Registration No. 2-34393
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. /__/
Post-Effective Amendment No. 76 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940
Amendment No. 59 /X/
(Check appropriate box or boxes.)
JANUS INVESTMENT FUND
(Exact Name of Registrant as Specified in Charter)
100 Fillmore Street, Denver, Colorado 80206-4923
Address of Principal Executive Offices (Zip Code)
Registrant's Telephone No., including Area Code: 303-333-3863
David C. Tucker - 100 Fillmore Street, Denver, Colorado 80206-4923
(Name and Address of Agent for Service)
Approximate Date of Proposed Offering: November 22, 1996
It is proposed that this filing will become effective (check appropriate line):
immediately upon filing pursuant to paragraph (b) of Rule 485.
on (date) pursuant to paragraph (b) of Rule 485.
X 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
on (date) pursuant to paragraph (a)(1) of Rule 485.
75 days after filing pursuant to paragraph (a)(2) of Rule 485.
on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following line:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of beneficial interest
under the Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule
24f-2 Notice on November 17, 1995, for the fiscal year ended October 31, 1995,
with respect to all of its series in existence as of October 31, 1995.
<PAGE>
JANUS INVESTMENT FUND
(Janus Money Market Fund - Service Shares)
(Janus Government Money Market Fund - Service Shares)
(Janus Tax-Exempt Money Market Fund - Service Shares)
Cross Reference Sheet
Between the Prospectus and Statement of
Additional Information and Form N-1A Item
(Cross Reference Sheets for other series of Janus Investment Fund are
included in previous post-effective amendments related to those series)
FORM N-1A ITEM CAPTION IN PROSPECTUS
PART A
1. Cover Page Cover Page
2. Synopsis Cover Page; Expense Information
3. Condensed Financial Performance
Information
4. General Description of Investment Objectives, Policies, and
Registrant Techniques
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Investment Adviser and Administrator
Fund Performance
6. Capital Stock and Other Distributions and Taxes; Shareholder's
Securities Guide
7. Purchase of Securities Being Shareholder's Guide
Offered
8. Redemption or Repurchase Shareholder's Guide
9. Pending Legal Proceedings Not Applicable
<PAGE>
FORM N-1A ITEM CAPTION IN STATEMENT OF
ADDITIONAL INFORMATION
PART B
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Miscellaneous Information
History
13. Investment Objectives and Investment Policies and Restrictions;
Policies Types of Securities and Techniques
14. Management of the Fund Investment Adviser and Administrator;
Officers and Trustees
15. Control Persons and Principal Not Applicable
Holders of Securities
16. Investment Advisory and Investment Adviser and Administrator;
Other Services Custodian, Transfer Agent and Certain
Affiliations; Portfolio Transactions and
Brokerage; Officers and Trustees;
Miscellaneous Information
17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices
18. Capital Stock and Other Purchase of Shares; Redemptions of
Securities Shares; Miscellaneous Information
19. Purchase, Redemption and Purchase of Shares; Redemptions of
Pricing of Securities Being Shares; Shareholder Accounts
Offered
20. Tax Status Dividends and Tax Status
21. Underwriters Custodian, Transfer Agent and Certain
Affiliations
22. Calculation of Performance Performance Data
Data
23. Financial Statements Not Applicable
<PAGE>
CONTENTS
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FEE TABLE
............................................................................ 2
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FINANCIAL HIGHLIGHTS
............................................................................ 3
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INVESTMENT OBJECTIVES,
POLICIES AND TECHNIQUES
............................................................................ 3
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INVESTMENT ADVISER AND ADMINISTRATOR
............................................................................ 6
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DISTRIBUTIONS AND TAXES
............................................................................ 7
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PERFORMANCE
............................................................................ 8
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MISCELLANEOUS INFORMATION
............................................................................ 9
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SHAREHOLDER'S GUIDE
Purchases ................................................................... 10
Redemptions ................................................................. 10
Shareholder Communications .................................................. 10
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 24, 1996
[LOGO]
JANUS MONEY MARKET FUND
JANUS GOVERNMENT MONEY MARKET FUND
JANUS TAX-EXEMPT MONEY MARKET FUND
Service Shares
100 Fillmore Street
Denver, CO 80206-4923
____________, 1996
Janus Money Market Fund, Janus Government Money Market Fund, and Janus
Tax-Exempt Money Market Fund (individually, a "Fund" and, collectively, the
"Funds") are designed for investors who seek maximum current income consistent
with stability of capital. This prospectus offers a separate class of shares of
each Fund (collectively, the "Shares") exclusively through banks and other
financial institutions ("Financial Institutions") in connection with trust
accounts, cash management programs and similar programs provided to their
customers. Each Fund is a separate series of Janus Investment Fund (the
"Trust"), an open-end management investment company.
Each Fund invests exclusively in high quality money market instruments. AN
INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
THERE IS NO ASSURANCE THAT A FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.
The Shares are offered with no sales charges, commissions, redemption fees, Rule
12b-1 fees or deferred sales charges. There is a $250,000 initial investment
minimum by each Financial Institution. The Financial Institution may aggregate
investments by all of its customers to achieve this minimum. There is no minimum
amount required for subsequent investments. For complete details on how to
purchase, redeem and exchange Shares, please see the Shareholder's Guide
beginning at page 10.
This prospectus contains information about the Shares that prospective investors
should consider before investing and should be read carefully and retained for
future reference. Additional information about the Shares is contained in the
Statement of Additional Information ("SAI") dated November 22, 1996, which is
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this Prospectus. The SAI is available upon request and without
charge by writing or calling your Financial Institution.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED
UPON 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 1
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FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES (Applicable to each Fund)
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
ANNUAL OPERATING EXPENSES*
(Expressed as a percentage of average net assets)
<TABLE>
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Management Other Total Operating
Fee Expenses Expenses
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<S> <C> <C> <C>
Janus Money Market Fund - Service Shares 0.10% 0.30% 0.40%
Janus Government Money Market Fund - Service Shares 0.10% 0.30% 0.40%
Janus Tax-Exempt Money Market Fund - Service Shares 0.10% 0.30% 0.40%
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</TABLE>
*The fees and expenses in the table above are based on the estimated fees and
expenses that the Service Shares of the Funds expect to incur in their initial
fiscal year, net of fee waivers from the investment adviser. Without such
waivers, the Management Fee, Other Expenses and Total Operating Expenses for
Service Shares are estimated to be 0.20%, 0.40% and 0.60%, respectively. Janus
Capital may modify or terminate the waivers at any time upon 90 days' notice to
the Trustees. See "Investment Adviser and Administrator" for a more detailed
discussion of the fees.
EXAMPLE
You would indirectly pay the following expenses on a $1,000 investment, assuming
expense ratios remain as listed above and assuming a 5% annual return, with or
without redemption at the end of each period:
<TABLE>
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1 Year 3 Years
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<S> <C> <C>
Janus Money Market Fund - Service Shares $4 $13
Janus Government Money Market Fund - Service Shares $4 $13
Janus Tax-Exempt Money Market Fund - Service Shares $4 $13
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</TABLE>
THE EXPENSES IN THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED
A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS
THAN THE ASSUMED AMOUNT.
The purpose of the preceding table and example is to assist the investor in
understanding the various costs and expenses that an investor in each Fund will
bear directly or indirectly. These expenses are described in greater detail
under "Investment Adviser and Administrator."
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 2
<PAGE>
FINANCIAL HIGHLIGHTS
No Financial Highlights are presented for the Shares because the Shares did not
commence operations until November 22, 1996.
INVESTMENT OBJECTIVES, POLICIES AND TECHNIQUES
Unless otherwise stated, the investment objectives and policies set forth in
this Prospectus are not fundamental and may be changed by the Trustees of the
Trust (the "Trustees") without shareholder approval. Shareholders will be
notified of material changes in investment objectives or policies. If there is a
change in the investment objective or policies of any Fund, shareholders should
consider whether that Fund remains an appropriate investment in light of their
then current financial position and needs. The Funds are subject to additional
investment policies and restrictions described in the SAI, some of which are
fundamental and may not be changed without shareholder approval.
INVESTMENT OBJECTIVES
The investment objective 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 that the Shares will be
able to maintain a stable net asset value of $1.00 per share.
COMMON INVESTMENT POLICIES
The Funds will invest only in eligible high quality, short-term money market
instruments that present minimal credit risks, as determined by Janus Capital
Corporation, the Funds' investment adviser ("Janus Capital"), pursuant to
procedures adopted by the Trustees. Each Fund may invest only in U.S.
dollar-denominated instruments that have a remaining maturity of 397 days or
less (as calculated pursuant to Rule 2a-7 under the Investment Company Act of
1940 ("1940 Act")) and will maintain a dollar-weighted average portfolio
maturity of 90 days or less.
Except to the limited extent permitted by Rule 2a-7 and except for U.S.
Government Securities (as defined below), each Fund will not invest more than 5%
of its total assets in the securities of any one issuer. A guarantor is not
considered an issuer for the purpose of this limit, provided that the value of
all securities held by a Fund that are issued or guaranteed by that institution
does not exceed 10% of the Fund's total assets. Until the amendments to Rule
2a-7 become effective, up to 25% of Janus Tax-Exempt Money Market Fund's assets
may be invested without regard to the foregoing limitations. To ensure adequate
liquidity, no Fund may invest more than 10% of its net assets in illiquid
investments, including repurchase agreements maturing in more than seven days
(unless subject to a demand feature) and certain time deposits that are subject
to early withdrawal penalties and mature in more than seven days. Because the
Funds are typically used as a cash management vehicle, they intend to maintain a
high degree of liquidity. Janus Capital determines and monitors the liquidity of
portfolio securities under the supervision of the Trustees.
Ratings.
High quality money market instruments include those that (i) are rated (or, if
unrated, are issued by an issuer with comparable outstanding short-term debt
that is rated) in one of the two highest rating categories for short-term debt
by any two nationally recognized statistical rating organizations ("NRSROs") or,
if only one NRSRO has issued a rating, by that NRSRO or (ii) are otherwise
unrated and determined by Janus Capital to be of comparable quality. Each Fund,
except Janus Tax-Exempt Money Market Fund, will invest at least 95% of its total
assets in securities in the highest rating category (as determined pursuant to
Rule 2a-7). Descriptions of the rating categories of Standard & Poor's Ratings
Services, Moody's Investors Service, Inc., and certain other NRSROs are
contained in the SAI, as is a further description of the Funds' investment
policies.
Although each Fund only invests in high quality money market instruments, an
investment in a Fund is subject to risk even if all securities in its portfolio
are paid in full at maturity. All money market instruments, including U.S.
Government Securities, can change in value as a result of changes in interest
rates, the issuer's actual or perceived creditworthiness or the issuer's ability
to meet its obligations.
TYPES OF INVESTMENTS
Janus Money Market Fund
Janus Money Market Fund pursues its objective by investing primarily in high
quality commercial paper and obligations of financial institutions. The Fund may
also invest in U.S. Government Securities (as defined below) and municipal
securities, although the Fund expects to invest in such securities to a lesser
degree.
Debt Obligations.
The Fund may invest in debt obligations of domestic issuers, including
commercial paper (short-term promissory notes issued by companies to finance
their, or their affiliates', current obligations), notes and bonds, and variable
amount master demand notes. The payment obligations on these instruments may be
backed by securities, swap agreements or other assets, by the guarantee of a
third party or solely by the unsecured promise of the issuer to make payments
when due. The Fund may invest in privately issued commercial paper or other
securities that are restricted as to disposition under the federal securities
laws. In general, sales of these securities may not be made absent registration
under the Securities Act of 1933 (the "1933 Act") or the availability of an
appropriate exemption therefrom. Pursuant to Section 4(2) of the 1933 Act or
Rule 144A adopted under the 1933 Act, however, some of these securities are
eligible for resale to institutional investors, and accordingly, Janus Capital
may determine that a liquid market exists for such a security pursuant to
guidelines adopted by the Trustees.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 3
<PAGE>
Obligations of Financial Institutions.
The Fund may invest in obligations of financial institutions. Examples of
obligations in which the Fund may invest include negotiable certificates of
deposit, bankers' acceptances and time deposits of U.S. banks (including savings
and loan associations) having total assets in excess of one billion dollars and
U.S. branches of foreign banks having total assets in excess of ten billion
dollars. The Fund may also invest in Eurodollar and Yankee bank obligations as
discussed below.
Certificates of deposit represent an institution's obligation to repay funds
deposited with it that earn a specified interest rate over a given period.
Bankers' acceptances are negotiable obligations of a bank to pay a draft which
has been drawn by a customer and are usually backed by goods in international
trade. Time deposits are non-negotiable deposits with a banking institution that
earn a specified interest rate over a given period. Fixed time deposits, which
are payable at a stated maturity date and bear a fixed rate of interest,
generally may be withdrawn on demand by the Fund but may be subject to early
withdrawal penalties that could reduce the Fund's yield. Unless there is a
readily available market for them, time deposits that are subject to early
withdrawal penalties and that mature in more than seven days will be treated as
illiquid securities.
Eurodollar or Yankee Obligations.
The Fund may invest in Eurodollar and Yankee bank obligations. Eurodollar bank
obligations are dollar-denominated certificates of deposit or time deposits
issued outside the U.S. capital markets by foreign branches of U.S. banks and by
foreign banks. Yankee bank obligations are dollar-denominated obligations issued
in the U.S. capital markets by foreign banks.
Eurodollar (and to a limited extent, Yankee) bank obligations are subject to
certain sovereign risks. One such risk is the possibility that a foreign
government might prevent dollar-denominated funds from flowing across its
borders. Other risks include: adverse political and economic developments in a
foreign country; the extent and quality of government regulation of financial
markets and institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers.
U.S. Government Securities.
The Fund may invest without limit in U.S. Government Securities as described
below under "Janus Government Money Market Fund."
Municipal Securities.
The Fund may invest in obligations of states, territories or possessions of the
United States and their subdivisions, authorities and corporations as described
below under "Janus Tax-Exempt Money Market Fund." These obligations may pay
interest that is exempt from federal income taxation.
JANUS GOVERNMENT MONEY MARKET FUND
Janus Government Money Market Fund pursues its objective by investing
exclusively in obligations issued and/or guaranteed as to principal and interest
by the United States government or by its agencies and instrumentalities and
repurchase agreements secured by such obligations.
U.S. Government Securities.
U.S. Government Securities shall have the meaning set forth in the 1940 Act. The
1940 Act defines U.S. Government Securities to include securities issued or
guaranteed by the U.S. government, its agencies and instrumentalities. U.S.
Government Securities may also include repurchase agreements collateralized by
and municipal securities escrowed with or refunded with U.S. government
securities. U.S. Government Securities in which the Fund may invest include U.S.
Treasury securities and obligations issued or guaranteed by U.S. government
agencies and instrumentalities that are backed by the full faith and credit of
the U.S. government, such as those guaranteed by the Small Business
Administration or issued by the Government National Mortgage Association. In
addition, U.S. Government Securities in which the Fund may invest include
securities supported primarily or solely by the creditworthiness of the issuer,
such as securities of the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation and the Tennessee Valley Authority. There is no
guarantee that the U.S. government will support securities not backed by its
full faith and credit. Accordingly, although these securities have historically
involved little risk of loss of principal if held to maturity, they may involve
more risk than securities backed by the full faith and credit of the U.S.
government.
Janus Tax-Exempt Money Market Fund
Janus Tax-Exempt Money Market Fund pursues its objective by investing primarily
in municipal securities whose interest is exempt from federal income taxes,
including the federal alternative minimum tax. Although the Fund will attempt to
invest substantially all of its assets in municipal securities whose interest is
exempt from federal income taxes, the Fund reserves the right to invest up to
20% of the value of its net assets in securities whose interest is federally
taxable. Additionally, when its portfolio manager is unable to locate investment
opportunities with desirable risk/reward characteristics, the Fund may invest
without limit in cash and cash equivalents, including obligations that may be
federally taxable (see "Taxable Investments").
Municipal Securities.
The municipal securities in which the Fund may invest include municipal notes
and short-term municipal bonds. Municipal notes are generally used to provide
for the issuer's short-term capital needs and generally have maturities of 397
days or less. Examples include tax anticipation and revenue anticipation notes,
which generally are issued in anticipation of various seasonal revenues, bond
anticipation notes, construction loan notes and tax-exempt commercial paper.
Short-term municipal bonds may include "general obligation bonds," which are
secured by the issuer's pledge of its faith, credit and taxing power for payment
of principal and interest; "revenue bonds," which are generally paid from the
revenues of a particular facility or a specific excise tax or other source; and
"industrial development bonds," which are issued by or on behalf of public
authorities
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 4
<PAGE>
to provide funding for various privately operated industrial and commercial
facilities. The Fund may also invest in high quality participation interests in
municipal securities. A more detailed description of various types of municipal
securities is contained in Appendix B in the SAI.
When the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
issuing entity and a security is backed only by the assets and revenues of the
issuing entity, that entity will be deemed to be the sole issuer of the
security. Similarly, in the case of an industrial development bond backed only
by the assets and revenues of the non-governmental issuer, the non-governmental
issuer will be deemed to be the sole issuer of the bond.
At times, the Fund may invest more than 25% of the value of its total assets in
tax-exempt securities that are related in such a way that an economic, business,
or political development or change affecting one such security could similarly
affect the other securities; for example, securities whose issuers are located
in the same state, or securities whose interest is derived from revenues of
similar type projects. The Fund may also invest more than 25% of its assets in
industrial development bonds or participation interests therein.
Yields on municipal securities are dependent on a variety of factors, including
the general conditions of the money market and of the municipal bond and
municipal note markets, the size of a particular offering, the maturity of the
obligation and the rating of the issue. The achievement of the Fund's investment
objective is dependent in part on the continuing ability of the issuers of
municipal securities in which the Fund invests to meet their obligations for the
payment of principal and interest when due. Obligations of issuers of municipal
securities are subject to the provisions of bankruptcy, insolvency and other
laws affecting the rights and remedies of creditors, such as the Bankruptcy
Reform Act of 1978, as amended. Therefore, the possibility exists that, as a
result of litigation or other conditions, the ability of any issuer to pay, when
due, the principal of and interest on its municipal securities may be materially
affected.
Municipal Leases.
The Fund may invest in municipal leases or participation interests therein.
Municipal leases are municipal securities which may take the form of a lease or
an installment purchase or conditional sales contract. Municipal leases are
issued by state and local governments and authorities to acquire a wide variety
of equipment and facilities. Lease obligations may not be backed by the issuing
municipality's credit and may involve risks not normally associated with general
obligation bonds and other revenue bonds. For example, their interest may become
taxable if the lease is assigned and the holders may incur losses if the issuer
does not appropriate funds for the lease payment on an annual basis, which may
result in termination of the lease and possible default. Janus Capital may
determine that a liquid market exists for municipal lease obligations pursuant
to guidelines established by the Trustees.
Taxable Investments.
As discussed above, although the Fund will attempt to invest substantially all
of its assets in municipal securities whose interest is exempt from federal
income tax, the Fund may under certain circumstances invest in certain
securities whose interest is subject to such taxation. These securities include:
(i) short-term obligations of the U.S. government, its agencies or
instrumentalities, (ii) certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of banks having total assets of more than one
billion dollars and whose deposits are insured by the Federal Deposit Insurance
Corporation, (iii) commercial paper and (iv) repurchase agreements as described
below covering any of the securities described in items (i)-(iii) above or any
other obligations of the U.S. government, its agencies or instrumentalities.
COMMON INVESTMENT TECHNIQUES
Participation Interests.
The Funds may invest in participation interests in any type of security in which
the Funds may invest. A participation interest gives a Fund an undivided
interest in the underlying securities in the proportion that the Fund's
participation interest bears to the total principal amount of the underlying
securities. Participation interests usually carry a demand feature, as described
below, backed by a letter of credit or guarantee of the institution that issued
the interests permitting the holder to tender them back to the institution.
Demand Features.
The Funds may invest in securities that are subject to puts and stand-by
commitments ("demand features"). Demand features give the Fund the right to
resell securities at specified periods prior to their maturity dates to the
seller or to some third party at an agreed-upon price or yield. Securities with
demand features may involve certain expenses and risks, including the inability
of the issuer of the instrument to pay for the securities at the time the
instrument is exercised, non-marketability of the instrument and differences
between the maturity of the underlying security and the maturity of the
instrument. Securities may cost more with demand features than without them.
Demand features can serve three purposes: to shorten the maturity of a variable
or floating rate security, to enhance the instrument's credit quality and to
provide a source of liquidity. Demand features are often issued by third party
financial institutions, generally domestic and foreign banks. Accordingly, the
credit quality and liquidity of the Funds' investments may be dependent in part
on the credit quality of the banks supporting the Funds' investments. This will
result in exposure to risks pertaining to the banking industry, including the
foreign banking industry. Brokerage firms and insurance companies also provide
certain liquidity and credit support. A substantial portion of the Janus
Tax-Exempt Money Market Fund's portfolio in particular may consist of securities
backed by banks and other financial institutions, and thus adverse changes in
the credit quality of these institutions could cause losses to the Fund and
affect its share price.
Variable and Floating Rate Securities.
The securities in which the Funds invest may have variable or floating rates of
interest. These securities pay interest
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 5
<PAGE>
at rates that are adjusted periodically according to a specified formula,
usually with reference to some interest rate index or market interest rate.
Securities with ultimate maturities of greater than 397 days may be purchased
only pursuant to Rule 2a-7. Under that Rule, only those long-term instruments
that have demand features which comply with certain requirements and certain
variable rate U.S. Government Securities may be purchased. Similar to fixed rate
debt instruments, variable and floating rate instruments are subject to changes
in value based on changes in market interest rates or changes in the issuer's or
guarantor's creditworthiness. The rate of interest on securities purchased by a
Fund may be tied to short-term Treasury or other government securities or
indices on securities that are permissible investments of the Funds, as well as
other money market rates of interest. The Funds will not purchase securities
whose values are tied to interest rates or indices that are not appropriate for
the duration and volatility standards of a money market fund.
Mortgage- and
Asset-Backed Securities.
Janus Money Market Fund and Janus Government Money Market Fund may purchase
fixed or adjustable rate mortgage-backed securities issued by the Government
National Mortgage Association, Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, or other governmental or
government-related entities. In addition, Janus Money Market Fund may purchase
other asset-backed securities, including securities backed by automobile loans,
equipment leases or credit card receivables. These securities directly or
indirectly represent a participation in, or are secured by and payable from,
fixed or adjustable rate mortgage or other loans which may be secured by real
estate or other assets. Unlike traditional debt instruments, payments on these
securities include both interest and a partial payment of principal. Prepayments
of the principal of underlying loans may shorten the effective maturities of
these securities and may result in a Fund having to reinvest proceeds at a lower
interest rate.
Repurchase Agreements.
Each Fund may seek additional income by entering into collateralized repurchase
agreements. Repurchase agreements are transactions in which a Fund purchases
securities and simultaneously commits to resell those securities to the seller
at an agreed-upon price on an agreed-upon future date. The resale price reflects
a market rate of interest that is not related to the coupon rate or maturity of
the purchased securities. If the seller of the securities underlying a
repurchase agreement fails to pay the agreed resale price on the agreed delivery
date, a Fund may incur costs in disposing of the collateral and may experience
losses if there is any delay in its ability to do so.
Reverse Repurchase Agreements.
Each Fund may enter into 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. This technique will be used only for temporary or
emergency purposes, such as meeting redemption requests, or to earn additional
income on portfolio securities.
Delayed Delivery Securities.
Each Fund may purchase securities on a when-issued or delayed delivery basis.
Securities so purchased are subject to market price fluctuation from the time of
purchase but no interest on the securities accrues to a Fund until delivery and
payment for the securities take place. Accordingly, the value of the securities
on the delivery date may be more or less than the purchase price. Forward
commitments will be entered into only when a Fund has the intention of taking
possession of the securities, but a Fund may sell the securities before the
settlement date if deemed advisable.
Borrowing and Lending.
Each Fund may borrow money for temporary or emergency purposes in amounts up to
25% of its total assets. A Fund may not mortgage or pledge securities except to
secure permitted borrowings. As a fundamental policy, a Fund will not lend
securities or other assets if, as a result, more than 25% of its total assets
would be lent to other parties; however, the Funds do not currently intend to
engage in securities lending. Each Fund intends to seek permission from the SEC
to borrow money from or lend money to other funds that permit such transactions
and are advised by Janus Capital. There is no assurance that such permission
will be granted.
INVESTMENT ADVISER AND ADMINISTRATOR
INVESTMENT ADVISER
Each Fund has a separate Investment Advisory Agreement with Janus Capital, 100
Fillmore Street, Denver, Colorado 80206-4923. Janus Capital has served as
investment adviser to Janus Fund 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., a publicly traded holding company whose
primary subsidiaries are engaged in transportation, information processing and
financial services ("KCSI"), owns approximately 83% of the outstanding voting
stock 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.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 6
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Pursuant to the Investment Advisory Agreements, Janus Capital furnishes
continuous advice and recommendations concerning each Fund's investments. Each
of the Funds has agreed to compensate Janus Capital for its advisory services by
the monthly payment of a fee at the annual rate of 0.20% of the value of the
average daily net assets of each Fund. Janus Capital has agreed to waive a
portion of its fee and accordingly, the advisory fee of each Fund will be
calculated at the annual rate of 0.10% of the value of each Fund's average daily
net assets. Janus Capital may modify or terminate the waiver at any time upon 90
days' notice to the Trustees.
ADMINISTRATOR
Each of the Funds has also entered into an Administration Agreement with Janus
Capital, pursuant to which Janus Capital furnishes certain administrative,
compliance and accounting services for the Funds, pays the costs of printing
reports and prospectuses for existing shareholders, provides office space for
the Funds and pays the salaries, fees and expenses of all Fund officers and of
those Trustees who are affiliated with Janus Capital. Administrative services
provided by Janus Capital under the Administration Agreements include custody
and transfer agency services. Janus Capital is paid an administration fee,
calculated daily and paid monthly, at the annual rate of 0.40% of the value of
the average daily net assets of each Fund attributable to Shares for services
rendered pursuant to the Administration Agreements. Janus Capital has agreed to
waive a portion of its fee and accordingly, the administration fee paid by the
Shares will be calculated at the annual rate of 0.30% of the value of each
Fund's average daily net assets attributable to the Shares. Janus Capital may
modify or terminate this waiver at any time upon 90 days' notice to the
Trustees.
Each Fund pays all of its expenses not assumed by Janus Capital, including
auditing fees and independent Trustees' fees and expenses.
Janus Capital may use all or a portion of its administration fee to compensate
Financial Institutions for providing administrative services to their customers
who invest in the Shares. The types of services that the Financial Institutions
would provide include serving as the sole shareholder of record, shareholder
recordkeeping, processing and aggregating purchase and redemption transactions,
providing periodic statements, forwarding shareholder reports and other
materials, providing tax information, and providing other similar services that
the Funds would have to perform if they were dealing directly with the
beneficial owners, rather than the Financial Institutions, as shareholders of
record.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Trustees will consider appropriate changes in the services.
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of each Fund are executed by brokers
and dealers selected by Janus Capital. Broker-dealers are selected on the basis
of their ability to obtain best price and execution for the Funds' 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 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. The Funds' Trustees have also authorized the Funds to place
portfolio transactions on an agency basis with a broker-dealer that is
affiliated with Janus Capital. Agency trades, if any, that are placed with such
affiliated party serve to reduce certain expenses of the Funds. The SAI further
explains the selection of broker-dealers.
PERSONAL INVESTING
Janus Capital does not permit portfolio managers 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 Funds and Janus Capital's other advisory
clients. See the SAI for more detailed information.
DISTRIBUTIONS AND TAXES
Dividends representing substantially all of the net investment income and any
net realized gains on sales of securities are declared daily, Saturdays, Sundays
and holidays included, and distributed on the last business day of each month.
If a month begins on a Saturday, Sunday or holiday, dividends for those days are
declared at the end of the preceding month and distributed on the first business
day of the month. Distributions will be reinvested in Shares of a Fund unless
otherwise elected by the shareholder pursuant to the options offered by the
Financial Institution.
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 in
cash or are reinvested in additional Shares. Full
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 7
<PAGE>
information regarding the tax status of income dividends and any capital gains
distributions will be mailed to Financial Institutions who will forward the
information to their customers for tax purposes on or before January 31st of
each year. Because the Funds are money market funds, they do not anticipate
making any capital gains distributions.
Janus Tax-Exempt Money Market Fund anticipates that substantially all income
dividends it pays will be exempt from federal income tax. However, dividends
attributable to interest on taxable investments, together with distributions
from any net realized capital gains, are taxable. In addition, interest on
certain private activity bonds is a preference item for purposes of the
individual and corporate alternative minimum taxes. To the extent that the Fund
earns such income, shareholders who are subject to the alternative minimum tax
must include such income as a preference item. The Fund will advise shareholders
of the percentage of dividends, if any, subject to the alternative minimum tax.
Dividends and capital gains distributions may also be subject to state and local
taxes. In certain states some portion of dividends and distributions (depending
on the sources of the Fund's net income) of Janus Tax-Exempt Money Market Fund
may be exempt from state and local taxes. Shareholders should consult their own
tax advisor regarding exemption from any applicable state and local tax, as well
as the tax treatment of any dividends or distributions from the Shares.
The Funds intend to comply with provisions of the Internal Revenue Code
applicable to investment companies, and thus it is not expected that any of the
Funds will be required to pay any federal income or excise taxes. The SAI
further explains the Funds' tax status.
PERFORMANCE
The Shares may measure performance in several ways, including "yield,"
"effective yield," and "tax equivalent yield" (for Janus Tax-Exempt Money Market
Fund only). Yield is a way of showing the rate of income the Shares earn on
investments as a percentage of the Share price. Yield represents the income,
less expenses generated by an investment, in the Shares over a seven-day period
expressed as an annual percentage rate. Effective yield is similar in that it is
calculated over the same time frame, but instead the net investment income is
compounded and then annualized. Due to the compounding effect, the effective
yield will normally be higher than the yield.
Shares of Janus Tax-Exempt Money Market Fund may also quote tax-equivalent
yield, which shows the taxable yield an investor would have to earn before taxes
to equal such Shares' tax-free yield. A tax-equivalent yield is calculated by
dividing such Shares' tax-exempt yield by the result of one minus a stated
federal tax rate. Only that portion of the Fund's income that is tax-exempt is
adjusted in this calculation.
Performance figures are based upon historical results and are not intended to
indicate future performance.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 8
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MISCELLANEOUS INFORMATION
ORGANIZATION
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. Each Fund
currently offers three classes of shares by separate prospectuses. The Shares
offered by this Prospectus are available only through Financial Institutions
that meet minimum investment requirements in connection with trust accounts,
cash management programs and similar programs provided to their customers. A
second class of shares, Institutional Shares of each Fund, are available only to
institutional clients, including corporations, foundations and trusts, and
individuals meeting certain initial investment requirements. A third class of
shares, Investor Shares of each Fund, are available to the general public.
Because the expenses of each class may differ, the performance of each class is
expected to differ. If you would like additional information, please call
1-800-29JANUS.
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to each Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Funds to the officers of the
Trust and meet at least quarterly to review the Funds' investment policies,
performance, expenses and other business affairs.
VOTING RIGHTS
The Trust is not required to hold annual shareholder meetings. However, special
meetings may be called for a specific class of shares, a specific Fund, or for
the Trust as a whole, for purposes such as electing or removing Trustees,
terminating or reorganizing the Trust, changing fundamental policies or voting
on matters when required by the 1940 Act. Separate votes are taken by a separate
Fund (or a separate class of shares) only if a matter affects or requires the
vote of just that Fund (or those shares). Shareholders are entitled to cast one
vote for each Share they own.
CUSTODIAN, TRANSFER AGENT
AND DISTRIBUTOR
United Missouri Bank, N.A., P.O. Box 419226, Kansas City, Missouri 64141-6226,
is the custodian of the Funds' assets. The custodian holds each Fund's assets in
safekeeping and collects and remits the income thereon subject to the
instructions of each Fund.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado 80217-3375, a
wholly-owned subsidiary of Janus Capital, provides transfer agency and
shareholder services for the Funds.
Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado 80206-4923, a
wholly-owned subsidiary of Janus Capital, is a distributor of the Shares.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 9
<PAGE>
SHAREHOLDER'S GUIDE
INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE FUNDS DIRECTLY. SHARES MAY BE
PURCHASED OR REDEEMED ONLY THROUGH FINANCIAL INSTITUTIONS IN CONNECTION WITH
TRUST ACCOUNTS, CASH MANAGEMENT PROGRAMS AND SIMILAR PROGRAMS. YOUR FINANCIAL
INSTITUTION WILL PROVIDE YOU WITH INSTRUCTIONS ON PURCHASING OR REDEEMING
SHARES.
PURCHASES
Purchases of Fund Shares may be made only through omnibus accounts of Financial
Institutions in connection with trust accounts, cash management programs and
similar programs. Your Financial Institution will provide you with instructions
on purchasing Shares.
All investments in the Funds are credited to a participating Financial
Institution's omnibus account upon acceptance of the investment by a Fund.
Investments will be processed at the NAV next determined after an order is
received and accepted by a Fund.
Each Fund reserves the right to reject any specific purchase order. Purchase
orders may be refused if, in Janus Capital's opinion, they are of a size that
would disrupt the management of a Fund. Any Fund may discontinue sales of its
Shares if management believes that a substantial further increase may adversely
affect that Fund's ability to achieve its investment objective. In such event,
however, it is anticipated that existing Financial Institution customers in that
Fund would be permitted to continue to authorize investment in such Fund and to
reinvest any dividends or capital gains distributions.
MINIMUM INVESTMENT
There is a $250,000 initial aggregate investment minimum by each Financial
Institution. The Funds may, in their discretion, waive this minimum under
certain circumstances but, in such event, the minimum must be reached within 90
days of opening the account. Financial Institutions who do not maintain the
$250,000 minimum will be given the option of requesting their customers to
exchange into Investor Shares if the required minimum investment for Investor
Shares is met or having their customers' Shares redeemed.
NET ASSET VALUE
The net asset value ("NAV") of the Shares is determined at the close of the
regular trading session of the New York Stock Exchange (normally 4:00 p.m., New
York time) each day that both the Exchange and the New York Federal Reserve Bank
are open. NAV per share is determined by dividing the total value of the
securities and other assets, less liabilities, by the total number of Shares
outstanding. Portfolio securities are valued at their amortized cost. Amortized
cost valuation involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity (or such other date as permitted by
Rule 2a-7) of any discount or premium. If fluctuating interest rates cause the
market value of a portfolio to deviate more than 1/2 of 1% from the value
determined on the basis of amortized cost, the Trustees will consider whether
any action, such as adjusting the Share's NAV to reflect current market
conditions, should be initiated to prevent any material dilutive effect on
shareholders.
SHARE CERTIFICATES
Share certificates are not available for the Shares in order to maintain the
general liquidity that is representative of a money market fund and to help
facilitate transactions in shareholder accounts.
REDEMPTIONS
Redemptions, like purchases, may be effected only through the accounts of
participating Financial Institutions. Your Financial Institution will provide
you with instructions on redeeming shares.
Shares of any Fund may be redeemed on any business day. Redemptions are
processed at the NAV next calculated after receipt and acceptance of the
redemption order by the Fund. Redemption proceeds will normally be wired to the
participating Financial Institution the business day following receipt of the
redemption order, but in no event later than seven days after receipt of such
order.
SHAREHOLDER COMMUNICATIONS
Shareholders will receive annual and semiannual reports including the financial
statements of the Funds that they have authorized for investment from their
Financial Institution. Each report will show the investments owned by each Fund
and the market values thereof, as well as other information about the Funds and
their operations. The Trust's fiscal year ends October 31.
JANUS MONEY MARKET FUNDS - SERVICE SHARES PROSPECTUS 10
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 24, 1996
[LOGO]
Janus Investment Fund
100 Fillmore Street
Denver, CO 80206-4923
- --------------------------------------------------------------------------------
Statement of Additional Information
___________, 1996
- --------------------------------------------------------------------------------
Janus Money Market Fund
Janus Government Money Market Fund
Janus Tax-Exempt Money Market Fund
Service Shares
This Statement of Additional Information ("SAI") expands upon and
supplements the information contained in the current Prospectus for the Service
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 ___________, 1996, which is incorporated by reference into this
SAI and may be obtained from the Trust at the above phone number or address.
This SAI contains additional and more detailed information about the Funds'
operations and activities than the Prospectus.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
1
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Statement of Additional Information
Table of Contents
Page
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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 ................................... 8
Custodian, Transfer Agent and Certain Affiliations ..................... 9
Portfolio Transactions and Brokerage ................................... 10
Officers and Trustees .................................................. 10
Purchase of Shares ..................................................... 12
Redemptions of Shares .................................................. 12
Shareholder Accounts ................................................... 13
Dividends and Tax Status ............................................... 13
Miscellaneous Information .............................................. 13
Shares of the Trust ................................................. 14
Voting Rights ....................................................... 14
Independent Accountants ............................................. 14
Registration Statement .............................................. 14
Financial Statements ................................................... 14
Appendix A - Description of Securities Ratings ......................... 15
Appendix B - Description of Municipal Securities ....................... 17
- --------------------------------------------------------------------------------
2
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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
class of Shares if a matter affects just that Fund or that class of Shares), or
(ii) 67% or more of the voting securities present at a meeting if the holders of
more than 50% of the outstanding voting securities of the Trust (or a particular
Fund or class of Shares) are present or represented by proxy.
As used in the restrictions set forth below and as used elsewhere in this
SAI, the term "U.S. Government Securities" shall have the meaning set forth in
the Investment Company Act of 1940, as amended (the "1940 Act"). The 1940 Act
defines U.S. Government Securities as securities issued or guaranteed by the
United States government, its agencies or instrumentalities. U.S. Government
Securities may also include repurchase agreements collateralized and municipal
securities escrowed with or refunded with escrowed U.S. government securities.
The 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, the Funds are also 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 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:
3
<PAGE>
(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. Until the
amendments to Rule 2a-7 become effective, up to 25% of Janus Tax-Exempt Money
Market Fund's assets may be invested without regard to the foregoing
limitations.
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, in certain cases) 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.
4
<PAGE>
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 investment.
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 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
5
<PAGE>
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.
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."
6
<PAGE>
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.
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, IBC/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. The Funds may also compare the Shares' yield to those of certain U.S.
Treasury obligations or other money market instruments.
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.
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.
7
<PAGE>
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 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, 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
value of each Fund's average daily net assets of the advisory fee. Janus Capital
may modify or terminate the waiver at any time upon 90 days' notice to the
Trustees. In addition, the Funds pay brokerage commissions or 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 .40% 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. 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 .30% for that period. Janus
Capital may terminate the waiver at any time upon 90 days' notice to the
Trustees.
Janus Capital may use all or a portion of its administration fee to
compensate Financial Institutions for providing administrative services to their
customers who invest in the Shares. The types of services that the Financial
Institutions would provide include serving as the sole shareholder of record,
shareholder recordkeeping, processing and aggregating purchase and redemption
transactions, providing periodic statements, forwarding shareholder reports and
other materials, and providing other similar services that the Funds would have
to perform if they were dealing directly with the beneficial owners, rather than
the Financial Institutions, as shareholders of record.
The following table summarizes the advisory fees paid by the Funds for the
fiscal years ended October 31:
<TABLE>
1996 1995
[TO BE FILED BY AMENDMENT]
Advisory Advisory Advisory Advisory
Fees Prior Fees After Fees Prior Fees After
Fund Name to Waiver Waiver to Waiver Waiver
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Janus Money Market Fund $ $
Janus Government Money Market Fund $ $
Janus Tax-Exempt Money Market Fund $ $
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Advisory Agreements for each Fund became effective on December 9, 1994
and will continue in effect until June 16, 1997, and thereafter from year to
year so long as such continuance is approved annually by a majority of the
Trustees who are not parties to the Advisory 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
8
<PAGE>
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 Capital, including the
Funds, are made independently from those for any other account that is or may in
the future become managed by Janus Capital or its affiliates. If, however, a
number of accounts managed by Janus Capital are contemporaneously engaged in the
purchase or sale of the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by an account or the size of the position obtained or liquidated for an
account. Pursuant to an exemptive order granted by the SEC, the Funds and other
funds advised by Janus Capital may also transfer daily uninvested cash balances
into one or more joint trading accounts. Assets in the joint trading accounts
are invested in money market instruments and the proceeds are allocated to the
participating funds on a pro rata basis.
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 does not permit portfolio
managers 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. In addition, 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,
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.
9
<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.
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. These research and other services may include, but are not limited to,
general economic and security market reviews, industry and company reviews,
evaluations of securities, recommendations as to the purchase and sale of
securities and access to third party publications, computer and electronic
equipment and software. Research received from brokers or dealers is
supplemental to Janus Capital's own research efforts.
[For the fiscal year ended October 31, 1996, the Funds did not incur any
brokerage commissions. Brokerage commissions are not normally charged on the
purchase and sale of money market instruments.]
Janus Capital may use research products and services in servicing other
accounts in addition to the Funds. If Janus Capital determines that any research
product or service has a mixed use, such that it also serves functions that do
not assist in the investment decision-making process, Janus Capital may allocate
the costs of such service or product accordingly. Only that portion of the
product or service that Janus Capital determines will assist it in the
investment decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus Capital.
Janus Capital may 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.
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
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, III*# - Trustee and Executive Vice President
100 Fillmore Street
Denver, CO 80206-4923
Trustee and Executive Vice President of Janus Aspen Series. Chief
Investment Officer, Vice President and Director of Janus Capital. Executive
Vice President and Portfolio Manager of Janus Fund series of the Trust.
- --------------------------------------------------------------------------------
* Interested person of the Trust and of Janus Capital.
# Member of the Executive Committee.
10
<PAGE>
Sharon S. Pichler* - Executive Vice President and Portfolio Manager
100 Fillmore Street
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).
David C. Tucker* - Vice President and General Counsel
100 Fillmore Street
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. Director,
Vice President and Secretary of Janus Capital International Ltd.
Steven R. Goodbarn* - Vice President and Chief Financial Officer
100 Fillmore Street
Denver, CO 80206-4923
Vice President and Chief Financial Officer of Janus Aspen Series. Vice
President of Finance, Treasurer and Chief Financial Officer of Janus
Service, Janus Distributors and Janus Capital. Director of IDEX and Janus
Distributors. Director, Treasurer and Vice President of Finance of Janus
Capital International Ltd. Formerly (1979 to 1992), with the accounting
firm of Price Waterhouse LLP, Denver, Colorado.
Glenn P. O'Flaherty* - Treasurer and Chief Accounting Officer
100 Fillmore Street
Denver, CO 80206-4923
Treasurer and Chief Accounting Officer of Janus Aspen Series. Director of
Fund Accounting of Janus Capital.
Kelley Abbott Howes* - Secretary
100 Fillmore Street
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 services).
John W. Shepardson# - Trustee
P.O. Box 9591
Denver, CO 80209
Trustee of Janus Aspen Series. Historian.
William D. Stewart# - Trustee
5330 Sterling Drive
Boulder, CO 80302
Trustee of Janus Aspen Series. President of HPS Corporation, Boulder,
Colorado (manufacturer of vacuum fittings and valves).
Gary O. Loo - Trustee
102 N. Cascade Avenue, Suite 500
Colorado Springs, CO 80903
Trustee of Janus Aspen Series. President and a Director of High Valley
Group, Inc., Colorado Springs, Colorado (investments) since 1987.
Dennis B. Mullen - Trustee
1601 114th Avenue, SE
Alderwood Building, Suite 130
Bellevue, WA 98004
Trustee of Janus Aspen Series. President and Chief Executive Officer of BC
Northwest, L.P., a franchise of Boston Chicken, Inc., Bellevue, Washington
(restaurant chain). Formerly (1982 to 1993), Chairman, President and Chief
Executive Officer of Famous Restaurants, Inc., Scottsdale, Arizona
(restaurant chain).
- --------------------------------------------------------------------------------
* Interested person of the Trust and of Janus Capital.
# Member of the Executive Committee.
11
<PAGE>
Martin H. Waldinger - Trustee
4940 Sandshore Court
San Diego, CA 92130
Trustee of Janus Aspen Series. Private Consultant and Director of Run
Technologies, Inc., a software development firm, San Carlos, California.
Formerly (1989 to 1993), President and Chief Executive Officer of
Bridgecliff Management Services, Campbell, California (a condominium
association management company).
The Trustees are responsible for major decisions relating to 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 Money Market Funds Committee, consisting of Messrs. Craig, Shepardson,
Loo and Waldinger, monitors the compliance with policies and procedures adopted
particularly for money market funds.
The following table shows the aggregate compensation paid to each Trustee
by the Funds described in this SAI 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>
Aggregate Compensation
from the Funds for fiscal year Total Compensation from the
ended October 31, 1996 Janus Funds for calendar year
Name of Person, Position [TO BE FILED BY AMENDMENT] ended December 31, 1995**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman* $ --
James P. Craig, Trustee* $ --
John W. Shepardson, Trustee $ $56,101
William D. Stewart, Trustee $ $53,228
Gary O. Loo, Trustee $ $50,365
Dennis B. Mullen, Trustee $ $53,228
Martin H. Waldinger, Trustee $ $53,228
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</TABLE>
*An interested person of the Funds and of Janus Capital. Compensated by Janus
Capital and not the Funds. **As of December 31, 1995, Janus Funds consisted of
two registered investment companies comprised of a total of 26 funds.
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. A Fund's net asset value is calculated each day that both
the NYSE and the New York Federal Reserve Bank are open. 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.
REDEMPTIONS OF SHARES
Redemptions, like purchases, may only be effected through the trust
accounts, cash management programs and similar programs of participating banks
and financial institutions. Shares normally will be redeemed for cash, although
each Fund retains the right to redeem its shares in kind under unusual
circumstances, in order to protect the interests of remaining shareholders, by
delivery of securities selected from its assets at its discretion. However, the
Funds are governed by Rule 18f-1 under the 1940 Act, which requires each Fund to
redeem shares solely in cash up to the lesser of $250,000 or 1% of the NAV of
that Fund during any 90-day period for any one shareholder. Should redemptions
by any shareholder exceed such limitation, a Fund will have the option of
redeeming the excess in cash or in kind. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage costs in converting the assets to
cash. The method of valuing securities used to make redemptions in kind will be
the same as the method of valuing portfolio securities described under "Shares
of the Trust" and such valuation will be made as of the same time the redemption
price is determined.
The right to require the Funds to redeem its shares may be suspended, or
the date of payment may be postponed, whenever (1) trading on the NYSE is
restricted, as determined by the SEC, or the NYSE is closed except for holidays
and weekends, (2) the SEC permits such suspension and so orders, or (3) an
emergency exists as determined by the SEC so that disposal of securities or
determination of NAV is not reasonably practicable.
12
<PAGE>
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 or writing your Financial Institution.
DIVIDENDS AND TAX STATUS
Dividends representing substantially all of the net investment income and
any net realized gains on sales of securities are declared daily, Saturdays,
Sundays and holidays included, and distributed on the last business day of each
month. If a month begins on a Saturday, Sunday or holiday, dividends for those
days are declared at the end of the preceding month and distributed on the first
business day of the month. 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 bank business day
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 bank
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. Closing times for purchase and redemption of Shares may be changed for
days in which the bond market or the New York Stock Exchange close early.
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 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.
Some money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability. If the
structure does not perform as intended, adverse tax or investment consequences
may result. Neither the Internal Revenue Service nor any other regulatory
authority has ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could adversely affect
the value, liquidity, or tax treatment of the income received from these
securities or the nature and timing of distributions made by a portfolio.
MISCELLANEOUS INFORMATION
Each Fund is a series of the Trust, a Massachusetts Business Trust that was
created on February 11, 1986. The Trust is an open-end management investment
company registered under the 1940 Act. As of the date of this SAI, the Trust
consists of 20 separate series, three of which currently offer three classes of
Shares. 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.
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<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 three classes of shares by separate
prospectuses. The Shares discussed in this SAI are offered only through
Financial Institutions that meet minimum investment requirements in connection
with trust accounts, cash management programs and similar programs provided to
their customers. A second class of shares, Institutional Shares, is offered to
individual, institutional and corporate clients and foundations and trusts
meeting certain minimum investment criteria. A third 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 or if the interest of the series or class in the
matter differs from the interests of other series or classes of the Trust.
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.
FINANCIAL STATEMENTS
No financial statements are presented for the Shares because the Shares did
not commence operations until November 22, 1996.
14
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
Moody's and Standard & Poor's
Municipal and Corporate Bonds and Municipal Loans
The two highest ratings of Standard & Poor's Ratings Services ("S&P") for
municipal and corporate bonds are AAA and AA. Bonds rated AAA have the highest
rating assigned by S&P to a debt obligation. Capacity to pay interest and repay
principal is extremely strong. Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest rated issues only in a
small degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within that rating category.
The two highest ratings of Moody's Investors Service, Inc. ("Moody's") for
municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are judged by
Moody's to be of the best quality. Bonds rated Aa are judged to be of high
quality by all standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Moody's states that Aa bonds are rated
lower than the best bonds because margins of protection or other elements make
long-term risks appear somewhat larger than Aaa securities. The generic rating
Aa may be modified by the addition of the numerals 1, 2 or 3. The modifier 1
indicates that the security ranks in the higher end of the Aa rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of such rating category.
Short Term Municipal Loans
S&P's highest rating for short-term municipal loans is SP-1. S&P states
that short-term municipal securities bearing the SP-1 designation have a strong
capacity to pay principal and interest. Those issues rated SP-1 which are
determined to possess a very strong capacity to pay debt service will be given a
plus (+) designation. Issues rated SP-2 have satisfactory capacity to pay
principal and interest with some vulnerability to adverse financial and economic
changes over the term of the notes.
Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1 are of
the best quality, enjoying strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2 designation are
of high quality, with margins of protection ample although not so large as in
the MIG-1/VMIG-1 group.
Other Short-Term Debt Securities
Prime-1 and Prime-2 are the two highest ratings assigned by Moody's for
other short-term debt securities and commercial paper, and A-1 and A-2 are the
two highest ratings for commercial paper assigned by S&P. Moody's uses the
numbers 1, 2 and 3 to denote relative strength within its highest classification
of Prime, while S&P uses the numbers 1, 2 and 3 to denote relative strength
within its highest classification of A. Issuers rated Prime-1 by Moody's have a
superior ability for repayment of senior short-term debt obligations and have
many of the following characteristics: leading market positions in
well-established industries, high rates of return on funds employed,
conservative capitalization structure with moderate reliance on debt and ample
asset protection, broad margins in earnings coverage of fixed financial charges
and high internal cash generation, and well established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 by Moody's have a strong ability for repayment of senior short-term debt
obligations and display many of the same characteristics displayed by issuers
rated Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a strong
degree of safety regarding timely repayment. Those issues determined to possess
extremely strong safety characteristics are denoted with a 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+.
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.
15
<PAGE>
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.
16
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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 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
17
<PAGE>
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.
18
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JANUS INVESTMENT FUND
PART C - OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
List all financial statements and exhibits filed as part of the
Registration Statement.
(a)(1) Financial Statements Included in the Prospectus:
Financial Highlights for the Service Shares of each of the money
market funds:
Not Applicable
(a)(2) Financial Statements included in the Statement of Additional
Information for the Service Shares of each of the money market
funds:
Not Applicable
(b) Exhibits:
Exhibit 1 (a) Agreement and Declaration of Trust,
dated February 11, 1986 is incorporated
herein by reference to Exhibit 1 to
Post-Effective Amendment No. 30.
(b) Certificate of Designation for Janus
Growth and Income Fund is incorporated
herein by reference to Exhibit 1(b) to
Post-Effective Amendment No. 42.
(c) Certificate of Designation for Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 1(c) to Post-
Effective Amendment No. 42.
(d) Certificate of Designation for Janus
Twenty Fund is incorporated herein by
reference to Exhibit 1(d) to Post-
Effective Amendment No. 46.
(e) Certificate of Designation for Janus
Flexible Income Fund is incorporated
herein by reference to Exhibit 1(e) to
Post-Effective Amendment No. 46.
(f) Certificate of Designation for Janus
Intermediate Government Securities Fund
is incorporated herein by reference to
Exhibit 1(f) to Post-Effective Amendment
No. 46.
(g) Certificate of Designation for Janus
Venture Fund is incorporated herein by
reference to Exhibit 1(g) to Post-
Effective Amendment No. 47.
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(h) Certificate of Designation for Janus
Enterprise Fund is incorporated herein
by reference to Exhibit 1(h) to Post-
Effective Amendment No. 48.
(i) Certificate of Designation for Janus
Balanced Fund is incorporated herein by
reference to Exhibit 1(i) to Post-
Effective Amendment No. 48.
(j) Certificate of Designation for Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 1(j) to
Post-Effective Amendment No. 48.
(k) Certificate of Designation for Janus
Federal Tax-Exempt Fund is incorporated
herein by reference to Exhibit 1(k) to
Post-Effective Amendment No. 54.
(l) Certificate of Designation for Janus
Mercury Fund is incorporated herein by
reference to Exhibit 1(l) to Post-
Effective Amendment No. 54.
(m) Certificate of Designation for Janus
Overseas Fund is incorporated herein by
reference to Exhibit 1(m) to
Post-Effective Amendment No. 60.
(n) Form of Amendment to the Registrant's
Agreement and Declaration of Trust is
incorporated herein by reference to
Exhibit 1(n) to Post-Effective Amendment
No. 62.
(o) Form of Certificate of Designation for
Janus Money Market Fund, Janus
Government Money Market Fund and Janus
Tax-Exempt Money Market Fund is
incorporated herein by reference to
Exhibit 1(o) to Post-Effective Amendment
No. 62.
(p) Form of Certificate of Designation for
Janus High-Yield Fund and Janus Olympus
Fund is incorporated herein by reference
to Exhibit 1(p) to Post-Effective
Amendment No. 68.
(q) Certificate of Designation for Janus
Equity Income Fund is incorporated
herein by reference to Exhibit 1(q) to
Post-Effective Amendment No. 72.
(r) Form of Certificate of Establishment and
Designation for Janus Special Situations
Fund is incorporated herein by reference
to Exhibit 1(r) to Post-Effective
Amendment No. 75.
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(s) Form of Amendment to Registrant's
Agreement and Declaration of Trust is
incorporated herein by reference to
Exhibit 1(s) to Post-Effective Amendment
No. 75.
Exhibit 2 (a) Restated Bylaws are incorporated herein
by reference to Exhibit 2(a) to
Post-Effective Amendment No. 71.
(b) First Amendment to the Bylaws is
incorporated herein by reference to
Exhibit 2(b) to Post-Effective Amendment
No. 71.
Exhibit 3 Not Applicable.
Exhibit 4 (a) Specimen Stock Certificate for Janus
Fund(1) is incorporated herein by
reference to Exhibit 4(b) to
Post-Effective Amendment No. 42.
(b) Specimen Stock Certificate for Janus
Growth and Income Fund is incorporated
herein by reference to Exhibit 4(b) to
Post-Effective Amendment No. 42.
(c) Specimen Stock Certificate for Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 4(c) to Post-
Effective Amendment No. 42.
(d) Specimen Stock Certificate for Janus
Twenty Fund(1) is incorporated herein by
reference to Exhibit 4(d) to Post-
Effective Amendment No. 46.
(e) Specimen Stock Certificate for Janus
Flexible Income Fund(1) is incorporated
herein by reference to Exhibit 4(e) to
Post-Effective Amendment No. 46.
(f) Specimen Stock Certificate for Janus
Intermediate Government Securities
Fund(1) is incorporated herein by
reference to Exhibit 4(f) to
Post-Effective Amendment No. 46.
(g) Specimen Stock Certificate for Janus
Venture Fund(1) is incorporated herein
by reference to Exhibit 4(g) to
Post-Effective Amendment 47.
(h) Specimen Stock Certificate for Janus
Enterprise Fund is incorporated herein
by reference to Exhibit 4(h) to Post-
Effective Amendment No. 48.
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(1) Outstanding certificates representing shares of predecessor entity to this
series of the Trust are deemed to represent shares of this series.
C-3
<PAGE>
(i) Specimen Stock Certificate for Janus
Balanced Fund is incorporated herein by
reference to Exhibit 4(i) to Post-
Effective Amendment No. 48.
(j) Specimen Stock Certificate for Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 4(j) to
Post-Effective Amendment No. 48.
(k) Specimen Stock Certificate for Janus
Federal Tax-Exempt Fund is incorporated
herein by reference to Exhibit 4(k) to
Post-Effective Amendment No. 54.
(l) Specimen Stock Certificate for Janus
Mercury Fund is incorporated herein by
reference to Exhibit 4(l) to Post-
Effective Amendment No. 54.
(m) Specimen Stock Certificate for Janus
Overseas Fund is incorporated herein by
reference to Exhibit 4(m) to
Post-Effective Amendment No. 60.
(n) Specimen Stock Certificates for Janus
High-Yield Fund and Janus Olympus Fund
are incorporated herein by reference to
Exhibit 4(n) to Post-Effective Amendment
No. 68.
(o) Specimen Stock Certificate for Janus
Equity Income Fund is incorporated
herein by reference to Exhibit 4(o) to
Post-Effective Amendment No. 72.
(p) Specimen Stock Certificate for Janus
Special Situations Fund is incorporated
herein by reference to Exhibit 4(p) to
Post-Effective Amendment No. 75.
Exhibit 5 (a) Investment Advisory Agreement for Janus
Fund is incorporated herein by reference
to Exhibit 5 to Post-Effective Amendment
No. 30.
(b) Investment Advisory Agreement for Janus
Growth and Income Fund and Janus
Worldwide Fund is incorporated herein by
reference to Exhibit 5(b) to
Post-Effective Amendment No. 42.
(c) Form of Investment Advisory Agreement
for Janus Twenty Fund and Janus Venture
Fund is incorporated herein by reference
to Exhibit 5(c) to Post-Effective
Amendment No. 46.
(d) Form of Investment Advisory Agreement
for Janus Flexible Income Fund and Janus
Intermediate Government Securities Fund
is incorporated herein by reference to
Exhibit 5(d) to Post-Effective Amendment
No. 46.
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<PAGE>
(e) Form of Investment Advisory Agreement
for Janus Enterprise Fund, Janus
Balanced Fund and Janus Short-Term Bond
Fund is incorporated herein by reference
to Exhibit 5(e) to Post-Effective
Amendment No. 48.
(f) Form of Investment Advisory Agreement
for Janus Federal Tax-Exempt Fund and
Janus Mercury Fund is incorporated
herein by reference to Exhibit 5(f) to
Post-Effective Amendment No. 54.
(g) Form of Investment Advisory Agreement
for Janus Overseas Fund is incorporated
herein by reference to Exhibit 5(g) to
Post-Effective Amendment No. 60.
(h) Form of Investment Advisory Agreement
for Janus Money Market Fund, Janus
Government Money Market Fund and Janus
Tax-Exempt Money Market Fund is
incorporated herein by reference to
Exhibit 5(h) to Post-Effective Amendment
No. 64.
(i) Restated form of Investment Advisory
Agreement for Janus High-Yield Fund is
filed herein as Exhibit 5(i).
(j) Restated form of Investment Advisory
Agreement for Janus Olympus Fund is
filed herein as Exhibit 5(j).
(k) Form of Investment Advisory Agreement
for Janus Equity Income Fund is
incorporated herein by reference to
Exhibit 5(k) to Post-Effective Amendment
No. 73.
(l) Form of Investment Advisory Agreement
for Janus Special Situations Fund is
incorporated herein by reference to
Exhibit 5(l) to Post-Effective Amendment
No. 75.
Exhibit 6 Form of Distribution Agreement between
Janus Investment Fund and Janus
Distributors, Inc. is incorporated
herein by reference to Exhibit 6 to
Post-Effective Amendment No. 57.
Exhibit 7 Not Applicable.
Exhibit 8 (a) Custodian Contract between Janus
Investment Fund and State Street Bank
and Trust Company is incorporated herein
by reference to Exhibit 8(a) to
Post-Effective Amendment No. 32.
(b) Amendment dated April 25, 1990 of State
Street Custodian Contract is
incorporated herein by reference to
Exhibit 8(b) to Post-Effective Amendment
No. 40.
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<PAGE>
(c) Letter Agreement dated February 1, 1991
regarding State Street Custodian
Contract is incorporated herein by
reference to Exhibit 8(c) to
Post-Effective Amendment No. 42.
(d) Custodian Contract between Janus
Investment Fund and Investors Fiduciary
Trust Company is incorporated herein by
reference to Exhibit 8(d) to
Post-Effective Amendment No. 42.
(e) Letter Agreement dated October 9, 1992
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(e) to
Post-Effective Amendment No. 52.
(f) Letter Agreement dated April 28, 1993
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(f) to
Post-Effective Amendment No. 60.
(g) Letter Agreement dated April 4, 1994
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(g) to
Post-Effective Amendment No. 64.
(h) Form of Custody Agreement between Janus
Investment Fund, on behalf of Janus
Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt
Money Market Fund, and United Missouri
Bank, N.A. is incorporated herein by
reference to Exhibit 8(h) to Post-
Effective Amendment No. 64.
(i) Letter Agreement dated December 12, 1995
regarding State Street Custodian
Contract is incorporated herein by
reference to Exhibit 8(i) to
Post-Effective Amendment No. 72.
(j) Amendment dated October 11, 1995 of
State Street Custodian Contract is
incorporated herein by reference to
Exhibit 8(j) to Post-Effective Amendment
No. 71.
(k) Form of Amendment dated September 10,
1996 of State Street Custodian Contract
is incorporated herein by reference to
Exhibit 8(k) to Post-Effective Amendment
No. 75.
(l) Letter Agreement dated September 10,
1996 regarding State Street Custodian
Contract is incorporated herein by
reference to Exhibit 8(l) to
Post-Effective Amendment No. 75.
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<PAGE>
(m) Form of Subcustodian Contract between
United Missouri Bank, N.A., and State
Street Bank and Trust Company is
incorporated herein by reference to
Exhibit 8(m) to Post-Effective Amendment
No. 75.
Exhibit 9 (a) Transfer Agency Agreement with Investors
Fiduciary Trust Company is hereby
withdrawn.
(b) Subagency Agreement between Janus
Service Corporation and Investors
Fiduciary Trust Company is hereby
withdrawn.
(c) Form of Administration Agreement with
Janus Capital Corporation for Janus
Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein
by reference to Exhibit 9(c) to
Post-Effective Amendment No. 64.
(d) Transfer Agency Agreement dated December
9, 1994 with Janus Service Corporation
for Janus Money Market Fund, Janus
Government Money Market Fund and Janus
Tax-Exempt Money Market Fund filed as
Exhibit 9(d) to Post-Effective Amendment
No. 64 is withdrawn.
(e) Transfer Agency Agreement dated
September 27, 1995 with Janus Service
Corporation for Janus Money Market Fund,
Janus Government Money Market Fund,
Janus Tax-Exempt Money Market Fund,
Janus High-Yield Fund and Janus Olympus
Fund is incorporated herein by reference
to Exhibit 9(e) to Post-Effective
Amendment No. 70.
(f) Letter Agreement dated December 21, 1995
regarding Janus Service Corporation
Transfer Agency Agreement is
incorporated herein by reference to
Exhibit 9(f) to Post-Effective Amendment
No. 72.
(g) Letter Agreement dated May 21, 1996
regarding Janus Service Corporation
Transfer Agency Agreement is
incorporated by reference to Exhibit
9(g) to Post-Effective Amendment No. 73.
(h) Form of Amended Administration Agreement
with Janus Capital Corporation for Janus
Money Market Fund, Janus Government
Money Market Fund, and Janus Tax-Exempt
Money Market Fund is filed herein as
Exhibit 9(h).
(i) Letter Agreement dated September 10,
1996 regarding Janus Service Corporation
Transfer Agency Agreement is filed
herein as Exhibit 9(i).
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<PAGE>
Exhibit 10 (a) Opinion and Consent of Messrs. Davis,
Graham & Stubbs with respect to shares
of Janus Fund is incorporated herein by
reference to Exhibit 10 (a) to
Post-Effective Amendment No. 31.
(b) Opinion and Consent of Fund Counsel with
respect to shares of Janus Growth and
Income Fund and Janus Worldwide Fund is
incorporated herein by reference to
Exhibit 10(b) to Post-Effective
Amendment 42.
(c) Opinion and Consent of Fund Counsel with
respect to shares of Janus Enterprise
Fund, Janus Balanced Fund and Janus
Short-Term Bond Fund is incorporated
herein by reference to Exhibit 10(d) to
Post-Effective Amendment No. 48.
(d) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Twenty Fund is incorporated herein
by reference to Exhibit 10(e) to Post-
Effective Amendment No. 49.
(e) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Venture Fund is incorporated
herein by reference to Exhibit 10(f) to
Post-Effective Amendment No. 49.
(f) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Flexible Income Fund is
incorporated herein by reference to
Exhibit 10(g) to Post-Effective
Amendment No. 49.
(g) Opinion and Consent of Messrs. Sullivan
and Worcester with respect to shares of
Janus Intermediate Government Securities
Fund is incorporated herein by reference
to Exhibit 10(h) to Post-Effective
Amendment No. 49.
(h) Opinion and Consent of Fund Counsel with
respect to shares of Janus Federal
Tax-Exempt Fund and Janus Mercury Fund
is incorporated herein by reference to
Exhibit 10(i) to Post-Effective
Amendment No. 54.
(i) Opinion and Consent of Fund Counsel with
respect to shares of Janus Overseas Fund
is incorporated herein by reference to
Exhibit 10(i) to Post-Effective
Amendment No. 60.
(j) Opinion and Consent of Fund Counsel with
respect to shares of Janus Money Market
Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market
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<PAGE>
Fund is incorporated herein by reference
to Exhibit 10(j) to Post-Effective
Amendment No. 62.
(k) Opinion and Consent of Fund Counsel with
respect to Institutional Shares of Janus
Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein
by reference to Exhibit 10(k) to
Post-Effective Amendment No. 65.
(l) Opinion and Consent of Fund Counsel with
respect to shares of Janus High-Yield
Fund and Janus Olympus Fund is
incorporated herein by reference to
Exhibit 10(l) to Post-Effective
Amendment No. 68.
(m) Opinion and Consent of Fund Counsel with
respect to shares of Janus Equity Income
Fund is incorporated herein by reference
to Exhibit 10(m) to Post-Effective
Amendment No. 72.
(n) Opinion and Consent of Fund Counsel with
respect to shares of Janus Special
Situations Fund is incorporated herein
by reference to Exhibit 10(n) to
Post-Effective Amendment No. 75.
(o) Opinion and Consent of Fund Counsel with
respect to shares of Janus Money Market
Fund, Janus Government Money Market
Fund, and Janus Tax-Exempt Money Market
Fund is filed herein as Exhibit 10(o).
Exhibit 11 Consent of Price Waterhouse LLP is filed
herein as Exhibit 11.
Exhibit 12 Not Applicable.
Exhibit 13 Not Applicable.
Exhibit 14 (a) Model Individual Retirement Plan is
incorporated herein by reference to
Exhibit 14(a) to Post-Effective
Amendment No. 57.
(b) Model Defined Contribution Retirement
Plan is incorporated herein by reference
to Exhibit 14(b) to Post-Effective
Amendment No. 41.
(c) Model Section 403(b)(7) Plan is
incorporated herein by reference to
Exhibit 14(c) to Post-Effective
Amendment No. 38.
Exhibit 15 Not Applicable.
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<PAGE>
Exhibit 16 (a) Computation of Total Return is
incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment
No. 44.
(b) Computation of Current Yield and
Effective Yield is incorporated herein
by reference to Exhibit 16(b) to Post-
Effective Amendment No. 67.
Exhibit 17 Powers of Attorney dated as of June 30,
1995, are incorporated herein by
reference to Exhibit 17 to Post-
Effective Amendment No. 67.
Exhibit 18 (a) Form of plan entered into by Janus Money
Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money
Market Fund pursuant to Rule 18f-3
setting forth the separate arrangement
and expense allocation of each class of
such Funds filed as Exhibit 18 to
Post-Effective Amendment No. 66 is
withdrawn.
(b) Restated form of Rule 18f-3 Plan entered
into by Janus Money Market Fund, Janus
Government Money Market Fund and Janus
Tax-Exempt Money Market Fund is
incorporated by reference to Exhibit
18(b) to Post-Effective Amendment No.
69.
(c) Amended and Restated form of Rule 18f-3
Plan entered into by Janus Money Market
Fund, Janus Government Money Market
Fund, and Janus Tax-Exempt Money Market
Fund is filed herein as Exhibit 18(c).
Exhibit 27 A Financial Data Schedule for the
following Fund will be filed by
amendment:
Janus Money Market Fund - Service Shares
Janus Government Money Market Fund
- Service Shares
Janus Tax-Exempt Money Market Fund
- Service Shares
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None
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<PAGE>
ITEM 26. Number of Holders of Securities
The number of record holders of shares of the Registrant as of August
15, 1996, was as follows:
Number of
Title of Class Record Holders
Janus Fund shares 800,829
Janus Growth and Income Fund shares 94,417
Janus Worldwide Fund shares 231,854
Janus Overseas Fund shares 38,479
Janus Twenty Fund shares 334,120
Janus Flexible Income Fund shares 31,098
Janus Intermediate Government
Securities Fund shares 4,576
Janus Venture Fund shares 132,657
Janus Enterprise Fund shares 83,543
Janus Balanced Fund shares 20,973
Janus Short-Term Bond Fund shares 4,400
Janus Federal Tax-Exempt Fund shares 3,867
Janus Mercury Fund shares 215,206
Janus Money Market Fund - Investor Shares 73,781
Janus Money Market Fund - Institutional Shares 87
Janus Money Market Fund - Service Shares N/A
Janus Government Money
Market Fund - Investor Shares 11,670
Janus Government Money
Market Fund - Institutional Shares 7
Janus Government Money
Market Fund - Service Shares N/A
Janus Tax-Exempt Money
Market Fund - Investor Shares 5,982
Janus Tax-Exempt Money
Market Fund - Institutional Shares 5
Janus Tax-Exempt Money
Market Fund - Service Shares N/A
Janus High-Yield Fund shares 5,023
Janus Olympus Fund shares 34,469
Janus Equity Income Fund shares 2,224
Janus Special Situations Fund shares N/A
ITEM 27. Indemnification
Article VIII of Janus Investment Fund's Agreement and Declaration of Trust
provides for indemnification of certain persons acting on behalf of the Funds.
In general, Trustees and officers will be indemnified against liability and
against all expenses of litigation incurred by them in connection with any
claim, action, suit or proceeding (or settlement of the same) in which they
become involved by virtue of their Fund office, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
or not opposed to the best interests of the Funds. A determination that a person
covered by the indemnification provisions is entitled to indemnification may be
made by the court or other body before which the proceeding is brought, or by
either a vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust nor parties to the proceeding or by an independent legal
counsel in a written opinion. The Funds also may advance money for these
expenses, provided that the Trustee or officer undertakes to repay the Funds if
his conduct is later determined to preclude indemnification, and that either he
provide
C-11
<PAGE>
security for the undertaking, the Trust be insured against losses resulting from
lawful advances or a majority of a quorum of disinterested Trustees, or
independent counsel in a written opinion, determines that he ultimately will be
found to be entitled to indemnification. The Trust also maintains a liability
insurance policy covering its Trustees and officers.
ITEM 28. Business and Other Connections of Investment Adviser
The only business of Janus Capital Corporation is to serve as the
investment adviser of the Registrant and as investment adviser or subadviser to
several other mutual funds and private and retirement accounts. Business
backgrounds of the principal executive officers and directors of the adviser
that also hold positions with the Registrant are included under "Officers and
Trustees" in the currently effective Statements of Additional Information of the
Registrant. The remaining principal executive officers of the investment adviser
and their positions with the adviser and affiliated entities are: Mark B.
Whiston, Vice President and Chief Marketing Officer of Janus Capital
Corporation, Director and President of Janus Capital International Ltd.;
Marjorie G. Hurd, Vice President of Janus Capital Corporation, Director and
President of Janus Service Corporation; and Stephen L. Stieneker, Assistant
General Counsel, Chief Compliance Officer and Vice President of Compliance of
Janus Capital Corporation. Mr. Michael E. Herman, a director of Janus Capital
Corporation, is Chairman of the Finance Committee (1990 to present) of Ewing
Marion Kauffman Foundation, 4900 Oak, Kansas City, Missouri 64112. Mr. Michael
N. Stolper, a director of Janus Capital Corporation, is President of Stolper &
Company, Inc., 525 "B" Street, Suite 1080, San Diego, California 92101, an
investment performance consultant. Mr. Thomas A. McDonnell, a director of Janus
Capital Corporation, is President, Chief Executive Officer and a Director of DST
Systems, Inc., 1055 Broadway, 9th Floor, Kansas City, Missouri 64105, provider
of data processing and recordkeeping services for various mutual funds, and is
Executive Vice President and a director of Kansas City Southern Industries,
Inc., 114 W. 11th Street, Kansas City, Missouri 64105, a publicly traded holding
company whose primary subsidiaries are engaged in transportation, information
processing and financial services. Mr. Landon H. Rowland, a director of Janus
Capital Corporation, is President and Chief Executive Officer of Kansas City
Southern Industries, Inc.
ITEM 29. Principal Underwriters
(a) Janus Distributors, Inc. ("Janus Distributors") does not serve as
a principal underwriter for any investment company other than
Registrant.
(b) The principal business address, positions with Janus Distributors
and positions with Registrant of David C. Tucker and Steven R.
Goodbarn, officers and directors of Janus Distributors, are
described under "Officers and Trustees" in the Statement of
Additional Information included in this Registration Statement.
The remaining principal executive officers of Janus Distributors
are Dana R. Cunningham, President, and Jennifer A. Davis,
Secretary. Mr. Cunningham and Ms. Davis do not hold any positions
with the Registrant. The principal business address of each
person is 100 Fillmore Street, Denver, Colorado 80206-4923.
(c) Not applicable.
C-12
<PAGE>
ITEM 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado
80206-4923, and by State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts 02101, and United Missouri Bank, P.O. Box 419226, Kansas City,
Missouri 64141-6226.
ITEM 31. Management Services
The Registrant has no management-related service contract which is not
discussed in Part A or Part B of this form.
ITEM 32. Undertakings
(a) Not applicable.
(b) The Registrant undertakes to file one or more post-effective
amendments for Janus Money Market Fund - Service Shares, Janus
Government Money Market Fund - Service Shares, and Janus
Tax-Exempt Money Market Fund - Service Shares, using financial
statements which need not be certified, within four to six months
of the later of the effective date of this Amendment to the
Registration Statement or the commencement of operations of the
Service Shares of such Funds.
(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
C-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Denver, and State of Colorado, on the
23rd day of September, 1996.
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Janus Investment Fund is organized under the Agreement and Declaration of
Trust of the Registrant dated February 11, 1986, a copy of which is on file with
the Secretary of State of The Commonwealth of Massachusetts. The obligations of
the Registrant hereunder are not binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Registrant personally, but bind
only the trust property of the Registrant, as provided in the Agreement and
Declaration of Trust of the Registrant. The execution of this Amendment to the
Registration Statement has been authorized by the Trustees of the Registrant and
this Amendment to the Registration Statement has been signed by an authorized
officer of the Registrant, acting as such, and neither such authorization by
such Trustees nor such execution by such officer shall be deemed to have been
made by any of them personally, but shall bind only the trust property of the
Registrant as provided in its Declaration of Trust.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Thomas H. Bailey President September 23, 1996
Thomas H. Bailey (Principal Executive
Officer) and Trustee
/s/ Steven R. Goodbarn Vice President and September 23, 1996
Steven R. Goodbarn Chief Financial Officer
(Principal Financial
Officer)
/s/ Glenn P. O'Flaherty Treasurer and Chief September 23, 1996
Glenn P. O'Flaherty Accounting Officer
(Principal Accounting
Officer)
<PAGE>
/s/ James P. Craig, III Trustee September 23, 1996
James P. Craig, III
Gary O. Loo* Trustee September 23, 1996
Gary O. Loo
Dennis B. Mullen* Trustee September 23, 1996
Dennis B. Mullen
John W. Shepardson* Trustee September 23, 1996
John W. Shepardson
William D. Stewart* Trustee September 23, 1996
William D. Stewart
Martin H. Waldinger* Trustee September 23, 1996
Martin H. Waldinger
/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact
<PAGE>
INDEX OF EXHIBITS
Exhibit 9(h) Form of Amended Administration Agreement
Exhibit 9(i) Letter Agreement to Transfer Agency Agreement
Exhibit 10(o) Opinion and Consent of Fund Counsel
Exhibit 11 Consent of Price Waterhouse
Exhibit 18(c) Amended and Restated Form of Rule 18f-3 Plan
EXHIBIT 9(h)
JANUS INVESTMENT FUND
ADMINISTRATION AGREEMENT
JANUS MONEY MARKET FUND
THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of
December, 1994, and amended on September 10, 1996, between JANUS INVESTMENT
FUND, a Massachusetts business trust (the "Trust"), on behalf of Janus Money
Market Fund (the "Fund"), a separate series of the Trust and JANUS CAPITAL
CORPORATION, a Colorado corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares of the Trust; and
WHEREAS, the Fund may offer shares in multiple classes representing
interest in the same portfolio of investments but having potentially different
distribution charges, exchange rights and investment minimum requirements (the
"Classes"); and
WHEREAS, the Trust and JCC have entered into a separate agreement for the
provision of investment advisory services; and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the administration of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Administrative Services. JCC shall provide, or arrange for and supervise
the provision by others of the following services to the Fund that are
incidental to its operations and business and appropriate for its Classes:
custody, transfer agency, and fund accounting services; shareholder servicing;
provision of office facilities and personnel necessary to carry on the business
of the Fund; preparation and filing of all documents necessary to obtain and
maintain registration and qualification of the shares of each Class with the
Securities and Exchange Commission and state securities commissions; clerical,
recordkeeping and bookkeeping services; preparation of reports for distribution
to shareholders of the Fund; preparation of prospectuses, statements of
additional information and proxy statements for the Fund or any Class thereof;
<PAGE>
preparation and filing of the Fund's required tax reports; preparation of
materials for all meetings of the Trustees (as such materials pertain to a Fund
or any Class thereof); preparation and review of contracts to which the Fund is
a party; monitoring and reporting to Fund officers the Fund's compliance with
investment policies and restrictions as set forth in the currently effective
prospectus and statement of additional information of the Fund.
2. Other Services. JCC is hereby authorized to furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as the Fund shall determine to be desirable.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
a. to keep JCC continuously and fully informed as to the composition
of the Fund's investment portfolio and the nature of all of its
assets and liabilities from time to time;
b. to furnish JCC with a certified copy of any financial statement
or report prepared for the Fund by certified or independent
public accountants and with copies of any financial statements or
reports made to the Fund's shareholders or to any governmental
body or securities exchange;
c. to furnish JCC with certified copies of the minutes of any and
all meetings of the Trustees of the Trust, together with any
exhibits presented to the Trustees at such meetings;
d. to furnish JCC with any further materials or information which
JCC may reasonably request to enable it to perform its functions
under this Agreement; and
e. to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. Compensation. The Fund shall pay JCC, for the administrative services
provided to the Fund or to any Class, fees calculated in the manner set forth on
Appendix A hereto. For the month during which this Agreement becomes effective
and the month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar days
of such month during which this Agreement is effective.
5. Expenses Borne by JCC. Except for those expenses borne by the Trust
pursuant to Section 6 below, JCC shall bear all expenses incurred in connection
with the operation of the Fund.
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<PAGE>
6. Expenses Borne by the Trust. The Trust shall bear the following
expenses: any compensation, fees, or reimbursements which the Trust pays to its
Trustees who are not interested persons of JCC ("Independent Trustees"); fees
and expenses of counsel to the Independent Trustees; fees and expenses of
consultants to the Fund; audit expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions; interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); expenses of shareholder meetings, including the preparation, printing
and distribution of proxy statements, notices and reports to shareholders; any
litigation and other extraordinary expenses.
7. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities (as
defined in the 1940 Act), provided in either case that sixty (60) days advance
written notice of termination be given to JCC at its principal place of
business. This Agreement may be terminated by JCC at any time, without penalty,
by giving sixty (60) days advance written notice of termination to the Trust,
addressed to its principal place of business.
8. Term. This Agreement shall continue in effect until June 16, 1996, and
for successive annual periods thereafter unless sooner terminated in accordance
with Section 7 hereof.
9. Amendments. This Agreement may be amended by the parties only if such
amendment is in writing and signed by the parties to this Agreement.
10. Allocation of Expenses.
a. The Trustees shall determine the basis for making an appropriate
allocation of the Trust's expenses (other than those directly
attributable to the Fund) between each Fund and the other series
of the Trust.
b. The Trustees shall determine the basis for making an appropriate
allocation of the Fund's expenses (other than those directly
attributable to a Class) between each Class of the Fund.
c. JCC will furnish to the Trustees such information as to the
nature and amounts of the expenses incurred by JCC in performing
its obligations under this Agreement as the Trustees may
reasonably require in order to enable the Trustees to allocate
expenses as provided in paragraphs (a) and (b) of this Section
10.
11. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable
-3-
<PAGE>
for any of the foregoing liabilities. The Trust's Declaration of Trust, as
amended from time to time, is on file in the Office of the Secretary of State of
the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
12. Limitation of Liability of JCC. JCC shall not be liable for any error
of judgment or mistake of law, for any loss arising out of this Agreement, or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 12,
"JCC" shall include any affiliate of JCC or any other person retained by JCC
performing services for the Trust contemplated hereunder and directors, officers
and employees of JCC and such affiliates or any such person.
13. Activities of JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Administration Agreement as of the date and year first above
written.
JANUS CAPITAL CORPORATION
By: /s/ Steven R. Goodbarn
Name: Steven R. Goodbarn
Title: Vice President
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Name: Thomas H. Bailey
Title: President
-4-
<PAGE>
Revised as of September 10, 1996
APPENDIX A
In accordance with Section 4 of this Agreement, the Fund shall compensate JCC
for services provided to each Class of the Fund in accordance with the following
schedule:
I. JANUS MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.15% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
II. JANUS MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.50% of
the closing aggregate net asset value of the shares of each such Class for each
day of such month.
III. JANUS MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.40% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
<PAGE>
JANUS INVESTMENT FUND
ADMINISTRATION AGREEMENT
JANUS GOVERNMENT MONEY MARKET FUND
THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of
December, 1994, between JANUS INVESTMENT FUND, a Massachusetts business trust
(the "Trust"), on behalf of Janus Government Money Market Fund (the "Fund"), a
separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado
corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares of the Trust; and
WHEREAS, the Fund may offer shares in multiple classes representing
interest in the same portfolio of investments but having potentially different
distribution charges, exchange rights and investment minimum requirements (the
"Classes"); and
WHEREAS, the Trust and JCC have entered into a separate agreement for the
provision of investment advisory services; and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the administration of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Administrative Services. JCC shall furnish or arrange for the following
services to the Fund incidental to its operations and business: provision of
custody, transfer agency, and fund accounting services; provision of shareholder
servicing; provision of office facilities and personnel necessary to carry on
the business of the Fund; preparation and filing of all documents necessary to
obtain and maintain registration and qualification of the shares of each Class
with the Securities and Exchange Commission and state securities commissions;
clerical, recordkeeping and bookkeeping services; preparation of reports for
distribution to shareholders of the Fund; preparation of prospectuses,
statements of additional information and proxy statements for the Fund or any
Class thereof; preparation and filing of the Fund's required tax
<PAGE>
reports; preparation of materials for all meetings of the Trustees (as such
materials pertain to a Fund or any Class thereof); preparation and review of
contracts to which the Fund is a party; monitoring and reporting to Fund
officers the Fund's compliance with investment policies and restrictions as set
forth in the currently effective prospectus and statement of additional
information of the Fund.
2. Other Services. JCC is hereby authorized to furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as the Fund shall determine to be desirable.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
a. to keep JCC continuously and fully informed as to the composition
of the Fund's investment portfolio and the nature of all of its
assets and liabilities from time to time;
b. to furnish JCC with a certified copy of any financial statement
or report prepared for the Fund by certified or independent
public accountants and with copies of any financial statements or
reports made to the Fund's shareholders or to any governmental
body or securities exchange;
c. to furnish JCC with certified copies of the minutes of any and
all meetings of the Trustees of the Trust, together with any
exhibits presented to the Trustees at such meetings;
d. to furnish JCC with any further materials or information which
JCC may reasonably request to enable it to perform its functions
under this Agreement; and
e. to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. Compensation. The Fund shall pay JCC for its administrative services a
fee calculated in the manner set forth on Appendix A hereto. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
5. Expenses Borne by JCC. Except for those expenses borne by the Trust
pursuant to Section 6 below, JCC shall bear all expenses incurred in connection
with the operation of the Fund.
-2-
<PAGE>
6. Expenses Borne by the Trust. The Trust shall bear the following
expenses: any compensation, fees, or reimbursements which the Trust pays to its
Trustees who are not interested persons of JCC ("Independent Trustees"); fees
and expenses of counsel to the Independent Trustees; fees and expenses of
consultants to the Fund; audit expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions; interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); expenses of shareholder meetings, including the preparation, printing
and distribution of proxy statements, notices and reports to shareholders; any
litigation and other extraordinary expenses.
7. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities (as
defined in the 1940 Act), provided in either case that sixty (60) days advance
written notice of termination be given to JCC at its principal place of
business. This Agreement may be terminated by JCC at any time, without penalty,
by giving sixty (60) days advance written notice of termination to the Trust,
addressed to its principal place of business.
8. Term. This Agreement shall continue in effect until June 16, 1996, and
for successive annual periods thereafter unless sooner terminated in accordance
with Section 7 hereof.
9. Amendments. This Agreement may be amended by the parties only if such
amendment is in writing and signed by the parties to this Agreement.
10. Allocation of Expenses.
a. The Trustees shall determine the basis for making an appropriate
allocation of the Trust's expenses (other than those directly
attributable to the Fund) between each Fund and the other series
of the Trust.
b. The Trustees shall determine the basis for making an appropriate
allocation of the Fund's expenses (other than those directly
attributable to a Class) between each Class of the Fund.
c. JCC will furnish to the Trustees such information as to the
nature and amounts of the expenses incurred by JCC in performing
its obligations under this Agreement as the Trustees may
reasonably require in order to enable the Trustees to allocate
expenses as provided in paragraphs (a) and (b) of this Section
10.
11. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable
-3-
<PAGE>
for any of the foregoing liabilities. The Trust's Declaration of Trust, as
amended from time to time, is on file in the Office of the Secretary of State of
the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
12. Limitation of Liability of JCC. JCC shall not be liable for any error
of judgment or mistake of law, for any loss arising out of this Agreement, or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 12,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
13. Activities of JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Administration Agreement as of the date and year first above
written.
JANUS CAPITAL CORPORATION
By: /s/ Jack R. Thompson
Name: Jack R. Thompson
Title: Executive Vice President
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Name: Thomas H. Bailey
Title: President
-4-
<PAGE>
Revised as of September 10, 1996
APPENDIX A
In accordance with Section 4 of this Agreement, the Fund shall compensate JCC
for services provided to each Class of the Fund in accordance with the following
schedule:
I. JANUS GOVERNMENT MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for
its administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.15% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
II. JANUS GOVERNMENT MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.50% of
the closing aggregate net asset value of the shares of each such Class for each
day of such month.
III. JANUS GOVERNMENT MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.15% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
<PAGE>
JANUS INVESTMENT FUND
ADMINISTRATION AGREEMENT
JANUS TAX-EXEMPT MONEY MARKET FUND
THIS ADMINISTRATION AGREEMENT (the "Agreement") is made this 9th day of
December, 1994, between JANUS INVESTMENT FUND, a Massachusetts business trust
(the "Trust"), on behalf of Janus Tax-Exempt Money Market Fund (the "Fund"), a
separate series of the Trust and JANUS CAPITAL CORPORATION, a Colorado
corporation ("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares of the Trust; and
WHEREAS, the Fund may offer shares in multiple classes representing
interest in the same portfolio of investments but having potentially different
distribution charges, exchange rights and investment minimum requirements (the
"Classes"); and
WHEREAS, the Trust and JCC have entered into a separate agreement for the
provision of investment advisory services; and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the administration of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Administrative Services. JCC shall furnish or arrange for the following
services to the Fund incidental to its operations and business: provision of
custody, transfer agency, and fund accounting services; provision of shareholder
servicing; provision of office facilities and personnel necessary to carry on
the business of the Fund; preparation and filing of all documents necessary to
obtain and maintain registration and qualification of the shares of each Class
with the Securities and Exchange Commission and state securities commissions;
clerical, recordkeeping and bookkeeping services; preparation of reports for
distribution to shareholders of the Fund; preparation of prospectuses,
statements of additional information and proxy statements for the Fund or any
Class thereof; preparation and filing of the Fund's required tax
<PAGE>
reports; preparation of materials for all meetings of the Trustees (as such
materials pertain to a Fund or any Class thereof); preparation and review of
contracts to which the Fund is a party; monitoring and reporting to Fund
officers the Fund's compliance with investment policies and restrictions as set
forth in the currently effective prospectus and statement of additional
information of the Fund.
2. Other Services. JCC is hereby authorized to furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as the Fund shall determine to be desirable.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
a. to keep JCC continuously and fully informed as to the composition
of the Fund's investment portfolio and the nature of all of its
assets and liabilities from time to time;
b. to furnish JCC with a certified copy of any financial statement
or report prepared for the Fund by certified or independent
public accountants and with copies of any financial statements or
reports made to the Fund's shareholders or to any governmental
body or securities exchange;
c. to furnish JCC with certified copies of the minutes of any and
all meetings of the Trustees of the Trust, together with any
exhibits presented to the Trustees at such meetings;
d. to furnish JCC with any further materials or information which
JCC may reasonably request to enable it to perform its functions
under this Agreement; and
e. to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. Compensation. The Fund shall pay JCC for its administrative services a
fee calculated in the manner set forth on Appendix A hereto. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate proration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
5. Expenses Borne by JCC. Except for those expenses borne by the Trust
pursuant to Section 6 below, JCC shall bear all expenses incurred in connection
with the operation of the Fund.
-2-
<PAGE>
6. Expenses Borne by the Trust. The Trust shall bear the following
expenses: any compensation, fees, or reimbursements which the Trust pays to its
Trustees who are not interested persons of JCC ("Independent Trustees"); fees
and expenses of counsel to the Independent Trustees; fees and expenses of
consultants to the Fund; audit expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions; interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); expenses of shareholder meetings, including the preparation, printing
and distribution of proxy statements, notices and reports to shareholders; any
litigation and other extraordinary expenses.
7. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Trust
acting by vote of at least a majority of its outstanding voting securities (as
defined in the 1940 Act), provided in either case that sixty (60) days advance
written notice of termination be given to JCC at its principal place of
business. This Agreement may be terminated by JCC at any time, without penalty,
by giving sixty (60) days advance written notice of termination to the Trust,
addressed to its principal place of business.
8. Term. This Agreement shall continue in effect until June 16, 1996, and
for successive annual periods thereafter unless sooner terminated in accordance
with Section 7 hereof.
9. Amendments. This Agreement may be amended by the parties only if such
amendment is in writing and signed by the parties to this Agreement.
10. Allocation of Expenses.
a. The Trustees shall determine the basis for making an appropriate
allocation of the Trust's expenses (other than those directly
attributable to the Fund) between each Fund and the other series
of the Trust.
b. The Trustees shall determine the basis for making an appropriate
allocation of the Fund's expenses (other than those directly
attributable to a Class) between each Class of the Fund.
c. JCC will furnish to the Trustees such information as to the
nature and amounts of the expenses incurred by JCC in performing
its obligations under this Agreement as the Trustees may
reasonably require in order to enable the Trustees to allocate
expenses as provided in paragraphs (a) and (b) of this Section
10.
11. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable
-3-
<PAGE>
for any of the foregoing liabilities. The Trust's Declaration of Trust, as
amended from time to time, is on file in the Office of the Secretary of State of
the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
12. Limitation of Liability of JCC. JCC shall not be liable for any error
of judgment or mistake of law, for any loss arising out of this Agreement, or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 12,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
13. Activities of JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Administration Agreement as of the date and year first above
written.
JANUS CAPITAL CORPORATION
By: /s/ Jack R. Thompson
Name: Jack R. Thompson
Title: Executive Vice President
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Name: Thomas H. Bailey
Title: President
-4-
<PAGE>
Revised as of September 10, 1996
APPENDIX A
In accordance with Section 4 of this Agreement, the Fund shall compensate JCC
for services provided to each Class of the Fund in accordance with the following
schedule:
I. JANUS TAX-EXEMPT MONEY MARKET FUND - INSTITUTIONAL SHARES will pay to JCC for
its administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.15% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
II. JANUS TAX-EXEMPT MONEY MARKET FUND - INVESTOR SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.50% of
the closing aggregate net asset value of the shares of each such Class for each
day of such month.
III. JANUS TAX-EXEMPT MONEY MARKET FUND - SERVICE SHARES will pay to JCC for its
administrative services a monthly fee, payable on the last day of each month
during which or part of which this Agreement is in effect, of 1/365 of 0.15% of
the closing aggregate net asset value of the shares of such Class for each day
of such month.
EXHIBIT 9(i)
September 10, 1996
Ms. Marjorie G. Hurd
Janus Service Corporation
100 Fillmore Street
Denver, CO 80206
Dear Ms. Hurd:
Attached are revised Appendix A and Appendix B to the Transfer Agency
Agreement dated as of September 27, 1995 (the "Agreement") between Janus
Investment Fund (the "Trust") and Janus Service Corporation ("JSC"). The revised
Appendices will be effective as of September 10, 1996. The purpose of the
revisions is to add Janus Special Situations Fund as an additional portfolio of
the Trust. Pursuant to Section 9 of the Agreement, the Fund hereby requests that
JSC acknowledge its acceptance of the terms contained in each of the revised
Appendices.
Please indicate your acceptance of the foregoing by executing two copies of
this letter, returning one copy to the Trust and retaining one copy for your
records.
JANUS INVESTMENT FUND
/s/ Steven R. Goodbarn
Steven R. Goodbarn, Vice President
JANUS SERVICE CORPORATION
By: /s/ Marjorie G. Hurd
Marjorie G. Hurd
President
Agreed to this 10th day of September, 1996
CC: Deborah Bielicke
Kelley Howes
Stephen Stieneker
David Tucker
Sue Vreeland
<PAGE>
Revised as of September 12, 1996
APPENDIX A
Janus Money Market Fund
Janus Government Money Market Fund
Janus Tax-Exempt Money Market Fund
Janus High-Yield Fund
Janus Olympus Fund
Janus Venture Fund
Janus Fund
Janus Twenty Fund
Janus Enterprise Fund
Janus Mercury Fund
Janus Overseas Fund
Janus Worldwide Fund
Janus Growth and Income Fund
Janus Balanced Fund
Janus Flexible Income Fund
Janus Intermediate Government Securities Fund
Janus Short-Term Bond Fund
Janus Federal Tax-Exempt Fund
Janus Equity Income Fund
Janus Special Situations Fund
<PAGE>
Revised as of September 10, 1996
APPENDIX B
I. NON-MONEY MARKET PORTFOLIOS
Each non-money market portfolio of the Trust shall pay JSC for its transfer
agency services a fee, calculated and payable for each day that this Agreement
is in effect, of 1/365 of 0.16% of the daily closing net asset value of such
portfolio, plus reasonable out-of-pocket expenses incurred in connection with
JSC's services as transfer agent. In addition, each of the non-money market
portfolios listed below shall pay a monthly fee at the annual rate of $4.00 per
open shareholder account per year:
Janus Balanced Fund
Janus Enterprise Fund
Janus Equity Income Fund
Janus Federal Tax-Exempt Fund
Janus Flexible Income Fund
Janus Growth and Income Fund
Janus High-Yield Fund
Janus Intermediate Government Securities Fund
Janus Mercury Fund
Janus Olympus Fund
Janus Overseas Fund
Janus Short-Term Bond Fund
Janus Special Situations Fund
Janus Twenty Fund
Janus Worldwide Fund
All such fees shall be subject to reduction as set forth in section 5.c. of this
Agreement. If an account is open on any day of a month, the per account fee (if
applicable) shall be payable for that month.
II. MONEY MARKET PORTFOLIOS
Notwithstanding the above, however, JSC agrees that it shall not look to the
Funds or the Trust for compensation for its services provided under this
Agreement to Janus Money Market Fund, Janus Government Money Market Fund or
Janus Tax-Exempt Money Market Fund (collectively, the "Money Funds"). JSC shall
be compensated for its services to the Money Funds entirely by Janus Capital
Corporation, the administrator to the Money Funds, pursuant to an Administration
Agreement between Janus Capital Corporation and each of the Money Funds.
EXHIBIT 10(o)
September 20, 1996
Janus Investment Fund
100 Fillmore Street, Suite 400
Denver, Colorado 80206-9916
Re: Public Offering of Janus Government Money Market Fund Service Shares,
Janus Money Market Fund Service Shares and Janus Tax-Exempt Money
Market Fund Service Shares
Gentlemen:
I have acted as counsel for Janus Investment Fund, a Massachusetts business
trust (the "Trust"), in connection with the filing with the Securities and
Exchange Commission of a post-effective amendment to the Trust's registration
statement with respect to the proposed sale of shares of beneficial interest,
$0.01 par value, of Janus Government Money Market Fund Service Shares, Janus
Money Market Fund Service Shares and Janus Tax-Exempt Money Market Fund Service
Shares (the "Shares").
I have examined the Trust's Agreement and Declaration of Trust and Bylaws,
as amended, the proceedings of its trustees relating to the authorization,
issuance and proposed sale of the Shares, and such other records and documents
as I have deemed relevant. Based upon such examination, it is my opinion that
upon the issuance and sale of the Shares in the manner contemplated by the
aforesaid post-effective amendment to the Trust's registration statement, such
Shares will be legally issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
above-referenced registration statement. This opinion is for the exclusive use
of the Trust in connection with the filing of such post-effective amendment to
the Trust's registration statement with the Securities and Exchange Commission
(and certain securities regulators of other jurisdictions) and is not to be
used, circulated, quoted, relied upon or otherwise referred to by any other
person or for any other purpose. This opinion is given as of the date hereof and
I render no opinion and disclaim any obligation to revise or supplement this
opinion based upon any change in applicable law or any factual matter that
occurs or comes to my attention after the date hereof.
Very truly yours,
/s/ David C. Tucker
David C. Tucker
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Independent
Accountants" in the Statement of Additional Information constituting part of
this Post-Effective Amendment No. 76 to the Registration Statement on Form N-1A
of Janus Investment Fund.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Denver, Colorado
September 20, 1996
EXHIBIT 18(c)
April 14, 1995
As Amended September 27, 1995
And September 10, 1996
RULE 18f-3 PLAN
This Rule 18f-3 Plan ("Plan") is adopted by Janus Investment Fund ("JIF")
with respect to Investor Shares, Institutional Shares, and Administrative
Service Shares (each a "Class") of each of the Janus Money Market Fund, the
Janus Government Money Market Fund and the Janus Tax- Exempt Money Market Fund
(each a "Fund") portfolios of JIF in accordance with the provisions of Rule
18f-3 under the Investment Company Act of 1940 (the "Act").
1. Pursuant to and as described in Administration Agreements, dated
December 9, 1994, as amended, between Janus Capital Corporation ("JCC") and JIF
with respect to each Fund (each an "Agreement"), JCC provides each Fund with
certain services incidental to the Fund's operations and business and, for
providing those services, is paid a fee by the Fund (an "Administration Fee"). A
portion of each Administration Fee relates to services performed by JCC (or a
service provider retained by JCC) that vary on a Class basis as identified in
Section 2 of this Plan; those services are referred to as Rule 18f-3 Plan
Services. A portion of each Administration Fee also relates to Class Expenses
(as defined below) that are assumed by JCC pursuant to Section 5 of each
Agreement. The fees paid for performing Rule 18f-3 Plan Services and assuming
Class Expenses are referred to as Rule 18f-3 Plan Fees. Rule 18f-3 Plan Fees and
Class Expenses, as defined below, relating to each Class are borne solely by the
Class to which they relate and within each Class are borne by each share pro
rata on the basis of its net asset value.
2. Rule 18f-3 Plan Services include the following: provision of transfer
agency and shareholder servicing functions for each Class; responding to
Shareholder inquiries; the receipt,
<PAGE>
aggregation and processing of purchase and redemption orders; transmission of
funds; preparation and filing of documents necessary to obtain and maintain
registration and qualification of shares of each Class with the Securities and
Exchange Commission and state or territorial securities commissions; clerical,
recordkeeping and bookkeeping services related to a specific Class; preparation
and distribution of prospectuses, statements of additional information, reports
to shareholders and proxy statements relating to a specific Class; preparation
of materials for all meetings of the Trustees of JIF insofar as they relate to
matters concerning a specific Class; and all other services performed by JCC or
a service provider retained by JCC insofar as they relate to a specific Class.
3. Pursuant to Section 5 of each Agreement, JCC assumes those Class
Expenses (as defined below) of each Fund that are not borne by JIF as provided
in Section 6 of the Agreement. JCC is not separately reimbursed for assuming
those Class Expenses.
4. Expenses incurred by JIF or assumed by JCC pursuant to each Agreement
that are chargeable to a specific Class ("Class Expenses") include expenses (not
including advisory or custodial fees or other expenses related to the management
of a Fund's assets) that are incurred in a different amount by that Class or are
in consideration of services provided to that Class of a different kind or to a
different degree than are provided to another Class. Class Expenses include, in
addition to expenses for Rule 18f-3 Plan Services: (i) expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxy statements to current shareholders of a specific Class; (ii) Blue Sky
registration fees incurred with respect to a specific Class; (iii) litigation or
other legal expenses relating to a specific Class; (iv) fees or expenses of the
Trustees of JIF who are not interested persons of JCC ("Independent Trustees"),
and of counsel and
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consultants to the Independent Trustees, incurred as a result of issues relating
to a specific Class; (v) auditing and consulting expenses relating to a specific
Class; and (vi) additional expenses incurred with respect to a specific Class as
identified and approved by the Trustees of JIF and the Independent Trustees.
5. The Rule 18f-3 Plan Fees are up to .50% of the average daily net assets
of the Investor Shares, up to .15% of the average daily net assets of the
Institutional Shares, and up to .40% of the average daily net assets of the
Administrative Service Shares of each Fund. JCC, in its sole discretion, may
waive any portion of the Rule 18f-3 Plan Fees with respect to a Class of Shares
of a Fund.
6. The differences in the Rule 18f-3 Plan Fees and Class Expenses payable
by each Class pursuant to this Plan are due to the differing levels of services
offered to shareholders and investors eligible to purchase shares of each Class
and to the differing levels of expenses expected to be incurred with respect to
each Class. Investor Shares are available to individual and other retail
investors, have a lower investment minimum than is applicable to the
Institutional Shares and have a checkwriting feature. Institutional Shares are
available only to eligible institutional and individual investors willing to
meet the higher investment minimum of that Class. Administrative Service Shares
are available only through banks and other financial institutions in connection
with trust accounts, cash management programs, and similar programs. The
financial institution aggregates its customers' investments to meet the
investment minimum of the Administrative Service Shares (which is also higher
than the Investor Shares' minimum). Investors in Administrative Service Shares
require more services than investors in Institutional Shares but fewer services
than investors in Investor Shares, and thus the Rule 18f-3 Plan Fees
attributable to the Administrative Service
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Shares are between those attributable to the Investor Shares and the
Institutional Shares. The Rule 18f-3 Plan Fees attributable to the Investor
Shares are higher than those attributable to the Institutional Shares because of
the increased costs (expressed as a percentage of assets) associated with retail
customer accounts as opposed to larger individual and institutional accounts.
These differences are due primarily to (i) smaller account balances and
transaction sizes associated with retail accounts, (ii) costs associated with
the checkwriting feature, (iii) costs associated with paper processing of retail
accounts versus wire or ACH processing of institutional accounts, and (iv) the
more extensive shareholder servicing needs of retail investors.
7. JCC may use a portion of its Administration Fee to pay banks and other
financial institutions that provide Rule 18f-3 Plan Services to their customers
in connection with investment in the Administrative Service Shares through trust
departments, cash management programs, and similar programs.
8. The exchange privilege offered by each Fund provides that shares of a
Class may be exchanged for (i) shares of certain other portfolios of JIF and
(ii) shares of the same Class of another Fund. Shareholders of another portfolio
of JIF who wish to exchange their shares for shares of a Fund will be required
to meet the standards applicable to the Class they wish to exchange into (e.g.,
the investment minimum). Notwithstanding the foregoing, exchanges will be
permitted among Classes should a shareholder cease to be eligible to purchase
shares of the original Class or become eligible to purchase shares of a
different Class by reason of a change in the shareholder's status.
9. This Plan is adopted as of April 14, 1995, and amended as of September
27, 1995 and September 10, 1996, pursuant to determinations made by the Trustees
of JIF, including a majority of the Independent Trustees, that the multiple
class structure and the allocation of expenses as set
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forth in the Plan are in the best interests of each of the Investor,
Institutional, and Administrative Service Shares individually and each Fund and
JIF as a whole. This Plan will continue in effect until terminated in accordance
with Section 12.
10. In any year in which JCC waives a portion of the Rule 18f-3 Plan Fee
payable to JCC with respect to a Class of Shares of a Fund, the Trustees will
review the waiver by JCC in order to confirm that the waiver is not a de facto
modification of the fees provided for in the Fund's advisory or any other
contracts for which the fees may not vary by Class pursuant to Rule 18f-3.
11. Material amendments to the Plan may be made with respect to a Class at
any time with the approval of the Trustees of JIF, including a majority of the
Independent Trustees, upon finding that the Plan as proposed to be amended,
including the allocation of expenses, is in the best interests of each Class
individually and each Fund and JIF as a whole. Non-material amendments to the
Plan may be made by JCC at any time.
12. This Plan may be terminated by the Trustees without penalty at any
time.
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