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________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________
Our Message to You 1
Portfolio Manager's Commentary and Schedule of Investments
Janus Flexible Income Fund 2
Janus High-Yield Fund 6
Janus Federal Tax-Exempt Fund 9
Janus Intermediate Government Securities Fund 12
Janus Short-Term Bond Fund 14
Janus Money Market Fund 16
Janus Government Money Market Fund 19
Janus Tax-Exempt Money Market Fund 20
Notes to Schedules of Investments 21
Statements of Operations - Bond Funds 22
Statements of Assets and Liabilities - Bond Funds 23
Statements of Changes in Net Assets - Bond Funds 24
Financial Highlights - Bond Funds 25
Statements of Operations - Money Market Funds 27
Statements of Assets and Liabilities - Money Market Funds 27
Statements of Changes in Net Assets - Money Market Funds 28
Financial Highlights - Money Market Funds 29
Notes to Financial Statements 30
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Performance Information
Performance overview graphs on the following pages
compare the performance of a $10,000 investment in each fund,
since its inception, to one or more widely used market indexes.
Each graph reflects the lifetime performance of the fund through
April 30, 1996.
When comparing the performance of a fund to an index,
keep in mind that market indexes do not take into account
brokerage commissions that would be incurred if you purchased the
individual securities that comprise the index. They also do not
include taxes payable on dividends and interest payments, or
operating expenses necessary to maintain a portfolio investing in
the index.
You will see average annual total returns quoted for
each fund. Average annual total return is calculated by taking
the growth or decline in value of an investment over a period of
time, including reinvestment of dividends and distributions, and
then calculating the annual compound percentage rate that would
have produced the same result had the rate of growth been
constant throughout the period.
An Explanation of the Schedule of Investments
Following the performance overview graph is each fund's
Schedule of Investments. This schedule reports the industry
concentrations and the different types of securities held in the
fund's portfolio on the last day of the reporting period.
Securities are usually listed by type (common stocks, corporate
bonds, U.S. government obligations, etc.) and by industry
classification (banking, communications, insurance, etc.).
The market value of each security represents its value
on the last day of the reporting period. Funds that own
securities denominated in foreign currencies convert the value of
their securities into U.S. dollars. Funds that invest in foreign
securities also provide a summary of investments by country.
This summary reports the fund's exposure in different countries
by indicating the percentage of securities invested in each
country.
An Explanation of the Forward
Foreign Currency Contract Table
A table listing forward foreign currency contracts will
follow each fund's Schedule of Investments (if applicable).
Forward foreign currency contracts represent agreements to
deliver or receive a preset amount of currency at a future date.
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Foreign currency contracts are used to hedge against foreign
currency risk in the fund's long-term holdings.
The table provides the foreign currency being sold and
the settlement date, the amount sold, the value of the currency
in U.S. dollars, and the amount of unrealized gain or loss. The
amount of unrealized gain or loss reflects the change in currency
exchange rates from the time the contract was opened to the last
day of the reporting period.
OUR MESSAGE TO YOU
Dear Shareholders:
The performance of the bond market during the first half
of our fiscal year (November 1, 1995-April 30, 1996) can be
summed up in one word: volatile. After finishing 1995 in a very
strong up trend, which registered excellent returns for fixed-
income investors, bond prices began falling in January and were
still retreating at the end of April. Yields on the benchmark
30-year U.S. Treasury Bond touched a low of 5.95% in late
December and then rose to a high of 6.91% by April 30. Bonds
declined even though the Federal Reserve Board, which controls
short-term interest rates, lowered the federal funds rate to
5.25% (from a high of 5.75% in 1995).
TREASURY YIELDS
April 30, 1996 October 31, 1995
30-Year Treasury Bond 6.91% 6.33%
10-Year Treasury Note 6.67% 6.02%
Treasury Bills 5.63% 5.55%
The Bond Market Likes to Stay Ahead of the Curve. The
sharp price decline that began in January was partially an
adjustment to the overly optimistic expectations that prevailed
at the end of 1995, when it was widely believed the sluggish
economy would allow rates to drop further. But the low rates of
December helped reignite growth, just as the higher rates of late
April appear to have helped slow it.
In 1996, the rise in interest rates represented the
market's efforts to stay ahead of the inflation curve. With
commodities already at pricey levels and much of the work force
employed, bond investors worried that additional growth might
take up any remaining slack in the economy and set in motion a
new inflationary cycle. Inflation is damaging because it
ratchets up both consumers' cost of living and the cost of doing
business. Once started, it can also take time to wind down.
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The early signs of an economic rebound were borne out by
a jump in the gross domestic product (GDP) for the first calendar
quarter. GDP, which measures our national economic output, came
in at a healthy annual rate of 2.8% (up from just 0.5% in the
fourth calendar quarter of 1995). Demand was robust throughout
the production cycle, as reflected in such areas as manufacturing
orders, construction spending, auto sales, and general consumer
confidence.
By pushing up rates, the market not only anticipated
faster growth, but, in effect, worked to slow it and head off any
potential inflationary forces before they gathered too much
strength. As of mid-May, the economy appeared softer and
inflation was benign, so bonds may have done their job without
any rate changes from the Federal Reserve Board.
HIGH-YIELD BONDS PERFORMED WELL
Despite the rise in interest rates, the high-yield/high-
risk (junk) market was able to generate strong returns during the
last six months. High-yield bonds proved an exception in an
otherwise difficult market, because, instead of responding
directly to changes in interest rates, as Treasuries and
investment-grade bonds do, high-yield bonds are often more
sensitive to strength in the general economy and changes in the
credit quality of the issuer. Economic strength and corporate
credit quality are frequently related, of course, because most
companies have a better chance of improving their financial
condition when the economy is healthy. The better yields on
high-yield bonds can also serve to "cushion" price declines when
interest rates are rising.
HOW OUR FUNDS PERFORMED
Our Cautious Strategy Made a Difference. Janus fixed-
income funds adapted quickly to the change in market sentiment.
As you will see from the individual managers' letters, we moved
to cash and shorter-term securities, whose prices tend to be less
volatile, and some portfolios were hedged. Hedging helps
stabilize the net asset value of the fund and can protect it from
price erosion when interest rates are rising.
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Our caution contributed to our fixed-income funds'
performance. Janus Federal Tax-Exempt Fund performed especially
well. For the twelve months ended April 30, the Fund was ranked
1st out of the 227 funds in the Municipal Debt category of Lipper
Analytical Services, a large mutual fund rating company.(1)
We are extremely pleased with Janus Money Market Funds'
one-year returns. Janus Government Money Market Fund ranked 21st
of 112 funds (top 19%) in Lipper's U.S. Government Money Market
Group and Janus Tax-Exempt Money Market Fund was 21st of 129
funds (top 16%) in the Lipper Tax-Exempt Money Market category,
both for the year ended April 30, 1996.(1)
We appreciate your continued investment in Janus fixed-
income funds.
Thomas H. Bailey
Chairman
(1) For a prospectus containing more complete information,
including expenses, please call a Janus Investor Service
Representative at 1-800-525-3713. Read the prospectus carefully
before you invest or send money. Past performance is no
guarantee of future results. Lipper rankings are based on total
return, including reinvestment of dividends and capital gains.
JANUS FLEXIBLE INCOME FUND Portfolio Manager, Ronald V. Speaker
Janus Flexible Income Fund Performance
The Janus Flexible Income Fund outperformed the Lehman
Brothers Government/Corporate Bond Index for the six months ended
April 30. The Fund returned 2.87%, versus a gain of 0.04% for
the Lehman Index. Both returns include reinvested dividends.
Diversity is Janus Flexible Income Fund's greatest
asset, and was the major reason we outperformed the Index in an
especially difficult rate environment. The Fund invested in a
range of fixed-income securities, including investment-grade
corporate and high-yield/high-risk (junk) bonds.
Unfortunately the overall bond market was very weak
during the first four months of 1996. Rising interest rates
pushed most bond prices lower as the economy showed signs of
rebounding from the depressed levels of the last calendar quarter
of 1995.
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FUND STRATEGY
The renewed economic strength took many in the bond
market by surprise. Until January, expectations were skewed
toward lower rates. When rates began to rise, our response was
to reduce holdings in investment-grade bonds, especially in the
30-year area, which is the most sensitive to interest rate
changes. We also reduced the Fund's weighted average maturity
from 12.8 years when the period began, to 9.2 years as of
April 30, so that the portfolio held somewhat shorter maturities
than the Lehman Index, which ended the period with a weighted
average maturity of 9.4. Average modified duration (a
theoretical measure of price volatility) was 5.1 years, and the
S.E.C. 30-day yield stood at 7.66%. The average rating of all
securities in the portfolio was BBB.
Faced with a strengthening economy and rising interest
rates, our overall strategy was to reduce interest rate risk and
raise credit risk by increasing holdings in high-yield bonds. In
a healthy economy these bonds tend to outperform other sectors of
the market because the firms that issue high-yield bonds have a
better opportunity to improve their financial condition.
Generous yields also can cushion prices against declines when
interest rates are rising. As a result of these factors, the
high-yield sector turned in a very strong performance during the
six months. We experienced especially nice returns in the gaming
area, including Grand Casinos and Trump Atlantic City.
The Fund was also hedged moderately with interest rate
futures in a further attempt to reduce interest rate risk and
stabilize net asset value.
PORTFOLIO ASSET MIX
As of April 30, the portfolio was positioned as follows:
April 30, 1996 October 31, 1995
Investment-Grade
Corporate Bonds 37% 39%
High-Yield/High-Risk Bonds 45% 37%
U.S. Government Bonds 9% 13%
Foreign Non-Dollar Bonds 2% 4%
Preferred Stock 2% 1%
Cash 5% 6%
PORTFOLIO HOLDINGS
The Fund's largest weighting was in high-yield bonds.
Holdings were diversified over a wide range of companies and
industries, from food and supermarket chains to cellular
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communications and gaming. Prominent issuers included AGCO (farm
equipment), EchoStar (telecommunications), Bally's (gaming), and
NeoData Services (data processing).
Although investment-grade corporate holdings were
reduced somewhat, high-quality banks and financial institutions
were still widely represented. Bank of Boston, First Union,
Chase Manhattan, and NationsBank were significant positions. We
also held IBM, Ford Motor Credit, GMAC, Ralston-Purina, and TCI
Communications.
U.S. Treasury issues were reduced and maturities
shortened to under 10 years.
Finally, we maintained small positions in government
bonds from Germany and New Zealand.
GOING FORWARD
At present, the interest rate environment is uncertain.
It is difficult to know whether the economy's strength in the
first calendar quarter of 1996 was a strong bounce from the slow
growth of the previous quarter or the beginning of a trend. The
rise in commodity prices, including industrial commodities such
as fuel, steel, aluminum, etc., is a cautionary sign.
Although our current strategy is somewhat cautious, the
bond market is often self-correcting. Bonds work to anticipate
economic strength and the possibility of higher inflation by
pushing up interest rates and slowing economic growth, as they
tried to do in early 1996. Conversely, the market can stimulate
growth by letting rates fall, as in 1995. So, the rate rise of
early 1996 may cause the economy to moderate in the second half
of the year, and allow rates to fall again.
Finally, we remain positive on the high-yield market,
where the risk/reward ratio is very attractive.
Thank you for your continued investment in Janus
Flexible Income Fund.
JANUS FLEXIBLE INCOME FUND Portfolio Manager, Ronald V. Speaker
PERFORMANCE OVERVIEW
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Flexible Income Fund and the Lehman
Brothers Gov't./Corporate Bond Index. Janus Flexible Income Fund
is represented by a solid purple line. The Lehman Brothers
Gov't./Corporate Bond Index is represented by a single dashed
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black line. The "y" axis reflects the value of the investment.
The "x" axis reflects the computation periods from inception,
July 2, 1987, through April 30, 1996. The upper right quadrant
reflects the ending value of the hypothetical investment in Janus
Flexible Income Fund ($21,610) as compared to the Lehman Brothers
Gov't./Corporate Bond Index ($21,075). There is a legend in the
upper left quadrant of the graph which indicates Janus Flexible
Income Fund's one-year, five-year and since inception (July 2,
1987) average annual total returns as 12.91%, 11.44% and 9.09%,
respectively.
*The Fund's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future
performance. Investment return and principal value may fluctuate
so that shares, when redeemed, may be worth more or less than
their original cost.
The Fund's portfolio may differ significantly from the
securities in the index. The index is unmanaged and therefore
does not reflect the cost of portfolio management or trading.
JANUS FLEXIBLE INCOME FUND April 30, 1996 (unaudited)
Principal Amount Market Value
Corporate Bonds - 81.2%
Agriculture - 1.3%
$ 7,500,000 Hines Horticulture, Inc.,
11.75% senior subordinated
notes, due 10/15/05 $7,912,500
Auto and Truck - 0.3%
2,000,000 Alamo Rent-A-Car, Inc.,
11.75% senior notes, due
1/31/06 2,005,000
Auto Parts - Original - 0.6%
3,500,000 Harvard Industries, Inc.,
11.125% senior notes, due
8/1/05 3,526,250
Broadcasting, Radio and Television - 6.9%
3,000,000 CF Cable TV, Inc., 11.625%
senior notes, due 2/15/05 3,307,500
2,000,000 Heartland Wireless Communications,
Inc., 13.00% senior notes,
due 4/15/03 2,215,000
4,000,000 Marcus Cable Co., L.P., 11.875%
debentures, due 10/1/05 4,230,000
5,500,000 Pegasus Media & Communications,
Inc., 12.50% notes, due 7/1/05 5,775,000
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3,000,000 Rifkin Acquisition Partners,
L.P., 11.125% senior subordinated
notes, due 1/15/06+ 2,977,500
3,000,000 Rogers Cablesystems of America,
10.00% senior secured second
priority notes, due 3/15/05 3,071,250
2,235,000 Sullivan Broadcasting Corp.,
10.25% senior subordinated notes,
due 12/15/05 2,179,125
17,500,000 TCI Communications, Inc., 8.00%
senior notes, due 8/1/05 17,171,875
2,500,000 Viacom, Inc., 8.00% subordinated
debentures, due 7/7/06 2,325,000
43,252,250
Building Materials - 0.4%
2,325,000 USG Corp., 8.75% sinking
fund debentures, due 3/1/17 2,243,625
Cable and Other Pay Television Services - 1.1%
7,000,000 Charter Communications Southeast,
L.P., 11.25% senior notes, due
3/15/06 7,017,500
Captive Finance - Auto - 4.8%
20,000,000 Ford Motor Credit Corp., 7.75%
notes, due 3/15/05 20,575,000
10,000,000 General Motors Acceptance Corp.,
6.625% notes, due 10/15/05 9,537,500
30,112,500
Commercial Services - 0.3%
2,000,000 Primeco, Inc., 12.75% senior
subordinated notes, due 3/1/05 2,075,000
Computers - 2.4%
15,000,000 IBM Corp., 7.50%
debentures, due 6/15/13 15,056,250
Financial - Bank Commercial - 6.9%
16,000,000 Bank of Boston Co., 6.625%
subordinated notes, due 12/1/05 15,200,000
10,000,000 First Union Corp., 7.05%
subordinated notes, due 8/1/05 9,737,500
10,000,000 NationsBank Corp., 7.75%
subordinated notes, due 8/15/15 10,037,500
8,500,000 Union Planters Corp., 6.75%
subordinated notes, due 11/1/05 8,032,500
43,007,500
Financial - Bank Money Center - 4.5%
10,000,000 BankAmerica Corp., 6.75%
subordinated notes, due 9/15/05 9,612,500
10,000,000 Chase Manhattan Corp., 6.75%
subordinated notes, due 8/15/08 9,475,000
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10,000,000 Chase Manhattan Corp., 6.50%
subordinated debentures, due
1/15/09 9,250,000
28,337,500
Financial - Savings/Loan/Thrift - 0.5%
3,000,000 Anchor Bancorp, Inc., 8.9375%
senior notes, due 7/9/03 3,000,000
Food Processing - 3.5%
4,000,000 Fresh Del Monte Produce, N.V.,
10.00% senior notes, due 5/1/03 3,745,000
15,000,000 Ralston Purina Co., 7.875%
debentures, due 6/15/25 14,775,000
3,000,000 Van de Kamps, Inc., 12.00%
senior subordinated notes, due
9/15/05 3,187,500
21,707,500
Food Wholesale - 2.3%
2,000,000 Americold Corp., 12.875% senior
subordinated notes, due 5/1/08 2,015,000
7,500,000 Doane Products Co., 10.625%
senior notes, due 3/1/06 7,584,375
5,000,000 TLC Beatrice International
Holdings, Inc., 11.50% senior
notes, due 10/1/05 5,037,500
14,636,875
Forest Products and Paper - 0.2%
1,000,000 Williamhouse-Regency of Delaware,
Inc., 13.00% senior subordinated
notes, due 11/15/05+ 1,132,500
Insurance - Life - 1.7%
11,000,000 Delphi Financial Group, Inc.,
8.00% senior notes, due 10/1/03 10,422,500
Insurance - Multiline - 1.7%
10,000,000 Leucadia National Corp., 10.375%
senior subordinated notes, due
6/15/02 10,637,500
Insurance - Property and Casualty - 1.9%
3,000,000 Arkwright CSN Trust, 9.625%
notes, due 8/15/26+ 3,018,750
9,000,000 Orion Capital Corp., 7.25%
senior notes, due 7/15/05 8,831,250
11,850,000
Lodging - 1.5%
9,500,000 Courtyard By Marriott II, L.P.,
10.75% senior notes, due 2/1/08+ 9,274,375
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Machine - Diversified - 2.6%
14,500,000 Agco Corp., 8.50% senior
subordinated notes, due 3/15/06+14,554,375
2,000,000 Imo Industries, Inc., 11.75%
senior subordinated notes, due
5/1/06+ 2,015,000
16,569,375
Medical - Hospital Management Services - 1.6%
10,000,000 Tenet Healthcare Corp., 8.625%
senior notes, due 12/1/03 10,200,000
Medical - Supplies - 1.4%
8,500,000 Dade International, Inc., 11.125%
senior subordinated notes, due
5/1/06 8,512,500
Mining - 0.4%
3,000,000 Freeport McMoRan Resource Partners,
L.P., 7.00% senior notes, due
2/15/08 2,775,000
Miscellaneous - Manufacturing - 2.1%
2,800,000 Alvey Systems, Inc., 11.375%
senior subordinated notes, due
1/31/03+ 2,912,000
9,750,000 Selmer Co., Inc., 11.00% senior
subordinated notes, due 5/15/05 10,261,875
13,173,875
Office and Business Equipment - 0.3%
2,000,000 Knoll, Inc., 10.875% senior
subordinated notes, due 3/15/06 2,060,000
Oil and Gas-Domestic - 2.0%
4,800,000 Coastal Corp., 7.75% debentures,
due 10/15/35 4,632,000
7,670,000 Texas Eastern Transmission Corp.,
10.00% sinking fund debentures,
due 10/1/11 8,111,025
12,743,025
Packaging and Containers - 0.7%
4,000,000 Stone Container Corp., 11.50%
senior subordinated notes, due
9/1/99 4,065,000
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Publishing and Printing - 0.7%
5,000,000 News America Holdings, Inc., 7.75%
notes, due 2/1/24 4,600,000
Restaurants and Food Service - 1.4%
10,000,000 Wendy's International, Inc., 7.00%
debentures, due 12/15/25 8,975,000
Retail - Department Stores - 0.4%
2,500,000 Hills Stores Co., 12.50%
senior notes, due 7/1/03 2,568,750
Retail - Grocery - 1.6%
3,000,000 Big V Supermarkets, Inc., 11.00%
senior subordinated notes, due
2/15/04 2,707,500
7,050,000 Carr-Gottstein Foods Co., 12.00%
senior subordinated notes, due
11/15/05 7,261,500
9,969,000
Retail - Special Line - 0.3%
2,076,000 Pier 1 Imports, Inc., 11.50%
subordinated debentures, due
7/15/03 2,078,595
Services - Amusement and Recreation - 3.1%
10,500,000 Grand Casinos, Inc., 10.125%
first mortgage notes, due
12/1/03 10,972,500
5,000,000 Lady Luck Gaming Corp., 11.875%
first mortgage notes, due 3/1/01 4,925,000
3,000,000 Mohegan Tribal Gaming Authority,
13.50% senior notes, due
11/15/02 3,727,500
19,625,000
Services - Business Services - 1.4%
8,434,000 NeoData Services, Inc., zero
coupon senior notes, due 5/1/03 8,560,510
Services - Hotels and Motels - 4.7%
9,000,000 GNF Corp., 10.625% first
mortgage bonds, due 4/1/03 9,270,000
2,000,000 Premier Parks, Inc., 12.00%
senior notes, due 8/15/03 2,160,000
3,255,000 Riviera Holdings Corp., 11.00%
first mortgage notes, due
12/31/02 3,124,800
1,500,000 Showboat Marina Casino Partnership,
13.50% first mortgage notes, due
3/15/03 1,597,500
13,000,000 Trump Atlantic City Associates,
11.25% first mortgage notes, due
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5/1/06 13,260,000
29,412,300
Services - Motion Picture Theaters -1.1%
7,000,000 United Artists Theatres Circuit,
Inc., 9.30% pass thru certificates,
due 7/1/15+ 6,606,250
Services - Motion Picture and Video Tape
Production - 2.3%
Time Warner, Inc.:
2,500,000 7.75% notes, due 6/15/05 2,468,750
12,000,000 8.11% notes, due 8/15/06 12,060,000
14,528,750
Telecommunications - 2.6%
3,000,000 A+ Network, Inc., 11.875%
senior subordinated notes, due
11/1/05 3,022,500
4,200,000 CAI Wireless Systems, Inc., 12.25%
senior notes, due 9/15/02 4,389,000
2,000,000 Galaxy Telecom, L.P., 12.375%
senior subordinated notes, due
10/1/05 2,105,000
3,000,000 NEXTLINK Communications, L.L.C.,
12.50% senior notes, due 4/15/06+3,030,000
6,500,000 WinStar Communications, Inc., zero
coupon senior discount notes, due
10/15/05 3,753,750
16,300,250
Telecommunications Equipment - 4.7%
9,500,000 360 Degree Communications Co., 7.50%
senior notes, due 3/1/06 9,084,375
15,600,000 EchoStar Satellite Broadcasting
Corp., zero coupon senior secured
discount notes, due 3/15/04+ 9,672,000
10,000,000 Wireless One, Inc., 13.00%
senior notes, due 10/15/03 10,725,000
29,481,375
Transportation - Airlines - 0.2%
1,000,000 ValueJet, Inc., 10.25%
senior notes, due 4/15/01+ 1,012,500
Utilities - Electric - 2.2%
8,000,000 El Paso Electric Co., 9.40%
first mortgage bonds, due 5/1/11 7,980,000
6,000,000 Long Island Lighting Co., 8.90%
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debentures, due 7/15/19 5,505,000
13,485,000
Utilities - Telecommunications - 0.6%
3,000,000 Intermedia Communications of
Florida, Inc., 13.50% senior notes,
due 6/1/05 3,427,500
Total Corporate Bonds (cost $510,982,401) 507,936,680
Convertible Bonds - 0.3%
3,250,000 WinStar Communications, Inc., zero
coupon senior discount notes, due
10/15/05 (cost $1,716,211) 2,104,375
Warrants - 0.1%
12,000 Heartland Wireless Communications,
Inc.-exp. 4/15/00*,+ 126,000
3,000 Intermedia Communications of Florida,
Inc.-exp. 6/1/00*,+ 3,000
30,000 Wireless One, Inc.-exp. 10/19/00* 210,000
1,131 Wright Medical Technology, Inc. -
exp. 6/30/03*,+ 186,623
Total Warrants (cost $139,179) 525,623
Common Stock - 0%
550 Pegasus Media & Communications,
Inc.*,+ (cost $0) 6
Preferred Stock - 1.9%
Financial - Bank Commercial - 1.0%
200,000 Chevy Chase Savings, 13.00%,
Non-Cumulative 6,400,000
Financial - Savings/Loan/Thrift - 0.3%
40,000 Glendale Federal Bank FSB, 8.75%,
Non-Cumulative-Series E 1,880,000
Services - Motion Picture and Video Tape
Production - 0.6%
3,500 Time Warner, Inc., 10.25%,
Cumulative-Series K+ 3,500,000
Total Preferred Stock (cost $11,385,900) 11,780,000
U.S. Government Obligations - 8.8%
U. S. Treasury Notes:
29,000,000 7.875%, 11/15/04 31,168,620
15,000,000 7.50%, 2/15/05 15,775,500
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9,000,000 5.625%, 2/15/06 8,337,150
Total U.S. Government Obligations (cost
$54,051,627) 55,281,270
Foreign Bonds - 2.4%
DEM 22,500,000 Baden Wurt LKB, 6.50% bank
guaranteed notes, due 9/15/08** 14,373,121
NZD 1,000,000 New Zealand Government, 8.00%
foreign government guaranteed,
due 4/15/04 660,371
Total Foreign Bonds (cost $15,948,013) 15,033,492
Short-Term Corporate Note - 3.5%
$22,000,000 Household Finance Corp.
5.20%, 5/1/96 (amortized cost
$22,000,000) 22,000,000
Total Investments-98.2% (total cost
$616,223,331) 614,661,446
Cash, Receivables and Other Assets, net
of Liabilities - 1.8% 11,231,825
Net Assets - 100% 625,893,271
Financial Futures - Short
500 Contracts U.S. Treasury - 10 year note,
expires June 1996, principal
amount $54,003,906, value
$53,750,000 cumulative appre-
ciation 253,906
200 Contracts U.S. Treasury - 30 year bond,
expires June 1996, principal amount
$23,081,563, value $21,831,250
cumulative appreciation 1,250,313
FORWARD CURRENCY CONTRACTS
Open at April 30, 1996
Currency
Currency Sold and Currency Value in Unrealized
Settlement Date Units Sold $ U.S. Gain
German Deutschemark 7/30/96 20,000,000 $13,133,701 $63,699
JANUS HIGH-YIELD FUND Portfolio Manager, Ronald V. Speaker
PERFORMANCE REVIEW
Janus High-Yield Fund opened on December 29, 1995. I
would like to take this opportunity to thank the Fund's
shareholders for their initial confidence and support. During
15
<PAGE>
the Fund's inaugural performance period the high-yield sector was
one of the few bright spots in an otherwise difficult bond
market. Bonds rallied into year-end 1995, but in January the
broad market reversed course when interest rates began to rise.
The high-yield sector parted company with the rest of the market,
however, and continued to produce positive returns. For the four
months ended April 30, Janus High-Yield Fund had a total return
of 10.10%, compared to a total return of 2.0% for the Lehman
High-Yield Bond Index during the same four-month period. Both
returns include reinvested dividends.
The rally in high-yield bonds was precipitated by
several factors. Initially, when rates were low, investors
searched for better yields in this sector. When interest rates
began to rise, these better yields helped cushion the impact on
prices. Paradoxically, the rebound in the economy, which was the
principal reason interest rates began to move up, was good news
for high-yield securities. In a strong economy, companies that
issue high-yield bonds have a better opportunity to improve their
financial condition. Finally, the high-yield market remained
strong because a large number of attractive new offerings came to
market.
PORTFOLIO STRATEGY
Our comprehensive strategy in managing the high-yield
portfolio is to use intensive research, much as an equity analyst
would, to find companies that have substantial asset values and a
plan for growth. Crucial to any plan is a coherent campaign to
reduce debt, or deleverage. In the course of our research we
also look to establish solid relationships with management teams
in an effort to gain greater insight into a company's operations
and the dynamics of its industry.
PORTFOLIO COMPOSITION
The Fund was able to outperform the high-yield market in
part because it was heavily weighted in telecommunications and
gaming securities. Many telecommunications companies will be
beneficiaries of the Telecommunications Act of 1996, which
deregulates the industry and should transform a market that was
largely monopolistic into one that is more competitive. During
the period, a number of telecommunications service companies
tapped the high-yield market to finance construction of their
systems. We own NEXTLINK, Wireless One, and A+ Network among
others.
The gaming market also presented substantial
opportunities. Revenue and visitor traffic is up at resorts in
both Atlantic City and Las Vegas. Hotel chains are increasingly
getting involved in the gaming business, and with the number of
16
<PAGE>
participants expanding, the potential exists for a wave of
consolidation over the next few years.
As of April 30, the Fund had a weighted average maturity
of 7.8 years, and a duration (a theoretical measure of price
volatility) of 4.8 years. The S.E.C. 30-day yield stood at
9.35%, and the average rating of bonds in the portfolio was B+.
GOING FORWARD
The high-yield market should continue to produce good
returns whether the economy grows moderately or somewhat faster
than at present. A growing economy is beneficial to high-yield
securities because it provides an environment where the issuing
companies can reduce debt and strengthen their balance sheets.
Once again, thank you for your initial investment in
Janus High-Yield Fund.
JANUS HIGH-YIELD FUND Portfolio Manager, Ronald V. Speaker
PERFORMANCE OVERVIEW
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus High-Yield Fund and the Lehman
Brothers High Yield Bond Index. Janus High-Yield Fund is
represented by a solid purple line. The Lehman Brothers High
Yield Bond Index is represented by a single dashed black line.
The "y" axis reflects the value of the investment. The "x" axis
reflects the computation periods from inception, December 29,
1995, through April 30, 1996. The upper right quadrant reflects
the ending value of the hypothetical investment in Janus High-
Yield Fund ($11,010) as compared to the Lehman Brothers High
Yield Bond Index ($10,200). There is a legend in the upper left
quadrant of the graph which indicates Janus High-Yield Fund's
since inception (December 29, 1995) [average annual total
returns] as 10.10%.
*The Fund's inception date Source for Janus High-Yield Fund -
Lipper Analytical Services, Inc. 1996. All returns reflect
reinvested dividends.
Sources for Lehman Brothers High Yield Index - Frank
Russell Company, Bloomberg 1996. All returns reflect reinvested
dividends.
Past performance is not predictive of future
performance. Investment return and principal value may fluctuate
so that shares, when redeemed, may be worth more or less than
their original cost.
17
<PAGE>
The Fund's portfolio may differ significantly from the
securities in the index. The index is unmanaged and therefore
does not reflect the cost of portfolio management or trading.
JANUS HIGH-YIELD FUND April 30, 1996 (unaudited)
Principal Amount Market Value
Corporate Bonds - 88.3%
Agriculture - 2.2%
$700,000 Hines Horticulture, Inc., 11.75%
senior subordinated notes, due
10/15/05 $738,500
Auto and Truck - 4.4%
1,500,000 Alamo Rent-A-Car, Inc., 11.75%
senior notes, due 1/31/06 1,503,750
Auto Parts - Original - 3.0%
1,000,000 Harvard Industries, Inc., 11.125%
senior notes, due 8/1/05 1,007,500
Broadcasting, Radio and Television - 1.3%
450,000 Rifkin Acquisition Partners, L.P.,
11.125% senior subordinated notes,
due 1/15/06+ 446,625
Cable and Other Pay Television Services - 2.9%
1,000,000 Charter Communications Southeast,
L.P., 11.25% senior notes, due
3/15/06 1,002,500
Cosmetics and Personal Care - 1.9%
650,000 Chattem, Inc., 12.75% senior
subordinated notes, due 6/15/04 656,500
Electronics - 1.5%
500,000 Exide Electronics Group, Inc.,
11.50% units, due 3/15/06 525,000
Food Processing - 1.6%
500,000 Van de Kamps, Inc., 12.00% senior
subordinated notes, due 9/15/05 531,250
Food Wholesale - 7.3%
485,000 Americold Corp., 12.875% senior
subordinated notes, due 5/1/08 488,637
750,000 Doane Products Co., 10.625%
senior notes, due 3/1/06 758,437
1,250,000 TLC Beatrice International Holdings,
Inc., 11.50% senior notes, due
10/1/05 1,259,375
2,506,449
Forest Products and Paper - 3.3%
1,000,000 Williamhouse-Regency of Deleware,
Inc., 13.00% senior subordinated
notes, due 11/15/05+ 1,132,500
18
<PAGE>
Furniture and Home Appliances - 0.7%
250,000 Simmons, Co., 10.75% senior
subordinated notes, due 4/15/06 251,250
Homebuilders - 1.7%
600,000 M.D.C. Holdings, Inc., 11.125%
senior notes, due 12/15/03 582,000
Machine - Diversified - 4.4%
1,500,000 Imo Industries, Inc., 11.75%
senior subordinated notes, due
5/1/06+ 1,511,250
Medical - Supplies - 2.9%
1,000,000 Dade International, Inc., 11.125%
senior subordinated notes, due
5/1/06 1,000,000
Miscellaneous - Manufacturing - 1.1%
350,000 Selmer Co., Inc., 11.00% senior
subordinated notes, due 5/15/05 368,375
Office and Business Equipment - 1.5%
500,000 Knoll, Inc., 10.875% senior
or subordinated notes, due
3/15/06 515,000
Retail - Grocery - 5.8%
500,000 Big V Supermarkets, Inc., 11.00%
senior subordinated notes, due
2/15/04 451,250
1,000,000 Carr-Gottstein Foods Co., 12.00%
senior subordinated notes, due
11/15/05 1,030,000
500,000 Jitney-Jungle Stores of America,
Inc., 12.00% senior notes, due
3/1/06 511,250
1,992,500
Services - Amusement and Recreation - 8.2%
1,250,000 Lady Luck Gaming Corp., 11.875%
first mortgage notes, due 3/1/01 1,231,250
1,000,000 Mohegan Tribal Gaming Authority,
13.50% senior notes, due
11/15/02+ 1,242,500
250,000 Stratosphere Corp., 14.25%
first mortgage notes, due 5/15/02 315,000
2,788,750
Services - Business Services - 3.0%
1,000,000 NeoData Services, Inc. zero
coupon senior notes, due 5/1/03 1,015,000
Services - Hotels and Motels - 10.6%
300,000 Premier Parks, Inc., 12.00%
senior notes, due 8/15/03 324,000
1,000,000 Riviera Holdings Corp., 11.00%
19
<PAGE>
first mortgage notes, 12/31/02 960,000
1,250,000 Showboat Marina Casino Partnership,
13.50% first mortgage notes, due
3/15/03 1,331,250
1,000,000 Trump Atlantic City Associates,
11.25% first mortgage notes, due
5/1/06 1,020,000
3,635,250
Services - Motion Picture Theaters - 1.5%
500,000 Cobb Theaters, L.L.C., 10.625%
senior secured notes, due 3/1/03 511,250
Telecommunications - 10.0%
1,000,000 A+ Network, Inc., 11.875% senior
subordinated notes, due 11/1/05 1,007,500
500,000 Galaxy Telecom, L.P., 12.375%
senior subordinated notes, due
10/1/05 526,250
1,000,000 NEXTLINK Communications, L.L.C.,
12.50% senior notes, due
4/15/06+ 1,010,000
950,000 Peoples Telephone Co., Inc., 12.25%
senior notes, due 7/15/02 881,125
3,424,875
Telecommunications Equipment - 5.9%
1,500,000 EchoStar Satellite Broadcasting
Corp. zero coupon senior secured
discount notes, due 3/15/04+ 930,000
1,000,000 Wireless One, Inc., 13.00% senior
notes, due 10/15/03 1,072,500
2,002,500
Textiles - 1.6%
500,000 PT Polysindo Eka Perkasa, 13.00%
senior notes, due 6/15/01 530,000
Total Corporate Bonds (cost $29,761,207) 30,178,574
Convertible Bonds - 1.6%
500,000 Quintiles Transnational Corp.,
4.25% convertible subordinated
notes, due 5/15/05 (cost $500,000) 538,125
Warrants - 0.1%
3,000 Wireless One, Inc., - exp.
10/19/00*,+ (cost $0) 21,000
Preferred Stock - 2.2%
750 IntelCom Group (U.S.A.), Inc.,
14.25% (cost $750,000) 759,375
20
<PAGE>
Short-Term Corporate Notes - 14.1%
1,600,000 Ford Motor Credit Co.
5.32%, 5/1/96 1,600,000
1,600,000 General Electric Capital Corp.
5.30%, 5/1/96 1,600,000
1,600,000 Household Finance Corp.
5.20%, 5/1/96 1,600,000
Total Short-Term Corporate Notes
(amortized cost $4,800,000) 4,800,000
Total Investments - 106.3% (total cost
$35,811,207) 36,297,074
Liabilities, net of Cash, Receivables and Other
Assets - (6.3%) (2,135,360)
Net Assets - 100% $34,161,714
JANUS FEDERAL TAX-EXEMPT FUND Portfolio Manager,
Darrell W. Watters
PERFORMANCE REVIEW
During the six months ended April 30, 1996, the
municipal market mirrored the behavior of the general fixed-
income market, which underwent a decisive downturn after economic
growth showed signs of accelerating from previous depressed
levels and interest rates began to rise. In early 1996, the
municipal bond market rebounded after flat-tax proposals faded
from the Congressional agenda. Yields on municipal bonds are
usually about 85% of equivalent securities in the taxable market,
but talk of a flat tax caused them to rise to approximately 95%
of taxable yields, which made municipal bonds inexpensive versus
taxable securities.
Despite the sharp upturn in interest rates, Janus
Federal Tax-Exempt Fund had a total return of 3.90% for the six-
month period, as compared to 1.11% for the Lehman Brothers
Municipal Bond Index. Both returns include reinvested dividends.
Janus Federal Tax-Exempt Fund performed well. For the
12 months ended April 30, the Fund was ranked 1st out of the 227
funds in the Municipal Debt category of Lipper Analytical
Services, a large mutual fund rating company.(1)
The Fund outperformed the Index because it hedged its
long bonds, which are more susceptible to price volatility, with
interest rate futures. The strategy was intended to stabilize
the Fund's value, to preserve yield, and to avoid selling bonds
when prices were declining.
21
<PAGE>
THE PORTFOLIO
Since assuming portfolio duties for the Fund on
January 1, I have continued to emphasize larger, high-quality
issues with broad market demand. As of April 30, Janus Federal
Tax-Exempt Fund's significant holdings included essential service
bonds (63% of assets) and general obligation bonds (37%). The
portfolio's average rating was AA3, and it had a weighted average
maturity of 15.8 years. Average modified duration (a theoretical
measure of price volatility) was 7.9 years. The S.E.C. 30-day
yield was a very competitive 5.72% - the equivalent of an 8.29%
taxable yield for investors in the 31% federal tax bracket.
GOING FORWARD
The Fund is positioned defensively in the current
difficult bond market. We have been able to adjust the portfolio
to perform in this environment, while maintaining the flexibility
to respond effectively to further interest rate moves, up or
down. I expect the fixed-income market to remain volatile until
investors can better understand the actual strength of economic
growth.
Thank you for your continued investment in Janus Federal
Tax-Exempt Fund.
(1) Lipper defines a General Municipal Debt Fund as one that
invests "at least 65% of assets in municipal debt issues in the
top four credit ratings." Past performance is no guarantee of
future results. Lipper rankings are based on total return,
including reinvestment of dividends and capital gains.
PERFORMANCE OVERVIEW
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Federal Tax-Exempt Fund and the
Lehman Brothers Municipal Bond Index. Janus Federal Tax-Exempt
Fund is represented by a solid purple line. The Lehman Brothers
Municipal Bond Index is represented by a single dashed black
line. The "y" axis reflects the value of the investment. The
"x" axis reflects the computation periods from inception, May 3,
1993, through April 30, 1996. The upper right quadrant reflects
the ending value of the hypothetical investment in Janus Federal
Tax-Exempt Fund ($11,614) as compared to the Lehman Brothers
Municipal Bond Index ($11,827). There is a legend in the upper
left quadrant of the graph which indicates Janus Federal Tax-
Exempt Fund's one-year and since inception (May 3, 1993) average
annual total returns as 10.20% and 5.12%, respectively.
22
<PAGE>
*The Fund's inception date Source - Lipper Analytical Services,
Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future
performance. Investment return and principal value may fluctuate
so that shares, when redeemed, may be worth more or less than
their original cost.
The Fund's portfolio may differ significantly from the
securities in the index. The index is unmanaged and therefore
does not reflect the cost of portfolio management or trading.
JANUS FEDERAL TAX-EXEMPT FUND April 30, 1996 (unaudited)
Principal Amount Market Value
Municipal Securities - 103.3%
Alaska - 2.8%
$1,000,000 Alaska State Housing Finance
Corp., (MBIA Insured), 5.875%,
12/1/30 $953,750
Arizona - 3.0%
1,000,000 Phoenix, 6.00%, 7/1/12 1,032,500
California - 10.2%
1,000,000 Foothill/Eastern Transportation
Revenue, (Corridor Agency Toll Road),
Senior Lien, Series A, 6.00%,
1/1/34 931,250
1,000,000 Long Beach Revenue, (Aquarium of
the Pacific), Series A, 6.125%,
7/1/23 930,000
800,000 Los Angeles Regional Airport
Improvements Corp. Lease Revenue,
(American Airlines - L.A. Inter-
national), Series F, 4.20%,
Variable Rate, 12/1/24 800,000
1,000,000 San Diego Public Facilities Financing
Authority Sewer Revenue, (FGIC
Insured), 5.00%, 5/15/25 867,500
3,528,750
Colorado - 15.8%
750,000 Arvada Urban Renewal Authority,
(Arvada County Center Urban Renewal),
8.75%, 3/1/06 736,875
1,000,000 Colorado Health Facilities Authority
Revenue, (Vail Valley Medical Center
Project), Series A, 6.50%, 1/15/13 998,750
100,000 Cordillera Metropolitan District,
(Eagle County), 6.05%, 12/1/06 99,625
23
<PAGE>
1,000,000 Denver City and County Airport
Revenue, (MBIA Insured), Series A,
5.50%, 11/15/25 935,000
500,000 Highlands Ranch Metropolitan District,
(No. 2), (FSA Insured), 6.50%,
6/15/12 533,125
1,000,000 Meridian Metropolitan District,
7.50%, 12/1/11 1,082,500
1,000,000 Mountain Village Metropolitan
District, (San Miguel County),
8.10%, 12/1/11 1,101,250
5,487,125
Florida - 3.2%
1,000,000 Jacksonville Electric Authority
Revenue, (Bulk Power Supply - Scherer
4-1-A), 6.75%, 10/1/16 1,101,250
Illinois - 11.8%
1,000,000 Chicago Motor Fuel Tax Revenue,
(AMBAC Insured), 6.125%, 1/1/09 1,050,000
1,000,000 Chicago O'Hare International
Airport Special Facilities Revenue,
(Delta Air Lines, Inc. Term),
6.45%, 5/1/18 988,750
1,150,000 Chicago, (FGIC Insured), Series B,
5.125%, 1/1/25 1,006,250
1,000,000 Metropolitan Pier and Exposition
Authority Hospital Facilities
Revenue, (McCormick Place Convention
Center Project), 7.00%, 7/1/26 1,060,000
4,105,000
Montana - 8.6%
1,000,000 Montana State Board of Investment
Workers Compensation Program,
(MBIA Insured), 6.875%, 6/1/20 1,090,456
1,000,000 Montana State Health Facility
Authority Healthcare Revenue,
(Montana Development Center Project),
6.40%, 6/1/19 1,015,000
1,000,000 University of Montana Facilities
Acquisition and Improvement
Revenue, (MBIA Insured), Series C,
5.00%, 11/15/17 888,750
2,994,206
New Jersey - 3.0%
1,000,000 North Brunswick Township Board of
Education, 6.30%, 2/1/14 1,041,250
24
<PAGE>
New Mexico - 12.6%
1,000,000 Albuquerque Airport Revenue, 7.60%,
7/1/08 1,050,000
385,000 Chaves County Hospital Revenue,
(Eastern New Mexico Medical Center
Project), 7.25%, 12/1/10 391,737
1,000,000 Gallup Pollution Control Revenue,
(Plains Electric Generation Project),
6.65%, 8/15/17 1,051,250
1,000,000 Santa Fe Utilities Revenue, (AMBAC
Insured), Series A, 5.25%, 6/1/17 920,000
950,000 University of New Mexico University
Revenue, Series A, 6.00%, 6/1/21 958,313
4,371,300
New York - 8.3%
1,000,000 Municipal Assistance Corporation
for the City of New York, Series E,
5.20%, 7/1/08 986,250
1,000,000 New York State Dorm Authority
Revenue, (State University Educa-
tional Facilities), Series A, 5.50%,
5/15/19 918,750
1,000,000 New York State Urban Development
Corporation Revenue, (University
Facilities Grants), 5.875%, 1/1/21 957,500
2,862,500
Oklahoma - 4.6%
1,000,000 Grand River Dam Authority Revenue,
(AMBAC Insured), 6.25%, 6/1/11 1,077,500
500,000 McGee Creek Authority Water Revenue,
(MBIA Insured), 6.00%, 1/1/23 510,625
1,588,125
Puerto Rico - 1.5%
500,000 Puerto Rico Commonwealth Aqueduct
and Sewer Authority Revenue,
(Commonwealth Guaranteed Insured),
6.00%, 7/1/09 514,375
Texas - 4.8%
Grapevine Industrial Development Corp.,
(American Airlines), Variable Rate:
300,000 Series A-2, 4.20%, 12/1/24 300,000
200,000 Series A-4, 4.20%, 12/1/24 200,000
200,000 Series B-4, 4.20%, 12/1/24 200,000
1,000,000 Texas Public Financing Authority,
Series B, 5.75%, 10/1/15 980,000
1,680,000
25
<PAGE>
Utah - 5.3%
Intermountain Power Agency Power
Supply Revenue:
1,000,000 Series D, 5.00%, 7/1/21 861,250
900,000 Series D, 8.625%, 7/1/21 963,000
1,824,250
Virginia - 2.9%
1,000,000 Fairfax County Virginia Water
Authority Water Revenue, (AMBAC
Insured), 6.00%, 4/1/22 995,000
Wisconsin - 2.0%
2,000,000 Wisconsin Central District Tax
Revenue, (Capital Appreciation -
Senior Dedicated), Series A, zero
coupon, 12/15/13 700,000
Wyoming - 2.9%
1,000,000 Cheyenne, 6.20%, 12/1/11 1,012,500
Total Municipal Securities - 103.3% (total cost
$36,283,871) 35,791,881
Liabilities, net of Cash, Receivables and Other
Assets - (3.3%) (1,129,809)
Net Assets - 100% $34,662,072
AMBAC - American Bond Assurance Corp.
CGIC - Capital Guaranty Insurance Corp.
FGIC - Financial Guaranty Insurance Corp.
FSA - Financial Security Insurance Corp.
MBIA - Municipal Bond Insurance Association
PSFG - Permanent School Fund Guaranty
Financial Futures - Short
25 Contracts Municipal Bond Index Future,
expires June, 1996, principal
amount $2,830,469, value
$2,781,250, cumulative
appreciation $49,219
150 Contracts U.S. Treasury - 30 year bond,
expires June, 1996, principal
amount $17,548,438, value
$16,373,438, cumulative
appreciation 1,175,000
26
<PAGE>
JANUS INTERMEDIATE GOVERNMENT SECURITIES FUND
Portfolio Manager, Sandy R. Rufenacht
PERFORMANCE REVIEW
The first six months ended April 30, 1996, was
characterized by a swift change in market sentiment in January,
when interest rates rose in response to renewed economic
strength. The intermediate segment of the government securities
market was particularly difficult. Yield on the five-year U.S.
Treasury note jumped from a low of 5.38% in late December, to
6.41% at the end of April. This was virtually identical to the
yield change in the 30-year Treasury bond, which rose from a
December low of 5.95% to 6.91% on April 30.
The Janus Intermediate Government Securities Fund
declined 2.78% for the six-month period, versus a gain of 1.23%
for the Lehman Brothers Intermediate Government Bond Index. Both
returns include reinvested dividends.
The Fund underperformed the Lehman Index because it had
a longer weighted average maturity than the Index through
January. Since January, the Fund's weighted average maturity has
been in line with the Index.
PORTFOLIO STRATEGY
Since taking over portfolio responsibilities on
January 1, I have made several alterations in the portfolio in an
attempt to bring performance closer to that of the Lehman Index
while improving the Fund's yield. Treasuries in the four-year
area were increased to bolster yield. These securities were less
expensive, relative to their yields, than two, three, or five-
year securities, a condition that is known in the investment
industry as "cheap to the (yield) curve." This gave the Fund a
slightly longer weighted average maturity than the Index, so a
position in interest rate futures contracts was opened to hedge
against any additional rise in rates. The strategy should help
stabilize the Fund in the face of market volatility while
producing a competitive yield.
As of April 30, the Fund's average maturity was up
slightly, to 4.5 years, with a modified duration (a theoretical
measure of price volatility) of 3.9 years. The S.E.C. 30-day
yield was 5.77%.
With the exception of cash and the futures position (the
hedge was down to less than one-tenth of 1% on April 30), Janus
Intermediate Government Securities Fund remains invested in AAA-
rated Treasury notes backed by the full faith and credit of the
U.S. Government.
27
<PAGE>
GOING FORWARD
My strategy will remain conservative until the rate of
economic growth becomes clearer. Until the market can better
gauge the strength of the economy, my expectation is that bond
prices will experience continued volatility.
Thank you for your investment in Janus Intermediate
Government Securities Fund.
JANUS INTERMEDIATE GOVERNMENT SECURITIES FUND
Portfolio Manager, Sandy R. Rufenacht
PERFORMANCE OVERVIEW
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Intermediate Government Securities
Fund and the Lehman Brothers Intermediate Gov't. Bond Index.
Janus Intermediate Government Securities Fund is represented by a
solid purple line. The Lehman Brothers Intermediate Gov't. Bond
Index is represented by a single dashed black line. The "y" axis
reflects the value of the investment. The "x" axis reflects the
computation periods from inception, July 26, 1991, through
April 30, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Intermediate
Government Securities Fund ($12,657) as compared to the Lehman
Brothers Intermediate Gov't. Bond Index ($14,963). There is a
legend in the upper left quadrant of the graph which indicates
Janus Intermediate Government Securities Fund's one year and
since inception (July 26, 1991) average annual total returns as
5.40%, and 5.09%, respectively.
*The Fund's inception date Source - Lipper Analytical Services,
Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future
performance. Investment return and principal value may fluctuate
so that shares, when redeemed, may be worth more or less than
their original cost.
The Fund's portfolio may differ significantly from the
securities in the index. The index is unmanaged and therefore
does not reflect the cost of portfolio management or trading.
28
<PAGE>
JANUS INTERMEDIATE GOVERNMENT SECURITIES FUND
April 30, 1996 (unaudited)
Principal Amount Market Value
U.S. Government Obligation - 100%
U.S. Treasury Note
$36,745,000 5.75%, due 10/31/00 $35,799,919
Total Investment - 100% (total cost $35,743,693) 35,799,919
Cash, Receivables and Other Assets, net of
Liabilities - 0% 13,823
Net Assets - 100% $35,813,742
Financial Futures - Short
55 Contracts U.S. Treasury - 5-year note,
expires June 1996, principal
amount $5,794,766, value
$5,825,703 cumulative depre-
ciation ($30,937)
JANUS SHORT-TERM BOND FUND
Portfolio Manager, Sandy R. Rufenacht
PERFORMANCE REVIEW
During the first half of our fiscal year (November 1,
1995 - April 30, 1996), short-term fixed-income securities
mirrored the performance of longer-term U.S. Treasury and
investment-grade corporate issues. Investors enjoyed a strong
market heading into 1996, but in January interest rates began to
rise sharply.
The Janus Short-Term Bond Fund had a total return of
1.96% for the six months ended April 30, versus a gain of 1.97%
for the Lehman Brothers Government/Corporate 1-3 Year Bond Index.
Both results include reinvested dividends.
PORTFOLIO STRATEGY
Since assuming management responsibilities for the Fund
on January 1, my challenge has been to respond to the very
dramatic rise in interest rates that was set in motion by an
acceleration in economic growth. Janus Short-Term Bond Fund
initiated several strategic adjustments to address these changes.
The intent was to dampen the effect of the bond market's
volatility and maintain a competitive yield.
To stabilize the portfolio I positioned approximately
25% of assets in a one-year Treasury bill (T-bill). The yield on
29
<PAGE>
the T-bill was approximately 1% less than the yield on a 30-year
Treasury bond - a condition known as a flat yield curve - but the
bill's short maturity made its price far less vulnerable to the
continuing climb in rates. Moderate, very selective positions
(approximately 6% of assets) in high-yield/high-risk (junk) bonds
were also added. In a healthy economy, high-yield bonds tend to
perform well, because issuers have a better chance of improving
their balance sheets by lowering debt. The high yields on these
bonds also can cushion against price erosion. Both factors
worked in favor of the high-yield sector during the first four
months of 1996, and high-yield bonds proved to be one of the few
bright spots in an otherwise difficult market.
In a more stable rate environment, my strategy will be
to adjust the Fund's weighted average maturity at the margins,
adding smaller positions in short- or long-term investment-grade
bonds to maintain both yield and credit quality.
PORTFOLIO COMPOSITION
As of April 30, the Fund's weighted average maturity was
2.8 years, up slightly from 2.5 years when the period began, and
longer than the Lehman Index. This is due to our high-yield
holdings, some of which have maturities approaching ten years.
Duration (a theoretical measure of price volatility) was
unchanged, however, at 2.3 years, and the portfolio's dollar-
weighted average rating also remained an A+. The S.E.C. 30-day
yield rose to 7.02%.
The Fund remains heavily positioned in high-quality
corporate bonds, which made up 68% of assets at the end of April.
Bonds in this sector are represented by familiar names such as
IBM, GMAC, and J.C. Penney. In the high-yield area, holdings
include Van de Kamps, NEXTLINK, and Exide Electronics Group.
GOING FORWARD
My strategy is to remain cautious. The portfolio is
currently positioned to respond effectively to volatile market
conditions. I expect volatility to persist so long as the
general bond market is uncertain about the economic outlook.
Thank you for your continued investment in Janus Short-
Term Bond Fund.
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PERFORMANCE OVERVIEW
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Short-Term Bond Fund and the Lehman
Brothers 1-3 Year Gov't./Corp. Bond Index. Janus Short-Term Bond
Fund is represented by a solid purple line. The Lehman Brothers
1-3 Year Gov't./Corp. Bond Index is represented by a single
dashed black line. The "y" axis reflects the value of the
investment. The "x" axis reflects the computation periods from
inception, September 1, 1992, through April 30, 1996. The upper
right quadrant reflects the ending value of the hypothetical
investment in Janus Short-Term Bond Fund ($11,555) as compared to
the Lehman Brothers 1-3 Year Gov't./Corp. Bond Index ($11,837).
There is a legend in the upper left quadrant of the graph which
indicates Janus Short-Term Bond Fund's one-year and since
inception (September 1, 1992) average annual total returns as
5.84% and 4.01%, respectively.
*The Fund's inception date Source - Lipper Analytical Services,
Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future
performance. Investment return and principal value may fluctuate
so that shares, when redeemed, may be worth more or less than
their original cost.
The Fund's portfolio may differ significantly from the
securities in the index. The index is unmanaged and therefore
does not reflect the cost of portfolio management or trading.
JANUS SHORT-TERM BOND FUND April 30, 1996 (unaudited)
Shares or
Principal Amount Market Value
Corporate Bonds - 74.1%
Aerospace and Defense - 9.8%
$2,000,000 International Lease Finance $1,940,000
Corp., 5.75% notes, due 12/15/99
2,250,000 Lockheed Martin Corp., 5.875% 2,221,875
notes, due 3/15/98
4,161,875
Business Credit - 4.6%
2,000,000 First USA Bank, 5.75% 1,950,000
bank notes, due 1/15/99
Captive Finance - Auto - 9.7%
2,250,000 Associates Corp. N.A., 5.75% 2,213,438
senior notes, due 11/15/98
2,000,000 General Motors Acceptance Corp., 1,902,500
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5.625% notes, due 2/15/01
4,115,938
Electronics - 0.6%
250,000 Exide Electronics Group, Inc.,
11.50% units,due 3/15/06 262,500
Financial - Bank Commerical - 13.7%
2,000,000 NationsBank Corp., 5.375% 1,902,500
senior notes, due 4/15/00
2,000,000 Norwest Corp., 5.75% 1,980,000
senior notes, due 3/15/98
2,000,000 Provident Bank (The), 6.125% 1,935,000
senior notes, due 12/15/00
5,817,500
Financial - Savings/Loan/Thrift - 4.6%
2,000,000 Aristar, Inc., 5.75% 1,970,000
notes, due 7/15/98
Financial - Security Broker - 4.1%
1,000,000 Dean Witter Discover & Co., 6.00% 993,750
global notes, due 3/1/98
750,000 Merrill Lynch & Co., Inc., 6.00% 723,750
notes, due 1/15/01
1,717,500
Food Processing - 2.5%
800,000 Grand Metropolitan Investment 795,000
Corp., 6.50% company guaranteed
notes, due 9/15/99
250,000 Van de Kamps, Inc., 12.00% 265,625
senior subordinated notes, due
9/15/05
1,060,625
Forest Products and Paper - 0.7%
250,000 Williamhouse-Regency of Delaware, 283,125
Inc., 13.00% senior subordinated
notes, due 11/15/05+
Insurance - Multiline - 4.7%
2,000,000 Travelers Group, Inc., 5.75% 1,975,000
notes, due 4/15/98
Packaging and Containers - 4.7%
2,000,000 Crown Cork & Seal Co., 5.875% 1,975,000
notes, due 4/15/98
Publishing - Newspaper - 2.3%
1,000,000 Dow Jones & Co., Inc., 5.75% 965,000
notes, due 12/1/00
Retail - Department Stores - 3.4%
1,500,000 J.C. Penny & Co., Inc., 5.375% 1,460,625
notes, due 11/15/98
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Retail - Grocery - 0.6%
250,000 Carr-Gottstein Foods Co., 12.00% 257,500
senior subordinated notes, due
11/15/05
Services - Hotels and Motels - 1.2%
275,000 Riviera Holdings Corp., 11.00% 264,000
first mortgage notes, due 12/31/02
250,000 Trump Atlantic City Associates, 255,000
11.25% first mortgage notes, due
5/1/06
519,000
Services - Motion Picture and Video Tape Production - 4.6%
2,000,000 Walt Disney Co. (The), 6.375% 1,970,000
global senior bonds, due 3/30/01
Telecommunications - 1.1%
250,000 NEXTLINK Communications, L.L.C., 252,500
12.50% senior notes, due 4/15/06+
250,000 Peoples Telephone Co., Inc., 231,875
12.25% senior notes, due 7/15/02
484,375
Telecommunications Equipment - 0.6%
250,000 Wireless One, Inc., 13.00% 268,125
senior notes, due 10/15/03
Textiles - 0.6%
250,000 PT Polysindo Eka Perkasa, 13.00% 265,000
senior notes, due 6/15/01
Total Corportate Bonds (cost $31,928,047) 31,478,688
Warrants - 0%
750 Wireless One, Inc. - exp. 10/19/00*
(cost $0) 5,250
U.S. Government Obligations - 24.8%
U.S. Treasury Bills:
370,000 5.19%, 4/3/97 352,024
500,000 5.215%, 4/3/97 475,590
240,000 5.23%, 4/3/97 228,250
9,970,000 5.36%, 4/3/97 9,469,750
Total U.S. Government Obligations (cost
$10,525,614) 10,525,614
Total Investments - 98.9% (total cost
$42,453,661) 42,009,552
Cash, Receivables and Other Assets, net of
Liabilities - 1.1% 487,367
Net Assets - 100% 42,496,919
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JANUS MONEY MARKET FUNDS
Portfolio Manager, Sharon S. Pichler
During the first half of fiscal 1996 the volatility in
the bond market proved challenging. November and December of
1995 witnessed a surge in prices, but starting in January bond
prices declined when the economy gave indications of renewed
vigor. Rising commodity prices and February's low unemployment
numbers stoked inflationary fears and kept bonds in retreat for
the remainder of the period. The yield on the 30-year Treasury
bond dropped as low as 5.95% in December when bond prices peaked,
but then rose to 6.91% on April 30. The yield on the one-year
Treasury hit a low of 4.78% in February, and finished the period
at 5.63%.
In February, yields on overnight maturities were higher
than yields on one-year securities, which meant the yield curve
was negative, or inverted. This occurred because the Federal
Reserve Board was expected to lower short-term rates.
However, when strong economic data came out in early
March, the yield curve changed from negative to positive in the
space of a few days. One-year obligations began yielding more
than overnight securities because the concern became that the Fed
would either raise rates or at best leave them unchanged. So
investors, many of whom had been substantial buyers of one-year
paper, were now afraid to buy these securities, fearing that
rates would continue to rise and they would be locked into lower
rates.
Unfortunately, many money market funds extended
portfolio maturities in late February, just before the change in
sentiment, in the belief that rates would decline. When lower
rates failed to materialize, and the opposite occurred, these
funds were stuck with lower-yielding, long-term securities.
This is a good example of why we avoid large wagers on
the direction of interest rates. Mistakes can be costly.
JANUS MONEY MARKET FUND
Faced with so much volatility and the rapid change in
market sentiment, our strategy was to emphasize overnight
obligations when short-term rates were higher than one-year rates
(the inverted yield curve). We also bought opportunistically in
six-month maturities when better yields were available.
This is the same "barbell" approach we employed through
much of 1995. With a barbell, both ends of the maturity spectrum
are more heavily weighted - though in our case the short end is
much heavier than the long end - and not much is in the middle.
34
<PAGE>
This structure enables the Fund to do well regardless of the
direction interest rates take. During this period of
uncertainty, however, we kept the long side of the barbell at six
months instead of one year. As a result, we were able to take
advantage of higher short-term rates while getting help from
longer-term positions, but without locking the portfolio into
positions where yields would underperform if the Fed raised
interest rates. This approach has given us a weighted average
maturity of 38 days as of April 30, 1996. The Fund is rated Aa
by Moody's.
JANUS GOVERNMENT MONEY MARKET FUND
Government money market instruments were also affected
by the negative yield curve and the abrupt change in market
sentiment. The same barbell strategy described above gave the
portfolio a weighted average maturity of 24 days as of April 30,
1996.
All government debt in the Fund is rated AAA, the
highest credit quality available. Janus Government Money Market
Fund also has a rating of AAAm from Standard & Poor's Ratings
Services, and an Aaa rating from Moody's. Both services analyze
the Fund's credit quality, market price exposure, and management.
For the 12 months ended April 30, Janus Government Money
Market Fund ranked 21st of 112 funds (top 19%) in the U.S.
Government Money Market category of Lipper Analytical Services, a
mutual fund rating company.(1)
JANUS TAX-EXEMPT MONEY MARKET FUND
The change in sentiment that characterized the taxable
money market during the last six months was mirrored in the tax-
exempt market. However, interest rates in the short-term
municipal markets are almost always lower than in the taxable
market. Currently a one-year AAA municipal note yields
approximately 65% of a U.S. Government security with a comparable
maturity.
Supply and demand can also have a substantial influence
on yields of tax-exempt securities, often as a result of seasonal
factors. For example, trading opportunities may arise during the
April 15 tax season, because taxpayers draw down their tax-exempt
money market fund balances, and demand for available securities
declines. We took advantage of this seasonal distortion to do
some bargain hunting.
Currently, such seasonal and other extraneous factors
are obscuring fundamental ones, causing the tax-exempt yield
curve to be flat-to-inverted, unlike the taxable curve. With
35
<PAGE>
long-term and short-term rates virtually the same, we opted for
the greater flexibility of short-term securities. The Fund's
weighted average maturity was 33 days as of April 30.
For the 12 months ended April 30, Janus Tax-Exempt Money
Market Fund ranked 21st of 129 funds (top 16%) in the Tax-Exempt
Money Market category of Lipper Analytical Services, a mutual
fund rating company.(2)
Thank you for your investment in Janus money market
funds.
(1) Lipper defines a U.S. Government Money Market Fund as one
that "invests principally in financial instruments issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, with dollar-weighted average maturities of
less than 90 days," and that intends "to keep constant net asset
value." Past performance is no guarantee of future results.
Lipper rankings are based on total return, including reinvestment
of dividends and capital gains.
(2) Lipper defines a Tax-Exempt Money Market Fund as one that
"invests in high quality municipal obligations with dollar-
weighted average maturities of less than 90 days," and that
intends "to keep constant net asset value." Past performance is
no guarantee of future results. Lipper rankings are based on
total return, including reinvestment of dividends and capital
gains.
JANUS MONEY MARKET FUND April 30, 1996 (unaudited)
Principal Amount Market Value
Short-Term Corporate Notes - 18.5%
7,700,000 Alabama State Industrial Development
Authority 5.556976%, 6/28/96 7,700,000
25,211,000 Allied Signal, Inc.
5.30%, 5/8/96 25,185,019
25,000,000 Bayerische Vereinsbank A.G.
5.00%, 9/6/96 24,555,556
15,000,000 Dean Health System, Inc.
5.10%, 8/30/96 14,742,875
General Electric Capital Corp.:
25,000,000 5.34375%, 6/11/96 25,000,000
25,000,000 5.24%, 6/14/96 24,839,889
General Motors Acceptance Corp.:
20,000,000 4.89%, 8/13/96 19,717,467
25,000,000 5.04%, 12/3/96 24,244,000
15,000,000 5.29%, 12/6/96 14,517,287
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<PAGE>
Hanover Direct, Inc.:
7,600,000 Series A, 5.556976%, 6/28/96 7,600,000
6,500,000 Series B, 5.556976%, 6/28/96 6,500,000
18,500,000 Los Angeles County Metropolitan
Transit Authority, Series A,
5.75%, 5/1/96 18,500,000
25,000,000 Merrill Lynch and Co., Inc.
5.30%, 5/6/96 24,981,597
Total Short-Term Corporate Notes
(amortized cost $238,083,690) 238,083,690
Put Bonds - 4.8%
New York, New York, Series H, Subseries H-7:
10,450,000 5.20%, 8/13/96 10,450,000
2,000,000 5.35%, 8/1/98 2,000,000
7,935,000 5.25%, 8/1/15 7,935,000
14,835,000 5.20%, 8/1/16 14,835,000
Northglenn Colorado Urban Renewal
Authority, (Northglenn Mall Project):
8,700,000 Series A-2, 5.90%, 12/1/13 8,700,000
5,700,000 Series B, 5.90%, 12/1/16 5,700,000
12,200,000 Richmond County, Georgia,
(Monsanto Co., Project), 6.27%,
6/1/20 12,200,000
Total Put Bonds (cost $61,820,000) 61,820,000
General Obligation Notes - 2.8%
New York City, New York:
4,500,000 Subseries A-2, 5.20%, 8/12/96 4,500,000
1,500,000 Subseries A-2, 5.35%, 8/12/96 1,500,000
30,000,000 Series A, 5.35%, 8/26/96 30,000,000
Total General Obligation Notes (cost $36,000,000) 36,000,000
Bank Notes - 6.2%
25,000,000 American Express Centurion Bank
5.43%, 11/12/96 25,000,000
20,000,000 Bank of New York
5.00%, 8/7/96 19,999,926
25,000,000 FCC National Bank
5.80%, 8/29/96 25,055,147
10,000,000 J.P. Morgan of Delaware
5.75%, 8/7/96 9,997,447
Total Bank Notes (amortized cost $80,052,520) 80,052,520
Taxable Variable Rate Demand Notes - 33.7%
13,700,000 Ann Arundel Medical Center,
5.60%, 7/1/24 13,700,000
Armstrong County, Pennsylvania Hospital
Authority Revenue, (St. Francis Financial Corp.):
13,750,000 Series A, 5.60%, 9/1/17 13,750,000
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<PAGE>
14,600,000 Series B, 5.60%, 9/1/17 14,600,000
4,300,000 Bayliss Group Partnership,
5.60%, 1/1/10 4,300,000
10,000,000 Cloquet, Minnesota Industrial
Facilities, (Potlatch Corp.
Project), 5.55%, 4/1/26 10,000,000
16,660,000 Community Health System, Inc.,
Series A, 5.65%, 10/1/03 16,660,000
14,700,000 Fontana, California Public Finance
Authority COPS, 5.68%, 10/1/20 14,700,000
5,000,000 General Motors Acceptance Corp.
5.5625%, 5/6/96 5,000,133
GMS Associates:
25,600,000 General Partnership, 5.60%,
5/15/24 25,600,000
12,100,000 General Partnership II, 5.60%,
8/15/25 12,100,000
6,400,000 GMS Associates III,
5.60%, 11/11/25 6,400,000
10,000,000 H/M Partners, L.L.C., 5.70%,
10/1/20 10,000,000
7,800,000 Health Midwest Ventures Group,
Inc., Demand Bond Series 1994A,
5.75%, 8/1/19 7,800,000
20,000,000 Hilander Finance L.L.C., 5.60%,
11/11/25 20,000,000
18,000,000 Illinois Student Assistance Community,
Student Loan Revenue, Series 1993D,
5.70%, 9/1/23 18,000,000
16,200,000 Jackson County, Alabama Industrial
Development, (Beaulieu America
Project), 5.587%, 7/1/10 16,200,000
22,500,000 Key Bank of New York, senior notes,
5.26%, 2/14/97 22,483,883
35,000,000 Lehman Brothers, Inc., senior
subordinated note, 5.90625%,
5/17/96 35,007,605
13,000,000 Lexington Financial Services,
L.L.C., Healthcare Revenue, 5.60%,
2/1/26 13,000,000
4,000,000 Liliha Partners, L.P. of California,
6.40%, 8/1/24 4,000,000
14,250,000 Massachusetts Healthcare Revenue,
(Nursing Home Project), 5.60%,
11/15/13 14,250,000
Mississippi Business Finance Industrial
Development Revenue:
5,000,000 (Dana Lighting Project),
5.55%, 5/1/10 5,000,000
11,500,000 (United Technology Motor System Project),
5.65%, 6/1/14 11,500,000
38
<PAGE>
7,000,000 (Choctaw Foods, Inc., Project),
5.55%, 8/1/15 7,000,000
17,500,000 Oakwood Medical Enterprises,
Inc., Series A, 5.70%, 9/1/12 17,500,000
11,800,000 OFC Corp., 5.60%, 1/1/26 11,800,000
14,100,000 Pasadena California COPS, (Los
Robles Avenue Parking Facility
Project), 5.60%, 11/1/12 14,100,000
12,120,000 Philip R. Wegman, (The Manors
Project), 5.95%, 10/1/20 12,120,000
3,175,000 St. Francis, Hawaii Healthcare
Foundation Revenue, 5.80%,
8/1/12 3,175,000
15,000,000 San Bernardino County, California,
(County Center Refining Project),
5.55%, 7/1/16 15,000,000
9,365,000 San Jose, California Financing
Authority, (Hayes Mansion Revenue
Project), Series A, 5.65%,
12/1/25 9,365,000
8,155,000 Tyler, Texas Health Facilities
Development Corp., (East Texas
Medical Center), 5.95%, 11/1/25 8,155,000
5,315,000 Union City, Tennessee Industrial
Development Board, (Cobank Limited,
L.L.C., Project), 5.70%, 1/1/25 5,315,000
5,000,000 Venturecor, Inc., Healthcare Revenue,
5.75%, 5/15/35 5,000,000
10,000,000 Virginia State Housing Development
Authority Residential Mortgage Revenue,
Series A, 5.55%, 3/1/02 10,000,000
Total Taxable Variable Rate Demand Notes
(amortized cost $432,581,621) 432,581,621
Certificates of Deposit - 3.5%
10,000,000 Canadian Imperial Bank
5.50%, 3/11/97 10,000,000
10,000,000 National Bank of Canada
5.5625%, 9/10/96 10,000,000
25,000,000 Royal Bank of Canada
5.31%, 9/25/96 24,993,942
Total Certificates of Deposit (amortized cost
$44,993,942) 44,993,942
Promissory Notes - 5.1%
65,000,000 Goldman Sachs Group, L.P. 5.50%,
7/22/96 (cost $65,000,000) 65,000,000
39
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Repurchase Agreements - 24.7%
17,500,000 Lehman Brothers Repurchase Agreement,
5.40%, dated 4/30/96, maturing 5/1/96,
to be repurchased at $17,502,625,
collateralized by $17,500,000 in U.S.
Treasury Notes 8.50%, 11/15/17, with a
value of $17,852,235 17,500,000
100,000,000 Lehman Brothers Repurchase Agreement,
5.44%, dated 4/30/96, maturing 5/1/96,
to be repurchased at $100,015,111
collateralized by $32,000,000 in Abbott
Labs 5/28/96; $40,000,000 in Anchor
Funding 5/31/96; $22,500,000 in Export
Development Corp. 5/6/96; $5,500,000 in
Pooled Accounts Receivable Capital Corp.
5/30/96 with respective values of
$32,000,000; $40,000,000; $22,500,000;
$7,500,000 100,000,000
200,000,000 NationsBank Repurchase Agreements, 5.42% -
5.44%, dated 4/30/96, maturing 5/1/96,
to be repurchased at $200,030,167,
collateralized by: $1,459,000 in Tennessee
Valley Authority Notes 4.60% - 8.25%,
11/15/96 - 12/15/96; $1,660,000 in Student
Loan Marketing Association Notes 6.05% -
6.925%, 9/12/00 - 12/1/05; $117,152,850 in
Government National Mortgage Association
Notes 5.00% - 11.50%, 6/15/01 - 4/20/26;
$71,210,000 in Federal National Mortgage
Association Notes 5.20% - 9.55%, 6/6/96 -
9/12/05; $1,780,000 in Federal Home Loan
Mortgage Corporation Notes 6.005% - 7.98%,
5/13/96 - 7/21/99; $13,870,000 in Federal
Home Loan Bank System Notes 5.04% - 8.26%,
5/27/96 - 10/19/05; $2,048,000 in Federal
Farm Credit Notes 5.29% - 8.80%, 6/3/96 -
11/10/03; $11,328,000 in B.I. Funding,
Inc. 5.34% - 5.36%, 5/29/96 - 6/17/96 with
respective values of $1,488,781;
$1,647,271; $100,605,791; $71,168,022;
$1,833,445; $13,906,123; $2,100,780;
$11,249,792 200,000,000
Total Repurchase Agreements (cost $317,500,000) 317,500,000
Total Investments - 99.3% (total cost
$1,276,031,773) 1,276,031,773
Cash, Receivables and Other Assets, net of
Liabilities - 0.7% 9,243,236
Net Assets - 100% $1,285,275,009
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JANUS GOVERNMENT MONEY MARKET FUND
April 30, 1996 (unaudited)
Principal Amount Market Value
U.S. Government Agency Discount Notes - 36.4%
Federal Farm Credit Bank
5,000,000 5.40%, 8/27/96 $ 4,911,500
Federal Home Loan Bank System:
2,000,000 5.50%, 5/3/96 1,999,389
1,835,000 5.58%, 5/31/96 1,826,467
1,000,000 5.51%, 7/11/96 989,133
1,000,000 5.44%, 7/16/96 988,516
2,000,000 5.39%, 7/26/96 1,974,248
1,000,000 5.44%, 8/1/96 986,098
1,000,000 5.38%, 10/4/96 976,687
2,000,000 5.34%, 10/11/96 1,951,643
1,365,000 5.25%, 3/14/97 1,301,897
Federal Home Loan Mortgage Corp.
36,700,000 5.30%, 5/1/96 36,700,000
Federal National Mortgage Association:
5,000,000 5.37%, 5/3/96 4,998,508
2,000,000 5.39%, 6/20/96 1,985,028
Total U.S. Government Agency Discount Notes
(amortized cost $61,589,114) 61,589,114
U.S. Government Agency Variable and
Floating Rate Notes - 14.4%
Federal Farm Credit Bank
2,000,000 5.35%, 6/13/97 1,998,918
Federal Home Loan Bank System:
5,000,000 5.68%, 9/6/96 5,006,336
3,000,000 5.22%, 9/2/97 2,987,881
Student Loan Marketing Association:
5,000,000 6.08%, 7/1/96 5,005,674
3,200,000 5.55%, 8/22/96 3,201,887
1,240,000 5.42%, 3/3/97 1,240,066
5,000,000 5.23%, 4/18/97 4,997,603
Total U.S. Government Agency Variable and
Floating Rate Notes (amortized cost
$24,438,365) 24,438,365
U.S. Government Obligations - 4.3%
7,500,000 U.S. Treasury Bill 5.045%, 11/14/96
(amortized cost $7,302,316) 7,302,316
Repurchase Agreements - 44.4%
15,000,000 HSBC Repurchase Agreement 5.38%,
dated 4/30/96, maturing 5/1/96, to
be repurchased at $15,002,242,
collateralized by $15,670,000 in
41
<PAGE>
Federal National Mortgage Association
Discount Notes, 10/9/96 and 10/11/96
with respective values of $10,184,895
and $5,115,288 15,000,000
20,000,000 HSBC Repurchase Agreement 5.41%,
dated 4/30/96, maturing 5/1/96,
to be repurchased at $20,003,006,
collateralized by: $2,674,174 in
Government National Mortgage Association
pooled assets 6.00% - 8.00%, 11/20/17 -
4/15/26; $1,930,908 in Federal Home Loan
Mortgage Corp. pooled assets 5.50% -
8.50%, 7/1/00 - 4/1/26; $17,128,539 in
Federal National Mortgage Association
pooled assets 6.00% - 8.00%, 10/1/10 -
5/1/26 with respective values
of $1,788,726; $1,647,970;
$16,967,710 20,000,000
40,000,000 NationsBank Repurchase Agreement 5.42%,
dated 4/30/96, maturing 5/1/96, to
be repurchased at $40,006,022,
collateralized by: $13,915,000 in U.S.
Treasury Notes 6.875%, 3/31/97;
$12,833,897 in Federal National Mortgage
Association Notes 5.50% and 6.21%, 1/26/06
and 4/1/09; $14,839,010 in Federal Home
Loan Mortgage Corp. Notes 7.00%,
10/15/18 with respective values of
$14,149,958; $2,742,739; $8,917,664;
$14,992,518 40,000,000
Total Repurchase Agreements (cost $75,000,000) 75,000,000
Total Investments - 99.5% (total cost
$168,329,795) 168,329,795
Cash, Receivables and Other Assets, net of
Liabilities - 0.5% 755,624
Net Assets - 100% $169,085,419
JANUS TAX-EXEMPT MONEY MARKET FUND
April 30, 1996 (unaudited)
Principal Amount Market Value
General Obligation Notes - 4.2%
1,000,000 Clark County, Washington School
District No. 114 Evergreen, Series A,
4.00%, 12/1/96 1,001,565
1,000,000 South Dakota Housing Development
Authority (Homeownership Mortgage),
Series A, 4.30%, 5/1/97 1,005,603
750,000 Texas A & M University Permanent
42
<PAGE>
University Fund, Series C, 3.40%,
7/1/96 751,027
Total General Obligation Notes (amortized cost
$2,758,195) 2,758,195
Tax and Revenue Anticipation Notes - 18.8%
1 ,000,000 Allegheny County, Pennsylvania Port
Authority Grant Anticipation Notes,
Series A, 3.875%, 6/28/96 1,000,000
1,000,000 Corcoran, California Joint Unified
School District, Tax and Revenue
Anticipation Notes, 4.25%,
6/28/96 1,000,228
1,000,000 Maricopa County, Arizona Unified
High School District Number 210,
Phoenix Tax Anticipation Notes,
Series A, 4.45%, 7/31/96 1,001,156
1,200,000 Milwaukee, Wisconsin Revenue
Anticipation Notes, Series A, 3.50%,
2/27/97 1,202,361
3,295,000 Mono County, California Board of
Education Tax Anticipation Notes,
4.50%, 6/28/96 3,297,408
500,000 New Bedford, Massachusetts Revenue
Anticipation Notes, 4.00%, 6/28/96 500,511
1,000,000 Rhode Island State Tax Anticipation
Notes, 4.50%, 6/28/96 1,001,728
2,500,000 Texas State Tax and Revenue
Anticipation Notes, Series A,
3.30%, 8/30/96 2,511,392
1,000,000 Tuolomne County, California Board
of Education Tax and Revenue
Anticipation Notes, 4.50%,
6/28/96 1,000,838
Total Tax and Revenue Anticipation Notes
(amortized cost $12,515,622) 12,515,622
Put Bonds - 7.8%
1,000,000 Klamath Falls, Oregon Electric Revenue,
(Salt Caves Hydroelectric), Series A,
4.40%, 5/1/23 1,000,000
985,000 Le Claire, Iowa Electric Revenue,
Series D, 4.125%, 9/1/26 985,505
Missouri State Environmental Impact and
Energy Resource Authority, Pollution Control
Revenue, (Union Electric Co.):
1,000,000 Series A, 4.00%, 6/1/14 1,000,000
1,180,000 Series B, 4.00%, 6/1/14 1,180,000
500,000 Missouri State Environmental
Improvement and Energy Resource
43
<PAGE>
Authority Pollution Control
Revenue, (Union Electric Company
Project), Series A, 3.50%, 6/1/15 500,000
500,000 Pendleton County, Kentucky Self-Insurance
Funding, 4.00%, 7/1/01 500,000
Total Put Bonds (amortized cost $5,165,505) 5,165,505
Variable Rate Demand Notes - 68.4%
Alabama - 0.4%
300,000 Athens Industrial Development Board
Revenue, (Coilplus Income Project),
4.35%, 9/1/99 300,000
Arizona - 3.0%
1,972,000 Tucson Industrial Development Authority
Revenue, (Freedom Park Apartments
Project), 4.45%, 12/1/07 1,972,000
California - 12.0%
2,600,000 California Statewide Communities,
(Whispering Winds Apartments),
Series D, 4.35%, 12/1/22 $2,600,000
1,500,000 Carlsbad Housing and Redevelopment
Community, (Seascape Village Project),
4.35%, 12/1/05 1,500,000
1,150,000 Orange County Housing Authority
Apartment Development Revenue,
(Lantern Pines Project), 4.38%,
12/1/07 1,150,000
2,700,000 Orange County Improvement Board Irvine
Coast Special Assessment, (District
No. 88-1), 4.10%, 9/2/18 2,700,000
7,950,000
Colorado - 12.0%
460,000 Colorado Health Facility Authority
Revenue, (Valley View Hospital
Association Project), 4.85%,
10/1/12 460,000
4,090,000 Colorado Multifamily Housing Finance
Authority Revenue Refunding,
(Huntersridge Partnership), 4.80%,
3/1/12 4,090,000
3,400,000 Denver City & County Airport Revenue,
Series B, 4.30%, 12/1/25 3,400,000
7,950,000
Florida - 6.9%
3,700,000 Dade County, Apartment Revenue,
Series A, 4.50%, 10/1/09 3,700,000
900,000 Orange County, Health Facilities
Authority Revenue, (Adventist Health
44
<PAGE>
Systems/Sunbelt), 4.45%, 11/15/14 900,000
4,600,000
Hawaii - 0.9%
Hawaii State Housing Finance and Development
Corp. Revenue, (Rental Housing System):
400,000 Series A, 4.35% 7/1/25 400,000
200,000 Series B, 4.35% 7/1/25 200,000
600,000
Illinois - 3.5%
100,000 Jackson-Union Counties Regional Port
Facilities Revenue, (Enron Trans-
portation Services), 4.30%,
4/1/24 100,000
649,070 Village of Franklin Park, (AM Castle
and Company Project), 4.35%,
6/1/17 649,070
187,500 Village of Rosemont, (AM Castle and
Company Project), 4.35%, 6/1/17 187,500
1,400,000 Wood Dale Industrial Development
Revenue, (Nippon Express, Inc. Project),
4.40%, 6/1/00 1,400,000
2,336,570
Kansas - 0.3%
200,000 City of Wichita, (CSJ Health Systems
Project), Series XXV, 4.40%,
10/1/11 200,000
Louisiana - 2.2%
1,485,000 Sulphur Industrial Development Revenue,
(La Quinta Inns Project), 4.25%,
12/1/04 1,485,000
Minnesota - 2.9%
1,900,000 St. Paul Housing and Redevelopment
Authority Revenue, (District Heating),
4.25%, 12/1/12 1,900,000
Missouri - 4.6%
1,400,000 Cole County Industrial Development
Authority Revenue, (Mobine Manu-
facturing Company Project), 4.40%,
12/1/15 1,400,000
973,000 Kansas City Industrial Development
Authority Revenue, (AM Castle and
Company Project), 4.35%, 6/1/10 973,000
100,000 Missouri State Health and Education
Facilities Authority Revenue,
(St. Louis University Project), 4.30%,
12/1/05 100,000
600,000 West Plains Industrial Revenue
Authority, (West Plains Manor
45
<PAGE>
Project), 3.65%, 11/1/10 600,000
3,073,000
New York - 1.3%
900,000 Ontario County Industrial Development
Authority, (Eastman Kodak V Association
Project), 5.85%, 8/1/15 900,000
Ohio - 1.4%
350,000 Cincinnati Student Loan Funding Corp.,
Student Loan Revenue, Series 1983-A,
4.55%, 12/29/98 350,000
590,000 Ohio Industrial Development Revenue,
(AM Castle and Company Project),
4.35%, 12/1/06 590,000
940,000
Oklahoma - 5.6%
1,200,000 Claremore Redevelopment Authority
Industrial Development Revenue,
(Worthington Cylinder Corp. Project),
4.25%, 1/1/11 1,200,000
2,500,000 Tulsa Home Finance Authority,
(Greenbriar Project), Series B,
4.50%, 3/15/05 2,500,000
3,700,000
Pennsylvania - 4.3%
1,550,000 Philadelphia Authority for Industrial
Development Multifamily Revenue,
(Harbor View Towers), 4.40%,
11/1/27 1,550,000
1,300,000 Venango Industrial Development
Authority, (Pennzoil Co. Project),
Series A, 4.80%, 12/1/12 1,300,000
2,850,000
South Carolina - 2.8%
1,825,000 Lexington County, (Charter Rivers
Hospital), 4.25%, 6/1/07 1,825,000
Texas - 0.3%
200,000 Metropolitan Higher Education Authority
Revenue, (University of Dallas Project),
4.30%, 12/1/04 200,000
Washington - 4.0%
2,620,000 Washington State Housing Finance
Community Nonprofit Housing Revenue,
(YMCA of Greater Seattle), 4.30%,
46
<PAGE>
7/1/11 2,620,000
Total Variable Rate Notes (amortized cost
$45,401,570) 45,401,570
Total Investments - 99.2% (total cost
$65,840,892) 65,840,892
Cash, Receivables and Other Assets, net of
Liabilities - 0.8% 555,017
Net Assets - 100% $66,395,909
47
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
* Non-Income producing security
** A portion of this security has been segregated by the
custodian to cover margin or segregation requirements on open
futures contracts and/or foreign currency contracts.
+ Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
1) Variable Rate Notes. The interest rate, which is based on
specific, or an index of, market interest rates, is subject to
change. Rates in the security description are as of April 30,
1996. Adjustable Rate Preferred Stock Dividend Rates are as of
April 30, 1996.
2) Money Market Funds may hold securities with stated maturities
of greater than one year, when those securities have features
which allow the Fund to "put" back the security to the issuer or
to a third party within a year of acquisition.
The maturity date shown in the security descriptions are
the stated maturity dates.
DEM - German Deutschemarks
NZD - New Zealand Dollars
<TABLE>
STATEMENTS OF OPERATIONS - BOND FUNDS
<CAPTION>
Janus Janus Janus Janus
For the six months or period ended Flexible Janus Federal Intermediate Short-Term
April 30, 1996 (all numbers in Income High-Yield Tax-Exempt Government Bond
thousands) (unaudited) Fund Fund Fund Securities Fund Fund
Investment Income:
<S> <C> <C> <C> <C> <C>
Interest $24,686 $ 583 $ 949 $1,063 $1,356
Dividends 348 - - - -
25,034 583 949 1,063 1,356
Expenses:
Advisory fees 1,856 43 99 93 147
Transfer agent fees and expenses 589 25 52 66 81
48
<PAGE>
Registration fees 19 7 8 12 8
Postage and mailing expenses 135 4 16 21 22
Custodian fees 49 1 3 6 4
Printing expenses 23 - 2 - 4
Audit fees 12 3 4 3 2
Trustees' fees and expenses 4 - - - -
Other expenses 36 3 5 6 4
Total expenses 2,723 86 189 207 272
Expense and fee offsets (26) - (6) (2) (3)
Net expenses 2,697 86 183 205 269
Less: Excess expense reimbursement - (28) (76) (84) (122)
2,697 58 107 121 147
Net investment income 22,337 525 842 942 1,209
Net Realized and Unrealized Gain/(Loss)
on Investments:
Net realized gain/(loss) from securities
transactions 11,334 558 104 (469) 299
Net realized gain from foreign currency 1,271 - - - -
Net realized gain from futures contracts 2,284 - 172 - -
Change in net unrealized appreciation
or depreciation of investments (20,132) 486 165 (619) (606)
Net gain/(loss) on investments (5,243) 1,044 441 (1,088) (307)
Net increase/(decrease) in net assets
resulting from operations $17,094 $1,569 $1,283 $ (146) $ 902
<FN>
__________________
(1) Period December 29, 1995 (inception) to April 30, 1996
</TABLE>
An Explanation of the Statement of Operations
This financial statement details the Funds' income,
expenses, and gains and losses on securities and currency
transactions and from appreciation or depreciation of portfolio
holdings. The first section in this statement, called
"Investment Income," reports both the dividends earned from
49
<PAGE>
stocks and interest earned from interest-bearing securities held
in the portfolio.
The next section reports the expenses and expense
offsets incurred by the Funds including the advisory fee paid to
the investment advisor, the transfer agent fees for shareholder
servicing expenses, and printing and postage for mailing
statements, financial reports, and prospectuses to investors.
The last section lists the increase or decrease in the
value of securities held in the Funds' portfolio. Funds realize
a gain (or loss) when they sell their position in a particular
security. Unrealized gain (or loss) refers to the change in net
appreciation or depreciation of the Funds' portfolio during the
period. This figure is affected by both changes in the market
value of portfolio holdings and by gains (or losses) realized
during the reporting period.
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES - BOND FUNDS
<CAPTION>
Janus Janus Janus Janus
As of April 30, 1996 Flexible Janus Federal Intermediate Short-Term
(all numbers in thousands) except net Income High-Yield Tax-Exempt Government Bond
asset value per share) (unaudited) Fund Fund Fund Securities Fund Fund
<S> <C> <C> <C> <C> <C>
Assets:
Investments at cost $616,223 $35,811 $36,284 $35,744 $42,454
Investments at value $614,661 $36,297 $35,792 $35,800 $42,010
Cash 57 814 227 119 3
Receivables:
Investments sold 10,454 960 - - 256
Fund shares sold 1,012 351 19 3 9
Interest 12,443 702 694 6 460
Variation margin - futures contracts 325 - 122 14 -
Forward currency contracts 64 - - - -
Other assets 5 - - - -
Total Assets 639,021 39,124 36,854 35,942 42,738
Liabilities:
Payables:
Investments purchased 10,291 4,799 2,080 - -
Fund shares repurchased 1,707 99 53 82 189
50
<PAGE>
Dividends 577 28 24 - -
Advisory fee 309 11 4 - 10
Transfer agent fee 103 13 9 9 17
Accrued expenses 141 12 22 37 25
Total Liabilities 13,128 4,962 2,192 128 241
Net Assets $625,893 $34,162 $34,662 $35,814 $42,497
Shares Outstanding, $0.01 Par Value
(unlimited shares authorized) 65,990 3,193 4,971 7,408 15,058
Net Asset Value Per Share $9.48 $10.70 $6.97 $4.83 $2.82
</TABLE>
An Explanation of the Statement of Assets and Liabilities
This financial statement is often referred to as the
"balance sheet." It lists the assets and liabilities of the Fund
on the last day of the fiscal period.
The Funds' assets are calculated by adding the value of
the securities owned, the receivable for securities sold but not
yet settled, the receivable for dividends declared on stocks
owned but not yet received, and the receivable for Fund shares
sold to investors but not yet settled. The Funds' liabilities
include payables for securities purchased but not yet settled,
fund shares redeemed but not yet paid, and expenses owed but not
yet paid.
The last line of this schedule reports the Funds' net
asset value (NAV) per share on the last day of the fiscal period.
The NAV is calculated by dividing the Funds' total net assets
(assets minus liabilities) by the number of shares outstanding.
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS - BOND FUNDS
<CAPTION>
For the six months or period ended Janus Janus Janus Janus
April 30, 1996 (unaudited) and Flexible Janus Federal Intermediate Short-Term
the fiscal year ended October 31, Income High-Yield Tax-Exempt Government Bond
1995 (all numbers in thousands) Fund Fund Fund Securities Fund Fund
1996 1995 1996(1) 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
51
<PAGE>
Net investment income $22,337 $35,605 $ 525 $ 842 $ 1,591 $ 942 $2,245 $1,209 $3,158
Net realized gain/(loss) from
investment transactions 14,889 (2,794) 558 276 (317) (469) (118) 299 (1,863)
Change in unrealized net
appreciation or depreciation
of investments (20,132) 34,614 486 165 2,038 (619) 1,347 (606) 1,234
Net increase/(decrease) in
net assets resulting from
operations 17,094 67,425 1,569 1,283 3,312 (146) 3,474 902 2,529
Dividends and Distributions
to Shareholders:
Net investment income* (22,328) (35,571) (525) (842) (1,591) (942) (2,245) (1,209) (3,062)
Net realized gain from
investment transactions - - - - - - - - -
Net decrease from dividends
and distributions (22,328) (35,571) (525) (842) (1,591) (942) (2,245) (1,209) (3,062)
Capital Share Transactions:
Shares sold 181,725 349,106 39,319 9,684 26,365 8,188 15,220 11,079 32,690
Reinvested dividends and
distributions 18,947 27,431 447 693 1,284 862 2,015 1,110 2,664
Shares repurchased (149,904) (205,377) (6,648) (8,749)(23,241)(10,179)(17,150)(17,502) (40,989)
Net increase/(decrease) from
capital share transactions 50,768 171,160 33,118 1,628 4,408 (1,129) 85 (5,313) (5,635)
Net increase/(decrease) in
net assets 45,534 203,014 34,162 2,069 6,129 (2,217) 1,314 (5,620) (6,168)
Net Assets:
Beginning of period 580,359 377,345 - 32,593 26,464 38,031 36,717 48,117 54,285
End of Period $625,893 $580,359 $34,162 $34,662 $32,593 $35,814 $38,031 $42,497 $48,117
Net Assets consist of:
Capital (par value and
paid-in surplus)* $621,171 $570,403 $33,118 $35,562 $33,935 $40,271 $41,400 $46,015 $51,328
Undistributed net investment
52
<PAGE>
income* 463 454 - - - 3 3 1 1
Undistributed net realized
gain/(loss)* from
investments 4,288 (10,601) 558 (1,632) (1,909) (4,485) (4,017) (3,075) (3,374)
Unrealized appreciation/
(depreciation) of
investments (29) 20,103 486 732 567 25 645 (444) 162
$625,893 $580,359 $34,162 $34,662 $32,593 $35,814 $38,031 $42,497 $48,117
Transactions in Fund Shares:
Shares sold 18,765 38,305 3,784 1,388 3,916 1,642 3,132 3,872 11,546
Reinvested distributions 1,961 2,993 42 99 192 173 414 389 941
Total 20,726 41,298 3,826 1,487 4,108 1,815 3,546 4,261 12,487
Shares repurchased (15,531) (22,614) (633) (1,253) (3,475) (2,042) (3,544) (6,128) (14,449)
Net increase/(decrease) 5,195 18,684 3,193 234 633 (227) 2 (1,867) (1,962)
Shares outstanding beginning
of period 60,795 42,111 - 4,737 4,104 7,635 7,633 16,925 18,887
Shares outstanding end of
period 65,990 60,795 3,193 4,971 4,737 7,408 7,635 15,058 16,925
Purchases and Sales of
Investment Securities:
(excluding Short-Term Securities)
Purchases of Securities $630,938 $1,000,286 $71,655 $48,178 $53,375 - - $32,727 $81,206
Proceeds from Sales of
Securities 564,052 901,698 42,459 43,444 46,184 - - 39,063 90,036
Purchases of Long-Term
U.S. Government
Obligations 18,727 213,741 1,115 - - $157,394 $89,908 49,832 74,963
Proceeds from Sales of
Long-Term U.S. Government
Obligations 35,301 152,266 1,141 - - 159,893 90,221 60,549 70,371
53
<PAGE>
<FN>
(1) Fiscal period December 29, 1995 (inception) to April 30, 1996
*See Note 3 in Notes to Financial Statements
</TABLE>
An Explanation of the Statement of Changes in Net Assets
This financial statement reports the increase or
decrease in the Funds' net assets during the reporting period.
Changes in the Funds' net assets are attributable to investment
operations, dividends, distributions, and capital share
transactions. This schedule is of importance to investors because
it shows exactly what caused the Funds' asset size to change
during the period. Investors can use this information to
determine if the Funds' growth was a result of operations or an
increase in the number of shares being purchased.
The first section summarizes the information from the
Statement of Operations regarding changes in net assets due to
the Funds' investment performance. The Funds' net assets will
also change as a result of dividend and capital gain
distributions to investors. If investors receive their dividends
in cash, money is taken out of the Fund to pay the distribution.
If investors reinvest their dividends, the Funds' net assets will
not be affected. If you compare each Fund's "Net decrease from
dividends and distributions" to the "Reinvested dividends and
distributions," you'll notice that dividend distributions had
little effect on each Fund's net assets. This is because the
majority of Janus investors reinvest their distributions.
The reinvestment of dividends is included under "Capital
Share Transactions." "Capital Shares" refers to the money
investors contribute to the Fund through purchases or withdraw
via redemptions. The Fund's net assets will increase and decrease
in value as investors purchase and redeem shares from the Fund.
The section titled "Net Assets Consist of" breaks down the
components of the Funds' net assets. Since funds must distribute
substantially all earnings, you'll notice that a significant
portion of net assets is shareholder capital.
<TABLE>
FINANCIAL HIGHLIGHTS - BOND FUNDS
<CAPTION>
For the six months or period
ended April 30, 1996 Janus
(unaudited) and the fiscal High-Yield
year or period ended Janus Flexible Income Fund Fund
October 31) 1996 1995 1994 1993 1992(1) 1991(2) 1996(3)
<S> <C> <C> <C> <C> <C> <C> <C>
54
<PAGE>
Net asset value, beginning of
period $9.55 $8.96 $10.03 $9.26 $9.09 $8.01 $10.00
Income from investment
operations
Net investment income .35 .72 .74 .77 .68 .68 .30
Net gains or (losses) on
securities (both
realized and unrealized) (.07) .59 (.86) .79 .15 1.29 .70
Total from investment
operations .28 1.31 (.12) 1.56 .83 1.97 1.00
Less distributions
Dividends (from net
investment income) (.35) (.72) (.72) (.77) (.66) (.72) (.30)
Distributions
(from capital gains) - - (.23) (.02) - (.17) -
Total distributions (.35) (.72) (.95) (.79) (.66) (.89) (.30)
Net asset value,
end of period $9.48 $9.55 $8.96 $10.03 $9.26 $9.09 $10.70
Total return* 2.87% 15.35% (1.26%) 17.48% 9.43% 25.98% 10.10%
Net assets, end of period
(in thousands) $625,893 $580,359 $377,345 $473,116 $205,371 $72,145 $34,162
Average net assets for the
period (in thousands) $623,961 $450,001 $428,962 $337,568 $143,766 $33,260 $17,088
Ratio of gross expenses to
average net assets** 0.88% 0.96% NA NA NA NA 1.00% (7)
Ratio of net expenses to
average net assets** 0.87% 0.96% 0.93% 1.00% (6) 1.00% (6) 1.00% (6) 1.00%
Ratio of net investment income
to average net assets** 7.20% 7.91% 7.75% 7.96% 8.98% 9.38% 9.08%
Portfolio turnover rate** 205% 250% 137% 201% 210% 88% 627%
55
<PAGE>
For the six months ended
April 30, 1996 (unaudited) Janus Federal Janus Short-Term
and the fiscal year or Tax-Exempt Fund Bond Fund
period ended October 31 1996 1995 1994 1993(4) 1996 1995 1994 1993 1992(5)
Net asset value, beginning
of period $6.88 $6.45 $7.30 $7.00 $2.84 $2.87 $3.02 $2.98 $3.00
Income from investment
operations
Net investment income .18 .36 .36 .14 .08 .18 .18 .14 .01
Net gains or (losses) on
securities (both realized
and unrealized) .09 .43 (.83) .30 (.02) (.03) (.15) .04 (.02)
Total from investment
operations .27 .79 (.47) .44 .06 .15 .03 .18 (.01)
Less distributions
Dividends (from net
investment income) (.18) (.36) (.36) (.14) (.08) (.18) (.17) (.14) (.01)
Distributions
(from capital gains) - - (.02) - - - (.01) - -
Total distributions (.18) (.36) (.38) (.14) (.08) (.18) (.18) (.14) (.01)
Net asset value,
end of period $6.97 $6.88 $6.45 $7.30 $2.82 $2.84 $2.87 $3.02 $2.98
Total return* 3.90% 12.60% (6.62%) 6.33%* 1.96% 5.55% 1.26% 6.17% (0.19%)*
Net assets, end of
period (in thousands) $34,662 $32,593 $26,464 $27,331 $42,497 $48,117 $54,285 $76,096 $3,472
Average net assets for the
period (in thousands) $33,094 $29,318 $28,384 $16,038 $45,583 $47,383 $59,584 $36,794 $779
Ratio of gross expenses to
average net assets** 0.69%(8) 0.70%(8) NA NA 0.67%(9) 0.66%(9) NA NA NA
Ratio of net expenses to
average net assets** 0.65% 0.65% 0.65%(8) 0.75%(8) 0.65% 0.65% 0.65%(9) 0.83%(9) 1.00%(9)
Ratio of net investment
income to average net
assets** 5.12% 5.43% 5.20% 4.58% 5.33% 6.67% 6.08% 4.86% 3.22%
56
<PAGE>
Portfolio turnover rate** 267% 164% 160% 124% 386% 337% 346% 372% 7%
For the six months ended
April 30, 1996 (unaudited) Janus Intermediate Government Securities Fund
and the fiscal year or period
ended October 31 1996 1995 1994 1993 1992 (1) 1991(2)
Net asset value, beginning
of period $4.98 $4.81 $5.16 $5.36 $5.35 $5.00
Income from investment operations
Net investment income .12 .30 .25 .22 .22 .13
Net gains or (losses) on
securities (both realized
and unrealized) (.15) .17 (.35) (.09) .01 .35
Total from investment operations (.03) .47 (.10) .13 .23 .48
Less distributions
Dividends (from net investment
income) (.12) (.30) (.25) (.22) (.22) (.13)
Distributions (from capital gains) - - - (.11) - -
Total distributions (.12) (.30) (.25) (.33) (.22) (.13)
Net asset value, end of period $4.83 $4.98 $4.81 $5.16 $5.36 $5.35
Total return* (0.55%) 10.19% (1.89%) 2.68% 4.48%* 9.74%*
Net assets, end of period
(in thousands) $35,814 $38,031 $36,717 $64,784 $69,702 $14,545
Average net assets for the
period (in thousands) $37,517 $35,962 $46,621 $67,972 $39,960 $5,814
Ratio of gross expenses to
average net assets** 0.66%(10) 0.65%(10) NA NA NA NA
Ratio of net expenses to
average net assets** 0.65% 0.65% 0.65%(10) 0.91%(10) 1.00%(10) 1.00%(10)
Ratio of net investment income
to average net assets** 5.05% 6.24% 4.97% 4.27% 4.95% 5.93%
Portfolio turnover rate** 865% 252% 304% 371% 270% 0%
57
<PAGE>
<FN>
(1) Fiscal period from January 1, 1992 to October 31, 1992
(2) Fiscal year ended December 31
(3) Fiscal period from December 29, 1995 (inception) to April 30, 1996
(4) Fiscal period from May 3, 1993 (inception) to October 31, 1993
(5) Fiscal period from September 1, 1992 (inception) to October 31, 1992
(6) The ratio was 1.01% in 1993, 1.21% in 1992 and 1.74% in 1991 before voluntary waiver of certain fees
incurred by the Fund.
(7) The ratio was 1.49% in 1996 before voluntary waiver of certain fees incurred by the Fund.
(8) The ratio was 1.15% in 1996, 1.31% in 1995, 1.41% in 1994 and 1.60% in 1993 before voluntary waiver
of certain fees incurred by the Fund.
(9) The ratio was 1.20% in 1996, 1.23% in 1995, 1.15% in 1994, 1.40% in 1993 and 2.50% in 1992 before
voluntary waiver of certain fees incurred by the Fund.
(10) The ratio was 1.10% in 1996, 1.22% in 1995, 1.15% in 1994, 1.09% in 1993, 1.32% in 1992 and 1.39%
in 1991 before voluntary waiver of certain fees incurred by the Fund.
*Total return not annualized for periods of less than one year
**Annualized for periods less than one year
NA - Disclosure not required for prior periods
</TABLE>
An Explanation of the Financial Highlights
This schedule provides a per share breakdown of the
components that affect the Funds' NAV for the current and past
reporting periods. Not only does this table provide you with
total return, it also reports total distributions, asset size,
expense ratios and portfolio turnover rate.
The first line in the table reflects the Funds' NAV per
share at the beginning of the fiscal period. The next line
reports the Funds' net investment income per share which is
comprised of dividends and interest income earned on securities
held by the Fund. Dividends and distributions are then subtracted
to arrive at the NAV per share at the end of the fiscal period.
Also included in the Financial Highlights is the Funds'
expense ratio, or the percentage of net assets that was used to
cover operating expenses during the period. Expense ratios vary
across the Funds for a number of reasons including the
differences in management fees, average shareholder account size,
the frequency of dividend payments, and the extent of foreign
investments, which entail greater transaction costs.
The Funds' expenses may be reduced through expense
reduction arrangements. Those arrangements include the use of
broker commissions and cash balances earning interest or balance
credits with the Funds' custodian and transfer agent bank
58
<PAGE>
accounts. The Statements of Operations reflect the total expenses
before any offset, the amount of offset and the net expenses. The
expense ratios listed in the Financial Highlights reflect total
expenses both prior to any expense offset and after the offsets.
These changes are part of new disclosure requirements.
Prior years do not reflect these changes.
The next line reports the ratio of net investment
income, which is the income earned divided by the average net
assets of the Funds during the reporting period. Don't confuse
this ratio with a Fund's yield. The net investment income ratio
is not a true measure of a Funds' yield because it doesn't take
into account the dividends distributed to the Funds' investors.
The next ratio provided in this table is the portfolio
turnover rate, which measures the amount of buying and selling
activity in the Funds' portfolio. Portfolio turnover is affected
by market conditions, changes in the size of a Fund, the nature
of the Funds' investments, and the investment style of the
portfolio manager. A 100% rate implies that an amount equal to
the value of the entire portfolio is turned over in a year; a 50%
rate means that an amount equal to the value of half the
portfolio is traded in a year; and a 200% rate would mean that an
amount equal to the value of the portfolio is sold in an average
of six months.
The last item on the table is the average commission
rate per share. This number is derived by taking the agency
commissions paid on equity securities trades (excluding Syndicate
or IPO and principal trades amounts but including foreign
commissions) and dividing by the number of shares purchased. This
is a new requirement under revised SEC regulations and is not a
meaningful representation of actual costs incurred.
STATEMENTS OF OPERATIONS - MONEY MARKET FUNDS
Janus Janus
For the six months ended Janus Government Tax-Exempt
April 30, 1996 Money Market Money Market Mondy
(all numbers in thousands) Fund Fund Fund
(unaudited)
Investment Income:
Interest $35,069 $4,380 $1,343
35,069 4,380 1,343
Expenses:
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<PAGE>
Advisory Fee for Investor Shares 317 56 34
Advisory Fee for Institutional
Shares 299 23 1
Administrative Fee for Investor
Shares 1,585 278 168
Administrative Fee for
Institutional Shares 150 11 -
Interest Expense for Investor Shares 7 - -
Interest Expense for
Institutional Shares 5 - -
2,363 368 203
Net Investment Income: $32,706 $4,012 $1,140
Net Realized Gain/(Loss) on
Investments:
Net realized gain/(loss)
from securities transactions 62 5 (1)
Net gain/(loss) on investments 62 5 (1)
Net increase/(decrease) in net
assets resulting from operations $32,768 $4,017 $1,139
STATEMENTS OF ASSETS AND LIABILITIES - MONEY MARKET FUNDS
Janus Janus
As of April 30, 1996 (all Janus Government Tax-Exempt
numbers in thousands except Money Market Money Market Money-Market
net asset value)(unaudited) Fund Fund Fund
Assets:
Investments at amortized
cost $1,276,032 $168,330 $65,841
Cash 120 88 28
Receivables:
Investments Sold 3,200 - -
Fund Shares Sold 2,317 900 88
Interest 8,144 251 646
Total Assets $1,289,813 $169,569 $66,603
Liabilities:
Payables
Fund Shares Repurchased 2,765 396 168
Dividends and Distributions 1,378 29 6
Advisory Fee 109 13 5
60
<PAGE>
Administrative Fee 286 46 28
Total Liabilities $4,538 $484 $207
Total Net Assets $1,285,275 $169,085 $66,396
Shares Outstanding,
$0.01 Par Value
(unlimited shares authorized) 1,285,215 169,081 66,397
Net Asset Value Per Share $1.00 $1.00 $1.00
STATEMENTS OF CHANGES IN NET ASSETS - MONEY MARKET FUNDS
For the six months ended Janus Janus
April 30, 1996 (unaudited) Janus Government Tax-Exempt
and the fiscal period ended Money Money Money
October 31, 1995 Market Market Market
(all numbers in thousands) Fund Fund Fund
<TABLE>
<CAPTION>
1996 1995(1) 1996 1995(1) 1996 1995(1)
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 32,706 $ 24,298 $ 4,012 $ 4,125 $ 1,140 $ 1,392
Net realized gain/(loss)
from investment transactions 62 9 5 8 (1) (3)
Net increase/(decrease)
in net assets resulting
from operations $ 32,768 $ 24,307 $ 4,017 $ 4,133 $ 1,139 $ 1,389
Dividends and Distributions
to Shareholders:
Net investment income:
Investor Shares $(16,227) $(17,868) $(2,788) $(3,353) $(1,103) $(1,366)
Institutional Shares (16,479) (6,430) (1,225) (772) (36) (23)
Net realized gain/(loss)
from investment transactions:
Investor Shares (1) (6) - (8) - -
Institutional Shares (1) (3) - - - -
61
<PAGE>
Net decrease from dividends
and distributions $(32,708) $ (24,307) $ (4,013) $(4,133) $(1,139) $(1,389)
Capital Share Transactions:
Shares sold:
Investor Shares $ 592,646 $1,109,965 $ 52,199 $183,758 $ 41,485 $126,046
Institutional Shares 9,346,557 1,974,800 259,147 179,373 30,800 37,121
Reinvested dividends and
distributions:
Investor Shares 15,658 17,285 2,687 3,252 1,070 1,323
Institutional Shares 5,733 1,269 768 435 24 11
Shares repurchased:
Investor Shares (634,976) (484,031) (67,180) (67,703) (43,648) (59,890)
Institutional Shares (8,988,574) (1,671,117) (242,011)(135,644) (42,006) (25,940)
Net increase/(decrease)
from capital share
transactions $ 337,044 $ 948,171 $ 5,610 $163,471 $(12,275) $ 78,671
Net increase/(decrease)
in net assets $ 337,104 $ 948,171 $ 5,614 $163,471 $(12,275) $ 78,671
Net Assets beginning of
period 948,171 - 163,471 - 78,671 -
Net Assets end of
period $1,285,275 $ 948,171 $169,085 $163,471 $ 66,396 $ 78,671
Net Assets consist of:
Capital (par value and
paid-in surplus) $1,285,215 $ 948,171 $169,081 $163,471 $ 66,396 $ 78,671
Undistributed net
realized gain/(loss)
from investments 60 - 4 - - -
$1,285,275 $ 948,171 $169,085 $163,471 $ 66,396 $ 78,671
62
<PAGE>
Transactions in Fund Shares - Investor Shares
Shares Sold 592,646 1,109,965 52,199 183,758 41,485 126,046
Reinvested dividends
and distributions 15,658 17,285 2,687 3,252 1,070 1,323
Total 608,304 1,127,250 54,886 187,010 42,555 127,369
Shares repurchased (634,976) (484,031) (67,180) (67,703) (43,648) (59,890)
Net increase(decrease)
in fund shares (26,672) 643,219 (12,294) 119,307 (1,093) 67,479
Shares outstanding at
beginning of period 643,219 - 119,307 - 67,479 -
Shares outstanding at
end of period 616,547 643,219 107,013 119,307 66,386 67,479
Transactions in Fund Shares - Institutional Shares
Shares Sold 9,346,557 1,974,800 259,147 179,373 30,800 37,121
Reinvested dividends
and distributions 5,733 1,269 768 435 24 11
Total 9,352,290 1,976,069 259,915 179,808 30,824 37,132
Shares repurchased (8,988,574) (1,671,117) (242,011)(135,644) (42,005) (25,940)
Net increase/(decrease)
in fund shares 363,716 304,952 17,904 44,164 (11,181) 11,192
Shares outstanding at
beginning of period 304,952 - 44,164 - 11,192 -
Shares outstanding at
end of period 668,668 304,952 62,068 44,164 11 11,192
(1) Fiscal period February 15, 1995 (inception) to October 31, 1995
FINANCIAL HIGHLIGHTS - MONEY MARKET FUNDS
For a share outstanding
throughout the six months Janus Janus
ended April 30, 1996 Janus Government Tax-Exempt
(unaudited) and the fiscal Money Money Money
63
<PAGE>
period February 15, 1995 Market Market Market
(inception) to October 31, 1995 Fund Fund Fund
Investor Shares 1996 1995 1996 1995 1996 1995
Net asset value at
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income .03 .04 .02 .04 .02 .02
Total from investment operations .03 .04 .02 .04 .02 .02
Less Dividends and Distributions:
Dividends (from net
investment income) (.03) (.04) (.02) (.04) (.02) (.02)
Total dividends and distributions (.03) (.04) (.02) (.04) (.02) (.02)
Net asset value at end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total return* 2.57% 3.95% 2.51% 3.90% 1.65% 2.40%
Net assets at end of period
(in thousands) $616,574 $643,219 $107,016 $119,307 $66,293 $67,479
Average net assets for the
period (in thousands) $637,389 $461,311 $111,908 $ 87,906 $67,587 $57,366
Ratio of expenses to average
net assets** 0.60%(1) 0.60%(1) 0.60%(1) 0.60%(1) 0.60%(1) 0.60% (1)
Ratio of net investment
income to average net assets** 5.12% 5.56% 5.01% 5.40% 3.28% 3.38%
For a share outstanding
throughout the six months Janus Janus
ended April 30, 1996 Janus Government Tax-Exempt
(unaudited) and the fiscal Money Money Money
period April 17, 1995 Market Market Market
(inception) to October 31, 1995 Fund Fund Fund
Institutional Shares 1996 1995 1996 1995 1996 1995
Net asset value at
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
64
<PAGE>
Income from investment operations:
Net investment income .03 .03 .03 .03 .02 .02
Total from investment operations .03 .03 .03 .03 .02 .02
Less Dividends and Distributions:
Dividends (from net
investment income) (.03) (.03) (.03) (.03) (.02) (.02)
Total dividends and distributions (.03) (.03) (.03) (.03) (.02) (.02)
Net asset value at end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total return* 2.80% 3.25% 2.74% 3.20% 1.88% 2.09%
Net assets at end of period
(in thousands) $668,701 $304,952 $62,069 $44,164 $ 11 $11,192
Average net assets for the
period (in thousands) $602,351 $202,427 $45,248 $24,748 $1,823 $ 1,115
Ratio of expenses to
average net assets** 0.15%(2) 0.15%(2) 0.15%(2) 0.15%(2) 0.15%(2) 0.15% (2)
Ratio of net investment
income to average net assets** 5.51% 5.86% 5.45% 5.75% 4.01% 3.82%
<FN>
*Total return is not annualized for periods of less than one year
**Annualized
(1) The ratio was .70% before voluntary reduction of fees.
(2) The ratio was .35% before voluntary reduction of fees.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
The following section describes the organization and
significant accounting policies of the funds and provides more
detailed information about the schedules and tables that appear
throughout this report. In addition, the Notes explain how the
funds operate and the methods used in preparing and presenting
this report.
65
<PAGE>
1. Organization and Significant Accounting Policies
Janus Investment Fund (the Trust) is registered under
the Investment Company Act of 1940 (the 1940 Act) as a no-load,
open-end management investment company. Five series of shares
(the "Bond Funds") included in this report invest primarily in
income producing securities, and three series of shares (the
"Money Market Funds") invest exclusively in high-quality money
market instruments.
Janus High-Yield Fund began operations on December 29,
1995. The Janus Money Market, Janus Government Money Market and
Janus Tax-Exempt Money Market Funds began operations on February
15, 1995 with the issuance of the investor class of shares.
Effective April 17, 1995, Janus Money Market, Janus
Government Money Market, and Janus Tax-Exempt Money Market Funds
began offering an institutional class of shares. "Investor
Shares" are available to the general public and "Institutional
Shares" are available only to investors that meet the $250,000
minimum account size, and allow wire transactions only.
The following policies have been consistently followed
by the Funds and are in conformity with accounting principles
generally accepted in the investment company industry.
Investment Valuation
Securities are valued at the closing price for
securities traded on a principal exchange (U.S. or foreign) and
on the NASDAQ National Market. Securities traded on over-the-
counter markets and listed securities for which no sales are
reported are valued at the latest bid price (or yield equivalent
thereof) obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Funds'
Trustees. Short-term investments maturing within 60 days for the
Bond Funds and all money market securities in the Money Market
Funds are valued at amortized cost, which approximates market
value. Foreign securities are converted to U.S. dollars using
exchange rates at the close of the New York Stock Exchange. When
market quotations are not readily available, securities are
valued at fair value as determined in good faith by the Funds'
Trustees.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date
purchased or sold. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis and
includes amortization of discounts and premiums. Gains and losses
66
<PAGE>
are determined on the identified cost basis, which is the same
basis used for federal income tax purposes.
Forward Foreign Currency Transactions and Futures Contracts
The Funds enter into forward currency contracts in order
to reduce their exposure to changes in foreign currency exchange
rates on their foreign portfolio holdings and to lock in the U.S.
dollar cost of firm purchase and sale commitments for securities
denominated in foreign currencies. A forward currency exchange
contract is a commitment to purchase or sell a foreign currency
at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the U.S. dollar cost of the
original contract and the value of the foreign currency in U.S.
dollars upon closing of such contract is included in net realized
gain or loss on foreign currency transactions.
Currency gain and loss is also calculated on payables
and receivables that are denominated in foreign currencies. The
payables and receivables are generally related to security
transactions and income.
Futures contracts are marked to market daily and the
variation margin is recorded as an unrealized gain or loss. When
a contract is closed, a realized gain or loss is recorded equal
to the difference between the opening and closing value of the
contract. Generally, open forward and futures contracts are
marked to market for federal income tax purposes at fiscal year
end.
Foreign denominated assets and forward currency
contracts may involve more risks than domestic transactions,
including: currency risk, political and economic risk, regulatory
risk, and market risk. Risks may arise from the potential
inability of a counterparty to meet the terms of a contract and
from unanticipated movements in the value of foreign currencies
relative to the U.S. dollar.
The Funds may enter into "futures contracts" and
"options" on securities, financial indices, and foreign
currencies; forward contracts; and interest rate swaps and swap-
related products. The Funds intend to use such derivative
instruments primarily to hedge or protect from adverse movements
in securities prices, currency rates or interest rates. The use
of futures contracts and options may involve risks such as the
possibility of illiquid markets or imperfect correlation between
the value of the contracts and the underlying securities, or that
the counterparty will fail to perform its obligations.
67
<PAGE>
Additional Investment Risk
Janus High-Yield Fund and a portion of the Janus
Flexible Income Fund may be invested in lower-rated debt
securities that have a higher risk of default or loss of value
due to changes in the economy or in their respective industry.
Dividend Distributions and Expenses
Dividends are declared daily and distributed monthly.
Each Bond Fund bears expenses incurred specifically on its behalf
as well as a portion of general expenses.
Federal Income Taxes
The Funds intend to distribute to shareholders all
taxable investment income and realized gains and otherwise comply
with the Internal Revenue Code applicable to regulated investment
companies.
Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amount
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
2. Investment Advisory Agreement and Other
Transactions with Affiliates
The advisory agreement with the Bond Funds spells out
the expenses that the Funds must pay. Each of the Funds are
subject to the following schedule:
Average Daily Net Annual Rate Expense Limit
Fee Schedule Assets of Fund Percentage(%) Percentage (%)
Janus Flexible Income Fund First $300 Million .65 1.00*
Over $300 Million .55
Janus High-Yield Fund First $300 Million .75 1.00*
Over $300 Million .65
Janus Federal First $300 Million .60 .65*
Tax-Exempt Fund Over $300 Million .55
Janus Intermediate First $300 Million .50 .65*
Government Securities Fund Over $300 Million .40
68
<PAGE>
Janus Short-Term Bond Fund First $300 Million .65 .65*
Over $300 Million .55
* Janus Capital will waive certain fees and expenses to the extent that net
expenses exceed the stated limits.
Each of the Money Market Funds pays Janus Capital .20%
of average daily net assets as an investment advisory fee. In
addition, each class of shares of each Fund pays Janus Capital an
administrative fee. This fee is .50% and .15% of average daily
net assets for the investor shares and institutional shares,
respectively. Janus Capital has voluntarily agreed to reduce its
advisory fee for the Janus Money Market Funds to .10%. In
addition, Janus Capital has voluntarily agreed to reduce the
administrative fee on the institutional shares to .05%. All other
expenses of the Money Market Funds, except Trustees fees and
expenses and audit fees, are paid by Janus Capital. However,
Janus Capital has agreed to reduce its fees to the extent of
these expenses for the period ending April 30, 1996.
Janus Capital will reduce advisory fees to the extent
that a Fund's normal operating expenses (exclusive of brokerage
commissions, interest and taxes) exceed the most restrictive
state limitation, which is believed by the Funds to be 2.50% of
the first $30 million, 2% of the next $70 million and 1.50% of
the balance of a Fund's average net assets for a fiscal year.
Janus Service Corporation (Janus Service), a wholly
owned subsidiary of Janus Capital, received an annual fee of $16
per shareholder account from each Bond Fund for transfer agent
services plus reimbursement of certain out of pocket expenses.
Officers and certain trustees of the Funds are also
officers and/or directors of Janus Capital; however, they receive
no compensation from the Funds.
DST Systems Inc. (DST), an affiliate of Janus Capital
through a degree of common ownership, provides fund accounting
and shareholder accounting systems to the Funds through Janus
Capital and Janus Service. Fees paid to DST for the period ended
April 30, 1996 are noted below.
DST Fees
Janus Flexible Income Fund $145,885
Janus High-Yield Fund 5,158
Janus Federal Tax-Exempt Fund 19,771
Janus Intermediate Government Securities Fund 24,808
69
<PAGE>
Janus Short-Term Bond Fund 19,681
3. Federal Income Tax
Gains and losses on forward currency contracts and
foreign currency gains and losses on debt instruments are treated
as ordinary income for federal income tax purposes pursuant to
Section 988 of the Internal Revenue Code. Listed below are such
currency gains or losses for the period ended April 30, 1996.
Net capital loss carryovers noted below as of October
31, 1995 are available to offset future realized capital gains
and thereby reduce future taxable gains distributions. These
carryovers expire between October 31, 2001, and October 31, 2003.
The aggregate cost of investments and the composition of
unrealized appreciation and depreciation of investment securities
for federal income tax purposes as of April 30, 1996 are as
follows:
70
<PAGE>
<TABLE>
<CAPTION>
at October 31, 1995 at April 30, 1996
Net Net
Currency Capital Federal Appreciation/
Gains/ Loss Tax Unrealized Unrealized (Deprec-
(Losses) Carryovers Cost Appreciation (Depreciation) iation)
<S> <C> <C> <C> <C> <C> <C>
Janus Flexible Income Fund $1,289,334 $10,433,198 $616,250,559 $10,657,314 ($12,246,427) ($1,589,113)
Janus High-Yield Fund - - 35,811,207 581,536 (95,669) 485,867
Janus Federal Tax-Exempt Fund - 1,908,578 36,283,871 306,221 (798,211) (491,990)
Janus Intermediate Government
Securities Fund - 4,010,719 35,743,754 56,898 (733) 56,165
Janus Short-Term Bond Fund - 3,360,334 42,456,400 50,127 (496,975) (446,848)
</TABLE>
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00178001.AP4
