CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary
of financial data ....................................................... 2
THE FUND IN DETAIL
The Fund's Investment
Objective and Policies .................................................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 5
PERFORMANCE TERMS
An Explanation of
Performance Terms ....................................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open an Account .................................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES
AND ACCOUNT POLICIES
JETS ...................................................................... 11
Transactions Through
Processing Organizations ................................................ 11
Tax Identification Number ................................................. 11
Share Certificates ........................................................ 11
Involuntary Redemptions ................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Management & Investment
Personnel ............................................................... 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distribution Options and Taxes ............................................ 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS TWENTY FUND
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
1-800-525-3713
February 15, 1995 as supplemented November 1, 1995
Janus Twenty Fund (the "Fund") is a no-load, nondiversified mutual fund that
seeks growth of capital in a manner consistent with the preservation of capital.
The Fund emphasizes investments in common stocks of companies that offer rapid
growth potential. Under normal conditions, the Fund will concentrate its
investments in a core position of 20-30 common stocks.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 15, 1995, as
supplemented November 1, 1995, is incorporated by reference into this
Prospectus. For a copy of the SAI, write or call the Fund at the address or
phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND
AT A GLANCE
INVESTMENT OBJECTIVE:
The Fund seeks growth of capital in a manner consistent with the preservation of
capital.
PRIMARY HOLDINGS:
A nondiversified fund that, under normal conditions, concentrates its
investments in a core position of 20-30 common stocks offering rapid growth
potential.
SHAREHOLDER'S
INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in foreign and
domestic common stocks. The Fund is not designed as a short-term trading vehicle
and should not be relied upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for nearly
25 years and currently manages over $22 billion in assets.
FUND MANAGER:
Thomas F. Marsico
FUND INCEPTION:
April 30, 1985
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee None
* There is an $8 service fee for redemptions by wire.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
Management Fee .67%
Other Expenses .35%
Total Fund Operating Expenses 1.02%
EXAMPLE(1)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $10 $32 $56 $125
(1) The information in the table and example above is for the fiscal period
ended October 31, 1994.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
1
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FINANCIAL HIGHLIGHTS
Unless otherwise noted, the information below is for fiscal periods ending on
October 31 of each year. The accounting firm of Price Waterhouse LLP has audited
the Fund's financial statements since October 1, 1990. Their report is included
in the Fund's Annual Report, which is incorporated by reference into the SAI.
The Fund's financial statements for fiscal periods prior to October 1, 1990,
were audited by other independent accountants whose reports are not included in
the Annual Report. Expense and income ratios and portfolio turnover rates have
been annualized for periods of less than one year. Total returns for periods of
less than one year are not annualized.
<TABLE>
<CAPTION>
1994 1993 1992(1) 1992(2) 1991(2) 1990(2)
---- ---- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $25.85 $22.75 $22.17 $18.88 $16.01 $13.05
Income from investment operations:
2. Net investment income 0.16 0.17 0.09 0.11 0.16 0.05
3. Net gains or (losses) on securities
(both realized and unrealized) (1.07) 3.31 0.49 3.62 2.90 3.35
4. Total from investment operations (0.91) 3.48 0.58 3.73 3.06 3.40
Less distributions:
5. Dividends (from net investment income) (0.25) (0.18) -- (0.02) (0.19) (0.02)
6. Distributions (from capital gains) (0.45) (0.20) -- (0.42) -- (0.42)
7. Total distributions (0.70) (0.38) -- (0.44) (0.19) (0.44)
8. Net asset value, end of period $24.24 $25.85 $22.75 $22.17 $18.88 $16.01
9. Total return (3.52%) 15.39% 2.62% 19.60% 19.43% 26.36%
10. Net assets, end of period (in millions) $2,743 $3,749 $2,434 $2,081 $556 $175
11. Ratio of expenses to average net assets 1.02% 1.05% 1.12% 1.01% 1.07% 1.32%
12. Ratio of net investment income
to average net assets 0.57% 0.87% 1.27% 1.08% 1.30% 1.28%
13. Portfolio turnover rate 102% 99% 79% 83% 163% 228%
</TABLE>
********************
<TABLE>
<CAPTION>
1989(2) 1988(2) 1987(2) 1986(2) 1985(2)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $9.66 $13.69 $14.27 $11.57 $10.00
Income from investment operations:
2. Net investment income 0.46 0.42 0.30 0.19 0.36
3. Net gains or (losses) on securities
(both realized and unrealized) 3.73 (2.86) 0.74 3.05 1.21
4. Total from investment operations 4.19 (2.44) 1.04 3.24 1.57
Less distributions:
5. Dividends (from net investment income) (0.80) (0.41) (0.25) (0.23) --
6. Distributions (from capital gains) -- (1.18) (1.37) (0.31) --
7. Total distributions (0.80) (1.59) (1.62) (0.54) --
8. Net asset value, end of period $13.05 $9.66 $13.69 $14.27 $11.57
9. Total return 45.89% (17.13%) 8.66% 29.06% 4.04%(3)
10. Net assets, end of period (in millions) $20 $13 $19 $10 $2
11. Ratio of expenses to average net assets 1.88% 1.70% 1.79% 2.00% 1.99%
12. Ratio of net investment income
to average net assets 0.68% 3.35% 2.98% 3.55% 5.68%
13. Portfolio turnover rate 220% 317% 202% 152% 68%
</TABLE>
(1) Fiscal period from June 1, 1992 to October 31, 1992.
(2) Fiscal year ended on May 31st of each year.
(3) Total return from the Fund's initial public offering date of 4/30/85 to
5/31/85.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period, but not its total return.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gain (or loss) on securities is the per share increase or decrease in value
of the securities the Fund holds. A gain (or loss) is realized when securities
are sold. A gain (or loss) is unrealized when securities increase or decrease in
value but are not sold. Distributions (from capital gains) is the per share
amount that the Fund paid from net realized gains.
Total Return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calulating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. THE FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratio of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed discussion of instruments in which the Fund may invest. You
should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is growth of capital in a manner consistent
with the preservation of capital. It is a nondiversified fund that will normally
concentrate its investments in a core position of 20-30 common stocks.
TYPES OF SECURITIES
The Fund invests substantially all of its assets in common stocks selected for
their growth potential. The Fund may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities and debt
securities. Debt securities that the Fund may purchase include corporate bonds
and debentures (not to exceed 35% of net assets in high-yield/high-risk bonds);
government securities; mortgage- and asset-backed securities (not to exceed 25%
of assets); zero coupon bonds (not to exceed 10% of assets); indexed/structured
notes; high-grade commercial paper; certificates of deposit; and repurchase
agreements. Such securities may offer growth potential because of anticipated
changes in interest rates, credit standing, currency relationships or other
factors. The Fund may also invest in short-term debt securities as a means of
receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 5. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund invests substantially all of its assets in common stocks to the extent
its portfolio manager believes that the relevant market environment favors
profitable investing in those securities. The portfolio manager takes a "bottom
up" approach to building the portfolio. In other words, the portfolio manager
seeks to identify individual companies with earnings growth potential that may
not be recognized by the market at large. Although themes may emerge in the
Fund, securities are selected without regard to any defined industry sector or
other similarly defined selection procedure. Realization of income is not a
significant investment consideration. Any income realized on the Fund's
investments will be incidental to its objective.
ARE THE SAME CRITERIA USED TO SELECT FOREIGN STOCKS?
Generally, yes. The portfolio manager seeks companies with earnings growth
potential, regardless of country of organization or place of principal business
activity. Foreign securities are selected on a stock-by-stock basis without
regard to any defined allocation among countries or geographic regions. However,
certain factors such as expected levels of inflation, government policies
influencing business conditions, the outlook for currency relationships, and
prospects for economic growth among countries, regions or geographic areas may
warrant greater consideration in selecting foreign stocks. See "Additional Risk
Factors" on page 5.
- --------------------------------------------------------------------------------
WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors"on page 5.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
3
<PAGE>
HOW DOES A DIVERSIFIED FUND DIFFER FROM A NONDIVERSIFIED FUND?
A "nondiversified" fund has the ability to take larger positions in a smaller
number of issuers than a "diversified" fund. Because the appreciation or
depreciation of a single stock may have a greater impact on the NAV of a
nondiversified fund, its share price can be expected to fluctuate more than a
comparable diversified fund.
- --------------------------------------------------------------------------------
HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options and other derivative instruments to protect
its portfolio from movements in securities prices and interest rates. The Fund
may also use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk when investing directly in
foreign markets. See "Additional Risk Factors" on page 5. In addition, to the
extent that the Fund holds a larger cash position, it may not participate in
market declines to the same extent as if it had remained more fully invested in
common stocks.
GENERAL PORTFOLIO POLICIES
In investing its assets, the Fund will follow the general policies listed below.
The percentage limitations included in these policies and elsewhere in this
Prospectus apply only at the time of purchase of the security. For example, if
the Fund exceeds a limit as a result of market fluctuations or the sale of other
securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund is deemed to be a
nondiversified fund under the 1940 Act and is subject to the following
diversification requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 50% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
o The Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID SECURITIES
The Fund may invest up to 15% of its net assets in illiquid securities,
including restricted securities or private placements. An illiquid security is a
security that cannot be sold quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors ("Rule
144A Securities") or on foreign markets are liquid. Janus Capital will follow
guidelines established by the Trustees of the Trust in making liquidity
determinations for Rule 144A Securities and other securities, including
commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above limits. There is no assurance that such permission will be granted.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
4
<PAGE>
ADDITIONAL RISK FACTORS
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
FOREIGN SECURITIES
Investments in foreign securities, including those of foreign governments,
involve greater risks than investing in comparable domestic securities.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
o Currency Risk. The Fund must buy the local currency when it buys a foreign
security and sell the local currency when it sells the security. As long as
the Fund holds a foreign security, its value will be affected by the value
of the local currency relative to the U.S. dollar. In other words, when the
Fund sells a foreign security, its value may be worth less in U.S. dollars
even though the security increases in value in its home country.
o Political and Economic Risk. Foreign investments are subject to heightened
political and economic risks, particularly in underdeveloped or developing
countries which may have relatively unstable governments and economies
based on only a few industries. In some countries, there is the risk that
the government may take over the assets or operations of a company or that
the government may impose taxes or limits on the removal of the Fund's
assets from that country.
o Regulatory Risk. Generally, there is less government supervision of foreign
markets. Foreign issuers generally are not subject to the uniform
accounting, auditing and financial reporting standards and practices
applicable to domestic issuers. There may be less publicly available
information about foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use most derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as increasing the Fund's income or otherwise enhancing
return. Please refer to Appendix A and the SAI for a more detailed discussion of
these instruments.
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the direction that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
5
<PAGE>
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities to "cover" the Fund's position. Assets segregated or set aside
generally may not be disposed of so long as the Fund maintains the positions
requiring segregation or cover. Segregating assets could diminish the Fund's
return due to the opportunity losses of foregoing other potential investments
with the segregated assets.
HIGH-YIELD/HIGH-RISK BONDS
High-yield/high-risk bonds (or "junk" bonds) are debt securities rated below
investment grade by the primary rating agencies (Standard & Poor's and Moody's).
The Fund expects that its holdings of lower rated securities, if any, will
consist primarily of bonds rated in the highest two tiers of noninvestment grade
securities.
The value of lower rated securities generally is more dependent on the ability
of the company to meet interest and principal payments (i.e., credit risk) than
is the case for higher rated securities. Conversely, the value of higher rated
securities may be more sensitive to interest rate movements than lower rated
securities. In addition, companies issuing high-yield securities are more
vulnerable to real or perceived economic changes, political changes and other
developments adverse to the company, and lower rated securities may have less
liquid markets than higher rated securities. Investments in companies issuing
high-yield securities are considered to be more speculative than higher quality
investments.
Please refer to the SAI for a description of bond rating categories, including
the treatment of unrated securities and securities that have received different
ratings from different agencies.
- --------------------------------------------------------------------------------
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative Total Return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average Annual Total Return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
6
<PAGE>
SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. In addition, the Shareholder's Manual explains in
detail the wide array of services and features you can establish on your
account.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 7:00 a.m.-1:00
a.m., and Saturday-Sunday: 10:00 a.m.-7:00 p.m., Eastern Time.
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MINIMUM INVESTMENTS
To open a new account ............................................. $1,000
To open a new retirement or UGMA/UTMA account ..................... $ 250
To open a new account with an Automatic Investment Program ........ $ 50*
To add to any type of an account .................................. $ 50
* May be waived for certain accounts that participate in an automatic group
billing purchase program or automatic payroll deduction program.
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TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this prospectus:
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 59 1/2.
Investors Fiduciary Trust Company ("IFTC") serves as custodian for the
retirement plans offered by the Fund. There is an annual $12 fee per account to
maintain your retirement account. The maximum annual fee is $24 per taxpayer
identification number. You may pay the fee by check or have it automatically
deducted from your account (usually in December). In lieu of the annual fee, a
special nonrefundable Lifetime IRA(R) Fee of $100 may be paid. This fee covers
all retirement plans that are maintained under the same taxpayer identification
number as long as they are continuously maintained at Janus.
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account: An IRA allows individuals under the age of
70 1/2 with earned income to contribute up to the lesser of $2,000 or 100%
of compensation annually. Please refer to the Janus Funds IRA booklet for
complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
7
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HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of following addresses:
Regular Mail
- ------------
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
- -------------------------
Janus Funds
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers three Investor Service Centers for those individuals who
would like to conduct their investing in person. Our representatives will be
happy to assist you at any of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
1004 Baltimore Ave., Suite 100
Kansas City, MO 64105
JANUS NO MINIMUM INITIAL
INVESTMENT PROGRAM(R)
If you participate in our popular Automatic Monthly Investment Program, the Fund
will waive the minimum initial investment ($50 minimum monthly payment). If you
discontinue the program before your account reaches the required minimum initial
investment, then the Fund reserves the right to close your account. Please see
"Involuntary Redemption" on page 11. For more detailed information on automatic
monthly investing, see "How to Purchase Shares."
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards and third party checks will not be accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $50. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares" section on the application
and attach a "voided" check or deposit slip from your bank account. If your
account is already established, call 1-800-525-3713 to request the appropriate
form. This option will become effective ten business days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Automatic investing is an easy way to systematically add to your account. Janus
offers several automatic investment plans to help investors achieve their
financial goals as simply and conveniently as possible.
o Automatic Monthly Investment Program
You select the day each month that your money will be electronically
transferred from your bank account to your Fund account. To establish this
option, complete the "Automatic Investing" section on the application and
attach a "voided" check or deposit slip from your bank account. If your
Fund account is already established, call 1-800-525-3713 to request the
appropriate form.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
8
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o Payroll Deduction
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o By Systematic Exchange
With a Systematic Exchange you determine the amount of money ($50 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus Quoteline 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an investor service representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, a Systematic Exchange may be established for as little as $50 a
month.
Please note our exchange policies:
o Except for Systematic Exchanges, the exchange minimum is $1,000, or the
total account value if less than $1,000.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges). There is no charge for exchanges.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to the Fund prior to making any exchanges.
o Be sure to read the prospectus for the fund into which you are exchanging.
o The Fund reserves the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one fund and the purchase of
shares of another fund, which may produce a taxable gain or loss in a
non-tax deferred account.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. IF THE SHARES BEING REDEEMED WERE PURCHASED BY
CHECK, TELEPHONE OR THROUGH THE AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND
MAY DELAY THE MAILING OF YOUR REDEMPTION CHECK FOR UP TO 15 DAYS FROM THE DAY OF
PURCHASE TO ALLOW THE PURCHASE TO CLEAR.
Your transaction will be processed at the NAV on the day your redemption request
is received. Unless you provide alternate instruction, your proceeds will be
invested in the Janus Money Market Fund during the 15 day hold period.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. Eastern Time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your Fund account on a
regular basis. For more information on SWPs or to request the appropriate form,
please call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o By Check
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
9
<PAGE>
o Electronic Transfer
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o By Wire
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
WRITTEN INSTRUCTIONS
To redeem all or part of your shares in writing, your request should be sent to
one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account registration,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions
must be signed by each shareholder, exactly as the names appear in the
account.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed
by an authorized individual in his/her capacity as it appears on the
account registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified
copy of the corporate resolution authorizing the signer to act must
accompany the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must
also be submitted.
o IRA: Written instructions must be signed by the account owner. If you
do not want federal income tax withheld from your redemption, you must
state that you elect not to have such withholding apply. In addition,
your instructions must state whether the distribution is normal (after
age 59 1/2) or premature (before age 59 1/2) and, if premature,
whether any exceptions such as death or disability apply with regard
to the 10% additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. Eastern Time) each day that the NYSE
is open. In order to receive a day's price your order must be received by 4:00
p.m. Eastern Time. NAV per share is calculated by dividing the total value of
the Fund's securities and other assets, less liabilities, by the total number of
shares outstanding. Securities are valued at market value or, if a market
quotation is not readily available, at their fair value determined in good faith
under procedures established by and under the supervision of the Trustees. Money
market instruments maturing within 60 days are valued at amortized cost, which
approximates market value. See the SAI for more detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, a signature guarantee is also
required if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A signature guarantee may not
be provided by a notary public.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
10
<PAGE>
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(a) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution (a "Processing Organization"). Processing Organizations
may charge you a fee for this service and may require different minimum initial
and subsequent investments than the Fund. A Processing Organization may also
impose other charges or restrictions different from those applicable to
shareholders who invest in the Fund directly. The Processing Organization,
rather than its customer, may be the shareholder of record of your shares. The
Fund is not responsible for the failure of any Processing Organization to carry
out its obligations to its customers. Certain Processing Organizations may
receive compensation from Janus Capital or its affiliates and certain Processing
Organizations may receive compensation from the Fund for shareholder
recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On your application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
If your account balance falls below the $1,000 minimum as a result of a
redemption or exchange or if you discontinue the Automatic Monthly Investment
Program before your account balance reaches the required minimum, you will be
given a 60-day notice to reestablish the minimum balance or activate an
Automatic Monthly Investment Program. If this requirement is not met, your
account may be closed and the proceeds sent to you.
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions or other shareholder services upon reasonable notice.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmations. Information regarding the tax status of
income dividends and capital gains distributions will be mailed to shareholders
on or before January 31st of each year. Account tax information will also be
sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts listed under
the same Social Security number. Upon request, such reports will be mailed to
all accounts in the same household. Please call 1-800-525-3713 if you would like
to receive additional reports.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
11
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MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet quarterly to review the Fund's investment policies, performance,
expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital is the investment adviser to the Fund and is responsible for the
day-to-day management of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation and financial services. Thomas H. Bailey, President and
Chairman of the Board of Janus Capital, owns approximately 12% of its voting
stock and, by agreement with KCSI, selects a majority of Janus Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
INVESTMENT PERSONNEL
Thomas H. Bailey founded Janus Capital in 1969 and has been active in the
advisory and securities business since that time. Mr. Bailey oversees the
investment management of all Janus funds. He holds a Bachelor of Arts in
Business from Michigan State University and a Master of Business Administration
from the University of Western Ontario.
- --------------------------------------------------------------------------------
Thomas F. Marsico is the portfolio manager of the Fund, which he has managed
since March 1988. Mr. Marsico is also the portfolio manager of Janus Growth and
Income Fund, which he has managed since its inception. He holds a Bachelor of
Arts in Biology from the University of Colorado and a Master of Business
Administration in Finance from the University of Denver.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee. The advisory agreement with the
Fund spells out the management fee and other expenses that the Fund must pay.
The Fund's management fee schedule (expressed as an annual rate) is set out in
the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- -------------- --------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Over $500 Million .65%
The actual management fee paid by the Fund for the fiscal year ended October 31,
1994 was .67% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
subcustodian fees and expenses, legal and auditing fees, printing and mailing
costs of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses. Janus Capital will reduce its
management fee to the extent that Fund expenses exceed statutory limits imposed
by state securities regulators.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
12
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PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian and Transfer Agent
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Domestic Subcustodian
United Missouri Bank, N.A.
Tenth and Grand Streets
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Subtransfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective.
The Trust consists of 16 separate series. The Fund became a series of the Trust
on August 7, 1992. It was previously known as Janus Twenty Fund, Inc., a
Maryland corporation, and was originally incorporated as Janus Value Fund, Inc.
in the state of Maryland. All references in this Prospectus to the Fund prior to
the above date are to its predecessor entities and all references after such
date are to the series of the Trust.
The Trust currently offers the other 15 series of the Trust pursuant to separate
prospectuses.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund. As a shareholder, you
are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund may discontinue sales of its shares if management believes that
continued sales may adversely affect the Fund's ability to achieve its
investment objective. If sales of the Fund are discontinued, it is expected that
existing shareholders of the Fund would be permitted to continue to purchase
shares and to reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The Fund's shareholders of record on April 30, 1992, and the
initial shareholder(s) of all series of the Trust created after April 30, 1992,
have voted to vest authority to use this investment structure in the sole
discretion of the Trustees. No further approval of the shareholders of the Fund
is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although management of the Fund believes that the Trustees will
not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will be materially reduced if this option is
implemented.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
13
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DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
The Internal Revenue Code requires the Fund to distribute net income and any net
gains realized by its investments annually. The Fund's income from dividends and
interest and any net realized short-term capital gains are paid to shareholders
as dividends. The Fund realizes capital gains whenever it sells securities for a
higher price than it paid for them. Net realized long-term gains are paid to
shareholders as capital gains distributions. Dividends and capital gains
distributions are declared and paid in December.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions to purchase additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other to purchase
additional shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. This discussion does not apply to tax-deferred retirement accounts,
nor is it a complete analysis of the federal tax implications of investing in
the Fund. You may wish to consult your own tax adviser. Additionally, state or
local taxes may apply to your investment, depending upon your residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year.
TAXATION OF THE FUND
Dividends and interest received by the Fund on foreign securities may be subject
to tax withholding or other foreign taxes. Any foreign taxes paid by the Fund
will be treated as an expense to the Fund or passed through to shareholders as a
foreign tax credit, depending on particular facts and circumstances. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes.
For your information, the Fund does not expect to pay any federal income or
excise taxes because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meet these requirements so that your
investment will not be taxed twice.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
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APPENDIX A
GLOSSARY OF INVESTMENTS AND INVESTMENT TECHNIQUES
This glossary provides a more detailed description of the types of securities in
which the Fund may invest. The Fund may invest in these securities to the extent
permitted by its investment objective and policies. The Fund is not limited by
this discussion and may invest in any type of security unless precluded by the
policies discussed elsewhere in this Prospectus.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality or government
agency. The issuer of a bond is required to pay the holder the amount of the
loan (or par value) at a specified maturity and to make scheduled interest
payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933. Janus Capital may determine that
such securities are liquid under guidelines established by the Trustees.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-income securities are securities that pay a fixed rate of return. The term
generally includes short- and long-term government, corporate and municipal
obligations that pay a fixed rate of interest or coupons for a specified period
of time and preferred stock, which pays fixed dividends. Coupon and dividend
rates may be fixed for the life of the issue or, in the case of adjustable and
floating rate securities, for a shorter period.
High-yield/High-risk bonds are securities that are rated below investment grade
by the primary rating agencies (BB or lower by Standard & Poor's and Ba or lower
by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in an organized pool of
mortgages or other debt. These securities are generally pass-through securities,
which means that principal and interest payments on the underlying securities
(less servicing fees) are passed through to shareholders on a pro rata basis.
These securities involve prepayment risk, which is the risk that the underlying
mortgages or other debt may be refinanced or paid off prior to their maturities
during periods of declining interest rates. In that case, the portfolio manager
may have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies (PFICs) are foreign investment funds or
trusts. In addition to bearing their proportionate share of the Fund's expenses,
shareholders may indirectly bear similar expenses of PFICs and similar trusts.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement (generally by a bank or dealer) to repurchase the
security from the Fund at a specified date or upon demand. This technique offers
a method of earning income on idle cash. These securities involve the risk that
the seller will fail to repurchase the security, as agreed. In that case, the
Fund will bear the risk of market value fluctuations until the security can be
sold and may encounter delays and incur costs in liquidating the security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
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When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery due at some time in the future
- - i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a significant discount from face value. The
discount approximates the total amount of interest the security will accrue from
the date of issuance to maturity. Strips are debt securities that are stripped
of their interest (usually by a financial intermediary) after the securities are
issued. The market value of these securities generally fluctuates more in
response to changes in interest rates than interest-paying securities of
comparable maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. An option on
a futures contract gives the buyer the right, but not the obligation, to buy or
sell a futures contract at a specified price on or before a specified date.
Futures contracts and options on futures are standardized and traded on
designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices or other financial indicators. Such
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the reference index or instrument appreciates).
Indexed/structured securities may have return characteristics similar to direct
investments in the underlying instruments and may be more volatile than the
underlying instruments. The Fund bears the market risk of an investment in the
underlying instruments, as well as the credit risk of the issuer.
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines in
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
JANUS TWENTY FUND PROSPECTUS FEBRUARY 15, 1995 AS SUPPLEMENTED NOVEMBER 1, 1995
16
