Being Shareholder's Manual
Offered

8. Redemption or Repurchase Shareholder's Manual

9. Pending Legal Proceedings Not Applicable

<PAGE>

FORM N-1A ITEM CAPTION IN STATEMENT OF
ADDITIONAL INFORMATION
PART B

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and Not Applicable
History

13. Investment Objectives and Investment Policies, Restrictions and
Policies Techniques; Appendix A

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

15. Control Persons and Not Applicable
Principal Holders of
Securities

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

17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices

18. Capital Stock and Other Purchase of Shares; Redemption of Shares;
Securities Miscellaneous Information

19. Purchase, Redemption and Purchase of Shares; Redemption of Shares;
Pricing of Securities Being Shareholder Accounts
Offered

20. Tax Status Income Dividends, Capital Gains Distributions
and Tax Status

21. Underwriters Custodian, Transfer Agent and Certain
Affiliations

22. Calculation of Performance Performance Information
Data

23. Financial Statements Not Applicable

<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 15, 1995

JANUS HIGH-YIELD FUND

100 Fillmore Street, Suite 300
Denver, CO 80206-4923
1-800-525-3713

PROSPECTUS

_______________, 1995

Janus High-Yield Fund (the "Fund") is a no-load, diversified mutual fund that
seeks to obtain high current income as its primary objective. Capital
appreciation is a secondary objective when consistent with the primary
objective. The Fund seeks to achieve these objectives by investing primarily in
high-yield fixed-income securities. The Fund is recently organized and has a
limited operating history.

THE FUND MAY INVEST ALL OF ITS ASSETS IN HIGH-YIELD CORPORATE DEBT SECURITIES,
COMMONLY KNOWN AS "JUNK BONDS." THESE SECURITIES ENTAIL GREATER RISKS, INCLUDING
A GREATER RISK OF DEFAULT, THAN HIGHER QUALITY SECURITIES. YOU SHOULD CAREFULLY
CONSIDER THE GREATER RISKS OF JUNK BONDS BEFORE INVESTING. SEE "TYPES OF
SECURITIES" ON PAGE __ AND "ADDITIONAL RISK FACTORS" ON PAGE __.

THE FUND RESERVES THE RIGHT TO INVEST MORE THAN 15% OF ITS TOTAL ASSETS IN
SECURITIES OF UNSEASONED ISSUERS AND SECURITIES WHICH MAY BE CONSIDERED
RESTRICTED SECURITIES, INCLUDING RULE 144A SECURITIES.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page ___ .

The Fund is a portfolio of Janus Investment Fund (the "Trust") which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.

Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated _______________, 1995 is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

1
<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

2
<PAGE>

CONTENTS

THE FUND AT A GLANCE
Brief Description of the Fund ........................................... 4

EXPENSE INFORMATION
The Fund's annual operating expenses .................................... 5

THE FUND IN DETAIL
The Fund's Investment Objectives and Policies ........................... 6
General Portfolio Policies .............................................. 9
Additional Risk Factors ................................................. 11

PERFORMANCE TERMS
An Explanation of Performance Terms ..................................... 14

SHAREHOLDER'S MANUAL
Types of Account Ownership .............................................. 15
How to Open an Account .................................................. 16
How to Purchase Shares .................................................. 17
How to Exchange Shares .................................................. 19
How to Redeem Shares .................................................... 20
Shareholder Services and Account Policies ............................... 23
JETS(R) ................................................................. 23
Transactions Through Processing Organizations ........................... 23
Tax Identification Number ............................................... 23
Share Certificates ...................................................... 23
Involuntary Redemption .................................................. 24
Telephone Transactions .................................................. 24
Making Changes to Your Acccount ......................................... 24
Statements and Reports .................................................. 24

MANAGEMENT OF THE FUND
Management & Portfolio Manager .......................................... 25
Management Expenses ..................................................... 26
Portfolio Transactions .................................................. 26
Other Service Providers ................................................. 26
Other Information ....................................................... 27

DISTRIBUTIONS AND TAXES
Distribution Options and Taxes .......................................... 29

APPENDIX A
Glossary of Investments and Investment Techniques ....................... 31

APPENDIX B
Explanation of Rating Categories ........................................ 35

3
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVES:

The primary investment objective of the Fund is to obtain high current income.
Capital appreciation is a secondary objective when consistent with the primary
objective.

PRIMARY HOLDINGS:

The Fund is a diversified fund that pursues its objectives primarily through
investments in high-yield fixed-income securities. The Fund emphasizes
investments in high-yield corporate debt securities ("junk bonds") and may
invest all of its assets in such securities.

SHAREHOLDER'S INVESTMENT HORIZON:

The Fund is designed for long-term aggressive investors who primarily seek high
current income with some potential for capital growth, and who are willing to
accept greater price movements and credit and other risks associated with
investment in high-yield securities.

FUND ADVISER:

Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages over $28 billion in assets.

FUND MANAGER:

Ronald V. Speaker

FUND INCEPTION:

December 1995

4
<PAGE>

EXPENSE INFORMATION

The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.

SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange Fee None

* There is an $8 service fee for redemptions by wire.

ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

Management Fee .48%
Other Expenses .52%
Total Fund Operating Expenses 1.00%

EXAMPLE(1)

Assume you invest $1,000, the Fund returns 5% annually and the expense ratio
remains as listed above. This example shows the operating expenses that you
would indirectly bear as an investor in the Fund.

1 Year 3 Years
------ -------
$10 $32

(1) The fees and expenses in the table and example above are based on the
estimated fees and expenses that the Fund expects to incur in its
initial fiscal year, net of fee waivers from Janus Capital. Without
such waivers, the Management Fee, Other Expenses and Total Fund
Operating Expenses are estimated to be .75%, .52% and 1.27%,
respectively.

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

5
<PAGE>

THE FUND IN DETAIL

This section takes a closer look at the Fund's investment objectives, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a description of certain of the Fund's investments (and certain of the risks
associated with those investments). You should carefully consider your own
investment goals, time horizon and risk tolerance before investing in the Fund.

Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objectives, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objectives or policies, you should consider
whether the Fund remains an appropriate investment for you.

INVESTMENT OBJECTIVES

The primary investment objective of the Fund is to obtain high current income.
Capital appreciation is a secondary objective when consistent with its primary
objective. Capital appreciation may result, for example, from an improvement in
the credit standing of an issuer whose securities are held by the Fund or from a
general lowering of interest rates, or both. The Fund pursues its objectives by
investing primarily in high-yield fixed-income securities. The Fund will
normally invest at least 65% of its total assets in those securities.

TYPES OF INVESTMENTS

The Fund may invest in a variety of income-producing securities including
corporate bonds and notes, government securities, preferred stock, debt
securities that are convertible or exchangeable into equity securities, and debt
securities that carry with them the right to acquire equity securities as
evidenced by warrants attached to or acquired with the securities. The Fund may
invest to a lesser degree in common stocks, other equity securities or debt
securities that are not currently paying interest.

The high yields sought by the Fund are expected to result primarily from
investments in longer-term, lower quality corporate bonds, commonly referred to
as "junk" bonds. The Fund considers lower quality securities to be securities
rated below investment grade by established rating agencies or unrated
securities of comparable quality. Securities rated BB or lower by Standard &
Poor's Ratings Services ("Standard & Poor's") or Ba or lower by Moody's
Investors Service, Inc. ("Moody's") are below investment grade. Lower quality
securities are often considered to be speculative and involve greater risk of
default or price changes due to changes in interest rates, economic conditions
and the issuer's creditworthiness. As a result, their market prices tend to
fluctuate more than higher quality securities of comparable maturity. Additional
risks of lower quality securities are described under "Additional Risk Factors"
on page ___.

The Fund may purchase defaulted debt securities if, in the opinion of Janus
Capital, it appears likely that the issuer may resume interest payments or other
advantageous developments appear likely in the near term. Defaulted debt
securities may be illiquid and subject to the Fund's limit on illiquid
investments.

6
<PAGE>

The Fund may invest without limit in foreign securities, including those of
corporate and government issuers. The risks of foreign securities are described
under "Additional Risk Factors" on page ___.

The Fund may also invest in mortgage- and asset-backed securities; zero coupon,
pay-in-kind and step coupon securities; securities purchased on a when-issued,
delayed delivery or forward commitment basis; and indexed/structured securities.
The Fund may use futures, options, swaps, forward contracts and other
derivatives for hedging purposes or for other purposes, such as enhancing
return. See "Additional Risk Factors" on page ___ and Appendix A.

When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash and similar investments are a residual -- they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities.

Securities that the Fund may purchase as a means of receiving a return on idle
cash include commercial paper, certificates of deposit, repurchase agreements
and other instruments. The Fund may also invest in money market funds (including
money market funds managed by Janus Capital). When the Fund's investments in
cash or similar investments increase, the Fund may not participate in the
high-yield security market advances or declines to the same extent that it would
if the Fund remained more fully invested in high-yield securities.

See Appendix A for a further description of the Fund's investments.

[Sidebar] THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN
INVESTMENT IN THE FUND.

WHAT IS MEANT BY "CREDIT QUALITY"?

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. Corporate debt securities, particularly those rated below investment
grade, present the highest credit risk.

HOW IS CREDIT QUALITY MEASURED?

Ratings published by nationally recognized rating agencies such as Standard &
Poor's and Moody's 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 Appendix B for a description of rating
categories.

7
<PAGE>

WHAT IS A HIGH-YIELD SECURITY?

A high-yield security (also called a "junk" bond) is 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.

WHAT RISKS DO HIGH-YIELD SECURITIES PRESENT?

High-yield securities are often considered to be speculative and involve greater
risk of default or price changes due to changes in economic and industry
conditions and the issuer's creditworthiness. Their market prices tend to
fluctuate more than higher quality securities as a result of changes in these
factors.

The default rate of lower quality debt securities is likely to be higher when
issuers have difficulty meeting projected goals or obtaining additional
financing. This could occur during economic recessions or periods of high
interest rates. In addition, there may be a smaller market for lower quality
securities than for higher quality securities, making lower quality securities
more difficult to sell promptly at an acceptable price.

The junk bond market can experience sudden and sharp price swings and thus,
investors in the Fund should be willing to tolerate significant and sudden
changes in the Fund's net asset value.

HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?

Another fundamental risk associated with any fund that invests in fixed-income
securities (e.g., a bond fund) is the risk that the value of the securities it
holds will rise or fall as interest rates change. 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. A bond fund's
average-weighted maturity and its duration are measures of how the fund will
react to interest rate changes. High-yield bond prices are generally less
directly responsive to interest rate changes than investment grade issues and
may not always follow this pattern.

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

The stated maturity of a bond is the date when the issuer must repay the bond's
entire principal value to an investor, such as the Fund. A bond's term to
maturity is the number of years remaining to maturity. A bond fund does not have
a stated maturity, but it does have an average-weighted maturity. This number is
calculated by averaging the terms to maturity of bonds held by the Fund with
each maturity "weighted" according to the percentage of net assets that it
represents.

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

8
<PAGE>

on a bond, the lower its duration will be. The duration of a bond fund 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.

HOW DOES THE FUND MANAGE INTEREST RATE RISK?

The Fund may vary the average-weighted maturity of its portfolio to reflect its
portfolio manager's analysis of interest rate trends and other factors. The
Fund's average-weighted maturity will tend to be shorter when its 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 risk. See "Additional Risk Factors" on page
__.

GENERAL PORTFOLIO POLICIES

The Fund will follow the general policies listed below in investing its
portfolio assets. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the 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.

DIVERSIFICATION

The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:

o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.

o As a fundamental policy, with respect to 75% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.

o The Fund will invest no more than 25% of its assets in a single issuer.

INDUSTRY CONCENTRATION

As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.

PORTFOLIO TURNOVER

9
<PAGE>

yield objective, anticipated 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. Changes are made in the 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.

To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The 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. 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. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.

ILLIQUID INVESTMENTS

The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for 144A securities and certain other securities, including
commercial paper.

BORROWING AND LENDING

The Fund may borrow money and lend securities or other assets, as follows:

o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.

o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.

o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.

The Fund intends to seek permission from the SEC to 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. There is no assurance that such permission will be granted.

10
<PAGE>

JOINT ACCOUNTS

The Fund has requested exemptive relief from the SEC to permit the Fund and
other funds advised by Janus Capital to invest in certain money market
instruments through a joint account. Accordingly, the Fund may purchase such
instruments through a joint account if such relief is granted.

ADDITIONAL RISK FACTORS

HIGH-YIELD/HIGH-RISK BONDS

[sidebar] HIGH-YIELD/HIGH-RISK BONDS (OR "JUNK" BONDS) ARE DEBT SECURITIES RATED
BELOW INVESTMENT GRADE BY THE PRIMARY RATING AGENCIES (SUCH AS STANDARD & POOR'S
AND MOODY'S) OR UNRATED SECURITIES OF EQUIVALENT QUALITY. PLEASE REFER TO
APPENDIX B FOR A DESCRIPTION OF BOND RATING CATEGORIES. THE FUND MAY INVEST IN
BONDS OF ANY QUALITY, INCLUDING UNRATED SECURITIES.

The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (for instance, an economic downturn or prolonged period of
rising interest rates), political changes or adverse developments specific to
the issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing, particularly if the
issuer is highly leveraged. In the event of a default, the Fund would experience
a reduction of its income and could expect a decline in the market value of the
defaulted securities.

The market for lower quality securities is generally less liquid than the market
for higher quality bonds. Adverse publicity and investor perceptions as well as
new or proposed laws may also have a greater negative impact on the market for
lower quality securities. Unrated debt, while not necessarily of lower quality
than rated securities, may not have as broad a market. Sovereign debt of foreign
governments is generally rated by country. Because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly, Janus Capital may treat such securities as unrated debt.

The market prices of high-yield bonds structured as zero coupon or pay-in-kind
securities are generally affected to a greater extent by interest rate changes
and tend to be more volatile than securities which pay interest periodically. In
addition, zero coupon, pay-in-kind and delayed interest bonds do not pay
interest until maturity. However, the Fund must recognize a computed amount of
interest income and pay dividends to shareholders even though it has received no
cash. In some instances, the Fund may have to sell securities to have sufficient
cash to pay the dividends.

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FOREIGN SECURITIES

[Sidebar] INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN
GOVERNMENTS, INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC
SECURITIES.

Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

o Currency Risk. The Fund must buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.

o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments 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
the Fund's assets from that country.

o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.

o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing 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. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.

o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage tax and custody costs, are generally higher
than those involved in domestic transactions.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS

The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively, "derivative instruments"). The Fund intends to use derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as increasing the Fund's income or otherwise enhancing
return. Please refer to

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<PAGE>

Appendix A and the SAI for a more detailed discussion of these instruments.

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;

o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;

o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;

o inability to close out certain hedged positions to avoid adverse tax
consequences;

o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;

o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and

o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.

When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.

SPECIAL SITUATIONS

The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the 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.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.

See Appendix A for risks associated with certain other investments.

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PERFORMANCE TERMS

This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund may measure performance in terms of yield or total
return.

Cumulative Total Return represents the actual rate of return on an investment
for a specified period. Cumulative total return is generally quoted for more
than one year (e.g., the life of the Fund). A cumulative total return does not
show interim fluctuations in the value of an investment.

Average Annual Total Return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.

Yield shows the rate of income the Fund earns on its investments as a percentage
of the Fund's share price. It is calculated by dividing a Fund's net investment
income for a 30-day period by the average number of shares entitled to receive
dividends and dividing the result by the Fund's net asset value ("NAV") per
share at the end of the 30-day period. Yield does not include changes in NAV.

Yields are calculated according to standardized SEC formulas and may not equal
the income on an investor's account. Yield is usually quoted on an annualized
basis. An annualized yield represents the amount you would earn if you remained
in a Fund for a year and that Fund continued to have the same yield for the
entire year.

THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN OR
YIELD COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS
AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET
ASSET VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.

SHAREHOLDER'S MANUAL

This section will help you become familiar with the different types of accounts
you can establish with Janus. In addition, the Shareholder's Manual explains in
detail the wide array of services and features you can establish on your
account. These services may be modified or discontinued without shareholder
approval.

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<PAGE>

HOW TO GET IN TOUCH WITH JANUS

If you have any questions while reading this prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 7:00 a.m.-1:00
a.m., and Saturday-Sunday: 10:00 a.m.-7:00 p.m., New York time.

MINIMUM INVESTMENTS

To open a new account $1,000
To open a new retirement account
or UGMA/UTMA account $ 250
To open a new account with an Automatic
Investment Plan $ 0*
To add to any type of account $ 50*

*There is a $50 minimum monthly investment. This minimum may be waived for
certain accounts that participate in an automatic group billing purchase program
or automatic payroll deduction program.

TYPES OF ACCOUNT OWNERSHIP

If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this prospectus:

o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.

o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.

o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.

o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.

RETIREMENT ACCOUNTS

If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 59 1/2.

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<PAGE>

fee is $24 per taxpayer identification number. You may pay the fee by check or
have it automatically deducted from your account (usually in December). In lieu
of the annual fee, a special nonrefundable Lifetime IRA(R) Fee of $100 may be
paid. This fee covers all retirement plans that are maintained under the same
taxpayer identification number as long as they are continuously maintained at
Janus.

The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.

o Individual Retirement Account: An IRA allows individuals under the age of
70 1/2 with earned income to contribute up to the lesser of $2,000 or 100%
of compensation annually. Please refer to the Janus Funds IRA booklet for
complete information regarding IRAs.

o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.

o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.

o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.

HOW TO OPEN YOUR JANUS ACCOUNT

Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of following addresses:

Regular Mail Express or Certified Mail
------------ -------------------------
Janus Funds Janus Funds
P.O. Box 173375 100 Fillmore Street, Suite 300
Denver, CO 80217-3375 Denver, CO 80206-4923

INVESTOR SERVICE CENTERS

Janus Funds offers three Investor Service Centers for those individuals who
would like to conduct their investing in person. Our representatives will be
happy to assist you at any of the following locations:

100 Fillmore Street, Suite 100
Denver, CO 80206

3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209

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<PAGE>

1004 Baltimore Ave., Suite 100
Kansas City, MO 64105

JANUS NO MINIMUM INITIAL INVESTMENT PROGRAM(R)

If you participate in our popular Automatic Monthly Investment Program ($50
minimum monthly payment), the Fund will waive the minimum initial investment.
The Fund reserves the right to close your account if you discontinue the program
before your account reaches the required minimum initial investment. Please see
"Involuntary Redemption" on page ___. For more detailed information on automatic
monthly investing, see "How to Purchase Shares."

HOW TO PURCHASE SHARES

PAYING FOR SHARES

When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:

o Cash, credit cards, third party checks and credit card checks will not be
accepted.

o All purchases must be made in U.S. dollars.

o Checks must be drawn on a U.S. bank and made payable to Janus Funds.

o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.

o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.

o The Fund reserves the right to reject any specific purchase request.

If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.

ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $50. You may add to your account at any time through any of the
following options:

BY MAIL

Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.

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<PAGE>

BY TELEPHONE

This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you call to make an additional
purchase by telephone, Janus will automatically debit your predesignated bank
account for the desired amount. To establish the telephone purchase option on
your new account, complete the "Telephone Purchase of Shares" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten business days after the
form is received.

BY WIRE

Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.

AUTOMATIC INVESTMENT PROGRAMS

Automatic investing is an easy way to systematically add to your account. Janus
offers several automatic investment plans to help investors achieve their
financial goals as simply and conveniently as possible.

o Automatic Monthly Investment Program
You select the day each month that your money ($50 minimum) will be
electronically transferred from your bank account to your Fund account. To
establish this option, complete the "Automatic Investing" section on the
application and attach a "voided" check or deposit slip from your bank
account. If your Fund account is already established, call 1-800-525-3713
to request the appropriate form.

o Payroll Deduction
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.

o Systematic Exchange
With a Systematic Exchange you determine the amount of money ($50 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.

QUICK ADDRESS AND TELEPHONE REFERENCE

Regular Mail Express or Certified Mail
Janus Funds Janus Funds
P.O. Box 173375 100 Fillmore Street, Suite 300
Denver, CO 80217-3375 Denver, CO 80206-4923

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<PAGE>

Janus Investor Services 1-800-525-3713 Janus Quoteline(sm) 1-800-525-0024
To speak to a service representative. For automated daily quotes on fund
share prices, yields and total returns.

JETS(R) 1-800-525-6125 Janus Literature Line 1-800-525-8983
For 24-hour access to account and To request a prospectus, shareholder
fund information. reports or marketing materials.

TDD 1-800-525-0056
A telecommunications device for our
hearing and speech-impaired shareholders.

HOW TO EXCHANGE SHARES

On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.

IN WRITING

To request an exchange in writing, please follow the instructions for written
requests on page ---.

BY TELEPHONE

All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an investor service representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.

BY SYSTEMATIC EXCHANGE

As noted above, a Systematic Exchange may be established for as little as $50 a
month.

Please note our exchange policies:

o Except for Systematic Exchanges, the minimum is $1,000, or the total
account value if less than $1,000.

o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges). There is no charge for exchanges.

o Exchanges between accounts will be accepted only if the registrations are
identical.

o If the shares you are exchanging are held in certificate form, you must
return the certificate to the Fund prior to making any exchanges.

o Be sure that you read the prospectus for the fund into which you are
exchanging.

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<PAGE>

o The Fund reserves the right to reject any exchange request and to modify or
terminate the exchange privilege at any time. For example, the Fund may
reject exchanges from accounts engaged in excessive trading (including
market timing transactions) that are detrimental to the Fund.

o An exchange represents the sale of shares from one fund and the purchase of
shares of another fund, which may produce a taxable gain or loss in a
non-tax deferred account.

HOW TO REDEEM SHARES

On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.

IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE MAILING OF THE
REDEMPTION CHECK FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund during the 15 day hold period.

IN WRITING

To request a redemption in writing, please follow the instructions for written
requests noted on page ___.

BY TELEPHONE

Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.

This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.

SYSTEMATIC WITHDRAWAL PLAN ("SWP")

SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.

PAYMENT OF REDEMPTION PROCEEDS

o By Check
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.

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<PAGE>

o Electronic Transfer
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.

o By Wire
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.

WRITTEN INSTRUCTIONS

To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page ___ and must include the
following information:

o the name of the Fund
o the account number
o the amount of money or number of shares being redeemed
o the name(s) on the account
o the signature(s) of all registered account owners
o your daytime telephone number

o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE

o Individual, Joint Tenants, Tenants in Common: Written instructions
must be signed by each shareholder, exactly as the names appear in the
account registration.

o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.

o Sole Proprietor, General Partner: Written instructions must be signed
by an authorized individual in his/her capacity as it appears on the
account registration.

o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified
copy of the corporate resolution authorizing the signer to act must
accompany the request.

o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must
also be submitted.

o IRA: Written instructions must be signed by the account owner. If you
do not want

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<PAGE>

federal income tax withheld from your redemption, you must state that
you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
59 1/2) or premature (before age 59 1/2) and, if premature, whether
any exceptions such as death or disability apply with regard to the
10% additional tax on early distributions.

PRICING OF FUND SHARES

All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by 4:00
p.m. New York time. NAV per share is calculated by dividing the total value of
the Fund's securities, and other assets, less liabilities, by the total number
of shares outstanding. Securities 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.

SIGNATURE GUARANTEE

In addition to the signature requirements, a signature guarantee is also
required if any of the following is applicable:

o The redemption exceeds $100,000.

o You would like the check made payable to anyone other than the
shareholder(s) of record.

o You would like the check mailed to an address which has been changed within
10 days of the redemption request.

o You would like the check mailed to an address other than the address of
record.

THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.

HOW TO OBTAIN A SIGNATURE GUARANTEE

A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, brokers-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A signature guarantee may not
be provided by a notary public.

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<PAGE>

If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.

SHAREHOLDER SERVICES AND ACCOUNT POLICIES

JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))

JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.

TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS

You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. A Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customers, may be the shareholder
of record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.

TAX IDENTIFICATION NUMBER

On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.

SHARE CERTIFICATES

Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.

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<PAGE>

INVOLUNTARY REDEMPTION

If your account balance falls below the $1,000 minimum as a result of a
redemption or exchange or if you discontinue the Automatic Monthly Investment
Program before your account balance reaches the required minimum, you will be
given a 60-day notice to reestablish the minimum balance or activate an
Automatic Investment Program. If this requirement is not met, your account may
be closed and the proceeds sent to you.

The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.

TELEPHONE TRANSACTIONS

You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.

It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.

TEMPORARY SUSPENSION OF SERVICES

The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions or other shareholder services upon reasonable notice.

ADDRESS CHANGES

To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.

REGISTRATION CHANGES

To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.

STATEMENTS AND REPORTS

The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmations. 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. Account tax information will also be
sent to the IRS.

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<PAGE>

Financial reports for the Fund, which includes a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.

MANAGEMENT OF THE FUND

TRUSTEES

The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.

INVESTMENT ADVISER

Janus Capital, 100 Fillmore, Suite 300, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.

Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.

Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
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 its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.

Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund 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 Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.

PORTFOLIO MANAGER

Ronald V. Speaker is the Executive Vice President and portfolio manager of the
Fund, which he has managed since inception. Mr. Speaker joined Janus Capital in
1986 and has managed each of Janus Intermediate Government Securities Fund,
Janus Short-Term Bond Fund and Janus Federal Tax-Exempt Fund since their
inceptions and has managed Janus Flexible Income Fund since December 1991. He
holds a Bachelor of Arts in Finance from the University of Colorado and is a
Chartered Financial Analyst.

25
<PAGE>

PERSONAL INVESTING

Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.

BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS

The Fund pays Janus Capital a management fee equal, on an annual basis, to .75%
of the first $300 million of average daily net assets and .65% of average daily
net assets in excess of $300 million. The fee is accrued daily and paid monthly.
The advisory agreement with the Fund spells out the management fee and other
expenses that the Fund must pay. Janus Capital will waive certain fees and
expenses to the extent that the Fund's total expenses exceed 1.00% in any fiscal
year. This waiver will be continued until at least October 31, 1996.

The actual management fee paid by the Fund may be higher than the management fee
paid by most other mutual funds. The Fund incurs expenses not assumed by Janus
Capital, including transfer agent and subcustodian 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.

PORTFOLIO TRANSACTIONS

Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the 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. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.

OTHER SERVICE PROVIDERS

The following parties provide the Fund with administrative and other services.

Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64106

26
<PAGE>

Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101

Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217

Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.

OTHER INFORMATION

ORGANIZATION

The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective.

The Trust consists of 19 separate series, including the Fund. The Trust
currently offers the other 18 series of the Trust pursuant to separate
prospectuses.

SHAREHOLDER MEETINGS

The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically 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 the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.

SIZE OF THE FUND

27
<PAGE>

the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.

MASTER/FEEDER OPTION

The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The shareholders of the Trust of record on April 30, 1992,
and the initial shareholder(s) of all series of the Trust created after April
30, 1992, have voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of the shareholders of the
Fund is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Fund believes that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.

DISTRIBUTIONS AND TAXES

[Sidebar- bold] DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS ARE DECLARED DAILY AND PAID AS OF THE LAST
BUSINESS DAY OF EACH MONTH. IF A MONTH BEGINS ON A SATURDAY, SUNDAY OR HOLIDAY,
DIVIDENDS FOR THOSE DAYS ARE PAID AT THE END OF THE PRECEDING MONTH. CAPITAL
GAINS DISTRIBUTIONS (IF ANY) ARE DECLARED AND PAID IN DECEMBER. NOTICES OF
DIVIDENDS ARE MAILED AS OF EACH CALENDAR QUARTER END.

HOW DISTRIBUTIONS AFFECT A FUND'S NAV

Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the 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.

"BUYING A DIVIDEND"

28
<PAGE>

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.

DISTRIBUTION OPTIONS

When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800- 525-3713. The Fund offers the following options:

1. Reinvestment Option. You may reinvest your income dividends and
capital gains distributions to purchase additional shares. This option
is assigned automatically if no other choice is made.

2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.

3. Reinvest and Cash Option. You may receive either your income dividends
or capital gains distributions in cash and reinvest the other to
purchase additional shares.

4. Redirect Option. You may direct your dividends or capital gains to
purchase shares of another Janus fund.

TAXES

As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
your residence.

TAXES ON DISTRIBUTIONS

Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the 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.

TAXATION OF THE FUND

Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.

29
<PAGE>

The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meets these requirements so that any earnings on your
investment will not be taxed twice.

30
<PAGE>

APPENDIX A

GLOSSARY OF INVESTMENTS AND INVESTMENT TECHNIQUES

This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objectives
and policies. The Fund is not limited by this discussion and may invest in any
other type of instrument permitted by the policies discussed elsewhere in this
Prospectus. Please refer to the SAI for a more detailed discussion of these
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) at a specified maturity and to make scheduled
interest payments.

Certificates of Participation ("COPs") are certificates representing an
interest in a pool of securities. Holders are entitled to a proportionate
interest in the underlying securities.

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 Fund may purchase commercial paper
issued under Section 4(2) of the Securities Act of 1933. Janus Capital may
determine that such securities are liquid under guidelines established by the
Trustees.

Common stock represents a share of ownership in a company, and usually
carries 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.

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 securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms

31
<PAGE>

commonly used to describe such securities 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, the 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. Income tax regulations may require the
Fund to recognize income associated with the PFIC prior to the actual receipt of
any such income.

Preferred stock is a class of stock that generally pays dividends at a
specified rate and has 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 the 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, the 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 the 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 to provide cash to satisfy unusually heavy 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. Janus Capital may determine that such
securities are liquid pursuant to procedures adopted by the Trustees.

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

Tender option bonds are generally long-term securities that have been
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.

32
<PAGE>

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.

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 "underlying index"). Certain variable rate
securities (including certain mortgage-backed securities) pay interest at a rate
that varies inversely to prevailing short-term interest rates (sometimes
referred to as inverse floaters). 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 mechanism that multiplies the
effects of changes in the underlying index. Such mechanism may increase the
volatility of the security's market value.

Warrants are securities, typically issued with preferred stocks 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 Fund does not earn interest on such
securities until settlement and bears 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 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. Strips 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.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

Forward contracts are contracts to purchase or sell a specified amount of
property 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 Fund may enter into forward currency contracts to hedge against declines in
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation

33
<PAGE>

on purchases of non-dollar denominated securities. It 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 at a specified price on a specified date. The
Fund 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 Fund 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. The 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.

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 Fund may purchase and write put and call options on
securities, securities indices and foreign currencies.

34
<PAGE>

APPENDIX B

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 the adviser considers security ratings when
making investment decision, it also performs its own investment analysis and
does not rely solely on the ratings assigned by credit agencies.

STANDARD & POOR'S RATINGS SERVICES

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.

MOODY'S INVESTORS SERVICE, INC.
--------------------------------------------------------------------------------

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.

35
<PAGE>

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

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.

36
<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 15, 1995

JANUS OLYMPUS FUND

100 Fillmore Street, Suite 300
Denver, CO 80206-4923
1-800-525-3713

PROSPECTUS

_________________, 1995

Janus Olympus Fund (the "Fund") is a no-load, nondiversified mutual fund that
seeks long-term growth of capital. The Fund pursues its objective by investing
primarily in common stocks of issuers of any size, which may include larger
well-established issuers and/or smaller emerging growth companies. The Fund is
recently organized and has a limited operating history.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page ___.

Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated _________________, 1995,
is incorporated by reference into this Prospectus. For a copy of the SAI, write
or call the Fund at the address or phone number listed above.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

1
<PAGE>

CONTENTS

THE FUND AT A GLANCE
Brief description of the Fund ........................................... 3

EXPENSE INFORMATION
The Fund's annual operating expenses .................................... 4

THE FUND IN DETAIL
The Fund's Investment Objective and Policies ............................ 5
General Portfolio Policies .............................................. 7
Additional Risk Factors ................................................. 9

PERFORMANCE TERMS
An Explanation of Performance Terms ..................................... 11

SHAREHOLDER'S MANUAL
Types of Account Ownership .............................................. 13
How to Open an Account .................................................. 14
How to Purchase Shares .................................................. 15
How to Exchange Shares .................................................. 17
How to Redeem Shares .................................................... 18
Shareholder Services and Account Policies ............................... 21
JETS(R) ................................................................. 21
Transactions Through Processing Organizations ........................... 21
Tax Identification Number ............................................... 21
Share Certificates ...................................................... 21
Involuntary Redemption .................................................. 21
Telephone Transactions .................................................. 22
Making Changes to Your Account .......................................... 22
Statements and Reports .................................................. 22

MANAGEMENT OF THE FUND
Management & Portfolio Manager .......................................... 23
Management Expenses ..................................................... 24
Portfolio Transactions .................................................. 24
Other Service Providers ................................................. 25
Other Information ....................................................... 25

DISTRIBUTIONS AND TAXES
Distribution Options and Taxes .......................................... 27

APPENDIX A
Glossary of Investments and Investment Techniques ....................... 29

2
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVE:

The investment objective of the Fund is long-term growth of capital.

PRIMARY HOLDINGS:

The Fund is a nondiversified fund that pursues its investment objective by
investing primarily in common stocks of companies of any size.

SHAREHOLDER'S INVESTMENT HORIZON:

The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in foreign and
domestic common stocks. The Fund is not designed as a short-term trading vehicle
and should not be relied upon for short-term financial needs.

FUND ADVISER:

FUND MANAGER:

Scott W. Schoelzel

FUND INCEPTION:

December 1995

3
<PAGE>

EXPENSE INFORMATION

SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange Fee None

* There is an $8 service fee for redemptions by wire.

ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

Management Fee .82%
Other Expenses .40%
Total Fund Operating Expenses 1.22%

EXAMPLE(1)

1 Year 3 Years
------ -------
Assume you invest $1,000, the Fund $12 $39
returns 5% annually and the expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund.

(1) The fees and expenses in the table and example above are based on the
estimated fees and expenses that the Fund expects to incur in its
initial fiscal year.

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

4
<PAGE>

THE FUND IN DETAIL

This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a description of certain of the Fund's investments (and certain of the risks
associated with those investments). You should carefully consider your own
investment goals, time horizon and risk tolerance before investing in the Fund.

Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.

INVESTMENT OBJECTIVE

The investment objective of the Fund is long-term growth of capital. It is a
nondiversified fund that pursues its objective by investing primarily in common
stocks of issuers of any size, which may include larger well-established issuers
and/or smaller emerging growth companies.

TYPES OF INVESTMENTS

The Fund invests substantially all of its assets in common stocks selected for
their growth potential. The Fund may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities and debt
securities. Debt securities that the Fund may purchase include corporate bonds
and debentures (not to exceed 35% of net assets in high-yield/high-risk bonds);
government securities; mortgage- and asset-backed securities (not to exceed 25%
of assets); zero-coupon bonds (not to exceed 10% of assets); indexed/structured
notes; high-grade commercial paper; certificates of deposit; and repurchase
agreements. Such securities may offer growth potential because of anticipated
changes in interest rates, credit standing, currency relationships or other
factors. The Fund may also invest in short-term debt securities and money market
funds (including money market funds managed by Janus Capital) as a means of
receiving a return on idle cash.

When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual -- they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.

The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See

5
<PAGE>

"Additional Risk Factors" on page __. The Fund may purchase securities on a
when-issued, delayed delivery or forward commitment basis.

[Sidebar] THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN
INVESTMENT IN THE FUND.

HOW ARE COMMON STOCKS SELECTED?

The Fund invests substantially all of its assets in common stocks to the extent
its portfolio manager believes that the relevant market environment favors
profitable investing in those securities. The portfolio manager takes a "bottom
up" approach to building the portfolio. In other words, the manager seeks to
identify individual companies with earnings growth potential that may not be
recognized by the market at large. Although themes may emerge in the Fund,
securities are selected without regard to any defined industry sector or other
similarly defined selection procedure. Realization of income is not a
significant investment consideration. Any income realized on the Fund's
investments will be incidental to its primary objective.

ARE THE SAME CRITERIA USED TO SELECT FOREIGN STOCKS?

Generally, yes. The portfolio manager seeks companies with earnings growth
potential, regardless of country of organization or place of principal business
activity. Foreign securities are 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 stocks. See "Additional Risk
Factors" on page ___.

WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?

The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors" on page ___.

HOW DOES A DIVERSIFIED FUND DIFFER FROM A NONDIVERSIFIED FUND?

A "nondiversified" fund, such as the Fund, has the ability to take larger
positions in a smaller number of issuers than a "diversified" fund. 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.

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<PAGE>

HOW DOES THE FUND TRY TO REDUCE RISK?

The Fund may use futures, options and other derivative instruments to protect
the portfolio from movements in securities prices and interest rates. The Fund
may also use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk when investing directly in
foreign markets. See "Additional Risk Factors" on page ___. In addition, to the
extent that the Fund holds a larger cash position, it may not participate in
market declines to the same extent as if it had remained more fully invested in
common stocks.

GENERAL PORTFOLIO POLICIES

DIVERSIFICATION

The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
nondiversified fund under the 1940 Act and is subject to the following
requirements:

o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 50% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
o The Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.

INDUSTRY CONCENTRATION

As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.

PORTFOLIO TURNOVER

The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective,
anticipated 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. Changes are made in the 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.

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<PAGE>

ILLIQUID INVESTMENTS

The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for 144A Securities and certain other securities, including
commercial paper.

BORROWING AND LENDING

The Fund may borrow money and lend securities or other assets, as follows:

o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.

JOINT ACCOUNTS

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<PAGE>

ADDITIONAL RISK FACTORS

INVESTMENTS IN SMALLER COMPANIES

[sidebar] SMALLER OR NEWER COMPANIES MAY SUFFER MORE SIGNIFICANT LOSSES AS WELL
AS REALIZE MORE SUBSTANTIAL GROWTH THAN LARGER OR MORE ESTABLISHED ISSUERS.

The Fund may invest in companies that have relatively small revenues, have a
small share of the market for their products or services, or have limited
geographic or product markets. Small companies may lack depth of management,
they may be unable to generate internally funds necessary for growth or
potential development or to generate such funds through external financing on
favorable terms, or they may 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 companies. Securities of
small companies held by the Fund may have limited trading markets that may be
subject to wide price fluctuations. Investments in such companies tend to be
more volatile and somewhat more speculative.

SPECIAL SITUATIONS

FOREIGN SECURITIES

[Sidebar] INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN
GOVERNMENTS, INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC
SECURITIES.

Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

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<PAGE>

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
the Fund's assets from that country.

o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS

The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as increasing the Fund's income or otherwise enhancing
return. Please refer to Appendix A and the SAI for a more detailed discussion of
these instruments.

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;

o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;

o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;

o inability to close out certain hedged positions to avoid adverse tax
consequences;

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<PAGE>

HIGH-YIELD/HIGH-RISK BONDS

High-yield/high-risk bonds (or "junk" bonds) are debt securities rated below
investment grade by the primary rating agencies (Standard & Poor's and Moody's).
The Fund expects that its holdings of lower rated securities, if any, will
consist primarily of bonds rated in the highest two tiers of noninvestment grade
securities.

The value of lower rated securities generally is more dependent on the ability
of the company to meet interest and principal payments (i.e., credit risk) than
is the case for higher rated securities. Conversely, the value of higher rated
securities may be more sensitive to interest rate movements than lower rated
securities. In addition, companies issuing high-yield securities are more
vulnerable to real or perceived economic changes, political changes and other
developments adverse to the company, and lower rated securities may have less
liquid markets than higher rated securities. Investments in companies issuing
high-yield securities are considered to be more speculative than higher quality
investments.

Please refer to the SAI for a description of bond rating categories, including
the treatment of unrated securities and securities that have received different
ratings from different agencies.

See Appendix A for risks associated with certain other investments.

PERFORMANCE TERMS

This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media

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<PAGE>

articles. Our newsletters and advertisements may include comparisons of the
Fund's performance to the performance of other mutual funds, mutual fund
averages or recognized stock market indices. The Fund generally measures
performance in terms of total return.

Cumulative Total Return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.

The Fund imposes no sales or other charges that would affect total return
computations. Fund performance figures are based upon historical results and are
not intended to indicate future performance. Investment returns and net asset
value will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.

SHAREHOLDER'S MANUAL

HOW TO GET IN TOUCH WITH JANUS

MINIMUM INVESTMENTS:

To open a new account $1,000
To open a new retirement account
or UGMA/UTMA account $ 250
To open a new account with an Automatic
Investment Program $ 0*
To add to any type of account $ 50*

*There is a $50 minimum monthly investment. This minimum may be waived for
certain accounts that participate in an automatic group billing purchase program
or automatic payroll deduction program.

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<PAGE>

TYPES OF ACCOUNT OWNERSHIP

o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.

o Trust. An established trust can open a Fund account. The names of each
trustee, the name of the trust and the date of the trust agreement must be
included on the application.

o Business Accounts. Corporations and partnerships may also open a Fund
account. The application must be signed by an authorized officer of the
corporation or a general partner of the partnership.

RETIREMENT ACCOUNTS

If you are eligible, you may set up an account under a tax-sheltered retirement
plan. A retirement plan allows you to shelter your investment income and capital
gains from current income taxes. A contribution to these plans may also be tax
deductible. Distributions from retirement plans are generally subject to income
tax and may be subject to an additional tax if withdrawn prior to age 59 1/2.

Investors Fiduciary Trust Company ("IFTC") serves as custodian for the
Retirement Plans offered by the Fund. There is an annual $12 fee per account to
maintain your retirement account. The maximum annual fee is $24 per taxpayer
identification number. You may pay the fee by check or have it automatically
deducted from your account (usually in December). In lieu of the annual fee, a
special nonrefundable Lifetime IRA(R) Fee of $100 may be paid. This fee covers
all retirement plans that are maintained under the same taxpayer identification
number as long as they are continuously maintained at Janus.

The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.

o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 70 1/2 with earned income to contribute up to the lesser of $2,000
or 100% of compensation annually. Please refer to the Janus Funds IRA
booklet for complete information regarding IRAs.

o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.

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<PAGE>

o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.

o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.

HOW TO OPEN YOUR JANUS ACCOUNT

Regular Mail Express or Certified Mail
------------ -------------------------
Janus Funds Janus Funds
P.O. Box 173375 100 Fillmore Street, Suite 300
Denver, CO 80217-3375 Denver, CO 80206-4923

INVESTOR SERVICE CENTERS

100 Fillmore Street, Suite 100
Denver, CO 80206

3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209

1004 Baltimore Ave., Suite 100
Kansas City, MO 64105

JANUS NO MINIMUM INITIAL INVESTMENT PROGRAM(R)

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<PAGE>

HOW TO PURCHASE SHARES

PAYING FOR SHARES

When you purchase shares, your request will be processed at the next net asset
value ("NAV") calculated after your order is received and accepted. Please note
the following:

o Cash, credit cards, third party checks and credit card checks will not be
accepted.

o All purchases must be made in U.S. dollars.

o Checks must be drawn on a U.S. bank and made payable to Janus Funds.

o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.

o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.

o The Fund reserves the right to reject any specific purchase request.

ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $50. You may add to your account at any time through any of the
following options:

BY MAIL

BY TELEPHONE

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<PAGE>

BY WIRE

Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.

AUTOMATIC INVESTMENT PROGRAMS

Automatic investing is an easy way to systematically add to your account. Janus
offers several automatic investment programs to help investors achieve their
financial goals as simply and conveniently as possible.

QUICK ADDRESS AND TELEPHONE REFERENCE

Regular Mail Express or Certified Mail
Janus Funds Janus Funds
P.O. Box 173375 100 Fillmore Street, Suite 300
Denver, CO 80217-3375 Denver, CO 80206-4923

Janus Investor Services 1-800-525-3713 Janus Quoteline(sm) 1-800-525-0024
To speak to a service representative. For automated daily quotes on fund
share prices, yields and total
returns.

JETS(R) 1-800-525-6125 Janus Literature Line 1-800-525-8983
For 24-hour access to account and To request a prospectus, shareholder
fund information. reports or marketing materials.

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<PAGE>

TDD 1-800-525-0056
A telecommunications device for our
hearing and speech-impaired shareholders.

HOW TO EXCHANGE SHARES

On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.

IN WRITING

To request an exchange in writing, please follow the instructions for written
requests noted on page ___.

BY TELEPHONE

BY SYSTEMATIC EXCHANGE

As noted above, a Systematic Exchange may be established for as little as $50 a
month.

Please note our exchange policies:

o Except for Systematic Exchanges, the exchange minimum is $1,000, or the
total account value if less than $1,000.

o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges). There is no charge for exchanges.

o Exchanges between accounts will be accepted only if the registrations are
identical.

o If the shares you are exchanging are held in certificate form, you must
return the certificate to the Fund prior to making any exchanges.

o Be sure to read the prospectus for the fund into which you are exchanging.

o An exchange represents the sale of shares from one fund and the purchase of
shares of another fund, which may produce a taxable gain or loss in a
non-tax deferred account.

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<PAGE>

HOW TO REDEEM SHARES

IN WRITING

To request a redemption in writing, please follow the instructions for written
requests noted on page ___.

BY TELEPHONE

Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.

This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.

SYSTEMATIC WITHDRAWAL PLAN ("SWP")

SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.

PAYMENT OF REDEMPTION PROCEEDS

o By Check
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.

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<PAGE>

for each wire and your bank may charge an additional fee to receive the
wire. If you would like to establish this option on an existing account,
please call 1-800-525-3713 to request the appropriate form. Wire
redemptions are not available for retirement accounts.

WRITTEN INSTRUCTIONS

To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page ___ and must include the
following information:

o Signature Requirements Based on Account Type

o Individual, Joint Tenants, Tenants in Common: Written instructions
must be signed by each shareholder, exactly as the names appear in the
account registration.

o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.

o Sole Proprietor, General Partner: Written instructions must be signed
by an authorized individual in his/her capacity as it appears on the
account registration.

o IRA: Written instructions must be signed by the account owner. If you
do not want federal income tax withheld from your redemption, you must
state that you elect not to have such withholding apply. In addition,
your instructions must state whether the distribution is normal (after
age 59 1/2) or premature (before age 59 1/2) and, if premature,
whether any exceptions such as death or disability apply with regard
to the 10% additional tax on early distributions.

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<PAGE>

PRICING OF FUND SHARES

All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by 4:00
p.m. New York time. NAV per share is calculated by dividing the total value of
the Fund's securities and other assets, less liabilities, by the total number of
shares outstanding. Securities 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.

SIGNATURE GUARANTEE

In addition to the signature requirements, a signature guarantee is also
required if any of the following is applicable:

o The redemption exceeds $100,000.

o You would like the check made payable to anyone other than the
shareholder(s) of record.

o You would like the check mailed to an address that has been changed within
10 days of the redemption request.

o You would like the check mailed to an address other than the address of
record.

HOW TO OBTAIN A SIGNATURE GUARANTEE

A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A signature guarantee may not
be provided by a notary public.

If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.

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<PAGE>

SHAREHOLDER SERVICES AND ACCOUNT POLICIES

JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))

TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS

You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customers, may be the shareholder
of record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.

TAXPAYER IDENTIFICATION NUMBER

SHARE CERTIFICATES

INVOLUNTARY REDEMPTION

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<PAGE>

Monthly Investment Program. If this requirement is not met, your account may be
closed and the proceeds sent to you.

The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.

TELEPHONE TRANSACTIONS

TEMPORARY SUSPENSION OF SERVICES

The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services upon reasonable notice.

ADDRESS CHANGES

REGISTRATION CHANGES

To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.

STATEMENTS AND REPORTS

The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will have the option of requesting confirmation statements on a monthly or
quarterly basis. Statements will be mailed quarterly unless you instruct the
Fund otherwise. 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. Account tax information will also be sent to the IRS.

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<PAGE>

mailed to all accounts in the same household. Please call 1-800-525-3713 if you
would like to receive additional reports.

MANAGEMENT OF THE FUND

TRUSTEES

INVESTMENT ADVISER

Janus Capital, 100 Fillmore Street, Suite 300, Denver, Colorado 80206-4923, is
the investment adviser to the Fund and is responsible for the day-to-day
management of its investment portfolio and other business affairs.

PORTFOLIO MANAGER

Scott W. Schoelzel is the Executive Vice President and portfolio manager of the
Fund, which he has managed since inception. Mr. Schoelzel is Vice President of
Janus Capital, where he has been employed since January 1994. From 1991 to 1993,
Mr. Schoelzel was a portfolio manager with Founders Asset Management, Denver,
Colorado. Prior to 1991, he was a general partner of Ivy Lane Investments,
Denver, Colorado (a real estate investment partnership). He holds a Bachelor of
Arts in Business from Colorado College.

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<PAGE>

PERSONAL INVESTING

BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS

The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.

Average Daily Net Annual Rate
Assets of Fund Percentage(%)
---------------------------------------------------------------------
First $30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Over $500 Million .65%
---------------------------------------------------------------------

PORTFOLIO TRANSACTIONS

24
<PAGE>

OTHER SERVICE PROVIDERS

The following parties provide the Fund with administrative and other services.

Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64106

Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101

Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217

Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206

OTHER INFORMATION

ORGANIZATION

The Trust consists of 19 separate series, including the Fund. The Trust
currently offers the other 18 series of the Trust pursuant to separate
prospectuses.

SHAREHOLDER MEETINGS

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<PAGE>

a shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.

SIZE OF THE FUND

The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.

MASTER/FEEDER OPTION

DISTRIBUTIONS AND TAXES

HOW DISTRIBUTIONS AFFECT A FUND'S NAV

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<PAGE>

dividend in the amount of $0.25 per share. If the 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.

"BUYING A DIVIDEND"

If you purchase shares of the 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.

DISTRIBUTION OPTIONS

1. Reinvestment Option. You may reinvest your income dividends and
capital gains distributions to purchase additional shares. This option
is assigned automatically if no other choice is made.

2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.

3. Reinvest and Cash Option. You may receive either your income dividends
or capital gains distributions in cash and reinvest the other to
purchase additional shares.

4. Redirect Option. You may direct your dividends or capital gains into
another Janus fund.

TAXES

TAXES ON DISTRIBUTIONS

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<PAGE>

TAXATION OF THE FUND

The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meet these requirements so that any earnings on your
investment will not be taxed twice.

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<PAGE>

APPENDIX A

GLOSSARY OF INVESTMENTS AND INVESTMENT TECHNIQUES

This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other type of instruments permitted by the policies discussed elsewhere in this
Prospectus. Please refer to the SAI for a more detailed discussion of these
instruments.

I. EQUITY AND DEBT SECURITIES

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.

High-yield/High-risk bonds are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "non-investment grade bonds" and "junk bonds."

29
<PAGE>

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

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<PAGE>

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.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

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 Fund 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 Fund 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.

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<PAGE>

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).

<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 15, 1995

JANUS HIGH-YIELD FUND

100 Fillmore Street, Suite 300
Denver, CO 80206-4923
(800) 525-3713

STATEMENT OF ADDITIONAL INFORMATION

_______________, 1995

Janus High-Yield Fund (the "Fund") is a no-load mutual fund that seeks to
obtain high current income as its primary investment objective. Capital
appreciation is a secondary objective when consistent with the primary
objective. The Fund seeks to achieve these objectives by investing primarily in
high-yield, high-risk fixed-income securities.

The Fund is a separate series of Janus Investment Fund, a Massachusetts
business trust (the "Trust"). Each series of the Trust represents shares of
beneficial interest in a separate portfolio of securities and other assets with
its own objective and policies. The Fund is managed by Janus Capital Corporation
("Janus Capital").

This Statement of Additional Information ("SAI") is not a Prospectus and
should be read in conjunction with the Fund's Prospectus dated _______________,
1995, which is incorporated by reference into this SAI and may be obtained from
the Trust at the above address. This SAI contains additional and more detailed
information about the Fund's operations and activities than the Prospectus.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

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<PAGE>

JANUS HIGH-YIELD FUND

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

INVESTMENT POLICIES, RESTRICTIONS AND TECHNIQUES .......................... 3
Investment Objectives ................................................ 3
Portfolio Policies ................................................... 3
Investment Restrictions .............................................. 3
Types of Securities and Investment Techniques ........................ 6
Illiquid Investments ........................................ 6
Zero Coupon, Pay-In-Kind and Step Coupon Securities ......... 6
Pass-Through Securities ..................................... 7
Repurchase and Reverse Repurchase Agreements ................ 8
Futures, Options and Other Derivative Instruments ........... 9

INVESTMENT ADVISER ........................................................ 20

CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS ........................ 22

PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 23

OFFICERS AND TRUSTEES ..................................................... 24

PURCHASE OF SHARES ........................................................ 28
Net Asset Value Determination ........................................ 28
Reinvestment of Dividends and Distributions .......................... 29

REDEMPTION OF SHARES ...................................................... 29

SHAREHOLDER ACCOUNTS ...................................................... 30
Systematic Withdrawals ............................................... 30

RETIREMENT PLANS .......................................................... 30

INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONSAND TAX STATUS ............... 31

MISCELLANEOUS INFORMATION ................................................. 31
Shares of the Trust .................................................. 32
Voting Rights ........................................................ 32
Independent Accountants .............................................. 33
Registration Statement ............................................... 33

PERFORMANCE INFORMATION ................................................... 33

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<PAGE>

INVESTMENT POLICIES, RESTRICTIONS AND TECHNIQUES

INVESTMENT OBJECTIVES

As stated in the Prospectus, the Fund's investment objective is high
current income with capital appreciation as a secondary objective. There can be
no assurance that the Fund will achieve its objectives. The investment
objectives of the Fund are not fundamental and may be changed by the Trustees
without shareholder approval.

PORTFOLIO POLICIES

The Prospectus discusses the types of securities in which the Fund will
invest, portfolio policies of the Fund and the investment techniques of the
Fund. The Prospectus includes a discussion of portfolio turnover rates.

Portfolio turnover is calculated by dividing total long-term purchases or
sales, whichever is less, by the average monthly value of a fund's long-term
portfolio securities. The Fund anticipates that its portfolio turnover rate will
be approximately 200%.

INVESTMENT RESTRICTIONS

As indicated in the Prospectus, the Fund is 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 the Fund if a matter affects just
the Fund), 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) are present or represented by proxy. As fundamental policies, the
Fund may not:

(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to seventy-five percent (75%) of the value of its total
assets, purchase the securities of any one issuer (except cash items and
"government securities" as defined under the Investment Company Act of
1940, as amended (the "1940 Act")), if immediately after and as a result of
such purchase, the value of the holdings of the Fund in the securities of
such issuer exceeds 5% of the value of the Fund's total assets.

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

(3) Invest directly in real estate or interests in real estate; however,
the Fund 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 Fund from purchasing or selling options, futures,
swaps and forward contracts or from investing in securities or other
instruments backed by physical commodities).

3
<PAGE>

(5) 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).

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

As a fundamental policy, the 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 objectives, policies and
limitations as the Fund.

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

(a) The Fund's investments in warrants, valued at the lower of cost or
market, may not exceed 5% of the value of its net assets. Included within
that amount, but not to exceed 2% of the value of the Fund's net assets,
may be warrants that are not listed on the New York or American Stock
Exchange. Warrants acquired by the Fund in units or attached to securities
shall be deemed to be without value for the purpose of monitoring this
policy.

(b) The 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 the 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 the
Fund's commitments under outstanding futures contracts positions would
exceed the market value of its total assets.

(c) The Fund does not currently intend to sell securities short, unless it
owns or has 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
and forward contracts are not deemed to constitute selling securities
short.

(d) The Fund does not currently intend to purchase securities on margin,
except that the Fund 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 and
forward contracts shall not be deemed to constitute purchasing securities
on margin.

(e) The Fund does not currently intend to (i) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (ii) purchase or retain
securities issued by other open-end investment

4
<PAGE>

companies. Limitations (i) and (ii) do not apply to money market funds or
to securities received as dividends, through offers of exchange, or as a
result of a reorganization, consolidation, or merger. If the Fund invests
in a money market fund, Janus Capital will reduce its advisory fee by the
amount of any investment advisory and administrative services fees paid to
the investment manager of the money market fund.

(f) The Fund may not mortgage or pledge any securities owned or held by the
Fund in amounts that exceed, in the aggregate, 15% of the 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 or forward contracts, or the segregation of assets in connection
with such contracts.

(g) The Fund does not intend to purchase securities of any issuer (other
than U.S. government agencies and instrumentalities or instruments
guaranteed by an entity with a record of more than three years' continuous
operation, including that of predecessors) with a record of less than three
years' continuous operation (including that of predecessors) if such
purchase would cause the cost of the Fund's investments in all such issuers
to exceed 5% of the Fund's total assets taken at market value at the time
of such purchase.

(h) The Fund does not currently intend to invest directly in oil, gas, or
other mineral development or exploration programs or leases; however, the
Fund may own debt or equity securities of companies engaged in those
businesses.

(i) The Fund may borrow money for temporary or emergency purposes (not for
leveraging or investment) 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, 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.

(j) The Fund does not currently intend to purchase any security or enter
into a repurchase agreement, if as a result, more than 15% of its 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 Fund's
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.

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

5
<PAGE>

For purposes of the Fund's restriction on investing in a particular
industry, the Fund will rely primarily on industry classifications as published
by Bloomberg L.P., provided that financial service companies will be 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). To the extent that Bloomberg L.P. classifications are so broad that
the primary economic characteristics in a single class are materially different,
the Fund may further classify issuers in accordance with industry
classifications as published by the Securities and Exchange Commission ("SEC").

TYPES OF SECURITIES AND INVESTMENT TECHNIQUES

ILLIQUID INVESTMENTS

The Fund may invest up to 15% of its net assets in illiquid investments
(i.e., securities that are not readily marketable). The Trustees of the Fund
have authorized Janus Capital to make liquidity determinations with respect to
its securities, including Rule 144A Securities and commercial paper. 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.

ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES

The Fund may invest 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.

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"), the Fund must
distribute its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds. Because the 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 the Fund may have to distribute cash
obtained from other sources in order to satisfy the distribution requirements
under the Code. The Fund might obtain such cash from

6
<PAGE>

selling other portfolio holdings which might cause the Fund to incur capital
gains or losses on the sale. 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 the 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.

PASS-THROUGH SECURITIES

The Fund 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 Fund. The most common type of
pass-through securities are mortgage-backed securities. Government National
Mortgage Association ("GNMA") Certificates are mortgage-backed securities that
evidence an undivided interest in a pool of mortgage loans. GNMA 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. The Fund
will generally purchase "modified pass-through" GNMA 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 GNMA,
regardless of whether or not the mortgagor actually makes the payment. GNMA
Certificates are backed as to the timely payment of principal and interest by
the full faith and credit of the U.S. government.

The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC 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 FHLMC as to timely payment of principal
and interest but it is not guaranteed by the full faith and credit of the U.S.
government.

The Federal National Mortgage Association ("FNMA") issues guaranteed
mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates
resemble GNMA Certificates in that each FNMA 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 FNMA 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

7
<PAGE>

received the underlying mortgage loans. The payments to the security holders
(such as the Fund), 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 the 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 the Fund might be converted to cash and the 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 the
Fund's ability to participate in as large a market gain as may be experienced
with a comparable security not subject to prepayment.

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 or 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.

REPURCHASE AND REVERSE REPURCHASE AGREEMENTS

In a repurchase agreement, the 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 reflects 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." The Fund may engage in
a repurchase agreement with respect to any security in which it is authorized to
invest. A risk associated with repurchase agreements is the failure of the
seller to repurchase the securities as agreed, which may cause the 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, the Fund may encounter delays and incur costs in liquidating the
underlying security. Repurchase agreements that mature in more than seven days
will be subject to the 15% limit on illiquid investments. While it is not
possible to eliminate all risks from these transactions, it is the policy of the
Fund to limit repurchase agreements to those parties whose creditworthiness has
been reviewed and found satisfactory by Janus Capital.

8
<PAGE>

The Fund may use reverse repurchase agreements to provide 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, the 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, the Fund will maintain cash and appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. The
Fund will enter into reverse repurchase agreements only with parties that Janus
Capital deems creditworthy.

DEPOSITARY RECEIPTS

The Fund 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 Fund may also invest in European
Depositary Receipts ("EDRs"), receipts issued by a European financial
institution evidencing an arrangement similar to that of ADRs, and in other
similar instruments representing securities of foreign companies. EDRs, in
bearer form, are designed for use in European securities markets.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS

Futures Contracts. The Fund 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 high-grade liquid assets by the Fund's custodian 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 the Fund,
the Fund may be

9
<PAGE>

entitled to return of margin owed to the 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 Fund does business and by depositing margin payments in a segregated account
with the Fund's custodian.

The Fund intends 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 Fund will use futures contracts and related options primarily for
bona fide hedging purposes within the meaning of CFTC regulations. To the extent
that the Fund holds 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 the Fund's net assets, after taking into account
unrealized profits and unrealized losses on any such contracts it has entered
into.

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

The Fund's primary purpose in entering into futures contracts is to protect
the 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 owns Treasury bonds and the portfolio manager expects interest rates
to increase, the Fund may take a short position in interest rate futures
contracts. Taking such a position would have much the same effect as the Fund
selling Treasury bonds in its portfolio. If interest rates increase as
anticipated, the value of the Treasury bonds would decline, but the value of the
Fund's interest rate futures contract will increase, thereby keeping the net
asset value of the Fund from declining as much as it may have otherwise. If, on
the other hand, a portfolio manager expects interest rates to decline, the 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 the
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.

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<PAGE>

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 Fund believes that use of such
contracts will benefit the Fund, the Fund's overall performance could be worse
than if the Fund had not entered into futures contracts if the portfolio
manager's investment judgement proves incorrect. For example, if the Fund has
hedged against the effects of a possible decrease in prices of securities held
in its portfolio and prices increase instead, the 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 the 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 the 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
the Fund will not match exactly the Fund's current or potential investments. The
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 the Fund's
investments.

Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with the
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 the 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. The
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 the 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 the 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 the Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract

11
<PAGE>

is not liquid because of price fluctuation limits or otherwise, the 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, the Fund's access to
other assets held to cover its futures positions also could be impaired.

Options on Futures Contracts. The Fund may buy and write put and call
options on futures contracts. An option on a future gives the 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
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 the 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, the
Fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in the Fund's portfolio
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, the Fund will retain the full amount of the option premium which provides
a partial hedge against any increase in the price of securities which the Fund
is considering buying. If a call or put option the Fund has written is
exercised, the 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, the 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, the 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 the 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 invoice amount for the assets at the time of delivery. The Fund may
enter into forward contracts to purchase and sell government 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

12
<PAGE>

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 Fund's principal uses of forward
foreign currency exchange contracts ("forward currency contracts"). The Fund may
enter into forward currency contracts with stated contract values of up to the
value of the 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). The 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"). The Fund also may hedge some or all of its investments denominated in a
foreign currency 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 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. The 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 the 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 the 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 the Fund's currency exposure from one foreign
currency to another removes the Fund's opportunity to profit from increases in
the value of the original currency and involves a risk of increased losses to
the 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 the Fund than if it had not entered into such
contracts.

The Fund will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in the currency underlying the forward
contract or the currency being hedged. To the extent that the Fund is not able
to cover its forward currency positions with underlying portfolio securities,
the Fund's custodian will segregate cash or high-grade liquid assets having a
value equal to the aggregate amount of the 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, the Fund will find alternative cover or
segregate additional cash or high-grade liquid assets on a daily basis so that
the value of the covered

13
<PAGE>

and segregated assets will be equal to the amount of the Fund's commitments with
respect to such contracts. As an alternative to segregating assets, the Fund may
buy call options permitting the Fund to buy the amount of foreign currency being
hedged by a forward sale contract or the 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 contacts. In such event,
the Fund's ability to utilize forward contracts may be restricted. In addition,
the 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 Fund 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, the Fund may buy put options
on the foreign currency. If the value of the currency declines, the 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.

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, the 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 the 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 desired, the Fund could sustain losses on transactions in foreign
currency options that would require the Fund to forego a portion or all of the
benefits of advantageous changes in those rates.

The Fund 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, the 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, the Fund could
write a put option on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow the 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 the 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, the
Fund also may lose all or a portion of the benefits which might otherwise have
been obtained from favorable movements in exchange rates.

14
<PAGE>

The Fund may write covered call options on foreign currencies. A call
option written on a foreign currency by the Fund is "covered" if the 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 the 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 the Fund in cash or high-grade liquid assets in a segregated
account with the Fund's custodian.

The Fund 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
the 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, the Fund will collateralize the option by segregating cash or
high-grade 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 Fund 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 Fund may write
and buy options on the same types of securities that the Fund may purchase
directly.

A put option written by the Fund is "covered" if the Fund (i) segregates
cash not available for investment or high-grade liquid assets with a value equal
to the exercise price of the put with the Fund's custodian or (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 the Fund is "covered" if the 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 Fund's
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also deemed to be covered if the 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 the Fund in cash and high-grade
liquid assets in a segregated account with its custodian.

The Fund also may write call options that are not covered for cross-hedging
purposes. The Fund collateralizes its obligation under a written call option for
cross-hedging purposes by segregating cash or high-grade liquid assets in an
amount not less than the market value of the underlying security,

15
<PAGE>

marked to market daily. The 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 the 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 the Fund to write another put
option to the extent that the exercise price thereof is secured by deposited
high-grade liquid assets. Effecting a closing transaction also will permit the
Fund to use the cash or proceeds from the concurrent sale of any securities
subject to the option for other investments. If the Fund desires to sell a
particular security from its portfolio on which it has written a call option,
the Fund will effect a closing transaction prior to or concurrent with the sale
of the security.

The 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. The 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 the 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 the
Fund is unable to effect a closing purchase transaction in a secondary market,
it will

16
<PAGE>

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.

The Fund may write options in connection with buy-and-write transactions.
In other words, the 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, the Fund's maximum gain will be the premium
received by it for writing the option, adjusted upwards or downwards by the
difference between the 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 the 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, the Fund may elect to close the position or take
delivery of the security at the exercise price and the 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.

The Fund may buy put options to hedge against a decline in the value of its
portfolio. By using put options in this way, the 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.

The 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

17
<PAGE>

benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
worthless to the Fund.

Eurodollar Instruments. The 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. The 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. The 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 the 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 the 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
high-grade liquid assets having an aggregate net asset value at least equal to
the accrued excess will be maintained in a segregated account by the Fund's
custodian. If the 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. The 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 nationally recognized
statistical rating organization 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,
the 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 the
Fund sells (i.e., writes) caps and floors, it will segregate cash or high-grade
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 the Fund. These transactions may in some instances involve
the delivery of securities or other underlying assets by the 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 the Fund
is contractually obligated to make. If the other party to an interest rate swap
that is not collateralized defaults, the Fund would risk the loss of the net
amount of the payments that it contractually is entitled to receive. The Fund
may buy and sell (i.e., write) caps and floors without limitation, subject to
the segregation requirement described above.

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<PAGE>

Additional Risks of Options on Foreign Currencies, Forward Contracts and
Foreign Instruments. Unlike transactions entered into by the Fund 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 Securities and Exchange Commission ("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 the 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 the
Fund's ability to act upon economic events occurring in foreign markets during
non-business

19
<PAGE>

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.

INVESTMENT ADVISER

As stated in the Prospectus, the Fund has an Investment Advisory Agreement
with Janus Capital, 100 Fillmore Street, Suite 300, Denver, Colorado 80206-4923.
The Advisory Agreement provides that Janus Capital will furnish continuous
advice and recommendations concerning the Fund's investments, provide office
space for the Fund, pay the salaries, fees and expenses of all Fund officers and
of those Trustees who are affiliated with Janus Capital, and pay all expenses of
promoting the sale of Fund shares other than the cost of complying with
applicable laws relating to the offer or sale of shares of the Fund. Janus
Capital also may make payments to selected broker-dealer firms or institutions
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 Fund.

The Fund pays 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, costs of preparing, printing and mailing the Fund's Prospectuses
and Statements of Additional Information to current shareholders, 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 and Fund accounting,
recordkeeping, and blue sky registration and monitoring services, for which the
Fund may reimburse Janus Capital for its costs.

The Fund has agreed to compensate Janus Capital for its services by the
monthly payment of a fee at the annual rate of .75% of the first $300 million of
the Fund's average daily net assets and .65% of average daily net assets in
excess of $300 million . Janus Capital has agreed to waive the advisory fee
payable by the Fund in an amount equal to the amount, if any, that the Fund's
normal operating expenses chargeable to its income account in any fiscal year,
including the investment advisory fee but excluding brokerage commissions,
interest, taxes and extraordinary expenses, exceed the most restrictive
limitation imposed by any state. The Fund believes that the most restrictive
limitation currently effective is 2.50% of the first $30 million of average
daily net assets, plus 2.00% of the next $70 million of average daily net
assets, plus 1.50% of the balance of the Fund's average daily net assets for a
fiscal year. In addition, Janus Capital has agreed until at least October 31,
1996, to waive the advisory fee payable by the Fund in an amount equal to the
amount, if any, that the Fund's normal operating expenses chargeable to its
income account in any fiscal year, including the investment advisory fee but
excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.00% of the average daily net assets for a fiscal year.

The current Advisory Agreement became effective on __________, 1995, and it
will continue in effect until __________, 1997, and thereafter from year to year
so long as such continuance

20
<PAGE>

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 of the Fund 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 performs investment advisory services for other mutual
funds, and for individual, charitable, corporate and retirement 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 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.

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.

As indicated in the Prospectus, Janus Capital permits investment and other
personnel to purchase and sell securities for their own accounts in accordance
with a Janus Capital policy regarding personal investing by directors, officers
and employees of Janus Capital and the Fund. The policy requires investment
personnel and officers of Janus Capital, inside directors of Janus Capital and
the Fund and other designated persons deemed to have access to current trading
information to pre-clear all transactions in securities not otherwise exempt
under the policy. Requests for trading authority will be denied when, among
other reasons, the proposed personal transaction would be contrary to the
provisions of the policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Fund.

In addition to the pre-clearance requirement described above, the policy
subjects investment personnel, officers and directors/Trustees of Janus Capital
and the Fund to various trading restrictions and reporting obligations. All
reportable transactions are reviewed for compliance with Janus Capital's policy.
Those persons also may be required under certain circumstances to forfeit their
profits made from personal trading.

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

21
<PAGE>

Board of Janus Capital, owns approximately 12% of its voting stock and, by
agreement with KCSI, selects a majority of Janus Capital's Board.

CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS

Investors Fiduciary Trust Company ("IFTC"), 127 W. 10th Street, Kansas
City, Missouri 64105, as custodian, has custody of the securities and cash of
the Fund maintained in the United States. IFTC is a wholly-owned subsidiary of
State Street Bank and Trust Company ("State Street"), P.O. Box 351, Boston,
Massachusetts 02101. State Street and the foreign subcustodians selected by it
and approved by the Trustees, have custody of the assets of the Fund held
outside the U.S. and cash incidental thereto. State Street may also have custody
of certain domestic and foreign securities held in connection with repurchase
agreements. The custodians and subcustodians hold the Fund's assets in
safekeeping and collect and remit the income thereon, subject to the
instructions of the Fund.

Janus Service Corporation ("Janus Service"), 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 to the Fund.

Janus Distributors, Inc. ("Janus Distributors"), 100 Fillmore Street, Suite
300, Denver, Colorado 80206, 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. Janus Distributors acts
as the agent of the Fund in connection with the sale of their shares in all
states in which the shares are registered and in which Janus Distributors is
qualified as a broker-dealer. Under the Distribution Agreement, Janus
Distributors continuously offers the Fund's shares and accepts orders at net
asset value. No sales charges are paid by investors. Promotional expenses in
connection with offers and sales of shares are paid by Janus Capital.

For transfer agency and other services, Janus Service receives a fee
calculated at an annual rate of $16 per Fund shareholder account. In addition,
the Fund pays DST Systems, Inc. ("DST"), a subsidiary of KCSI, license fees for
the use of DST's shareholder accounting and portfolio and fund accounting
systems, and postage and forms costs of a DST affiliate incurred in mailing Fund
shareholder transaction confirmations.

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

22
<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 Advisory Agreement
specifically provides that in placing portfolio transactions for the Fund, Janus
Capital may agree to pay brokerage commissions for effecting a securities
transaction in an amount higher than another broker or dealer would have charged
for effecting that transaction as authorized, under certain circumstances, by
the Exchange Act. The Fund 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 the 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.

23
<PAGE>

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 clients, including the Fund.
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.

The Advisory Agreement also authorizes Janus Capital to consider sales of
Fund shares 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 portfolio transactions. Janus Capital may also
consider payments made by brokers effecting transactions for the 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.

The Fund's 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.

OFFICERS AND TRUSTEES

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. In August 1992, Janus Venture Fund, Inc. and Janus Twenty Fund, Inc.
(both separate Maryland corporations) and the Janus Income Series (a
Massachusetts business trust comprised of the Janus Flexible Income Fund and
Janus Intermediate Government Securities Fund series) were reorganized into
separate series of the Trust. In general, all references to Trust offices in
this section include comparable offices with the respective predecessor funds,
unless a Trust office was filled subsequent to the reorganization.

24
<PAGE>

Thomas H. Bailey*# - Trustee, Chairman and President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Trustee, Chairman and President of Janus Aspen Series. Chairman, Director
and President of Janus Capital. Chairman and Director of IDEX Management,
Inc., Largo, Florida (50% subsidiary of Janus Capital and investment
adviser to a group of mutual funds) ("IDEX").

James P. Craig*# - Trustee and Executive Vice President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Trustee and Executive Vice President of Janus Aspen Series. Chief
Investment Officer, Vice President, and Director of Janus Capital.
Portfolio manager of Janus Fund and Janus Balanced Fund series of the
Trust.

Ronald V. Speaker* - Executive Vice President and Portfolio Manager
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Executive Vice President and Portfolio Manager of Janus Flexible Income
Fund, Janus Intermediate Government Securities Fund, Janus Short-Term Bond
Fund, Janus Federal Tax-Exempt Fund and Janus High-Yield Fund series of the
Trust. Executive Vice President of Janus Aspen Series. Vice President of
Janus Capital. Formerly, securities analyst and research associate at Janus
Capital (1986 to 1992).

David C. Tucker* - Vice President and General Counsel
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Vice President and General Counsel of Janus Aspen Series. Vice President,
Secretary and General Counsel of Janus Capital. Vice President, General
Counsel and Director of Janus Service and Janus Distributors.

Steven R. Goodbarn* - Treasurer and Chief Financial Officer
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Treasurer and Chief Financial Officer of Janus Aspen Series. Vice President
of Finance, Chief Financial Officer and Treasurer of Janus Service, Janus
Distributors and Janus Capital. Director of IDEX. Formerly (1979 to 1992),
with the accounting firm of Price Waterhouse LLP, Denver, Colorado, and
Kansas City, Missouri.

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

25
<PAGE>

Kelley Abbott Howes* - Secretary
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Secretary of Janus Aspen Series. Associate Counsel of Janus Capital.
Formerly (1990 to 1994) with The Boston Company Advisors, Inc., Boston,
Massachusetts (mutual fund administration and advisory services).

John W. Shepardson# - Trustee
910 - 16th Street, Suite 222
Denver, CO 80202

Trustee of Janus Aspen Series. Historian.

William D. Stewart# - Trustee
5330 Sterling Drive
Boulder, CO 80302

Trustee of Janus Aspen Series. President of HPS Corporation, Boulder,
Colorado (manufacturer of vacuum fittings and valves).

Gary O. Loo - Trustee
102 N. Cascade Avenue, Suite 500
Colorado Springs, CO 80903

Trustee of Janus Aspen Series. President and a Director of High Valley
Group, Inc., Colorado Springs, Colorado (investments) since 1987.

Dennis B. Mullen - Trustee
1601 114th Avenue, SE
Alderwood Building, Suite
130 Bellevue, WA 98004

Trustee of Janus Aspen Series. President and Chief Executive Officer of BC
Northwest, L.P., a franchise of Boston Chicken, Inc., Bellevue, Washington
(restaurant chain). Formerly (1982 to 1993), Chairman, President and Chief
Executive Officer of Famous Restaurants, Inc., Scottsdale, Arizona
(restaurant chain).

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

26
<PAGE>

Martin H. Waldinger - Trustee
4940 Sandshore Court
San Diego, CA 92130

Trustee of Janus Aspen Series. Private Consultant and Director of Run
Technologies, Inc., a software development firm, San Carlos, California.
Formerly (1989 to 1993), President and Chief Executive Officer of
Bridgecliff Management Services, Campbell, California (a condominium
association management company).

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 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 Executive Committee of the Trustees shall have and may exercise all the
powers and authority of the Board except for matters requiring action by the
whole Board pursuant to the Trust's Bylaws or Agreement and Declaration of Trust
("Declaration of Trust"), Massachusetts law or the 1940 Act.

The following table shows the aggregate compensation paid to each Trustee
by the Fund and all funds advised and sponsored by Janus Capital (collectively,
the "Janus Funds") for the periods indicated. None of the Trustees receive any
pension or retirement from the Fund or the Janus Funds.

<TABLE>

<CAPTION>
Aggregate Compensation Total Compensation from the
from the Fund for fiscal year Janus Funds for calendar year
Name of Person, Position ended October 31, 1995** ended December 31, 1994***
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman* $0 $0
James P. Craig, Trustee*+ $0 $0
John W. Shepardson, Trustee $0 $39,250
William D. Stewart, Trustee $0 $39,250
Gary O. Loo, Trustee $0 $39,250
Dennis B. Mullen, Trustee $0 $39,250
Martin H. Waldinger, Trustee $0 $39,250
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
* An interested person of the Fund and of Janus Capital. Compensated by Janus
Capital and not the Fund.
** The Fund had not commenced operations as of October 31, 1995.
*** As of December 31, 1994, Janus Funds consisted of two registered investment
companies comprised of a total of 20 funds.
+ Mr. Craig became a Trustee as of June 30, 1995.

27
<PAGE>

PURCHASE OF SHARES

As stated in the Prospectus, Janus Distributors is a distributor of the
Fund's shares. Shares of the Fund are sold at the net asset value per share as
determined at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") next occurring after a purchase order is received and
accepted by the Fund. The Shareholder's Manual Section of the Prospectus
contains detailed information about the purchase of shares.

NET ASSET VALUE DETERMINATION

As stated in the Prospectus, the net asset value ("NAV") of Fund shares 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 Fund shares is not determined on days the NYSE is closed (generally, New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas). The per share NAV of the Fund is determined by
dividing the total value of the Fund's securities and other assets, less
liabilities, 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 Fund are traded primarily in the over-the-counter market. Valuations of such
securities are furnished by one or more pricing services employed by the Fund
and are based upon 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. The 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 money market securities maturing within
60 days are valued on the 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 the Fund's NAV is not calculated. The 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.

28
<PAGE>

REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS

If investors do not elect in writing or by phone to receive their dividends
and distributions in cash, all income dividends and capital gains distributions,
if any, 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. Dividend statements will be mailed at the end of each calendar quarter.
Checks for cash dividends and distributions and confirmations of reinvestments
are usually mailed to shareholders within ten days after the record date. Any
election of the manner in which a shareholder wishes to receive dividends and
distributions (which may be made on the New Account Application form or by
phone) will apply to dividends and distributions the record dates of which fall
on or after the date that the Fund receives such notice. Investors receiving
cash distributions and dividends may elect in writing or by phone to change back
to automatic reinvestment at any time.

REDEMPTION OF SHARES

Procedures for redemption of shares are set forth in the Shareholder's
Manual section of the Prospectus. Shares normally will be redeemed for cash,
although the Fund retains the right to redeem its shares in kind under unusual
circumstances, in order to protect the interests of 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 NAV 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 "Purchase
of Shares -- Net Asset Value Determination" and such valuation will be made as
of the same time the redemption price is determined.

Shares in non-retirement accounts and IRAs may be redeemed by telephone
unless a shareholder declines this option in writing. The Fund, its transfer
agent and its distributor disclaim responsibility for the authenticity of
instructions received by telephone. Such entities will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine.
Such procedures may include, among others, requiring personal identification
prior to acting upon telephone instructions, providing written confirmation of
the transactions and tape recording telephone conversations.

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.

29
<PAGE>

SHAREHOLDER ACCOUNTS

Detailed information about the general procedures for shareholder accounts
and specific types of accounts is set forth in the Prospectus. Applications for
specific types of accounts may be obtained by calling the Fund at 1-800-525-3713
or writing to the Fund at P.O. Box 173375, Denver, Colorado 80217-3375.

SYSTEMATIC WITHDRAWALS

As stated in the Shareholder's Manual section of the Prospectus, if you
have a regular account or are eligible for normal distributions from a
retirement plan, you may establish a systematic withdrawal program. The payments
will be made from the proceeds of periodic redemptions of shares in the account
at the NAV. Depending on the size or frequency of the disbursements requested,
and the fluctuation in value of the Fund's portfolio, redemptions for the
purpose of making such disbursements may reduce or even exhaust the
shareholder's account. Either an investor or the Fund, by written notice to the
other, may terminate the investor's systematic withdrawal program without
penalty at any time.

Information about requirements to establish a systematic withdrawal program
may be obtained by writing or calling the Fund at the address or phone number
shown above.

RETIREMENT PLANS

The Fund offers several different types of tax-deferred retirement plans
that an investor may establish to invest in Fund shares, depending on rules
prescribed by the Code. The Individual Retirement Account ("IRA") may be used by
most individuals who have taxable compensation. The Simplified Employee Pension
("SEP") and the Defined Contribution Plans may be used by most employers,
including corporations, partnerships and sole proprietors, for the benefit of
business owners and their employees. In addition, the Fund offers a Section
403(b)(7) Plan for employees of educational organizations and other qualifying
tax-exempt organizations. Investors should consult their tax advisor or legal
counsel before selecting a retirement plan.

Contributions under IRAs, SEPs, Defined Contribution Plans (Profit Sharing
or Money Purchase Pension Plans) and Section 403(b)(7) Plans are subject to
specific contribution limitations. Generally, such contributions will be
invested at the direction of the participant. The investment is then held by
IFTC as custodian. Each participant's account is charged an annual fee of $12.
There is a maximum annual fee of $24 per taxpayer identification number. In lieu
of the annual fee, a special nonrefundable one-time fee of $100 may be paid.
This fee covers all retirement plans discussed above that are maintained under
the same taxpayer identification number in any series of the Trust, and carries
over to spousal beneficiaries who transfer or rollover the plan assets to a plan
in their name upon the death of the participant, as long as the accounts remain
with Janus on a continuing basis.

Distributions from retirement plans are generally subject to ordinary
income tax and may be subject to an additional 10% tax if withdrawn prior to age
59-1/2. Several exceptions to the general

30
<PAGE>

rule may apply. However, shareholders must start withdrawing retirement plan
assets no later than April 1 of the year after they reach age 70-1/2. Several
methods exist to determine the amount of the minimum annual distribution.
Shareholders should consult with their tax advisor or legal counsel prior to
receiving any distribution from any retirement plan, in order to determine the
income tax impact of any such distribution.

To receive additional information about IRAs, SEPs, Defined Contribution
Plans and Section 403(b)(7) Plans along with the necessary materials to
establish an account, please call the Fund at 1-800-525-3713 or write to the
Fund at P.O. Box 173375, Denver, Colorado 80217-3375. No contribution to an IRA,
SEP, Defined Contribution Plan or Section 403(b)(7) Plan can be made until the
appropriate forms to establish any such plan have been completed.

INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS
AND TAX STATUS

It is a policy of the Fund to make distributions of substantially all of
its investment income and any net realized capital gains. The Fund declares
dividends daily and may make monthly distributions of income. Any capital gains
realized during each fiscal year of the Fund ended October 31, as defined by the
Code, are normally declared and payable to shareholders in December. It is also
a policy of the Fund to qualify as a regulated investment company by satisfying
certain requirements prescribed by Subchapter M of the Code. Dividend statements
will be sent to shareholders at the end of each calendar quarter.

The Fund may purchase the securities of certain foreign corporations called
passive foreign investment companies. In accordance with income tax regulations,
the Fund intends to treat these securities as sold on the last day of the Fund's
fiscal year and recognize any gains for tax purposes at that time; losses will
not be recognized. Such gains will be considered ordinary income which the Fund
will be required to distribute even though it has not sold the security and
received cash to pay such distributions.

Some foreign securities purchased by the Fund 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. Accordingly, the Fund does not
intend to make the election permitted under section 853 of the Code to pass
through such taxes to shareholders as a foreign tax credit. As a result, any
foreign taxes paid or accrued will represent an expense to the Fund which will
reduce its investment company taxable income.

MISCELLANEOUS INFORMATION

The Fund is a series of the Trust, a Massachusetts business trust which was
created on February 11, 1986. The Trust is an open-end management investment
company registered under the 1940 Act. As of the date of this SAI, the Trust
consists of 18 other series, which are offered by separate prospectuses.

31
<PAGE>

Janus Capital reserves the right to the name "Janus." In the event that
Janus Capital does not continue to provide investment advice to the Fund, the
Fund must cease to use the name "Janus" as soon as reasonably practicable.

Under Massachusetts law, shareholders of the Fund could, under certain
circumstances, be held liable for the obligations of the Fund. However, the
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of this disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or the Trustees.
The Declaration of Trust also provides for indemnification from the assets of
the Fund for all losses and expenses of the Fund shareholder held liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring a financial
loss on account of its liability as a shareholder of one of the Fund is limited
to circumstances in which the Fund would be unable to meet its obligations. The
possibility that these circumstances would occur is remote. The Trustees intend
to conduct the operations of the Fund to avoid, to the extent possible,
liability of shareholders for liabilities of the Fund.

SHARES OF THE TRUST

The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of one cent per share for each series of
the Trust. Shares of the Fund are fully paid and nonassessable when issued. All
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. Shares of the
Fund may be transferred by endorsement or stock power as is customary, but the
Fund is not bound to recognize any transfer until it is recorded on its books.

VOTING RIGHTS

The present Trustees were elected at a meeting of shareholders held on July
10, 1992, with the exception of Mr. Craig who was appointed by the Trustees as
of June 30, 1995. Under the Declaration of Trust, each Trustee will continue in
office until the termination of the Trust or his earlier death, 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
Declaration of Trust or the 1940 Act. Subject to the foregoing, shareholders
have the power to vote to elect or remove Trustees, to terminate or reorganize
the Fund, to amend the Declaration of Trust, to bring certain derivative actions
and on any other matters on which a shareholder vote is required by the 1940
Act, the Declaration of Trust, the Trust's Bylaws or the Trustees.

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 series of the
Trust will vote separately only with respect to those matters that affect only
that series.

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INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, 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 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 Fund or such securities, reference is made to the Registration
Statement and the exhibits filed as a part thereof.

PERFORMANCE INFORMATION

The Prospectus contains a brief description of how performance is
calculated.

Quotations of average annual total return for the Fund will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in the 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 Fund expenses on an annual
basis, and assume that all dividends and distributions are reinvested when paid.

Quotations of the Fund's yield 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
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

From time to time in advertisements or sales material, the Fund may discuss
its performance ratings or other information as published by recognized mutual
fund statistical rating services, including, but not limited to, Lipper
Analytical Services, Inc., Ibbotson Associates, Micropal or Morningstar or by
publications of general interest such as Forbes or Money. The Fund may also

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compare its performance to that of other selected mutual funds, 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 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 Fund may compare its total return to the yield on U.S. Treasury
obligations and to the percentage change in the Consumer Price Index. Such
performance ratings or comparisons may be made with funds that may have
different investment restrictions, objectives, policies or techniques than the
Fund and such other funds or market indicators may be comprised of securities
that differ significantly from the Fund's investments.

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<PAGE>

SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 15, 1995

JANUS OLYMPUS FUND

100 Fillmore Street, Suite 300
Denver, CO 80206-4923
(800) 525-3713

STATEMENT OF ADDITIONAL INFORMATION

_____________, 1995

Janus Olympus Fund (the "Fund") is a no-load mutual fund that seeks
long-term growth of capital. The Fund invests primarily in common stocks of
issuers of any size, which may include larger, well-established issuers and/or
smaller emerging growth companies.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

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<PAGE>

JANUS OLYMPUS FUND

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

INVESTMENT POLICIES, RESTRICTIONS AND TECHNIQUES .......................... 3
Investment Objective ................................................. 3
Portfolio Policies ................................................... 3
Investment Restrictions .............................................. 3
Types of Securities and Investment Techniques ........................ 6
Illiquid Investments ........................................ 6
Zero Coupon, Pay-In-Kind and Step Coupon Securities ......... 6
Pass-Through Securities ..................................... 7
Other Income-Producing Securities ........................... 8
Repurchase and Reverse Repurchase Agreements ................ 9
High-Yield/High-Risk Bonds .................................. 9
Futures, Options and Other Derivative Instruments ........... 10

INVESTMENT ADVISER ........................................................ 21

CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS ........................ 23

PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 23

OFFICERS AND TRUSTEES ..................................................... 25

PURCHASE OF SHARES ........................................................ 29
Net Asset Value Determination ........................................ 29
Reinvestment of Dividends and Distributions .......................... 30

REDEMPTION OF SHARES ...................................................... 30

SHAREHOLDER ACCOUNTS ...................................................... 31
Systematic Withdrawals ............................................... 31

RETIREMENT PLANS .......................................................... 31

INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONSAND TAX STATUS ............... 32

MISCELLANEOUS INFORMATION ................................................. 32
Shares of the Trust .................................................. 33
Voting Rights ........................................................ 33
Independent Accountants .............................................. 34
Registration Statement ............................................... 34

PERFORMANCE INFORMATION ................................................... 34

APPENDIX A ................................................................ 36
Explanation of Rating Categories ..................................... 36

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<PAGE>

INVESTMENT POLICIES, RESTRICTIONS AND TECHNIQUES

INVESTMENT OBJECTIVE

As stated in the Prospectus, the Fund's investment objective is long-term
growth of capital. There can be no assurance that the Fund will, in fact,
achieve its objective. The investment objective of the Fund is not fundamental
and may be changed by the Trustees without shareholder approval.

PORTFOLIO POLICIES

INVESTMENT RESTRICTIONS

As indicated in the Prospectus, the Fund is 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 if a matter
affects just that Fund), 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) are present or represented by proxy. As
fundamental policies, the Fund 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 its total assets,
purchase the securities of any one issuer (except cash items and
"government securities" as defined under the Investment Company Act of
1940, as amended (the "1940 Act")), if immediately after and as a result of
such purchase, the value of the holdings of the Fund in the securities of
such issuer exceeds 5% of the value of the Fund's total assets.

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

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

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

(c) The Fund does not currently intend to sell securities short, unless it
owns or has 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.

(d) The Fund does 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.

(e) The Fund does not currently intend to (i) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's

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<PAGE>

commission is paid, or (ii) purchase or retain securities issued by other
open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers
of exchange, or as a result of a reorganization, consolidation, or merger.
If the Fund invests in a money market fund, Janus Capital will reduce its
advisory fee by the amount of any investment advisory and administrative
services fees paid to the investment manager of the money market fund.

(f) The Fund may not mortgage or pledge any securities owned or held by the
Fund in amounts that exceed, in the aggregate, 15% of the 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.

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

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<PAGE>

TYPES OF SECURITIES AND INVESTMENT TECHNIQUES

ILLIQUID INVESTMENTS

ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES

The Fund may invest up to 10% 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.

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"), the Fund must
distribute its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds. Because the 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 the Fund may have to distribute cash
obtained from other sources in

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<PAGE>

order to satisfy the distribution requirements under the Code. The Fund might
obtain such cash from selling other portfolio holdings which might cause the
Fund to incur capital gains or losses on the sale. 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 the
Fund to sell the securities at the time.

PASS-THROUGH SECURITIES

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<PAGE>

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 Fund), 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 the
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 the Fund might be converted
to cash and the 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 the Fund's ability to participate in as large a market gain
as may be experienced with a comparable security not subject to prepayment.

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 or 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.

OTHER INCOME-PRODUCING SECURITIES

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

Variable and floating rate obligations. 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.

Standby commitments. These instruments, which are similar to a put, give the
Fund the option to obligate a broker, dealer or bank to repurchase a security
held by the 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.

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<PAGE>

Inverse floaters. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. The Fund will not
invest more than 5% of its assets in inverse floaters.

The Fund will purchase standby commitments, tender option bonds and
instruments with demand features primarily for the purpose of increasing the
liquidity of its portfolio.

REPURCHASE AND REVERSE REPURCHASE AGREEMENTS

HIGH-YIELD/HIGH-RISK BONDS

The Fund may invest up to 35% of its net assets in corporate debt
securities that are rated below investment grade (securities rated BB or lower
by Standard & Poor's Ratings Services ("Standard & Poor's") or Ba or lower by
Moody's Investors Service, Inc. ("Moody's") and unrated securities of equivalent
quality). 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, the Fund would experience a reduction in
its income, and could expect a decline in the market value of the securities so
affected.

9
<PAGE>

The Fund may also invest in unrated debt securities of foreign and domestic
issuers. Unrated debt, while not necessarily of lower quality than rated
securities, may not have as broad a market. Sovereign debt of foreign
governments is generally rated by country. Because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly, Janus Capital may treat such securities as unrated debt. Unrated debt
securities will be included in the 35% limit of the Fund unless its portfolio
manager deems such securities to be the equivalent of investment grade
securities.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS

Although the Fund will segregate cash and liquid assets in an amount
sufficient to cover its open futures obligations, the segregated assets would be
available to the Fund immediately upon closing

10
<PAGE>

out the futures position, while settlement of securities transactions could take
several days. However, because the Fund's cash that may otherwise be invested
would be held uninvested or invested in high- grade liquid assets so long as the
futures position remains open, the Fund's return could be diminished due to the
opportunity losses of foregoing other potential investments.

The Fund's primary purpose in entering into futures contracts is to protect
the 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, the 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 the Fund not participating in a market advance. This technique is
sometimes known as an anticipatory hedge. To the extent the Fund enters into
futures contracts for this purpose, the segregated assets maintained to cover
the Fund's obligations with respect to the futures contracts will consist of
high-grade 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 the Fund with respect to the futures contracts.
Conversely, if the 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. The
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 the Fund owns Treasury bonds and the portfolio manager expects interest
rates to increase, the Fund may take a short position in interest rate futures
contracts. Taking such a position would have much the same effect as the Fund
selling Treasury bonds in its portfolio. If interest rates increase as
anticipated, the value of the Treasury bonds would decline, but the value of the
Fund's interest rate futures contract will increase, thereby keeping the net
asset value of the Fund from declining as much as it may have otherwise. If, on
the other hand, a portfolio manager expects interest rates to decline, the 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 the
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.

11
<PAGE>

12
<PAGE>

13
<PAGE>

14
<PAGE>

15
<PAGE>

The Fund may write covered call options on foreign currencies. A call
option written on a foreign currency by the Fund is "covered" if the 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 the 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 the Fund in cash or high- grade liquid assets in a segregated
account with the Fund's custodian.

16
<PAGE>

17
<PAGE>

The Fund may write options in connection with buy-and-write transactions.
In other words, the 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, the Fund's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the difference between the
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 the 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, the Fund may elect to close the position or take
delivery of the security at the exercise price and the 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.

The 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

18
<PAGE>

benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
worthless to the Fund.

Swaps and Swap-Related Products. The 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 the 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 the 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
high-grade liquid assets having an aggregate net asset value at least equal to
the accrued excess will be maintained in a segregated account by the Fund's
custodian. If the 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. The 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 nationally recognized
statistical rating organization 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,
the Fund will have contractual remedies pursuant to the agreements related to
the transaction.

19
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<PAGE>

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.

INVESTMENT ADVISER

The Fund pays 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, costs of preparing, printing and mailing the Fund's Prospectuses
and Statements of Additional Information to current shareholders, 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 and Fund accounting,
recordkeeping, and blue sky registration and monitoring services, for which the
Fund may reimburse Janus Capital for its costs.

The Fund has agreed to compensate Janus Capital for its services by the
monthly payment of a fee at the annual rate of 1.00% of the first $30 million of
the Fund's average daily net assets, plus 0.75% of the next $270 million of the
Fund's average daily net assets, plus 0.70% of the next $200 million of the
Fund's average daily net assets, plus 0.65% of average daily net assets in
excess of $500 million. Janus Capital has agreed to waive the advisory fee
payable by the Fund in an amount equal to the amount, if any, that the Fund's
normal operating expenses chargeable to its income account in any fiscal year,
including the investment advisory fee but excluding brokerage commissions,
interest, taxes and extraordinary expenses, exceed the most restrictive
limitation imposed by any state. The Fund believes that the most restrictive
limitation currently effective is 2.50% of the first $30 million of average
daily net assets, plus 2.00% of the next $70 million of average daily net
assets, plus 1.50% of the balance of the Fund's average daily net assets for a
fiscal year.

The current Advisory Agreement became effective on __________, 1995 and it
will continue in effect until June 16, 1997, and thereafter from year to year so
long as such continuance is approved annually by a majority of the 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 of the Fund or
the Trustees. The Advisory Agreement i) may be terminated without the payment of
any penalty by

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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.

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

Kansas City Southern Industries, Inc., a publicly traded holding company
whose primary subsidiaries are engaged in transportation, information processing
and financial services ("KCSI"), owns approximately 83% of Janus Capital. Thomas
H. Bailey, the President and Chairman of the Board of Janus Capital, owns
approximately 12% of its voting stock and, by agreement with KCSI, selects a
majority of Janus Capital's Board.

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CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS

PORTFOLIO TRANSACTIONS AND BROKERAGE

23
<PAGE>

Agreement specifically provides that in placing portfolio transactions for the
Fund, Janus Capital may agree to pay brokerage commissions for effecting a
securities transaction in an amount higher than another broker or dealer would
have charged for effecting that transaction as authorized, under certain
circumstances, by the Exchange Act. The Fund 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.

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.

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OFFICERS AND TRUSTEES

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<PAGE>

Thomas H. Bailey*# - Trustee, Chairman and President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

James P. Craig*# - Trustee and Executive Vice President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Trustee and Executive Vice President of Janus Aspen Series. Chief
Investment Officer, Vice President and Director of Janus Capital. Portfolio
manager of Janus Fund and Janus Balanced Fund series of the Trust.

Scott W. Schoelzel* - Executive Vice President and Portfolio Manager
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Vice President of Janus Capital. Co-Portfolio Manager of WRL Growth
Portfolio, IDEX II Growth Portfolio, IDEX Fund and IDEX Fund 3. From 1991
to 1993, a portfolio manager with Founders Asset Management, Denver,
Colorado. Prior to 1991, a general partner of Ivy Lane Investments, Denver,
Colorado (a real estate investment partnership).

David C. Tucker* - Vice President and General Counsel
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Steven R. Goodbarn* - Treasurer and Chief Financial Officer
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

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

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<PAGE>

Kelley Abbott Howes* - Secretary
100 Fillmore Street, Suite 300
Denver, CO 80206-4923

Secretary of Janus Aspen Series. Associate Counsel of Janus Capital.
Formerly (1990 to 1994), with The Boston Company Advisors, Inc., Boston,
Massachusetts (mutual fund administration and advisory services).

John W. Shepardson# - Trustee
910 16th Street, Suite 222
Denver, CO 80202

Trustee of Janus Aspen Series. Historian.

William D. Stewart# - Trustee
5330 Sterling Drive
Boulder, CO 80302

Trustee of Janus Aspen Series. President of HPS Corporation, Boulder,
Colorado (manufacturer of vacuum fittings and valves).

Gary O. Loo - Trustee
102 N. Cascade Avenue, Suite 500
Colorado Springs, CO 80903

Trustee of Janus Aspen Series. President and a Director of High Valley
Group, Inc., Colorado Springs, Colorado (investments) since 1987.

Dennis B. Mullen - Trustee
1601 114th Avenue, SE
Alderwood Building, Suite 130
Bellevue, WA 98004

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

27
<PAGE>

Martin H. Waldinger - Trustee
4940 Sandshore Court
San Diego, CA 92130

<TABLE>

28
<PAGE>

PURCHASE OF SHARES

NET ASSET VALUE DETERMINATION

29
<PAGE>

REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS

If investors do not elect in writing or by phone to receive their dividends
and distributions in cash, all income dividends and capital gains distributions,
if any, on a 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. Checks for cash dividends and distributions and confirmations of
reinvestments are usually mailed to shareholders within ten days after the
record date. Any election of the manner in which a shareholder wishes to receive
dividends and distributions (which may be made on the New Account Application
form or by phone) will apply to dividends and distributions the record dates of
which fall on or after the date that the Fund receives such notice. Investors
receiving cash distributions and dividends may elect in writing or by phone to
change back to automatic reinvestment at any time.

REDEMPTION OF SHARES

Procedures for redemption of shares are set forth in the Shareholder's
Manual section of the Prospectus. Shares normally will be redeemed for cash,
although the Fund retains the right to redeem its shares in kind under unusual
circumstances, in order to protect the interests of remaining shareholders, by
delivery of securities selected from its assets at its discretion. However, the
Fund are 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 NAV 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 "Purchase
of Shares -- Net Asset Value Determination" and such valuation will be made as
of the same time the redemption price is determined.

30
<PAGE>

SHAREHOLDER ACCOUNTS

SYSTEMATIC WITHDRAWALS

Information about requirements to establish a systematic withdrawal program
may be obtained by writing or calling the Fund at the address or phone number
shown above.

RETIREMENT PLANS

Distributions from retirement plans are generally subject to ordinary
income tax and may be subject to an additional 10% tax if withdrawn prior to age
59-1/2. Several exceptions to the general

31
<PAGE>

INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS
AND TAX STATUS

It is a policy of the Fund to make distributions of substantially all of
its investment income and any net realized capital gains. The Fund declares and
makes annual distributions of income. Any capital gains realized during each
fiscal year of the Fund ended October 31, as defined by the Code, are normally
declared and payable to shareholders in December. It is also a policy of the
Fund to qualify as a regulated investment company by satisfying certain
requirements prescribed by Subchapter M of the Code.

MISCELLANEOUS INFORMATION

32
<PAGE>

SHARES OF THE TRUST

VOTING RIGHTS

33
<PAGE>

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado
80202, independent accountants for the Fund, audit the Fund's annual financial
statements and prepare its tax returns.

REGISTRATION STATEMENT

PERFORMANCE INFORMATION

The Prospectus contains a brief description of how performance is
calculated.

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

34
<PAGE>

35
<PAGE>

APPENDIX A

EXPLANATION OF RATING CATEGORIES

STANDARD & POOR'S RATINGS SERVICES

Bond Rating Explanation
----------- -----------

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

Investment Grade
----------------

Non-Investment Grade
--------------------

MOODY'S INVESTORS SERVICE, INC.
--------------------------------------------------------------------------------

Investment Grade
----------------

36
<PAGE>

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

Non-Investment Grade
--------------------

37
<PAGE>

JANUS INVESTMENT FUND
PART C - OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits

List all financial statements and exhibits filed as part of the
Registration Statement.

(a)(1) Financial Statements Included in the Prospectus:

Financial Highlights for each of the following Funds:

Not Applicable

(a)(2) Financial Statements Incorporated by Reference into
the Statement of Additional Information:

The Financial Statements for each of the following Funds,
included in the Semiannual Report dated April 30, 1995, are
incorporated by reference into the Statement of Additional
Information:

Not Applicable

(b) Exhibits:

Exhibit 1 (a) Agreement and Declaration of Trust, dated
February 11, 1986 is incorporated herein
by reference to Exhibit 1 to Post-
Effective Amendment No. 30.

(b) Certificate of Designation for Janus
Growth and Income Fund is incorporated
herein by reference to Exhibit 1(b) to
Post-Effective Amendment No. 42.

(c) Certificate of Designation for Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 1(c) to Post-
Effective Amendment No. 42.

(d) Certificate of Designation for Janus
Twenty Fund is incorporated herein by
reference to Exhibit 1(d) to Post-
Effective Amendment No. 46.

(e) Certificate of Designation for Janus
Flexible Income Fund is incorporated
herein by reference to Exhibit 1(e) to
Post-Effective Amendment No. 46.

(f) Certificate of Designation for Janus
Intermediate Government Securities Fund
is incorporated herein by reference to
Exhibit 1(f) to Post-Effective Amendment
No. 46.

C-1
<PAGE>

(g) Certificate of Designation for Janus
Venture Fund is incorporated herein by
reference to Exhibit 1(g) to Post-
Effective Amendment No. 47.

(h) Certificate of Designation for Janus
Enterprise Fund is incorporated herein by
reference to Exhibit 1(h) to Post-
Effective Amendment No. 48.

(i) Certificate of Designation for Janus
Balanced Fund is incorporated herein by
reference to Exhibit 1(i) to Post-
Effective Amendment No. 48.

(j) Certificate of Designation for Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 1(j) to
Post-Effective Amendment No. 48.

(k) Certificate of Designation for Janus
Federal Tax-Exempt Fund is incorporated
herein by reference to Exhibit 1(k) to
Post-Effective Amendment No. 54.

(l) Certificate of Designation for Janus
Mercury Fund is incorporated herein by
reference to Exhibit 1(l) to Post-
Effective Amendment No. 54.

(m) Certificate of Designation for Janus
Overseas Fund is incorporated herein by
reference to Exhibit 1(m) to
Post-Effective Amendment No. 60.

(n) Form of Amendment to the Registrant's
Agreement and Declaration of Trust is
incorporated herein by reference to
Exhibit 1(n) to Post-Effective Amendment
No. 62.

(o) Form of Certificate of Designation for
Janus Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein
by reference to Exhibit 1(o) to
Post-Effective Amendment No. 62.

(p) Form of Certificate of Designation for
Janus High-Yield Fund and Janus Olympus
Fund is filed herein as Exhibit 1(p).

Exhibit 2 Bylaws are incorporated herein by
reference to Exhibit 2 to Post-Effective
Amendment No. 30.

Exhibit 3 Not Applicable.

C-2
<PAGE>

Exhibit 4 (a) Specimen Stock Certificate for Janus
Fund(1) is incorporated herein by
reference to Exhibit 4(b) to Post-
Effective Amendment No. 42.

(b) Specimen Stock Certificate for Janus
Growth and Income Fund is incorporated
herein by reference to Exhibit 4(b) to
Post-Effective Amendment No. 42.

(c) Specimen Stock Certificate for Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 4(c) to Post-
Effective Amendment No. 42.

(d) Specimen Stock Certificate for Janus
Twenty Fund(1) is incorporated herein by
reference to Exhibit 4(d) to Post-
Effective Amendment No. 46.

(e) Specimen Stock Certificate for Janus
Flexible Income Fund(1) is incorporated
herein by reference to Exhibit 4(e) to
Post-Effective Amendment No. 46.

(f) Specimen Stock Certificate for Janus
Intermediate Government Securities
Fund(1) is incorporated herein by
reference to Exhibit 4(f) to Post-
Effective Amendment No. 46.

(g) Specimen Stock Certificate for Janus
Venture Fund(1) is incorporated herein by
reference to Exhibit 4(g) to
Post-Effective Amendment 47.

(h) Specimen Stock Certificate for Janus
Enterprise Fund is incorporated herein by
reference to Exhibit 4(h) to Post-
Effective Amendment No. 48.

(i) Specimen Stock Certificate for Janus
Balanced Fund is incorporated herein by
reference to Exhibit 4(i) to Post-
Effective Amendment No. 48.

(j) Specimen Stock Certificate for Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 4(j) to
Post-Effective Amendment No. 48.

(k) Specimen Stock Certificate for Janus
Federal Tax-Exempt Fund is incorporated
herein by reference to Exhibit 4(k) to
Post-Effective Amendment No. 54.

-------------------
(1) Outstanding certificates representing shares of predecessor entity to this
series of the Trust are deemed to represent shares of this series.

C-3
<PAGE>

(l) Specimen Stock Certificate for Janus
Mercury Fund is incorporated herein by
reference to Exhibit 4(l) to Post-
Effective Amendment No. 54.

(m) Specimen Stock Certificate for Janus
Overseas Fund is incorporated herein by
reference to Exhibit 4(m) to
Post-Effective Amendment No. 60.

(n) Specimen Stock Certificates for Janus
High-Yield Fund and Janus Olympus Fund
are filed herein as Exhibit 4(n).

Exhibit 5 (a) Investment Advisory Agreement for Janus
Fund is incorporated herein by reference
to Exhibit 5 to Post-Effective Amendment
No. 30.

(b) Investment Advisory Agreement for Janus
Growth and Income Fund and Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 5(b) to Post-
Effective Amendment No. 42.

(c) Form of Investment Advisory Agreement for
Janus Twenty Fund and Janus Venture Fund
is incorporated herein by reference to
Exhibit 5(c) to Post-Effective Amendment
No. 46.

(d) Form of Investment Advisory Agreement for
Janus Flexible Income Fund and Janus
Intermediate Government Securities Fund
is incorporated herein by reference to
Exhibit 5(d) to Post-Effective Amendment
No. 46.

(e) Form of Investment Advisory Agreement for
Janus Enterprise Fund, Janus Balanced
Fund and Janus Short-Term Bond Fund is
incorporated herein by reference to
Exhibit 5(e) to Post-Effective Amendment
No. 48.

(f) Form of Investment Advisory Agreement for
Janus Federal Tax-Exempt Fund and Janus
Mercury Fund is incorporated herein by
reference to Exhibit 5(f) to Post-
Effective Amendment No. 54.

(g) Form of Investment Advisory Agreement for
Janus Overseas Fund is incorporated
herein by reference to Exhibit 5(g) to
Post-Effective Amendment No. 60.

(h) Form of Investment Advisory Agreement for
Janus Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein
by reference to Exhibit 5(h) to
Post-Effective Amendment No. 64.

C-4
<PAGE>

(i) Draft form of Investment Advisory
Agreement for Janus High-Yield Fund is
filed herein as Exhibit 5(i).

(j) Draft form of Investment Advisory
Agreement for Janus Olympus Fund is filed
herein as Exhibit 5(j).

Exhibit 6 Form of Distribution Agreement between
Janus Investment Fund and Janus
Distributors, Inc. is incorporated herein
by reference to Exhibit 6 to Post-
Effective Amendment No. 57.

Exhibit 7 Not Applicable.

Exhibit 8 (a) Custodian Contract between Janus
Investment Fund and State Street Bank and
Trust Company is incorporated herein by
reference to Exhibit 8(a) to Post-
Effective Amendment No. 32.

(b) Amendment dated April 25, 1990 of State
Street Custodian Contract is incorporated
herein by reference to Exhibit 8(b) to
Post-Effective Amendment No. 40.

(c) Letter Agreement dated February 1, 1991
regarding State Street Custodian Contract
is incorporated herein by reference to
Exhibit 8(c) to Post-Effective Amendment
No. 42.

(d) Custodian Contract between Janus
Investment Fund and Investors Fiduciary
Trust Company is incorporated herein by
reference to Exhibit 8(d) to Post-
Effective Amendment No. 42.

(e) Letter Agreement dated October 9, 1992
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(e) to Post-
Effective Amendment No. 52.

(f) Letter Agreement dated April 28, 1993
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(f) to
Post-Effective Amendment No. 60.

(g) Letter Agreement dated April 4, 1994
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(g) to Post-
Effective Amendment No. 64.

(h) Form of Custody Agreement between Janus
Investment Fund, on behalf of Janus Money
Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money
Market Fund, and United Missouri Bank,
N.A. is

C-5
<PAGE>

incorporated herein by reference to
Exhibit 8(h) to Post-Effective Amendment
No. 64.

(i) Letter Agreement regarding State Street
Custodian Agreement, with respect to
Janus High-Yield Fund and Janus Olympus
Fund will be filed by amendment.

Exhibit 9 (a) Transfer Agency Agreement with Investors
Fiduciary Trust Company is incorporated
herein by reference to Exhibit 9(b) to
Post-Effective Amendment No. 42.

(b) Subagency Agreement between Janus Service
Corporation and Investors Fiduciary Trust
Company is incorporated herein by
reference to Exhibit 9(c) to Post-
Effective Amendment No. 42.

(c) Form of Administration Agreement with
Janus Capital Corporation for Janus Money
Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money
Market Fund is incorporated herein by
reference to Exhibit 9(c) to
Post-Effective Amendment No. 64.

(d) Transfer Agency Agreement with Janus
Service Corporation for Janus Money
Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money
Market Fund is incorporated herein by
reference to Exhibit 9(d) to
Post-Effective Amendment No. 64.

(e) Form of Transfer Agency Agreement with
Janus Service Corporation for Janus
High-Yield Fund and Janus Olympus Fund
will be filed by amendment.

Exhibit 10 (a) Opinion and Consent of Messrs. Davis,
Graham & Stubbs with respect to shares of
Janus Fund is incorporated herein by
reference to Exhibit 10 (a) to
Post-Effective Amendment No. 31.

(b) Opinion and Consent of Fund Counsel with
respect to shares of Janus Growth and
Income Fund and Janus Worldwide Fund is
incorporated herein by reference to
Exhibit 10(b) to Post-Effective Amendment
42.

(c) Opinion and Consent of Fund Counsel with
respect to shares of Janus Enterprise
Fund, Janus Balanced Fund and Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 10(d) to
Post-Effective Amendment No. 48.

(d) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Twenty Fund is incorporated

C-6
<PAGE>

herein by reference to Exhibit 10(e) to
Post- Effective Amendment No. 49.

(e) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Venture Fund is incorporated herein
by reference to Exhibit 10(f) to Post-
Effective Amendment No. 49.

(f) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Flexible Income Fund is
incorporated herein by reference to
Exhibit 10(g) to Post-Effective Amendment
No. 49.

(g) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Intermediate Government Securities
Fund is incorporated herein by reference
to Exhibit 10(h) to Post-Effective
Amendment No. 49.

(h) Opinion and Consent of Fund Counsel with
respect to shares of Janus Federal
Tax-Exempt Fund and Janus Mercury Fund is
incorporated herein by reference to
Exhibit 10(i) to Post-Effective Amendment
No. 54.

(i) Opinion and Consent of Fund Counsel with
respect to shares of Janus Overseas Fund
is incorporated herein by reference to
Exhibit 10(i) to Post-Effective Amendment
No. 60.

(j) Opinion and Consent of Fund Counsel with
respect to shares of Janus Money Market
Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market Fund is
incorporated herein by reference to
Exhibit 10(j) to Post-Effective Amendment
No. 62.

(k) Opinion and Consent of Fund Counsel with
respect to Institutional Shares of Janus
Money Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money
Market Fund is incorporated herein by
reference to Exhibit 10(k) to
Post-Effective Amendment No. 65.

(l) Opinion and Consent of Fund Counsel with
respect to shares of Janus High-Yield
Fund and Janus Olympus Fund is filed
herein as Exhibit 10(l).

Exhibit 11 Consent of Price Waterhouse is filed
herein as Exhibit 11.

Exhibit 12 Not Applicable.

Exhibit 13 Not Applicable.

C-7
<PAGE>

Exhibit 14 (a) Model Individual Retirement Plan is
incorporated herein by reference to
Exhibit 14(a) to Post-Effective Amendment
No. 57.

(b) Model Defined Contribution Retirement
Plan is incorporated herein by reference
to Exhibit 14(b) to Post-Effective
Amendment No. 41.

(c) Model Section 403(b)(7) Plan is
incorporated herein by reference to
Exhibit 14(c) to Post-Effective Amendment
No. 38.

Exhibit 15 Not Applicable.

Exhibit 16 (a) Computation of Total Return is
incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment
No. 44.

(b) Computation of Current Yield and
Effective Yield is incorporated herein by
reference to Exhibit 16(b) to Post-
Effective Amendment No. 67.

Exhibit 17 Powers of Attorney dated as of June 30,
1995, are incorporated herein by
reference to Exhibit 17 to Post-
Effective Amendment No. 67.

Exhibit 18 Form of plan entered into by Janus Money
Market Fund, Janus Government Money
Market Fund and Janus Tax- Exempt Money
Market Fund pursuant to Rule 18f-3
setting forth the separate arrangement
and expense allocation of each class of
such Funds is incorporated herein by
reference to Exhibit 18 to Post-Effective
Amendment No. 66.

Exhibit 27 A Financial Data Schedule for each of the
following Funds will be filed by
amendment:

Janus High-Yield Fund
Janus Olympus Fund

ITEM 25. Persons Controlled by or Under Common Control with Registrant
None

C-8
<PAGE>

ITEM 26. Number of Holders of Securities

The number of record holders of shares of the Registrant as of August
31, 1995, was as follows:

Number of
Title of Class Record Holders
-------------- --------------

Janus Fund shares 786,506
Janus Growth and Income Fund shares 81,258
Janus Worldwide Fund shares 195,443
Janus Overseas Fund shares 22,160
Janus Twenty Fund shares 349,337
Janus Flexible Income Fund shares 33,830
Janus Intermediate Government
Securities Fund shares 5,210
Janus Venture Fund shares 145,096
Janus Enterprise Fund shares 69,346
Janus Balanced Fund shares 18,988
Janus Short-Term Bond Fund shares 5,327
Janus Federal Tax-Exempt Fund shares 3,866
Janus Mercury Fund shares 171,526
Janus Money Market Fund - Investor Shares 69,736
Janus Money Market Fund - Institutional Shares 43
Janus Government Money
Market Fund - Investor Shares 12,239
Janus Government Money
Market Fund - Institutional Shares 29
Janus Tax-Exempt Money
Market Fund - Investor Shares 6,363
Janus Tax-Exempt Money
Market Fund - Institutional Shares 5
Janus High-Yield Fund shares N/A
Janus Olympus Fund shares N/A

ITEM 27. Indemnification

Article VIII of Janus Investment Fund's Agreement and Declaration of Trust
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 Fund office, 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
or not opposed to 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.

C-9
<PAGE>

ITEM 28. 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 private and retirement accounts. The only
businesses, professions, vocations or employments of a substantial nature of
Thomas H. Bailey, James P. Craig, Thomas F. Marsico, James P. Goff, Warren B.
Lammert, Ronald V. Speaker, Helen Young Hayes, Sharon S. Pichler, Scott W.
Schoelzel, David C. Tucker and Steven R. Goodbarn, officers and/or directors of
Janus Capital Corporation, are described under "Officers and Trustees" in the
currently effective Statements of Additional Information included in this
Registration Statement. 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., 525 "B" Street, Suite 1080, 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., 1004 Baltimore Avenue, 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, information
processing and financial services.

ITEM 29. Principal Underwriters

(a) Janus Distributors, Inc. ("Janus Distributors") does not serve as
a principal underwriter for any investment company other than
Registrant.

(b) The principal business address, positions with Janus Distributors
and positions with Registrant of David C. Tucker 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.

ITEM 30. 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, Suite 300,
Denver, Colorado 80206-4923 and by Investors Fiduciary Trust Company, 127 W.
10th Street, Kansas City, Missouri 64105, State Street Bank and Trust Company,
P.O. Box 351, Boston, Massachusetts 02101 and United Missouri Bank, P.O. Box
419226, Kansas City, Missouri 64141-6226.

C-10
<PAGE>

ITEM 31. Management Services

The Registrant has no management-related service contract which is not
discussed in Part A or Part B of this form.

ITEM 32. Undertakings

(a) Not applicable.

(b) The Registrant undertakes to file one or more post- effective
amendments for Janus High-Yield Fund and Janus Olympus Fund,
using financial statements which need not be certified, within
four to six months of the later of the effective date of this
Amendment to the Registration Statement or the commencement of
operations of such Funds.

(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

C-11
<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 Amendment to
its 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
14th day of September, 1995.

JANUS INVESTMENT FUND

By: /s/ Thomas H. Bailey
Thomas H. Bailey, President

Janus Investment Fund is organized under the Agreement and Declaration of
Trust of the Registrant dated February 11, 1986, a copy of which is on file with
the Secretary of State of The Commonwealth of Massachusetts. 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 Agreement and
Declaration of Trust of the Registrant. The execution of this Amendment to the
Registration Statement has been authorized by the Trustees of the Registrant and
this Amendment to the 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 Declaration of Trust.

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the 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 September 14, 1995
Thomas H. Bailey (Principal Executive
Officer) and Trustee

/s/ Steven R. Goodbarn Treasurer and Chief September 14, 1995
Steven R. Goodbarn Financial Officer
(Principal Financial
and Accounting Officer)

/s/ James P. Craig Trustee September 14, 1995
James P. Craig

<PAGE>

Gary O. Loo* Trustee September 14, 1995
Gary O. Loo

Dennis B. Mullen* Trustee September 14, 1995
Dennis B. Mullen

John W. Shepardson* Trustee September 14, 1995
John W. Shepardson

William D. Stewart* Trustee September 14, 1995
William D. Stewart

Martin H. Waldinger* Trustee September 14, 1995
Martin H. Waldinger

/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact

<PAGE>

INDEX OF EXHIBITS

Exhibit Number Exhibit Title
-------------- -------------

Exhibit 1(p) Form of Certificate of Designation

Exhibit 4(n) Specimen Stock Certificates

Exhibit 5(i) Draft form of Investment Advisory
Agreement for Janus High-Yield Fund

Exhibit 5(j) Draft form of Investment Advisory
Agreement for Janus Olympus Fund

Exhibit 10(l) Opinion and Consent of Fund Counsel

Exhibit 11 Consent of Price Waterhouse

EXHIBIT 1(p)

JANUS INVESTMENT FUND

FORM OF
CERTIFICATE OF DESIGNATION

FOR

[JANUS HIGH-YIELD FUND]
[JANUS OLYMPUS FUND]

The undersigned, being the Secretary of Janus Investment Fund (hereinafter
referred to as the "Trust"), a Massachusetts Business Trust, DOES HEREBY CERTIFY
that, pursuant to the authority conferred upon the Trustees of the Trust by
Section 6.1(b) and Section 9.3 of the Agreement and Declaration of Trust, dated
February 11, 1986, and all amendments thereto, (hereinafter referred to as the
"Declaration of Trust") and by the affirmative vote of a Majority of the
Trustees at a meeting duly called and held on September 27, 1995, the
Declaration of Trust is amended as follows:

There is hereby established and designated the [Janus High-Yield Fund]
[Janus Olympus Fund] (hereinafter referred to as the "Fund"). The beneficial
interest in the Fund shall be divided into Shares having a nominal or par value
of one cent ($.01) per Share, of which an unlimited number may be issued, which
Shares shall represent interests only in the Fund. The Shares of the Fund shall
have the following rights and preferences:

(a) Assets Belonging to the Fund. Any portion of the Trust Property
allocated to the Fund, and all consideration received by the Trust for the
issue or sale of Shares of the Fund, together with all assets in which such
consideration is invested or reinvested, all interest, dividends, income,
earnings, profits and gains therefrom, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held by the Trustees in trust for
the benefit of the holders of Shares of the Fund and shall irrevocably
belong to the Fund for all purposes, and shall be so recorded upon the
books of account of the Trust, and the Shareholders of any other Fund who
are not Shareholders of the Fund shall not have, and shall be conclusively
deemed to have waived, any claims to the assets of the Fund. Such
consideration, assets, interest, dividends, income, earnings, profits,
gains and proceeds, together with any General Items allocated to the Fund
as provided in the following sentence, are herein referred to collectively
as "Fund Assets" of the Fund,

1
<PAGE>

Certificate of Designation
[Janus High-Yield Fund] [Janus Olympus Fund]

and as assets "belonging to" the Fund. In the event that there are any
assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Fund
(collectively "General Items"), the Trustees shall allocate such General
Items to and among any one or more of the Funds of the Trust in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to the Fund shall belong to
and be part of the Fund Assets of the Fund. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders and
creditors of all the Funds for all purposes.

(b) Liabilities of the Fund. The assets belonging to the Fund shall be
charged with the liabilities incurred by or arising in respect of the
High-Yield Fund and all expenses, costs, charges and reserves attributable
to the High-Yield Fund, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
pertaining to any particular Fund shall be allocated and charged by the
Trustees to and among any one or more of the Funds of the Trust in such
manner and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges and reserves
allocated and so charged to the Fund are herein referred to as "liabilities
of" the Fund. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all the Funds for all purposes. Any creditor of the Fund
may look only to the assets of the Fund to satisfy such creditor's claims.

(c) Dividends. Dividends and distributions on Shares of the Fund may
be paid with such frequency as the Trustees may determine, which may be
daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, to the
Shareholders of the Fund, from such of the income, accrued or realized, and
capital gains, realized or unrealized, and out of the assets belonging to
the Fund, as the Trustees may determine, after providing for actual and
accrued liabilities of the Fund. Dividends and distributions shall be in
such amounts as may be declared from time to time by the Trustees, and all
dividends and distributions on Shares of the Fund shall be distributed pro
rata to the Shareholders of the Fund in proportion to the number of such
Shares held by such holders at the date and time of record established for
the payment of such dividends or distributions. Notwithstanding the
foregoing, the Trustees may determine, in connection with any dividend or
distribution program or procedure, that no dividend or distribution shall
be payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the
Trustees under such program

2
<PAGE>

Certificate of Designation
[Janus High-Yield Fund] [Janus Olympus Fund]

or procedure, or that dividends or distributions shall be payable on Shares
which have been tendered by the holder thereof for redemption or
repurchase, but the redemption or repurchase proceeds of which have not yet
been paid to such Shareholder. Dividends and distributions on Shares of
High-Yield Fund may be made in cash or Shares of the Fund or a combination
thereof as determined by the Trustees, or pursuant to any program that the
Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or distribution to
that Shareholder. Any such dividend or distribution paid in Shares will be
paid at the net asset value thereof as determined in accordance with
subsection (h) hereof, but without any load or sales charge.

(d) Liquidation. In the event of the liquidation or dissolution of the
Trust, the Shareholders of the Fund shall be entitled to receive, when and
as declared by the Trustees, the excess of the Fund Assets over the
liabilities of the Fund. The assets so distributable to the Shareholders of
the Fund shall be distributed among such Shareholders in proportion to the
number of Shares of the Fund held by them and recorded on the books of the
Trust. The liquidation of the Fund may be authorized by vote of a Majority
of the Trustees, subject to the affirmative vote of "a majority of the
outstanding voting securities" of the Fund, as the quoted phrase is defined
in the 1940 Act, determined in accordance with the definition of "Majority
Shareholder Vote" in Section 1.4 of the Declaration of Trust.

(e) Voting. The Shareholders shall have the voting rights set forth in
or determined under Article VII of the Declaration of Trust.

(f) Redemption by Shareholder. Each holder of Shares of the Fund shall
have the right at such times as may be permitted by the Trust, but no less
frequently than once each week, to require the Trust to redeem all or any
part of his Shares of the Fund at a redemption price equal to the net asset
value per Share of the Fund next determined in accordance with subsection
(h) hereof after the Shares are properly tendered for redemption; provided,
that the Trustees may from time to time, in their discretion, determine and
impose a fee for such redemption. Payment of the redemption price shall be
in cash; provided, however, that if the Trustees determine, which
determination shall be conclusive, that conditions exist which make payment
wholly in cash unwise or undesirable, the Trust may make payment wholly or
partly in Securities or other assets belonging to the Fund at the value of
such Securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of

3
<PAGE>

Certificate of Designation
[Janus High-Yield Fund] [Janus Olympus Fund]

Shares of the Fund to require the Trust to redeem Shares of the Fund during
any period or at any time when and to the extent permissible under the 1940
Act.

(g) Redemption at the Option of the Trust. Each Share of the Fund
shall be subject to redemption at the option of the Trust at the redemption
price which would be applicable if such Share were then being redeemed by
the Shareholder pursuant to subsection (f) hereof: (i) at any time, if the
Trustees determine in their sole discretion that failure to so redeem may
have materially adverse consequences to the holders of the Shares of the
Trust or of any Fund, or (ii) upon such other conditions with respect to
maintenance of Shareholder accounts of a minimum amount as may from time to
time be determined by the Trustees and set forth in the then current
Prospectus of the Fund. Upon such redemption the holders of the Shares so
redeemed shall have no further right with respect thereto other than to
receive payment of such redemption price.

(h) Net Asset Value. The net asset value per Share of the Fund at any
time shall be the quotient obtained by dividing the value of the net assets
of the Fund at such time (being the current value of the assets belonging
to the Fund, less its then-existing liabilities) by the total number of
Shares of the Fund then outstanding, all determined in accordance with the
methods and procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time. The Trustees may
determine to maintain the net asset value per Share of the Fund at a
designated constant dollar amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the continuing
declaration of income attributable to the Fund as dividends payable in
additional Shares of the Fund at the designated constant dollar amount and
for the handling of any losses attributable to the Fund. Such procedures
may provide that in the event of any loss each Shareholder shall be deemed
to have contributed to the shares of beneficial interest account of the
Fund such shareholder's pro rata portion of the total number of Shares
required to be canceled in order to permit the net asset value per share of
the Fund to be maintained, after reflecting such loss, at the designated
constant dollar amount. Each Shareholder of the Fund shall be deemed by his
purchase of shares of High-Yield Fund to have expressly agreed to make the
contribution referred to in the preceding sentence in the event of any such
loss.

(i) Transfer. All Shares of the Fund shall be transferable, but
transfers of Shares of the Fund will be recorded on the Share transfer
records of the Trust applicable to the Fund only at such times as
Shareholders shall have the right to require

4
<PAGE>

Certificate of Designation
[Janus High-Yield Fund] [Janus Olympus Fund]

the Trust to redeem Shares of the Fund and at such other times as may be
permitted by the Trustees.

(j) Equality. All Shares of the Fund shall represent an equal
proportionate interest in the assets belonging to the Fund (subject to a
like share of the liabilities of the Fund), and each Share of the Fund
shall be equal to each other Share thereof; but the provisions of this
sentence shall not restrict any distinctions permissible under subsection
(c) hereof that may exist with respect to dividends and distributions on
Shares of the Fund. The Trustees may from time to time divide or combine
the Shares of the Fund into a greater or lesser number of Shares of the
Fund without thereby changing the proportionate beneficial interest in the
assets belonging to the Fund or in any way affecting the rights of the
holders of Shares of any other Fund.

(k) Rights of Fractional Shares. Any fractional Share of the Fund
shall carry proportionately all the rights and obligations of a whole Share
of the HFund including rights and obligations with respect to voting,
receipt of dividends and distributions, redemption of Shares, and
liquidation of the Trust or of the HFund

(l) Conversion Rights. Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide that holders
of Shares of the Fund shall have the right to convert said Shares into
Shares of one or more other Funds of the Trust in accordance with such
requirements and procedures as the Trustees may establish.

(m) Amendment, etc. Subject to the provisions and limitations of
Section 9.3 of the Declaration of Trust and applicable law, this
Certificate of Designation may be amended by an instrument in writing
signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees), provided that, if any
amendment adversely affects the rights of the Shareholders of the Fund,
such amendment may be adopted by an instrument in writing signed by a
Majority of the Trustees (or by an officer of the Trust pursuant to the
vote of a Majority of the Trustees) when authorized to do so by the vote in
accordance with Section 7.1 of the Declaration of Trust of the holders of a
majority of all the Shares of the HFund outstanding and entitled to vote.

(n) Incorporation of Defined Terms. All capitalized terms which are
not defined herein shall have the same meanings as are assigned to those
terms in the

5
<PAGE>

Certificate of Designation
[Janus High-Yield Fund] [Janus Olympus Fund]

Declaration of Trust filed with the Secretary of State of the Commonwealth
of Massachusetts.

The Trustees further direct that, upon the execution of this Certificate of
Designation, the Trust take all necessary action to file a copy of this
Certificate of Designation with the Secretary of State of The Commonwealth of
Massachusetts and at any other place required by law or by the Declaration of
Trust.

IN WITNESS WHEREOF, the undersigned has set her hand and seal this ______
day of _______________________, 1995.

------------------------------
Kelley Abbott Howes, Secretary

6
<PAGE>

ACKNOWLEDGMENT

STATE OF COLORADO )
CITY AND :
COUNTY OF DENVER )

On this _____ day of ____________________, 1995, before me personally came
Kelley Abbott Howes, Secretary of Janus Investment Fund, to me known, and known
to me to be the person described in and who executed the foregoing instrument,
and acknowledged that she had executed the same as her free act and deed.
Witness my hand and official seal.

---------------------------------
Notary Public

My commission expires____________

EXHIBIT 4(n)

[LOGO]

JANUS INVESTMENT FUND
(A Massachusetts Business Trust)

SHARES OF BENEFICIAL INTEREST

ACCOUNT NO.

THIS CERTIFIES that CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS

Is the owner of ________________ shares of beneficial interest in the Janus
High-Yield Fund series of Janus Investment Fund (the "Fund"), fully paid and
nonassessable, the said shares being issued and held subject to the provisions
of the Agreement and Declaration of Trust of the Fund, and all amendments
thereto, copies of which are on file with the Secretary of The Commonwealth of
Massachusetts. The said owner by accepting this certificate agrees to and is
bound by all of the said provisions. The shares represented hereby are
transferable in writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Fund property endorsed for transfer (see
the reverse side hereof). This certificate is executed on behalf of the Trustees
of the Fund as Trustees and not individually and the obligations hereof are not
binding upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Janus High-Yield Fund series of
Janus Investment Fund. This certificate is not valid unless countersigned by the
Transfer Agent.

Witness the facsimile seal of the Fund and the facsimile signatures of its duly
authorized officers.

Dated:
/s/ Kelley Abbott Howes /s/ Thomas H. Bailey
SECRETARY PRESIDENT
[SEAL]

COUNTERSIGNED
INVESTORS FIDUCIARY TRUST COMPANY
(KANSAS CITY MISSOURI) TRANSFER AGENT

BY JANUS SERVICE CORPORATION
(DENVER COLORADO) SUBTRANSFER AGENT

AUTHORIZED SIGNATURE

<PAGE>

NOTICE. THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATIONS, ENLARGEMENT, OR ANY CHANGE WHATEVER.

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION IN
ACCORDANCE WITH FUND POLICIES.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common

UNIF GIFT MIN ACT. _____ Custodian _____
(Cust) (Minor)
Under Uniform Gifts to Minors Act
------------------------------
(State)

Additional abbreviations may also be used though not in the above list.

For value received, _____________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)

___________________________________________________________________ Shares

of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint

--------------------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within-named Fund with
full power of substitution in the premises.

Dated, ______________________ ___________________________________
Owner
___________________________________
Signature of Co-Owner, if any

IMPORTANT { BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.

Signature(s) guaranteed by:

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

<PAGE>

EXHIBIT 4(n)

[LOGO]

JANUS INVESTMENT FUND
(A Massachusetts Business Trust)

SHARES OF BENEFICIAL INTEREST

ACCOUNT NO.

THIS CERTIFIES that CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS

Is the owner of ________________ shares of beneficial interest in the Janus
Olympus Fund series of Janus Investment Fund (the "Fund"), fully paid and
nonassessable, the said shares being issued and held subject to the provisions
of the Agreement and Declaration of Trust of the Fund, and all amendments
thereto, copies of which are on file with the Secretary of The Commonwealth of
Massachusetts. The said owner by accepting this certificate agrees to and is
bound by all of the said provisions. The shares represented hereby are
transferable in writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Fund property endorsed for transfer (see
the reverse side hereof). This certificate is executed on behalf of the Trustees
of the Fund as Trustees and not individually and the obligations hereof are not
binding upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Janus Olympus Fund series of
Janus Investment Fund. This certificate is not valid unless countersigned by the
Transfer Agent.