[LOGO]
JANUS INVESTMENT FUND
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
(800) 29JANUS
STATEMENT OF ADDITIONAL INFORMATION
April 14, 1995 as supplemented September 28, 1995
JANUS MONEY MARKET FUND
JANUS GOVERNMENT MONEY MARKET FUND
JANUS TAX-EXEMPT MONEY MARKET FUND
Institutional Shares
This Statement of Additional Information ("SAI") expands upon and supplements
the information contained in the current Prospectus for the Institutional Shares
(the "Shares") of Janus Money Market Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market Fund (individually, a "Fund" and,
collectively, the "Funds"). The Funds are each a separate series of Janus
Investment Fund, a Massachusetts business trust (the "Trust"). Each Fund
represents shares of beneficial interest in a separate portfolio of securities
and other assets with its own objective and policies, and is managed separately
by Janus Capital Corporation ("Janus Capital").
This SAI is not a Prospectus and should be read in conjunction with the
Prospectus dated April 14, 1995, as supplemented September 28, 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 Funds' operations and activities than the Prospectus.
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
Investment Policies and Restrictions ...................................... 3
Types of Securities and Investment Techniques ............................. 4
Performance Data .......................................................... 7
Determination of Net Asset Value .......................................... 8
Investment Adviser and Administrator ...................................... 9
Custodian, Transfer Agent and Certain Affiliations ........................ 10
Portfolio Transactions and Brokerage ...................................... 11
Officers and Trustees ..................................................... 12
Purchase of Shares ........................................................ 13
Redemption of Shares ...................................................... 14
Shareholder Accounts ...................................................... 14
Dividends and Tax Status .................................................. 14
Principal Shareholders .................................................... 15
Miscellaneous Information ................................................. 15
Shares of the Trust ....................................................... 16
Voting Rights ............................................................. 16
Independent Accountants ................................................... 16
Registration Statement .................................................... 16
Financial Statements ...................................................... 17
Appendix A - Description of Securities Ratings ............................ 25
Appendix B - Description of Municipal Securities .......................... 27
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INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
As discussed in the Prospectus, the investment objective of each of Janus
Money Market Fund and Janus Government Money Market Fund is to seek maximum
current income to the extent consistent with stability of capital. The
investment objective of Janus Tax-Exempt Money Market Fund is to seek maximum
current income that is exempt from federal income taxes to the extent consistent
with stability of capital. There can be no assurance that a Fund will achieve
its investment objective or maintain a stable net asset value of $1.00 per
share. The investment objectives of the Funds are not fundamental and may be
changed by the Trustees of the Trust (the "Trustees") without shareholder
approval.
INVESTMENT RESTRICTIONS APPLICABLE TO ALL FUNDS
As indicated in the Prospectus, each Fund has adopted certain fundamental
investment restrictions that cannot be changed without shareholder approval.
Shareholder approval means approval by the lesser of (i) more than 50% of the
outstanding voting securities of the Trust (or a particular Fund or particular
Shares if a matter affects just that Fund or those Shares), or (ii) 67% or more
of the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities of the Trust (or a particular Fund or class of
Shares) are present or represented by proxy.
As used in the restrictions set forth below and as used elsewhere in this
SAI, the term "U.S. Government Securities" shall have the meaning set forth in
the Investment Company Act of 1940, as amended (the "1940 Act"). The 1940 Act
defines U.S. government securities as securities issued or guaranteed by the
United States government, its agencies or instrumentalities and has been
interpreted to include repurchase agreements collateralized and municipal
securities refunded with escrowed U.S. government securities ("U.S. Government
Securities").
The Funds have adopted the following fundamental policies:
(1) With respect to 75% of its assets, a Fund may not purchase a security
other than a U.S. Government Security, if, as a result, more than 5% of the
Fund's total assets would be invested in the securities of a single issuer or
the Fund would own more than 10% of the outstanding voting securities of any
single issuer. (As noted in the Prospectus, Janus Money Market Fund and Janus
Government Money Market Fund are currently subject to the greater
diversification standards of Rule 2a-7, which are not fundamental.)
(2) A Fund may not purchase securities if more than 25% of the value of a
Fund's total assets would be invested in the securities of issuers conducting
their principal business activities in the same industry; provided that: (i)
there is no limit on investments in U.S. Government Securities or in obligations
of domestic commercial banks (including U.S. branches of foreign banks subject
to regulations under U.S. laws applicable to domestic banks and, to the extent
that its parent is unconditionally liable for the obligation, foreign branches
of U.S. banks); (ii) this limitation shall not apply to a Fund's investments in
municipal securities; (iii) there is no limit on investments in issuers
domiciled in a single country; (iv) financial service companies are classified
according to the end users of their services (for example, automobile finance,
bank finance and diversified finance are each considered to be a separate
industry); and (v) utility companies are classified according to their services
(for example, gas, gas transmission, electric, and telephone are each considered
to be a separate industry).
(3) A Fund may not act as an underwriter of securities issued by others,
except to the extent that a Fund may be deemed an underwriter in connection with
the disposition of portfolio securities of such Fund.
(4) A Fund may not lend any security or make any other loan if, as a
result, more than 25% of a Fund's total assets would be lent to other parties
(but this limitation does not apply to purchases of commercial paper, debt
securities or repurchase agreements).
(5) A Fund may not purchase or sell real estate or any interest therein,
except that the Fund may invest in debt obligations secured by real estate or
interests therein or securities issued by companies that invest in real estate
or interests therein.
(6) A Fund may borrow money for temporary or emergency purposes (not for
leveraging) in an amount not exceeding 25% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings). If
borrowings exceed 25% of the value of a 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
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comply with the 25% limitation. Reverse repurchase agreements or the segregation
of assets in connection with such agreements shall not be considered borrowing
for the purposes of this limit.
(7) Each Fund may, notwithstanding any other investment policy or
restriction (whether or not fundamental), invest all of its assets in the
securities of a single open-end management investment company with substantially
the same fundamental investment objectives, policies and restrictions as that
Fund.
Each Fund has adopted the following nonfundamental investment restrictions
that may be changed by the Trustees without shareholder approval:
(1) A Fund may not invest in securities or enter into repurchase agreements
with respect to any securities if, as a result, more than 10% of the Fund's net
assets would be invested in repurchase agreements not entitling the holder to
payment of principal within seven days and in other securities that are not
readily marketable ("illiquid investments"). The Trustees, or the Fund's
investment adviser acting pursuant to authority delegated by the Trustees, may
determine that a readily available market exists for certain securities such as
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, or any successor to such rule, Section 4(2) commercial paper and municipal
lease obligations. Accordingly, such securities may not be subject to the
foregoing limitation.
(2) A Fund may not invest in the securities of another investment company,
except to the extent permitted by the 1940 Act.
(3) A Fund may not purchase securities on margin, or make short sales of
securities, except for short sales against the box and the use of short-term
credit necessary for the clearance of purchases and sales of portfolio
securities.
(4) A Fund may not invest more than 5% of the value of its total assets in
the securities of any issuer that has conducted continuous operations for less
than three years, including operations of predecessors, except that this shall
not affect the Fund's ability to invest in U.S. Government Securities, fully
collateralized debt obligations, municipal obligations, securities that are
rated by at least one nationally recognized statistical rating organization and
securities guaranteed as to principal and interest by an issuer in whose
securities the Fund could invest.
(5) A Fund may not pledge, mortgage, hypothecate or encumber any of its
assets except to secure permitted borrowings or in connection with permitted
short sales.
(6) A Fund may not invest directly in interests in oil and gas or interests
in other mineral exploration or development programs or leases; however, the
Fund may own debt securities of companies engaged in those businesses.
(7) A Fund may not invest in companies for the purpose of exercising
control of management.
For purposes of the Funds' restriction on investing in a particular
industry, the Funds will rely primarily on industry classifications as published
by Bloomberg L.P., subject to the exceptions noted in fundamental restriction
number two above. To the extent that such classifications are so broad that the
primary economic characteristics in a single class are materially different, the
Funds may further classify issuers in accordance with industry classifications
as published by the Securities and Exchange Commission.
TYPES OF SECURITIES AND INVESTMENT TECHNIQUES
Each of the Funds may invest only in "eligible securities" as defined in
Rule 2a-7 adopted under the 1940 Act. Generally, an eligible security is a
security that (i) is denominated in U.S. dollars and has a remaining maturity of
397 days or less (as calculated pursuant to Rule 2a-7); (ii) is rated, or is
issued by an issuer with short-term debt outstanding that is rated, in one of
the two highest rating categories by any two nationally recognized statistical
rating organizations ("NRSROs") or, if only one NRSRO has issued a rating, by
that NRSRO (the "Requisite NRSROs") or is unrated and of comparable quality to a
rated security, as determined by Janus Capital; and (iii) has been determined by
Janus Capital to present minimal credit risks pursuant to procedures approved by
the Trustees. In addition, the Funds will maintain a dollar-weighted average
portfolio maturity of 90 days or less. A description of the ratings of some
NRSROs appears in Appendix A.
Under Rule 2a-7, a Fund may not invest more than five percent of its total
assets in the securities of any one issuer other than U.S. Government
Securities, provided that in certain cases a Fund may invest more than 5% of its
assets in a single issuer for a period of up to three business days. In the case
of Janus Tax-Exempt Money Market Fund, up to 25% of its assets may be invested
without regard to the foregoing limitations.
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Pursuant to Rule 2a-7, each Fund (except Janus Tax-Exempt Money Market
Fund) will invest at least 95% of its total assets in "first-tier" securities.
First-tier securities are eligible securities that are rated, or are issued by
an issuer with short-term debt outstanding that is rated, in the highest rating
category by the Requisite NRSROs or are unrated and of comparable quality to a
rated security. In addition, a Fund may invest in "second-tier" securities which
are eligible securities that are not first-tier securities. However, a Fund
(except for Janus Tax-Exempt Money Market Fund) may not invest in a second-tier
security if immediately after the acquisition thereof the Fund would have
invested more than (i) the greater of one percent of its total assets or one
million dollars in second-tier securities issued by that issuer, or (ii) five
percent of its total assets in second-tier securities.
The following discussion of types of securities in which the Funds may
invest supplements and should be read in conjunction with the Prospectus.
PARTICIPATION INTERESTS
Each Fund may purchase participation interests in loans or securities in
which the Funds may invest directly. Participation interests are generally
sponsored or issued by banks or other financial institutions. A participation
interest gives a Fund an undivided interest in the underlying loans or
securities in the proportion that the Fund's interest bears to the total
principal amount of the underlying loans or securities. Participation interests,
which may have fixed, floating or variable rates, may carry a demand feature
backed by a letter of credit or guarantee of a bank or institution permitting
the holder to tender them back to the bank or other institution. For certain
participation interests, a Fund will have the right to demand payment, on not
more than seven days' notice, for all or a part of the Fund's participation
interest. The Funds intend to exercise any demand rights they may have upon
default under the terms of the loan or security, to provide liquidity or to
maintain or improve the quality of the Funds' investment portfolio. A Fund will
only purchase participation interests that Janus Capital determines present
minimal credit risks.
VARIABLE AND FLOATING RATE NOTES
Janus Money Market Fund also may purchase variable and floating rate demand
notes of corporations and other entities, which are unsecured obligations
redeemable upon not more than 30 days' notice. These obligations include master
demand notes that permit investment of fluctuating amounts at varying rates of
interest pursuant to direct arrangements with the issuer of the instrument. The
issuer of these obligations often has the right, after a given period, to prepay
the outstanding principal amount of the obligations upon a specified number of
days' notice. These obligations generally are not traded, nor generally is there
an established secondary market for these obligations. To the extent a demand
note does not have a seven day or shorter demand feature and there is no readily
available market for the obligation, it is treated as an illiquid security.
MORTGAGE- AND ASSET-BACKED SECURITIES
The Funds may invest in mortgage-backed securities, which represent an
interest in a pool of mortgages made by lenders such as commercial banks,
savings and loan institutions, mortgage bankers, mortgage brokers and savings
banks. Mortgage-backed securities may be issued by governmental or
government-related entities or by non-governmental entities such as banks,
savings and loan institutions, private mortgage insurance companies, mortgage
bankers and other secondary market issuers.
Interests in pools of mortgage-backed securities differ from other forms of
debt securities which normally provide for periodic payment of interest in fixed
amounts with principal payments at maturity or specified call dates. In
contrast, mortgage-backed securities provide periodic payments which consist of
interest and, in most cases, principal. In effect, these payments are a
"pass-through" of the periodic payments and optional prepayments made by the
individual borrowers on their mortgage loans, net of any fees paid to the issuer
or guarantor of such securities. Additional payments to holders of
mortgage-backed securities are caused by prepayments resulting from the sale of
the underlying residential property, refinancing or foreclosure, net of fees or
costs which may be incurred.
As prepayment rates of individual pools of mortgage loans vary widely, it
is not possible to predict accurately the average life of a particular security.
Although mortgage-backed securities are issued with stated maturities of up to
forty years, unscheduled or early payments of principal and interest on the
underlying mortgages may shorten considerably the effective maturities.
Mortgage-backed securities may have
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varying assumptions for average life. The volume of prepayments of principal on
a pool of mortgages underlying a particular security will influence the yield of
that security, and the principal returned to a Fund may be reinvested in
instruments whose yield may be higher or lower than that which might have been
obtained had the prepayments not occurred. When interest rates are declining,
prepayments usually increase, with the result that reinvestment of principal
prepayments will be at a lower rate than the rate applicable to the original
mortgage-backed security.
The Funds may invest in mortgage-backed securities that are issued by
agencies or instrumentalities of the U.S. government. The Government National
Mortgage Association ("GNMA") is the principal federal government guarantor of
mortgage-backed securities. GNMA is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. GNMA Certificates are
debt securities which represent an interest in one mortgage or a pool of
mortgages which are insured by the Federal Housing Administration or the Farmers
Home Administration or are guaranteed by the Veterans Administration. The Funds
may also invest in pools of conventional mortgages which are issued or
guaranteed by agencies of the U.S. government. GNMA pass-through securities are
considered to be riskless with respect to default in that (i) the underlying
mortgage loan portfolio is comprised entirely of government-backed loans and
(ii) the timely payment of both principal and interest on the securities is
guaranteed by the full faith and credit of the U.S. government, regardless of
whether or not payments have been made on the underlying mortgages. GNMA
pass-through securities are, however, subject to the same market risk as
comparable debt securities. Therefore, the market value of a Fund's GNMA
securities can be expected to fluctuate in response to changes in prevailing
interest rate levels.
Residential mortgage loans are pooled also by the Federal Home Loan
Mortgage Corporation ("FHLMC"). FHLMC is a privately managed, publicly chartered
agency created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. FHLMC issues
participation certificates ("PCs") which represent interests in mortgages from
FHLMC's national portfolio. The mortgage loans in FHLMC's portfolio are not U.S.
government backed; rather, the loans are either uninsured with loan-to-value
ratios of 80% or less, or privately insured if the loan-to-value ratio exceeds
80%. FHLMC guarantees the timely payment of interest and ultimate collection of
principal on FHLMC PCs; the U.S. government does not guarantee any aspect of
FHLMC PCs.
The Federal National Mortgage Association ("FNMA") is a
government-sponsored corporation owned entirely by private shareholders. It is
subject to general regulation by the Secretary of Housing and Urban Development.
FNMA purchases residential mortgages from a list of approved seller/servicers
which include savings and loan associations, savings banks, commercial banks,
credit unions and mortgage bankers. FNMA guarantees the timely payment of
principal and interest on the pass-through securities issued by FNMA; the U.S.
government does not guarantee any aspect of the FNMA pass-through securities.
The Funds may also invest in privately-issued mortgage-backed securities to
the extent permitted by their investment restrictions. Mortgage-backed
securities offered by private issuers include pass-through securities comprised
of pools of conventional residential mortgage loans; mortgage-backed bonds which
are considered to be debt obligations of the institution issuing the bonds and
which are collateralized by mortgage loans; and collateralized mortgage
obligations ("CMOs") which are collateralized by mortgage-backed securities
issued by GNMA, FHLMC or FNMA or by pools of conventional mortgages.
Asset-backed securities represent direct or indirect participation in, or
are secured by and payable from, assets other than mortgage-backed assets such
as motor vehicle installment sales contracts, installment loan contracts, leases
of various types of real and personal property and receivables from revolving
credit agreements (credit cards). Asset-backed securities have yield
characteristics similar to those of mortgage-backed securities and, accordingly,
are subject to many of the same risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are transactions in which a Fund sells a
security and simultaneously commits to repurchase that security from the buyer
at an agreed upon price on an agreed upon future date. The resale price in a
reverse repurchase agreement reflects a market rate of interest that is not
related to the coupon rate or maturity of the sold security. For certain demand
agreements, there is no agreed upon repurchase date and interest payments are
calculated daily, often based upon the prevailing overnight repurchase rate. The
Funds will use the proceeds of reverse repurchase agreements only to satisfy
unusually heavy redemption requests or for other temporary or emergency purposes
without the necessity of selling portfolio securities or to earn additional
income on portfolio securities.
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Generally, a reverse repurchase agreement enables the Fund to recover for
the term of the reverse repurchase agreement all or most of the cash invested in
the portfolio securities sold and to keep the interest income associated with
those portfolio securities. Such transactions are only advantageous if the
interest cost to the Fund of the reverse repurchase transaction is less than the
cost of obtaining the cash otherwise. In addition, interest costs on the money
received in a reverse repurchase agreement may exceed the return received on the
investments made by a Fund with those monies.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Fund may purchase securities on a when-issued or delayed delivery
basis. A Fund will enter into such transactions only when it has the intention
of actually acquiring the securities. To facilitate such acquisitions, the
Funds' custodian will segregate cash or high quality liquid assets in an amount
at least equal to such commitments. On delivery dates for such transactions, the
Fund will meet its obligations from maturities, sales of the segregated
securities or from other available sources of cash. If a Fund chooses to dispose
of the right to acquire a when-issued security prior to its acquisition, it
could, as with the disposition of any other portfolio obligation, incur a gain
or loss due to market fluctuation. At the time a Fund makes the commitment to
purchase securities on a when-issued or delayed delivery basis, it will record
the transaction as a purchase and thereafter reflect the value of such
securities in determining its net asset value.
MUNICIPAL LEASES
Janus Money Market Fund and Janus Tax-Exempt Money Market Fund may invest
in municipal leases. Municipal leases frequently have special risks not normally
associated with general obligation or revenue bonds. Leases and installment
purchase or conditional sale contracts (which normally provide for title to the
leased asset to pass eventually to the government issuer) have evolved as a
means for governmental issuers to acquire property and equipment without meeting
the constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations of many state constitutions and statutes are deemed to
be inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. A Fund will only purchase municipal leases subject to a
non-appropriation clause when the payment of principal and accrued interest is
backed by an unconditional irrevocable letter of credit, or guarantee of a bank
or other entity that meets the criteria described in the Prospectus under
"Taxable Investments."
In evaluating municipal lease obligations, Janus Capital will consider such
factors as it deems appropriate, including: (a) whether the lease can be
canceled; (b) the ability of the lease obligee to direct the sale of the
underlying assets; (c) the general creditworthiness of the lease obligor; (d)
the likelihood that the municipality will discontinue appropriating funding for
the leased property in the event such property is no longer considered essential
by the municipality; (e) the legal recourse of the lease obligee in the event of
such a failure to appropriate funding; (f) whether the security is backed by a
credit enhancement such as insurance; and (g) any limitations which are imposed
on the lease obligor's ability to utilize substitute property or services other
than those covered by the lease obligation. If a lease is backed by an
unconditional letter of credit or other unconditional credit enhancement, then
Janus Capital may determine that a lease is an eligible security solely on the
basis of its evaluation of the credit enhancement.
Municipal leases, like other municipal debt obligations, are subject to the
risk of non-payment. The ability of issuers of municipal leases to make timely
lease payments may be adversely impacted in general economic downturns and as
relative governmental cost burdens are allocated and reallocated among federal,
state and local governmental units. Such non-payment would result in a reduction
of income to the Funds, and could result in a reduction in the value of the
municipal lease experiencing non-payment and a potential decrease in the net
asset value of a Fund.
PERFORMANCE DATA
A Fund may provide current annualized and effective annualized yield
quotations based on its daily dividends. These quotations may from time to time
be used in advertisements, shareholder reports or other communications to
shareholders. All performance information supplied by the Funds in advertising
is historical and is not intended to indicate future returns.
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In performance advertising, the Funds may compare their Shares' performance
information with data published by independent evaluators such as Morningstar,
Inc., Lipper Analytical Services, Inc., or CDC/Wiesenberger, Donoghue's Money
Fund Report or other companies which track the investment performance of
investment companies ("Fund Tracking Companies"). The Funds may also compare
their Shares' performance information with the performance of recognized stock,
bond and other indices, including but not limited to the Municipal Bond Buyers
Indices, the Salomon Brothers Bond Index, the Lehman Bond Index, the Standard &
Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average, U.S.
Treasury bonds, bills or notes and changes in the Consumer Price Index as
published by the U.S. Department of Commerce. The Funds may refer to general
market performance over past time periods such as those published by Ibbotson
Associates (for instance, its "Stocks, Bonds, Bills and Inflation Yearbook").
The Funds may also refer in such materials to mutual fund performance rankings
and other data published by Fund Tracking Companies. Performance advertising may
also refer to discussions of the Funds and comparative mutual fund data and
ratings reported in independent periodicals, such as newspapers and financial
magazines.
Any current yield quotation of the Shares which is used in such a manner as
to be subject to the provisions of Rule 482(d) under the Securities Act of 1933,
as amended, shall consist of an annualized historical yield, carried at least to
the nearest hundredth of one percent, based on a specific seven calendar day
period. Current yield shall be calculated by (a) determining the net change
during a seven calendar day period in the value of a hypothetical account having
a balance of one Share at the beginning of the period, (b) dividing the net
change by the value of the account at the beginning of the period to obtain a
base period return, and (c) multiplying the quotient by 365/7 (i.e.,
annualizing). For this purpose, the net change in account value will reflect the
value of additional Shares purchased with dividends declared on the original
Share and dividends declared on both the original Share and any such additional
Shares, but will not reflect any realized gains or losses from the sale of
securities or any unrealized appreciation or depreciation on portfolio
securities. In addition, the Shares may advertise effective yield quotations.
Effective yield quotations are calculated by adding 1 to the base period return,
raising the sum to a power equal to 365/7, and subtracting 1 from the result
(i.e., compounding).
Janus Tax-Exempt Money Market Fund's tax equivalent yield is the rate an
investor would have to earn from a fully taxable investment in order to equal
such Shares' yield after taxes. Tax equivalent yields are calculated by dividing
Janus Tax-Exempt Money Market Fund's yield by one minus the stated federal or
combined federal and state tax rate. If only a portion of the Shares' yield is
tax-exempt, only that portion is adjusted in the calculation.
The Shares' current yield and effective yield for the seven-day period
ended August 31, 1995 is shown below:
<TABLE>
<CAPTION>
Seven-day Effective
Fund Name Yield Seven-day Yield
- --------- ----- ---------------
<S> <C> <C>
Janus Money Market Fund - Institutional Shares 5.82% 5.99%
Janus Government Money Market Fund - Institutional Shares 5.70% 5.87%
Janus Tax-Exempt Money Market Fund - Institutional Shares* 3.68% 3.75%
</TABLE>
*Janus Tax-Exempt Money Market Fund Institutional Shares' tax-equivalent yield
for the seven-day period ended August 31, 1995 was 5.11%.
Although published yield information is useful to investors in reviewing a
Fund's performance, investors should be aware that the Fund's yield fluctuates
from day to day and that the Fund's yield for any given period is not an
indication or representation by the Fund of future yields or rates of return on
the Shares. Also, Processing Organizations may charge their customers direct
fees in connection with an investment in a Fund, which will have the effect of
reducing the Fund's net yield to those shareholders. The yield on a class of
Shares is not fixed or guaranteed, and an investment in the Shares is not
insured. Accordingly, yield information may not necessarily be used to compare
Shares with investment alternatives which, like money market instruments or bank
accounts, may provide a fixed rate of interest. In addition, because investments
in the Funds are not insured or guaranteed, yield on the Shares may not
necessarily be used to compare the Shares with investment alternatives which are
insured or guaranteed.
DETERMINATION OF NET ASSET VALUE
Pursuant to the rules of the Securities and Exchange Commission, the
Trustees have established procedures to stabilize each Fund's net asset value at
$1.00 per Share. These procedures include a review
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of the extent of any deviation of net asset value per Share as a result of
fluctuating interest rates, based on available market rates, from the Fund's
$1.00 amortized cost price per Share. Should that deviation exceed 1/2 of 1%,
the Trustees will consider whether any action should be initiated to eliminate
or reduce material dilution or other unfair results to shareholders. Such action
may include redemption of Shares in kind, selling portfolio securities prior to
maturity, reducing or withholding dividends and utilizing a net asset value per
Share as determined by using available market quotations. Each Fund i) will
maintain a dollar-weighted average portfolio maturity of 90 days or less; ii)
will not purchase any instrument with a remaining maturity greater than 397 days
or subject to a repurchase agreement having a duration of greater than 397 days;
iii) will limit portfolio investments, including repurchase agreements, to those
U.S. dollar-denominated instruments that Janus Capital has determined present
minimal credit risks pursuant to procedures established by the Trustees; and iv)
will comply with certain reporting and recordkeeping procedures. The Trust has
also established procedures to ensure that portfolio securities meet the Funds'
high quality criteria.
INVESTMENT ADVISER AND ADMINISTRATOR
As stated in the Prospectus, each Fund has an Investment Advisory Agreement
with Janus Capital, 100 Fillmore Street, Suite 300, Denver, Colorado 80206-4923.
Each Advisory Agreement provides that Janus Capital will furnish continuous
advice and recommendations concerning the Funds' investments. The Funds have
each agreed to compensate Janus Capital for its advisory services by the monthly
payment of an advisory fee at the annual rate of .20% of the average daily net
assets of each Fund. However, Janus Capital has agreed to waive .10% of the
advisory fee through June 16, 1996. In addition, the Funds pay brokerage
commissions and dealer spreads and other expenses in connection with the
execution of portfolio transactions.
On behalf of the Shares, each of the Funds has also entered into an
Administration Agreement with Janus Capital. Under the terms of the
Administration Agreements, each of the Funds has agreed to compensate Janus
Capital for administrative services at the annual rate of .15% of the value of
the average daily net assets of the Shares for certain services, including
custody, transfer agent fees and expenses, legal fees not related to litigation,
accounting expenses, net asset value determination and fund accounting,
recordkeeping, and blue sky registration and monitoring services, registration
fees, expenses of shareholders' meetings and reports to shareholders, costs of
preparing, printing and mailing the Shares' Prospectuses and Statements of
Additional Information to current shareholders, and other costs of complying
with applicable laws regulating the sale of Shares. Each Fund will pay those
expenses not assumed by Janus Capital, including interest and taxes, fees and
expenses of Trustees who are not affiliated with Janus Capital, audit fees and
expenses, and extraordinary costs. For at least the period ending June 16, 1996,
Janus Capital has agreed to waive a portion of the administration fee, and
accordingly the effective rate for calculating the administration fee payable by
the Shares will be .05% for that period. For the Funds' fiscal year ending
October 31, 1995, Janus Capital has undertaken to reimburse the Funds for audit
fees and expenses and the fees and expenses of Trustees who are not affiliated
with Janus Capital.
The following table summarizes the advisory fees and administration fees
paid by the Shares for the period from April 14, 1995 to August 31, 1995:
<TABLE>
<CAPTION>
Advisory Fees Administration
Fund Name Prior to Waiver Fees
- --------- --------------- ----
<S> <C> <C>
Janus Money Market Fund - Institutional Shares $60,260 $30,130
Janus Government Money Market Fund - Institutional Shares $ 7,527 $ 3,763
Janus Tax-Exempt Money Market Fund - Institutional Shares $ 4 $ 1
</TABLE>
The Advisory Agreements for each Fund became effective on December 9, 1994
and will continue in effect until June 16, 1996, 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 Agreements or interested persons of
any such party, and by either a majority of the Funds' outstanding voting shares
or the Trustees. Each Advisory Agreement i) may be terminated without the
payment of any penalty by any Fund or Janus Capital on 60 days' written notice;
ii) terminates automatically in the event of its assignment; and iii) generally,
may not be amended without the approval of a majority of the Trustees of the
affected Fund, including the Trustees who are not interested persons of that
Fund or Janus Capital and, to the extent required by the 1940 Act, the vote of a
majority of the outstanding voting securities of that Fund.
Janus Capital 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
9
<PAGE>
Capital, including the Funds, are made independently from those for any other
account that is or may in the future become managed by Janus Capital or its
affiliates. If, however, a number of accounts managed by Janus Capital are
contemporaneously engaged in the purchase or sale of the same security, the
orders may be aggregated and/or the transactions may be averaged as to price and
allocated equitably to each account. In some cases, this policy might adversely
affect the price paid or received by an account or the size of the position
obtained or liquidated for an account.
Each account managed by Janus Capital has its own investment objective and
is managed in accordance with that objective by a particular portfolio manager
or team of portfolio managers. As a result, from time to time two or more
different managed accounts may pursue divergent investment strategies with
respect to investments or categories of investments.
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 Funds. The policy requires investment
personnel and officers of Janus Capital, inside directors of Janus Capital and
the Funds 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 Funds.
In addition to the pre-clearance requirement described above, the policy
subjects investment personnel, officers and directors/Trustees of Janus Capital
and the Funds 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.
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.
CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS
United Missouri Bank, N.A., P.O. Box 419226, Kansas City, Missouri
64141-6226, is the Funds' custodian. The custodian holds the Funds' assets in
safekeeping and collects and remits the income thereon, subject to the
instructions of each Fund.
Janus Service Corporation ("Janus Service"), P.O. Box 173375, Denver,
Colorado 80217-3375, a wholly-owned subsidiary of Janus Capital, is the Funds'
transfer agent. Janus Service provides certain other administrative,
recordkeeping and shareholder relations services to the Funds. The Funds do not
pay Janus Service a fee.
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 Funds. 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 Funds 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 Funds' 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.
Janus Capital also may make payments to selected broker-dealer firms or
institutions which were instrumental in the acquisition of shareholders for the
Funds or which performed services with respect to shareholder accounts. The
minimum aggregate size required for eligibility for such payments, and the
factors in selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital.
10
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of portfolio business for the Funds and
negotiation of its commission rates are made by Janus Capital whose policy is to
obtain the "best execution" (prompt and reliable execution at the most favorable
security price) of all portfolio transactions. The Advisory Agreements
specifically provide that in placing portfolio transactions for the Funds, 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.
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; 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.
For the period from April 14, 1995 to August 31, 1995, the Funds did not
incur any brokerage commissions.
Janus Capital may use research products and services in servicing other
accounts in addition to the Funds. If Janus Capital determines that any research
product or service has a mixed use, such that it also serves functions that do
not assist in the investment decision-making process, Janus Capital may allocate
the costs of such service or product accordingly. Only that portion of the
product or service that Janus Capital determines will assist it in the
investment decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus Capital.
The Advisory Agreements also authorize Janus Capital to consider sales of
Shares by a broker-dealer or the recommendation of a broker-dealer to its
customers that they purchase 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 a Fund i) to the
Fund or ii) to other persons on behalf of the Fund for services provided to the
Fund for which it would be obligated to pay. In placing portfolio business with
such broker-dealers, Janus Capital will seek the best execution of each
transaction.
When the Funds purchase or sell a security in the over-the-counter market,
the transaction takes place directly with a principal market-maker, without the
use of a broker, except in those circumstances where in the opinion of Janus
Capital better prices and executions will be achieved through the use of a
broker.
11
<PAGE>
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.
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.
Sharon S. Pichler* - Executive Vice President and Portfolio Manager
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Executive Vice President of Janus Money Market Fund, Janus Tax-Exempt Money
Market Fund and Janus Government Money Market Fund series of the Trust.
Vice President of Janus Capital. Formerly, Assistant Vice President and
portfolio manager at USAA Investment Management Co. (1990-1994) and
teaching associate at The University of Texas at San Antonio (1984-1990).
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.
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).
- --------------------------------------------------------------------------------
* Interested person of the Trust and of Janus Capital.
# Member of the Executive Committee.
12
<PAGE>
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).
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 each Fund's
objective, policies and techniques. The Trustees also supervise the operation of
the Funds by their officers and review the investment decisions of the officers
although they do not actively participate on a regular basis in making such
decisions.
The 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 Declaration of Trust,
Massachusetts Law or the 1940 Act.
The following table shows the aggregate compensation paid to each Trustee
by the Funds 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 benefits from the Funds or the Janus Funds.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation from the
from the Funds for fiscal year Janus Funds for calendar year
Name of Person, Position ended October 31, 1994** 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 Funds and of Janus Capital. Compensated by
Janus Capital and not the Funds.
** The Funds had not commenced operations as of October 31, 1994.
*** 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.
PURCHASE OF SHARES
As stated in the Prospectus, Janus Distributors is a distributor of the
Funds' shares. Shares 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" or the "Exchange") next occurring after a purchase order is received and
accepted by a Fund. As stated in the Prospectus, the Funds each seek to maintain
a stable net asset value per share of $1.00. The Shareholder's Guide Section of
the Prospectus contains detailed information about the purchase of Shares.
13
<PAGE>
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
If investors do not elect in writing or by phone to receive their dividends
and distributions via wire transfer, all income dividends and capital gains
distributions, if any, on Shares are reinvested automatically in additional
Shares of that Fund at the NAV determined on the first business day following
the record date. Any such election (which may be made on the Application or by
phone) will apply to dividends and distributions the record dates of which fall
on or after the date that a Fund receives such notice. Investors receiving
distributions and dividends via wire transfer 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
Guide section of the Prospectus. Shares normally will be redeemed for cash,
although each Fund retains the right to redeem 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
Funds are governed by Rule 18f-1 under the 1940 Act, which requires each Fund to
redeem Shares solely in cash up to the lesser of $250,000 or 1% of the net asset
value of that Fund during any 90-day period for any one shareholder. Should
redemptions by any shareholder exceed such limitation, their Fund will have the
option of redeeming the excess in cash or in kind. If Shares are redeemed in
kind, the redeeming shareholder might incur brokerage costs in converting the
assets to cash. The method of valuing securities used to make redemptions in
kind will be the same as the method of valuing portfolio securities described
under "Determination of Net Asset Value" and such valuation will be made as of
the same time the redemption price is determined.
The right to require the Funds to redeem Shares may be suspended, or the
date of payment may be postponed, whenever (1) trading on the NYSE is
restricted, as determined by the Securities and Exchange Commission, or the NYSE
is closed except for holidays and weekends, (2) the Securities and Exchange
Commission permits such suspension and so orders, or (3) an emergency exists as
determined by the Securities and Exchange Commission so that disposal of
securities or determination of NAV is not reasonably practicable.
SHAREHOLDER ACCOUNTS
Detailed information about the general procedures for shareholder accounts
is set forth in the Prospectus. Applications to open accounts may be obtained by
calling the Funds at 1-800-29JANUS or writing to the Funds at 100 Fillmore
Street, Suite 300, Denver, Colorado 80206-4923, Attention: Extended Services.
DIVIDENDS AND TAX STATUS
Dividends representing substantially all of the net investment income and
any net realized gains on sales of securities are declared daily, Saturdays,
Sundays and holidays included, and distributed on the last business day of each
month. If a month begins on a Saturday, Sunday or holiday, dividends for those
days are paid at the end of the preceding month. A shareholder may receive
dividends via wire transfer or may choose to have dividends automatically
reinvested in a Fund's Shares. As described in the Prospectus, Shares purchased
by wire on a day on which the Funds calculate their net asset value will receive
that day's dividend if the purchase is effected at or prior to 3:00 p.m. (New
York time) for Janus Money Market Fund and Janus Government Money Market Fund
and 12:00 p.m. (New York time) for Janus Tax-Exempt Money Market Fund.
Otherwise, such Shares will begin to accrue dividends on the first business day
following receipt of the order. Requests for redemption of Shares will be
redeemed at the next determined net asset value. Redemption requests made by
wire that are received prior to 3:00 p.m. (New York time) for Janus Money Market
Fund and Janus Government Money Market Fund and 12:00 p.m. (New York time) for
Janus Tax-Exempt Money Market Fund will result in Shares being redeemed that
day. Proceeds of such a redemption will normally be sent to the predesignated
bank account on that day, but that day's dividend will not be received.
Distributions for all of the Funds (except Janus Tax-Exempt Money Market
Fund) are taxable income and are subject to federal income tax (except for
shareholders exempt from income tax), whether such distributions are received
via wire transfer or are reinvested in additional Shares. Full information
regarding the tax status of income dividends and any capital gains distributions
will be mailed to shareholders for tax purposes on or before January 31st of
each year. As described in detail in the Prospectus, Janus
14
<PAGE>
Tax-Exempt Money Market Fund anticipates that substantially all income dividends
it pays will be exempt from federal income tax, although dividends attributable
to interest on taxable investments, together with distributions from any net
realized short- or long-term capital gains, are taxable.
The Funds intend to qualify as regulated investment companies by satisfying
certain requirements prescribed by Subchapter M of the Internal Revenue Code of
1986.
PRINCIPAL SHAREHOLDERS
As of September 15, 1995, the Shares were not available to individual
investors and accordingly the Fund's officers and Trustees as a group owned less
than 1% of the outstanding Shares.
As of September 15, 1995, the following institutions owned more than 5% of
Janus Money Market Fund - Institutional Shares:
Institution Address Ownership %
- ----------- ------- -----------
Manville Corporation P.O. Box 5108, Denver, CO 80217-5108 8.22%
GE Capital 570 Lexington Avenue, 11th Floor, 13.83%
New York, NY 10022-6824
Charles Schwab &Co. Inc. 101 Montgomery Street, 13.70%
San Francisco, CA 94104-4122
Household Finance Corporation 2700 Sanders RD 1 South Trading Room, 5.43%
Prospect Heights, IL 60070-2701
Cetus Oncology Corporation 4560 Horton Street, L-149, 5.48%
Emeryville, CA 94608-2916
As of September 15, 1995, the following institutions owned more than 5% of
Janus Government Money Market Fund Institutional Shares:
Institution Address Ownership %
- ----------- ------- -----------
Western Digital Corporation 8105 Irvine Drive, Irvine, CA 92718 43.99%
Rio Properties P.O. Box 14160, Las Vegas, NV 89114-4160 20.69%
As of September 15, 1995, Janus Capital, which provided seed capital for
the Shares, owned 100% of Janus Tax-Exempt Money Market Fund - Institutional
Shares.
MISCELLANEOUS INFORMATION
Each Fund is an open-end management investment company registered under the
1940 Act as a series of the Trust, which was created on February 11, 1986. As of
the date of this SAI, the Trust consists of 13 other series, which are offered
by separate prospectuses. The Funds were added to the Trust as separate series
on December 9, 1994.
Janus Capital reserves the right to the name "Janus." In the event that
Janus Capital does not continue to provide investment advice to the Funds, the
Funds must cease to use the name "Janus" as soon as reasonably practicable.
Under Massachusetts law, shareholders of the Funds could, under certain
circumstances, be held liable for the obligations of their Fund. However, the
Agreement and Declaration of Trust (the "Declaration of Trust") disclaims
shareholder liability for acts or obligations of the Funds and requires that
notice of this disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Funds or the Trustees. The Declaration of Trust
also provides for indemnification from the assets of the Funds for all losses
and expenses of any Fund shareholder held liable for the obligations of their
Fund. Thus, the risk of a shareholder incurring a financial loss on account of
its liability as a shareholder of one of the Funds is limited to circumstances
in which their 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 Funds to avoid, to the extent possible, liability of
shareholders for liabilities of their Fund.
15
<PAGE>
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 each Fund are fully paid and nonassessable when issued. All
shares of a Fund participate equally in dividends and other distributions by
such Fund, and in residual assets of that Fund in the event of liquidation.
Shares of each Fund have no preemptive, conversion or subscription rights.
The Trust is authorized to issue multiple classes of shares for each Fund.
Currently, Janus Money Market Fund, Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund each offer two classes of shares. The Shares
discussed in this SAI are offered only to individual, institutional and
corporate clients meeting certain minimum investment criteria. A second class of
shares, Investor Shares, is offered to the general public.
VOTING RIGHTS
The present Trustees were elected at a meeting of the Trust's 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 their 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 or class of
the Trust will vote separately only with respect to those matters that affect
only that series or class.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado
80202, independent accountants for the Funds, audit the Funds' annual financial
statements and prepare their tax returns.
REGISTRATION STATEMENT
The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities to which this SAI relates. If further
information is desired with respect to the Funds or such securities, reference
is made to the Registration Statement and the exhibits filed as a part thereof.
16
<PAGE>
FINANCIAL STATEMENTS
The following unaudited financial statements are for the period from April
14, 1995 (commencement of operations)to August 31, 1995.
<TABLE>
<CAPTION>
JANUS MONEY MARKET FUNDS JANUS JANUS
STATEMENTS OF OPERATIONS (UNAUDITED) JANUS GOVERNMENT TAX-EXEMPT
For the period from April 14, 1995 to August 31, 1995 MONEY MARKET MONEY MARKET MONEY MARKET
(all numbers in thousands) FUND FUND FUND
- ----------------------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Investment Income:
Interest $ 17,275 $ 3,035 $ 1,152
Dividends $ 0 $ 0 $ 0
Foreign Tax Withheld $ 0 $ 0 $ 0
$ 17,275 $ 3,035 $ 1,152
Expenses:
Advisory Fee for Investor Shares $ 223 $ 43 $ 29
Advisory Fee for Institutional Shares $ 60 $ 8 $ 0
Administrative Fee for Investor Shares $ 1,117 $ 215 $ 146
Administrative Fee for Institutional Shares $ 30 $ 3 $ 0
$ 1,430 $ 269 $ 175
Net Investment Income: $ 15,845 $ 2,766 $ 977
Net Realized Gain/(Loss) on Investments:
Net Realized gain/(loss) from securities transactions $ 0 $ 5 $ 3
Change in net unrealized appreciation
or depreciation of investments $ 0 $ 0 $ 0
Net gain/(loss) on investments $ 0 $ 5 $ 3
Net increase/(decrease) in net assets
resulting from operations $ 15,845 $ 2,771 $ 980
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
JANUS MONEY MARKET FUNDS JANUS JANUS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JANUS GOVERNMENT TAX-EXEMPT
As of August 31, 1995 MONEY MARKET MONEY MARKET MONEY MARKET
(all numbers in thousands except net asset value) FUND FUND FUND
- ----------------------------------------------------- ------------ ------------ ------------
Assets:
<S> <C> <C> <C>
Investments at amortized cost $ 972,018 $ 158,688 $ 73,227
Cash $ 44 ($ 201) $ 17
Receivables:
Investments Sold $ 0 $ 0 $ 0
Fund Shares Sold $ 1,452 $ 295 $ 60
Interest $ 4,649 $ 495 $ 359
Dividends $ 0 $ 0 $ 0
Other Assets $ 0 $ 0 $ 0
Total Assets $ 978,163 $ 159,277 $ 73,663
Liabilities:
Payables:
Investments Purchased $ 0 $ 0 $ 1,156
Fund Shares Repurchased $ 1,843 $ 705 $ 325
Dividends and Distributions $ 1,423 $ 78 $ 5
Advisory Fee $ 80 $ 14 $ 6
Administrative Fee $ 272 $ 50 $ 31
Total Liabilities $ 3,618 $ 847 $ 1,523
Total Net Assets $ 974,545 $ 158,430 $ 72,140
Shares Outstanding, $0.01 Par Value
(unlimited shares authorized) 974,547 158,427 72,140
Net Asset Value Per Share $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
JANUS MONEY MARKET FUNDS JANUS JANUS
STATEMENTS OF CHANGES IN NET ASSETS (unaudited) JANUS GOVERNMENT TAX-EXEMPT
For the period from April 14, 1995 to August 31, 1995 MONEY MARKET MONEY MARKET MONEY MARKET
(all numbers in thousands) FUND FUND FUND
- ----------------------------------------------------- ------------ ------------ ------------
Operations:
<S> <C> <C> <C>
Net investment income(loss) $ 15,844 $ 2,766 $ 977
Net realized gain/(loss) from investment transactions $ 0 $ 5 ($ 3)
Change in unrealized net appreciation or
depreciation of investments $ 0 $ 0 $ 0
Net increase/(decrease) in net assets
resulting from operations $ 15,844 $ 2,771 $ 974
Dividends and Distributions to Shareholders:
Net investment income:
Investor Shares ($ 12,295) ($ 2,334) ($ 977)
Institutional Shares ($ 3,552) ($ 432) $ 0
Net realized gain from investment transactions:
Investor Shares $ 0 ($ 2) $ 3
Institutional Shares $ 0 ($ 1) $ 0
Net decrease from dividends and distributions ($ 15,847) ($ 2,769) ($ 974)
Capital Share Transactions:
Shares sold:
Investor Shares $ 940,695 $ 162,210 $ 114,522
Institutional Shares $1,023,955 $ 115,915 $ 10
Reinvested dividends and distributions:
Investor Shares $ 11,869 $ 2,255 $ 943
Institutional Shares $ 339 $ 240 $ 0
Shares repurchased:
Investor Shares ($ 348,963) ($ 48,577) ($ 43,335)
Institutional Shares ($ 653,347) ($ 73,615) $ 0
Net increase/(decrease)
from capital share transactions $ 974,548 $ 158,428 $ 72,140
Net increase/(decrease) in net assets $ 974,545 $ 158,430 $ 72,140
Net Assets beginning of period $ 0 $ 0 $ 0
Net Assets end of period $ 974,545 $ 158,430 $ 72,140
Net Assets consist of:
Capital (par value and paid-in surplus) $ 974,548 $ 158,428 $ 72,140
Undistributed net ivestment income ($ 3) $ 0 $ 0
Undistributed net realized gain/(loss) from investments $ 0 $ 2 $ 0
Unrealized appreciation/(depreciation) of investments $ 0 $ 0 $ 0
$ 974,545 $ 158,430 $ 72,140
Transactions in Fund Shares - Investor Shares
Shares Sold 940,695 162,210 114,522
Reinvested dividends and distributions 11,869 2,255 943
Total 952,564 164,465 115,465
Shares repurchased (348,963) (48,577) (43,335)
Net increase/(decrease) in Fund shares 603,601 115,888 72,130
Shares outstanding at beginning of period 0 0 0
Shares outstanding at end of period 603,601 115,888 72,130
Transactions in Fund Shares - Institutional Shares
Shares Sold 1,023,955 115,915 10
Reinvested dividends and distributions 339 240 0
Total 1,024,294 116,155 10
Shares repurchased (653,347) (73,615) 0
Net increase/(decrease) in Fund shares 370,947 42,540 10
Shares outstanding at beginning of period 0 0 0
Shares outstanding at end of period 370,947 42,540 10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
JANUS MONEY MARKET FUNDS JANUS JANUS
FINANCIAL HIGHLIGHTS (unaudited) JANUS GOVERNMENT TAX-EXEMPT
For a share outstanding throughout the period MONEY MARKET MONEY MARKET MONEY MARKET
from April 14, 1995 to August 31, 1995 FUND FUND FUND
- --------------------------------------------- ------------ ------------ ------------
Institutional Shares 1995 1995 1995
- --------------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income $ 0.01 $ 0.01 $ 0.01
Net gain or (losses) on investments
(both realized and unrealized) $ 0.00 $ 0.00 $ 0.00
Total from investment operations $ 0.01 $ 0.01 $ 0.01
Less Dividends and Distributions:
Dividends (from net investment income) ($ 0.01) ($ 0.01) ($ 0.01)
Distribution (from net capital gains) $ 0.00 $ 0.00 $ 0.00
Total dividends and distributions ($ 0.01) ($ 0.01) ($ 0.01)
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00
Total Return 2.26% 2.21% 1.43%
Net assets at end of period (in thousands) $ 370,947 $ 42,540 $ 10
Average net assets for the period (in thousands) $ 160,548 $ 20,054 $ 10
Ratio of expenses to average net assets 0.15% 0.15% 0.15%
Ratio of net investment income to average net assets 5.90% 5.77% 3.87%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
JANUS MONEY MARKET FUND
August 31, 1995 (unaudited)
Principal Amount Market Value
- ---------------- ------------
Short-Term Corporate Notes - 31.2%
Aluminum Co. of America
$ 12,000,000 4.625%, 2/15/96 $ 11,926,353
CSC Enterprises:
5,000,000 5.87%, 9/21/95 4,983,694
10,000,000 5.85%, 10/12/95 9,933,375
Countrywide Mortgage:
12,000,000 5.78%, 9/1/95 12,000,000
25,000,000 5.78%, 9/18/95 24,931,764
Dean Witter Discover
3,250,000 5.65%, 2/29/96 3,157,677
First Interstate Bancorp
6,000,000 10.50%, 3/1/96 6,130,737
1,000,000 Ford Motor Credit Co.
8.25%, 5/15/96 1,012,777
10,000,000 General Electric Capital Corp.
5.85%, 8/29/96 9,994,942
General Motors
Acceptance Corp.:
5,000,000 5.88%, 9/25/95 4,980,400
9,460,000 7.50%, 10/15/95 9,472,290
10,000,000 5.66%, 3/8/96 9,702,850
Hanover Direct Series A
2,400,000 6.1856%, 11/27/95 2,400,000
Hanover Direct Series B
5,000,000 6.1856%, 11/27/95 5,000,000
J.P. Morgan and Co.
10,000,000 5.75%, 8/7/96 9,991,117
Merrill Lynch and Co.:
25,000,000 5.74%, 9/11/95 24,960,139
25,000,000 5.75%, 9/18/95 24,932,118
Nationsbank Corp.:
10,000,000 6.14%, 9/20/95 9,967,594
5,000,000 6.12%, 10/2/95 4,973,650
Nynex Corp.:
10,000,000 5.88%, 9/12/95 9,982,033
Principal Amount Market Value
- ---------------- ------------
Short-Term Corporate Notes (cont'd)
21,500,000 5.80%, 10/13/95 $ 21,354,517
Renault Credit:
25,000,000 5.72%, 9/18/95 24,932,472
10,100,000 5.88%, 9/28/95 10,055,459
Shoney's Inc., #3
9,350,000 5.8705%, 9/25/95 9,350,000
Southern Container Corp.
10,000,000 5.8835%, 9/25/95 10,000,000
Spiegel Funding Corp.:
5,000,000 5.85%, 10/6/95 4,971,564
10,000,000 5.68%, 10/10/95 9,938,467
Windsor at Pine Ridge:
2,300,000 5.8705%, 9/25/95 2,300,000
6,650,000 5.8835%, 9/25/95 6,650,000
Ziegler Corp.
4,000,000 5.80%, 10/23/95 3,966,489
Total Short-Term Corporate Notes
(amortized cost $303,952,478) 303,952,478
General Obligation Bonds - 5.3%
Los Angeles Metropolitan
Transit Authority:
5,000,000 6.35%, 9/7/95 5,000,143
10,000,000 5.95%, 9/18/95 10,000,000
10,000,000 6.025%, 10/2/95 10,000,000
Richmond County, Georgia,
(Monsanto Co. Project),
12,200,000 6.27%, 6/1/20 12,200,000
San Diego, California:
5,000,000 5.95%, 9/1/00 4,999,854
9,700,000 6.12%, 9/1/20 9,700,000
Total General Obligation Bonds
(cost $51,899,997) 51,899,997
Time Deposits - 1.9%
First Union Bank of
North Carolina
18,300,000 5.8125%, 9/1/95
(cost $18,300,000) 18,300,000
19
<PAGE>
Principal Amount Market Value
- ---------------- ------------
Bank Notes - 6.1%
Bank of New York
5,000,000 6.41%, 6/3/96 $ 5,000,000
Comerica Bank of Illinois
5,000,000 5.76%, 9/29/95 4,999,145
First National Bank of Ohio
10,000,000 5.95%, 8/1/96 9,995,600
First National Bank of Chicago:
5,000,000 6.45%, 9/20/95 5,000,619
10,000,000 6.12%, 8/26/96 10,000,000
Regions Bank of Louisiana
15,000,000 6.40%, 10/5/95 15,000,000
Wachovia Bank of
North Carolina
9,000,000 6.20%, 8/5/96 9,026,918
Total Bank Notes
(amortized cost $59,022,282) 59,022,282
Taxable Variable Rate Demand Notes - 33.2%
9,200,000 Ann Arundel Medical Center,
5.85%, 7/1/24 9,200,000
2,200,000 Armstrong County, Pennsylvania,
Hospital Authority Revenue,
(St. Francis Financial Corp.),
Series A, 5.90%, 9/1/17 2,200,000
4,500,000 Bayliss Group Partners,
6.05%, 1/1/10 4,500,000
3,500,000 Bessemer, Alabama, Industrial
Development Bond,
(Big B Inc. Project), Series B,
5.89%, 5/1/05 3,500,000
3,200,000 Columbia County, Georgia,
Development Authority
Industrial Park Revenue,
5.95%, 3/1/10 3,200,000
3,300,000 Community Health System, Inc.,
Series A, 6.05%, 10/1/03 3,300,000
10,000,000 FCC National Bank,
5.95%, 4/26/96 9,995,488
15,900,000 Fontana, California, Public
Finance Authority COPS,
6.14%, 10/1/20 15,900,000
General Electric Capital Corp.,
Medium Term Notes:
15,000,000 6.00%, 4/5/96 14,997,280
3,000,000 6.03%, 4/19/96 3,000,000
General Motors Acceptance
Corp., Medium Term Notes:
10,000,000 6.2812%, 12/22/95 10,003,812
5,000,000 6.125%, 5/6/96 5,006,134
100,000 Genesys Michigan Health
System Taxable Obligations,
Series A, 5.94%, 4/1/20 100,000
3,155,000 GMG Warehouse LLC,
5.90%, 5/15/25 3,155,000
800,000 Great Bend, Kansas Economic
Development Revenue
Board, (Fuller Industries,
Inc. Project), 5.90%, 6/1/09 800,000
1,525,000 Health Care Taxable Obligation,
(Glencrest Real Estate &
Development LLC Project),
5.90%, 2/15/24 1,525,000
Health Insurance Plan
of Greater New York:
4,700,000 Series B, 5.85%, 7/1/16 4,700,000
6,900,000 Series B-2, 5.85%, 7/1/20 6,900,000
6,800,000 Health Midwest Ventures
Group, Inc., Demand Bond
Series 1994A, 5.90%, 8/1/19 6,800,000
Principal Amount Market Value
- ---------------- ------------
Taxable Variable Rate Demand Notes (cont'd)
1,900,000 Hinds County, Mississippi
Industrial Development
Revenue Bond, (Cal-Maine
Foods, Inc. Project),
5.95%, 11/1/05 $ 1,900,000
2,100,000 Illinois Development Finance
Authority, (Chicago
Educational Television Assn.),
Series B, 5.90%, 2,100,000
2,920,000 Letts Industries, Inc.,
5.90%, 2/1/20 2,920,000
4,000,000 Liliha Partners L.P. of Hawaii,
6.05%, 8/1/24 4,000,000
12,500,000 Mac Papers, Inc., 5.90%, 8/1/15 12,500,000
800,000 Maryland State Industrial
Development Financing
Authority Terminal Corp.
Facility Revenue,
6.08%, 9/1/09 800,000
Mississippi Business Finance
Industrial Development Bond:
5,000,000 (Dana Lighting Inc. Project),
5.95%, 5/1/10 5,000,000
11,500,000 (United Technologies Motor
Systems Inc. Project),
5.95%, 6/1/14 11,500,000
6,000,000 (Choctaw Foods Inc. Project),
5.95%, 8/1/15 6,000,000
130,000 (Bryan Foods, Inc. Project),
5.85%, 2/1/19 130,000
170,000 Missouri State Economic
Development Export &
Infrastructures Industrial
Development Revenue,
(Able Body Corp. Project),
6.45%, 6/1/08 170,000
1,000,000 Montgomery County
Pennsylvania Industrial
Development Authority,
(410 Horsham Associates
Project), 6.15%, 3/1/10 1,000,000
New York City, New York,
General Obligation:
20,000,000 6.00%, 8/1/14 20,000,000
30,000,000 5.95%, 8/1/25 30,000,000
2,470,000 Nova University, Florida,
Lease Revenue, (Miami
Dolphins Training Facility
Project), 5.95%, 3/1/03 2,470,000
5,800,000 Oxnard, California, Finance
Authority Refunding Lease
Revenue, 5.90%, 6/1/06 5,800,000
7,000,000 Pasadena, California, COPS,
(Los Robles Avenue
Parking Facility Project),
5.95%, 11/1/12 7,000,000
1,800,000 Renssalaer County, New York
Industrial Development
Authority, (Allied Signal
Project), 5.94%, 9/1/1/09 1,800,000
3,175,000 St. Francis Hawaii Healthcare
Foundation Revenue Bond,
6.05%, 8/1/12 3,175,000
25,500,000 San Bernardino County,
California, (County Center
Refining Project),
5.85%, 7/1/16 25,500,000
20
<PAGE>
Principal Amount Market Value
- ---------------- ------------
Taxable Variable Rate Demand Notes (cont'd)
9,365,000 San Jose California Financing
Authority, (Hayes Mansion
Revenue Project), Series A,
6.15%, 12/1/25 $ 9,365,000
1,000,000 South Central Texas Industrial
Development Bond,
(Rohr Industries Project),
5.90%, 5/1/20 1,000,000
20,000,000 Taxable Adjustable Demand
Notes, 5.95%, 8/1/25 20,000,000
6,200,000 Texas Veterans' Housing
Assistance, 5.87%, 12/1/3 6,200,000
5,380,000 Union City, Tennessee,
Industrial Development Board,
Cobank Limited LLC Project),
5.95%, 1/1/25 5,380,000
5,000,000 Venturecor, Inc., 5.90%, 5/15/35 5,000,000
24,350,000 Virginia State Housing
Development Authority
Residential Mortgage
Revenue, Series A,
5.95%, 3/1/02 24,350,000
Total Variable Rate Notes
(amortized cost $323,842,715) 323,842,715
Certificates of Deposit - 12.3%
Bank of Tokyo, Portland:
20,000,000 5.88%, 9/22/95 20,000,116
20,000,000 5.90%, 9/25/95 20,000,398
Bayerische Vereinsbank:
10,000,000 6.03%, 6/5/96 10,000,000
10,000,000 5.95%, 7/22/96 10,000,000
Canadian Imperial Bank:
5,000,000 6.40%, 6/5/96 5,000,000
10,000,000 6.10%, 7/26/96 10,000,000
45,000,000 Sanwa Bank Ltd., New York,
5.85%, 9/6/95 45,000,000
Total Certificates of Deposit
(amortized cost $120,000,514) 120,000,514
Promissory Notes - 4.6%
45,000,000 Goldman Sachs Group L.P.
5.9375%, 10/23/95
(cost $45,000,000) 45,000,000
Repurchase Agreements - 5.1%
50,000,000 First Chicago Repurchase
Agreement, 5.88%, dated
8/31/95, maturing 9/1/95,
to be repurchased at
$50,008,167, collateralized
by: $50,890,000 United States
Treasury Note, 6.00%, 8/31/97,
with a value of $51,001,450
(cost $50,000,000) 50,000,000
Total Investments - 99.7% 972,017,986
Cash, Receivables and Other Assets,
net of Liabilities - 0.3% 2,526,563
Net Assets - 100% $974,544,549
JANUS GOVERNMENT MONEY MARKET FUND
August 31, 1995 (unaudited)
Principal Amount Market Value
- ---------------- ------------
U.S. Government Agency
Discount Note Obligations - 15.7%
Federal Farm Credit Bank
$ 5,000,000 5.40%, 8/27/96 $ 4,729,250
Federal Home Loan Bank:
1,000,000 5.51%, 2/5/96 975,970
1,000,000 5.80%, 2/8/96 974,222
2,000,000 5.50%, 5/3/96 1,925,139
1,835,000 5.58%, 5/31/96 1,757,352
2,000,000 5.98%, 7/3/96 2,000,000
1,000,000 5.51%, 7/11/96 951,940
2,000,000 5.44%, 7/12/96 1,904,800
1,000,000 5.44%, 7/16/96 951,795
1,000,000 5.44%, 8/1/96 949,378
Federal Home Loan
Mortgage Corp.
2,000,000 5.83%, 11/1/95 1,980,243
Federal National
Mortgage Association:
1,000,000 5.84%, 9/1/95 1,000,000
1,000,000 5.84%, 10/18/95 992,376
2,000,000 5.49%, 4/15/96 1,930,765
2,000,000 5.39%, 6/20/96 1,912,263
Total U.S. Government Agency
(amortized cost $24,935,493) 24,935,493
U.S. Government Agency Obligations -
Variable Notes - 21.7%
Federal Farm Credit
Medium Term Note
5,000,000 6.20%, 3/21/96 4,999,701
2,000,000 6.10%, 6/13/97 1,998,273
Federal Home Loan Bank:
5,000,000 5.67%, 3/8/96 4,994,227
5,000,000 6.18%, 9/6/96 5,018,366
Federal National Mortgage
Medium Term Notes:
3,000,000 6.37%, 1/26/96 3,000,294
Student Loan
Marketing Association:
5,000,000 5.86%, 12/14/95 5,000,000
3,200,000 6.09%, 8/22/96 3,205,967
1,240,000 5.93%, 3/3/97 1,240,118
5,000,000 5.64%, 4/18/97 4,995,948
Total U.S. Government Agency - Variable
Notes (amortized cost $34,452,894) 34,452,894
U.S. Government Agency Notes - .6%
Federal Home Loan Bank Note
1,000,000 6.22%, 6/17/96
(amortized cost $1,000,000) 1,000,000
Repurchase Agreements - 62.0%
35,000,000 First Chicago Repurchase
Agreement, 5.88% dated
8/31/95, maturing 9/1/95,
to be repurchased at
$35,005,717, collateralized
by $35,625,000 in U.S.
Treasury Notes 6.00%,
8/31/97 with a value of
$35,703,019 35,000,000
21
<PAGE>
Principal Amount Market Value
- ---------------- ------------
Repurchase Agreements (cont'd)
34,300,000 HSBC Repurchase Agreement,
5.86% dated 8/31/95,
maturing 9/1/95, to be
repurchased at $34,305,583
collateralized by: $32,550,000
in U.S. Treasury Notes:
6.00% - 7.875%, 9/30/99 -
11/30/99; with respective
values of $6,716,789,
$1,821,023, $1,849,125,
$3,661,495, $20,937,950 $ 34,300,000
29,000,000 Morgan Stanley Repurchase
Agreement, 5.80% dated 8/31/95,
maturing 9/1/95,
to be repurchased at
$29,004,672 collateralized
by: $1,375,000 in Federal
National Conventional
Pooled Loans 7.50%, 8/1/25;
$97,396,000 in Federal
National Mortgage
Association Notes 1.9562%,
11/23/25; $24,550,000 in
U.S. Treasury Notes 7.75%,
3/31/96 with respective values
of $1,384,884, $2,649,610
and $25,624,033 29,000,000
Total Repurchase Agreements
(cost $98,300,000) 98,300,000
Total Investments - 100.2% 158,688,387
Liabilities, net of Cash, Receivables
and Other Assets - (0.2%) (258,640)
Net Assets - 100% $158,429,747
JANUS TAX-EXEMPT MONEY MARKET FUND
August 31, 1995 (unaudited)
Principal Amount Market Value
- ---------------- ------------
General Obligation Notes - 18.1%
$ 1,000,000 Allegheny County, Pennsylvania
Port Authority Grant
Anticipation Notes, Series A,
3.875%, 6/28/96 $ 1,000,000
1,000,000 Baltimore, Maryland Industrial
Development Authority,
3.20%, 9/6/95 1,000,000
1,000,000 Corcoran, California Joint
Unified School District, Tax
and Revenue Anticipation
Notes, 4.25%, 6/28/96 1,001,188
1,000,000 Harris County, Texas Hospital
District, 6.90%, 2/15/96 1,013,530
1,000,000 Maricopa County, Arizona
Unified High School District
Number 210, Phoenix Tax
Anticipation Notes,
Series A, 4.45%, 7/31/96 1,004,237
750,000 Metropolitan Government
Nashville and Davidson
County, Tennesse,
4.75%, 1/15/96 750,000
3,295,000 Mono County, California Board
of Education Tax Anticipation
Notes, 4.50%, 6/28/96 3,307,554
1,500,000 North Carolina Eastern
3.20%, 9/6/95 1,500,000
1,150,000 Port of Seattle, Washington
Revenue, Series A,
5.50%, 2/1/96 1,155,359
300,000 State of Texas 3.25%, 10/5/95 300,000
1,000,000 Tuolomne County, California
Board of Education Tax and
Revenue Anticipation Notes,
4.50%, 6/28/96 1,004,367
Total General Obligation Notes
(amortized cost $13,036,235) 13,036,235
Put Bonds - 5.8%
500,000 Harris County, Texas Hospital
District, 8.50%, 4/1/15 522,481
1,000,000 Klamath Falls, Oregon Electric
Revenue, (Salt Caves
Hydroelectric), Series A,
4.40%, 5/1/23 1,000,000
2,180,000 Missouri State Environmental
Impact and Energy Resource
Authority, Pollution Control
Revenue, (Union Electric Co.),
Series B, 4.00%, 6/1/14 2,180,000
500,000 Pendleton, Kentucky
Self-Insurance Funding,
4.00%, 7/1/01 500,000
Total Put Bonds (amortized cost $4,202,481) 4,202,481
Variable Rate Demand Notes - 77.6%
California - 15.6%
3,500,000 California School Cash Reserve
Program Authority,
4.75%, 7/5/96 3,528,314
3,100,000 California Statewide
Communities, (Whispering
Winds Apartments),
Series D, 3.90%, 12/1/22 3,100,000
22
<PAGE>
Principal Amount Market Value
- ---------------- ------------
California (cont'd)
500,000 Carlsbad Housing &
Redevelopment Commission,
(Seascape Village Project),
4.00%, 12/12/05 $ 500,000
Irvine Ranch Water District:
800,000 (Consolidated Refunding
Project), Series B,
3.60%, 10/1/99 800,000
300,000 (Consolidated Refunding
Project), Series B,
3.60%, 10/1/04 300,000
200,000 (Consolidated Refunding
Project), Series B,
3.60%, 10/1/09 200,000
1,000,000 (Waterworks Improvement
District), Series A,
3.60%, 11/15/13 1,000,000
1,100,000 (Sewer Improvement District),
Series A, 3.60%, 11/15/13 1,100,000
300,000 (Consolidated Refunding
Project), 3.60%, 6/1/15 300,000
400,000 Orange County Apartment
Development Revenue,
(Aliso Creek Project),
Series B, 4.20%, 11/1/05 400,000
11,228,314
Florida - 1.5%
200,000 Broward County Housing
Finance Authority
Multi-Family Housing
Revenue, (Jacaranda Village
Project), 3.60%, 9/1/97 200,000
200,000 Dade County, Florida
(Apartment Revenue),
Series A, 3.80%, 10/1/09 200,000
700,000 Pinellas County Housing
Finance Authority
Multi-Family Housing
Revenue, (Lynn Lake Arms
Phase II Project), Series II-A,
3.75%, 7/1/11 700,000
1,100,000
Georgia - 5.9%
1,900,000 Glynn-Brunswick Hospital
Authority Revenue, (S.E.
Georgia Regional Medical
Center Project), Series A,
3.75%, 8/1/09 1,900,000
2,335,000 Peachtree City Development
Authority Revenue,
(Equitable PCDC Project),
3.75%, 7/1/10 2,335,000
4,235,000
Illinois - 6.0%
2,100,000 Bartlett Multi-Family Housing
Revenue, (Bartlett Square
Apartments), Series A,
3.65%, 3/1/25 2,100,000
649,070 Illinois Village of Franklin Park,
(AM Castle and Company
Project), 3.70%, 6/1/17 649,070
187,500 Village of Rosemont, Illinois,
(AM Castle and Company
Project), 3.70%, 9/1/17 187,500
Principal Amount Market Value
- ---------------- ------------
Illinois (cont'd)
1,400,000 Wood Dale Industrial
Development Revenue,
(Nippon Express, Inc. Project),
3.80%, 6/1/00 $ 1,400,000
4,336,570
Kansas - 2.9%
2,100,000 Wichita, Kansas Revenue,
(CSJ Health Systems Project),
Series XXV, 3.80%, 10/1/11 2,100,000
Kentucky - 1.4%
1,000,000 Calvert City, Kentucky PCRB
(Air Products and Chemical
Income Project), Series B,
3.65%, 2/1/07 1,000,000
Louisiana - 4.4%
1,620,000 Quachita, Louisiana Industrial
Development Bond (McRaes
Inc. Project), 3.75%, 7/1/04 1,620,000
100,000 South Louisiana Port Comm
Marine Term Facility Authority,
(Occidental Petroleum
Project), 3.60%, 7/1/21 100,000
1,485,000 Sulphur, Louisiana Industrial
Development Revenue,
(La Quinta Inns Project),
3.75%, 12/1/04 1,485,000
3,205,000
Maryland - 4.9%
3,500,000 Baltimore, Maryland (Terminal
Corp. Project), 3.70%, 8/1/16 3,500,000
Minnesota - 0.1%
100,000 Austin Commercial
Development Revenue,
(Hy-Vee Foods, Inc. Project),
3.75%, 12/1/04 100,000
Missouri - 3.1%
195,000 Columbia Certificate of
Participation Authority,
3.60%, 8/15/99 195,000
973,000 Kansas City Industrial
Development Authority,
(AM Castle and Company
Project), 3.70%, 6/1/10 973,000
500,000 Missouri Health Education
Financing Authority Hospital
Finance Revenue, (SSM
Health Care Project),
3.90%, 6/1/06 500,000
600,000 West Plains Industrial Revenue
Authority, (West Plains Manor
Project), 4.05%, 11/1/10 600,000
2,268,000
New York - 1.3%
900,000 Ontario County, NY Industrial
Development Authority,
(Eastman Kodak/V Assoc.
Project), 4.75%, 8/1/15 900,000
Ohio - 0.8%
590,000 Ohio Industrial Development
Revenue Bond, (AM Castle and
Company Project),
3.70%, 12/1/06 590,000
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Principal Amount Market Value
- ---------------- ------------
Oklahoma - 4.3%
615,000 Claremore Redevelopment
Authority Industrial
Development Revenue,
(Worthington Cylinder Corp.
Project), 3.75%, 1/1/11 $ 615,000
2,500,000 Tulsa Home Finance Authority,
(Greenbriar Project),
Series B, 4.00%, 3/15/05 2,500,000
3,115,000
Pennsylvania - 3.5%
1,000,000 Chester County Industrial
Development Revenue,
(Woods Project),
3.70%, 3/31/15 1,000,000
200,000 Delaware Valley Regional
Financing Authority,
Series 1985A-1V 1991,
3.60%, 12/1/17 200,000
1,300,000 Venango Industrial
Development Authority,
(Pennzoil Co. Project),
Series A, 4.25%, 12/1/12 1,300,000
2,500,000
South Carolina - 3.5%
2,000,000 Dorchester County (BOC Group
Project), 3.75%, 12/8/00 2,000,000
500,000 Lexington County
(Charter Rivers Hospital),
3.70%, 6/1/07 500,000
2,500,000
Tennessee - 11.1%
2,500,000 Greeneville Health &
Educational Facilities Board,
(Laughlin Memorial Hospital,
Inc. Project), 3.70%, 10/1/14 2,500,000
2,500,000 Hamilton County (Tennessee
Aquarium - IMAX),
3.70%, 3/1/15 2,500,000
Metropolitan Government
Nashville & Davidson County
Health and Educational
Facilities Board:
1,000,000 (Belmont University Project),
3.75%, 8/1/09 1,000,000
2,000,000 (Richland Place, Inc. Project),
3.55%, 5/1/23 2,000,000
8,000,000
Principal Amount Market Value
- ---------------- ------------
Texas - 7.2%
100,000 Grapevine Industrial
Development Corp. Revenue,
(American Airlines Inc.),
Series A-4 3.50%, 12/1/24 $ 100,000
1,400,000 Harris County Health Facilities
Development Corp. Hospital
Revenue, (Memorial Senior
Services, Inc. Project),
3.65%, 5/1/18 1,400,000
1,800,000 Lubbock, Texas Hospital
Finance Development Corp.
Revenue, (Charter Plains
Hospital Project),
3.70%, 10/1/13 1,800,000
1,910,000 Maverick County Industrial
Developement Revenue
Bond, (La Quinta Motor Inns),
3.75%, 12/1/01 1,910,000
5,210,000
Wisconsin - 0.1%
100,000 Wisconsin Health & Educational
Facilities Authority, (Felican
Health Care, Inc. Project),
3.80%, 1/1/19 100,000
Total Variable Rate Notes
(amortized cost $55,987,884) 55,987,884
Total Investments - 101.5% 73,226,600
Cash, Receivables and other Assets,
net of Liabilities - (1.5%) (1,086,522)
Net Assets - 100% $72,140,078
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APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
MOODY'S AND STANDARD & POOR'S
MUNICIPAL AND CORPORATE BONDS AND MUNICIPAL LOANS
The two highest ratings of Standard & Poor's Ratings Services ("S&P") for
municipal and corporate bonds are AAA and AA. Bonds rated AAA have the highest
rating assigned by S&P to a debt obligation. Capacity to pay interest and repay
principal is extremely strong. Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest rated issues only in a
small degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within that rating category.
The two highest ratings of Moody's Investors Service, Inc. ("Moody's") for
municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are judged by
Moody's to be of the best quality. Bonds rated Aa are judged to be of high
quality by all standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Moody's states that Aa bonds are rated
lower than the best bonds because margins of protection or other elements make
long-term risks appear somewhat larger than Aaa securities. The generic rating
Aa may be modified by the addition of the numerals 1, 2 or 3. The modifier 1
indicates that the security ranks in the higher end of the Aa rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of such rating category.
SHORT TERM MUNICIPAL LOANS
S&P's highest rating for short-term municipal loans is SP-1. S&P states
that short-term municipal securities bearing the SP-1 designation have a strong
capacity to pay principal and interest. Those issues rated SP-1 which are
determined to possess a very strong capacity to pay debt service will be given a
plus (+) designation. Issues rated SP-2 have satisfactory capacity to pay
principal and interest with some vulnerability to adverse financial and economic
changes over the term of the notes.
Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1 are of
the best quality, enjoying strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2 designation are
of high quality, with margins of protection ample although not so large as in
the MIG-1/VMIG-1 group.
OTHER SHORT-TERM DEBT SECURITIES
Prime-1 and Prime-2 are the two highest ratings assigned by Moody's for
other short-term debt securities and commercial paper, and A-1 and A-2 are the
two highest ratings for commercial paper assigned by S&P. Moody's uses the
numbers 1, 2 and 3 to denote relative strength within its highest classification
of Prime, while S&P uses the numbers 1, 2 and 3 to denote relative strength
within its highest classification of A. Issuers rated Prime-1 by Moody's have a
superior ability for repayment of senior short-term debt obligations and have
many of the following characteristics: leading market positions in
well-established industries, high rates of return on funds employed,
conservative capitalization structure with moderate reliance on debt and ample
asset protection, broad margins in earnings coverage of fixed financial charges
and high internal cash generation, and well established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 by Moody's have a strong ability for repayment of senior short-term debt
obligations and display many of the same characteristics displayed by issuers
rated Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a strong
degree of safety regarding timely repayment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus (+) designation.
Issuers rated A-2 by S&P carry a satisfactory degree of safety regarding timely
repayment.
FITCH
F-1+ - Exceptionally strong credit quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 - Very strong credit quality. Issues assigned this rating reflect an
assurance for timely payment only slightly less in degree than issues rated
F-1+.
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F-2 - Good credit quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 ratings.
DUFF & PHELPS INC.
Duff 1+ - Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or ready access to alternative sources of
funds, is clearly outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
Duff 1 - Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are
minor.
Duff 1- - High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very
small.
Duff 2 - Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
THOMSON BANKWATCH, INC.
TBW-1- The highest category; indicates a very high degree of likelihood that
principal and interest will be paid on a timely basis.
TBW-2- The second highest category; while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated TBW-1.
TBW-3- The lowest investment grade category; indicates that while more
susceptible to adverse developments (both internal and external) than
obligations with higher ratings, capacity to service principal and interest
in a timely fashion is considered adequate.
TBW-4- The lowest rating category; this rating is regarded as non-investment
grade and therefore speculative.
IBCA, INC.
A1+ - Obligations supported by the highest capacity for timely repayment. Where
issues possess a particularly strong credit feature, a rating of A1+ is
assigned.
A2 - Obligations supported by a good capacity for timely repayment.
A3 - Obligations supported by a satisfactory capacity for timely repayment.
B - Obligations for which there is an uncertainty as to the capacity to
ensure timely repayment.
C - Obligations for which there is a high risk of default or which are
currently in default.
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APPENDIX B
DESCRIPTION OF MUNICIPAL SECURITIES
Municipal Notes generally are used to provide for short-term capital needs
and usually have maturities of one year or less. They include the following:
1. Project Notes, which carry a U.S. government guarantee, are issued by
public bodies (called "local issuing agencies") created under the laws of a
state, territory, or U.S. possession. They have maturities that range up to one
year from the date of issuance. Project Notes are backed by an agreement between
the local issuing agency and the Federal Department of Housing and Urban
Development. These Notes provide financing for a wide range of financial
assistance programs for housing, redevelopment, and related needs (such as
low-income housing programs and renewal programs).
2. Tax Anticipation Notes are issued to finance working capital needs of
municipalities. Generally, they are issued in anticipation of various seasonal
tax revenues, such as income, sales, use and business taxes, and are payable
from these specific future taxes.
3. Revenue Anticipation Notes are issued in expectation of receipt of other
types of revenues, such as Federal revenues available under the Federal Revenue
Sharing Programs.
4. Bond Anticipation Notes are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds then
provide the money for the repayment of the Notes.
5. Construction Loan Notes are sold to provide construction financing.
After successful completion and acceptance, many projects receive permanent
financing through the Federal Housing Administration under the Federal National
Mortgage Association ("Fannie Mae") or the Government National Mortgage
Association ("Ginnie Mae").
6. Tax-Exempt Commercial Paper is a short-term obligation with a stated
maturity of 365 days or less. It is issued by agencies of state and local
governments to finance seasonal working capital needs or as short-term financing
in anticipation of longer term financing.
Municipal Bonds, which meet longer term capital needs and generally have
maturities of more than one year when issued, have three principal
classifications:
1. General Obligation Bonds are issued by such entities as states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind General Obligation Bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.
2. Revenue Bonds in recent years have come to include an increasingly wide
variety of types of municipal obligations. As with other kinds of municipal
obligations, the issuers of revenue bonds may consist of virtually any form of
state or local governmental entity, including states, state agencies, cities,
counties, authorities of various kinds, such as public housing or redevelopment
authorities, and special districts, such as water, sewer or sanitary districts.
Generally, revenue bonds are secured by the revenues or net revenues derived
from a particular facility, group of facilities, or, in some cases, the proceeds
of a special excise or other specific revenue source. Revenue bonds are issued
to finance a wide variety of capital projects including electric, gas, water and
sewer systems; highways, bridges, and tunnels; port and airport facilities;
colleges and universities; and hospitals. Many of these bonds provide additional
security in the form of a debt service reserve fund to be used to make principal
and interest payments. Various forms of credit enhancement, such as a bank
letter of credit or municipal bond insurance, may also be employed in revenue
bond issues. Housing authorities have a wide range of security, including
partially or fully insured mortgages, rent subsidized and/or collateralized
mortgages, and/or the net revenues from housing or other public projects. Some
authorities provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.
In recent years, revenue bonds have been issued in large volumes for
projects that are privately owned and operated (see 3 below).
3. Private Activity Bonds are considered municipal bonds if the interest
paid thereon is exempt from Federal income tax and are issued by or on behalf of
public authorities to raise money to finance various privately operated
facilities for business and manufacturing, housing and health. These bonds are
also
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used to finance public facilities such as airports, mass transit systems and
ports. The payment of the principal and interest on such bonds is dependent
solely on the ability of the facility's user to meet its financial obligations
and the pledge, if any, of real and personal property as security for such
payment.
While, at one time, the pertinent provisions of the Internal Revenue Code
permitted private activity bonds to bear tax-exempt interest in connection with
virtually any type of commercial or industrial project (subject to various
restrictions as to authorized costs, size limitations, state per capita volume
restrictions, and other matters), the types of qualifying projects under the
Code have become increasingly limited, particularly since the enactment of the
Tax Reform Act of 1986. Under current provisions of the Code, tax-exempt
financing remains available, under prescribed conditions, for certain privately
owned and operated rental multi-family housing facilities, nonprofit hospital
and nursing home projects, airports, docks and wharves, mass commuting
facilities and solid waste disposal projects, among others, and for the
refunding (that is, the tax-exempt refinancing) of various kinds of other
private commercial projects originally financed with tax-exempt bonds. In future
years, the types of projects qualifying under the Code for tax-exempt financing
are expected to become increasingly limited.
Because of terminology formerly used in the Internal Revenue Code,
virtually any form of private activity bond may still be referred to as an
"industrial development bond," but more and more frequently revenue bonds have
become classified according to the particular type of facility being financed,
such as hospital revenue bonds, nursing home revenue bonds, multi-family housing
revenue bonds, single family housing revenue bonds, industrial development
revenue bonds, solid waste resource recovery revenue bonds, and so on.
Other Municipal Obligations, incurred for a variety of financing purposes,
include: municipal leases, which may take the form of a lease or an installment
purchase or conditional sale contract, are issued by state and local governments
and authorities to acquire a wide variety of equipment and facilities such as
fire and sanitation vehicles, telecommunications equipment and other capital
assets. Municipal leases frequently have special risks not normally associated
with general obligation or revenue bonds. Leases and installment purchase or
conditional sale contracts (which normally provide for title to the leased asset
to pass eventually to the government issuer) have evolved as a means for
governmental issuers to acquire property and equipment without meeting the
constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations of many state constitutions and statutes are deemed to
be inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. To reduce this risk, the Fund will only purchase municipal
leases subject to a non-appropriation clause when the payment of principal and
accrued interest is backed by an unconditional irrevocable letter of credit, or
guarantee of a bank or other entity that meets the criteria described in the
Prospectus.
Tax-exempt bonds are also categorized according to whether the interest is
or is not includible in the calculation of alternative minimum taxes imposed on
individuals, according to whether the costs of acquiring or carrying the bonds
are or are not deductible in part by banks and other financial institutions, and
according to other criteria relevant for Federal income tax purposes. Due to the
increasing complexity of Internal Revenue Code and related requirements
governing the issuance of tax-exempt bonds, industry practice has uniformly
required, as a condition to the issuance of such bonds, but particularly for
revenue bonds, an opinion of nationally recognized bond counsel as to the
tax-exempt status of interest on the bonds.
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