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TABLE OF CONTENTS
Our Message to You 1
Portfolio Manager's Commentary and Schedule of Investments
Janus Fund 2
Janus Balanced Fund 7
Janus Enterprise Fund 11
Janus Equity Income Fund 14
Janus Growth and Income Fund 18
Janus Mercury Fund 21
Janus Olympus Fund 25
Janus Overseas Fund 28
Janus Twenty Fund 34
Janus Venture Fund 37
Janus Worldwide Fund 42
Statements of Operations 48
Statements of Assets and Liabilities 48
Statements of Changes in Net Assets 50
Financial Highlights 52
Notes to Schedules of Investments 56
Notes to Financial Statements 58
Report of Independent Accountants 60
______________________________________________________________________________
Performance Information
The following pages include performance overview
graphs that 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 October 31, 1996.
When comparing the performance of a fund to an index, keep
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in mind that market indexes do not take into account brokerage
commissions that would be incurred if you purchased the individual
securities in the index. They also do not include taxes payable on
dividends, interest payments, or operating expenses necessary to
maintain a portfolio investing in the index.
Average annual total returns are 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 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. The value of securities denominated
in foreign currencies is converted 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 to different
countries by indicating the percentage of securities invested in each
country.
An Explanation of the Forward
Currency Contract Table
A table listing forward currency contracts follows each fund's
Schedule of Investments (if applicable). Forward currency
contracts are agreements to deliver or receive a preset amount of
currency at a future date. Forward currency contracts are used to
hedge against foreign currency risk in the fund's long-term holdings.
The table provides the name of the foreign currency, the
settlement date of the contract, the amount of the contract, 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.
2
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OUR MESSAGE TO YOU
Dear Shareholders:
Stocks produced excellent gains again this year, despite hitting several
pockets of turbulence. Although prices were choppy compared to the last few
years, when volatility was very low, the market set new records. However, the
difference in performance between large stocks and their smaller brethren was
pronounced. The Standard & Poor's 500 Stock Index (the S&P 500 Index), an
index of large companies, had a total return of 24.10% for the year ended
October 31, while the Russell 2000, an index of small stocks, gained 16.61%.
The S&P MidCap 400 Stock Index, which measures the performance of mid-
capitalization stocks, was up 17.35%.
These results are in sharp contrast to the first half of the year, when
small stocks were the heroes, riding high on a speculative updraft. As of
April 30, the Russell 2000 Index had gained 18.47% versus 13.76% for the S&P
500. During the sharp market decline in July, however, small stocks were hit
especially hard and then recovered only moderately. The reversal of fortune in
the small-cap sector is not easy to explain. Often, the highest flying stocks
fall the hardest. And there may have been a "flight to quality" among
investors who were rattled by the uncertainty surrounding the rate of economic
growth and the outlook for inflation.
A Year of Crosscurrents. Presidential election years often add another
source of turbulence to the financial markets. Investors' chief political
concern this year was whether Washington would remain focused on deficit
reduction and fiscal restraint. The rally in October was partly in
anticipation of a positive political outcome. Further evidence of the market's
political component can be found in the tail wind the election itself provided
in November.
But the main ingredient in the market's behavior this year was interest
rates. Stocks suffered their most severe decline after the yield on the
benchmark 30-year Treasury bond moved above 7%. Interest rates rose along with
our Gross Domestic Product (GDP), which jumped from 2.8% in the first calendar
quarter this year, to 4.7% in the second. Rates rose and stocks fell because
investors feared that the spike in economic growth would carry over into the
second half of the year and precipitate higher inflation. However, when the
fast--growth scenario failed to materialize, interest rates subsided and large
stocks went on to set a string of records.
International Markets
Measured in U.S. dollars, the Morgan Stanley EAFE Index gained 10.47% for
the year, with net dividends reinvested.(1) (EAFE stands for Europe,
Australasia, and the Far East. Neither the U.S. market nor the emerging
markets of Latin America and Eastern Europe are represented in EAFE.) Although
many European markets managed records this year, growth remains slower on the
Continent. European central banks have continued to lower interest rates in an
effort to stimulate growth. The same is true in Japan, only more so. Japanese
3
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interest rates are among the world's lowest, and the Japanese economy
continues to struggle, especially in the banking and real estate sectors. A
stronger dollar, and weaker Yen, has helped Japanese exports. But growth in
the Far East remained relatively soft this year. Latin American economies
began to recover from currency devaluations, but are still vulnerable to
future money shocks.
How Our Funds Performed
Janus funds had a very good year overall. The uncertainty over economic
growth and the earnings outlook fostered demand for quality growth stocks with
predictable earnings streams -- the kinds of stocks we like to invest in.
Janus Worldwide Fund and Janus Overseas Fund performed especially well,
beating their benchmark indexes by wide margins and placing at or near the top
of their respective fund groups. You can find the exact numbers in the two
Funds' annual letters, but portfolio manager Helen Young Hayes deserves
congratulations for a first-rate year. (2)
Janus Special Situations Fund
Our newest fund offering, Janus Special Situations Fund, will open
December 31, 1996. The Fund is nondiversified, and will focus on stocks whose
value may be materially enhanced by a change in the company's situation. New
management, better capital deployment, an acquisition, or a share repurchase
program are examples of the kinds of changes the Fund will look for. David
Decker, currently Assistant Portfolio Manager of Janus Fund, will manage Janus
Special Situations Fund. He brings energy and intelligence to the special
situations discipline. I believe investors will find the Fund to be an
excellent addition to their portfolios.(2)
The Outlook For 1997
Given the excellent climate for business in the U.S., with low inflation
and moderate economic growth, the equity market should continue to produce
solid returns.
However, it may prove difficult for stocks to sustain the excellent
results they have achieved during the last 24 months, when the S&P 500 gained
a total of 50.54%. That translates to a compound return of over 2% a month --
more than double the Index's usual rate, based on a historical average annual
gain of about 10%. The outstanding performance of the last two years may prove
a hard act to follow.
We appreciate your investment with Janus.
Thomas H. Bailey
Chairman
4
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(1) Net dividends are those dividends that remain to be reinvested after
foreign tax obligations have been met. Tax obligations vary from country to
country.
(2) 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.
5
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JANUS FUND, Portfolio Manager, James P. Craig
Performance
Janus Fund gained 20.31% during our fiscal year ended October 31, 1996,
compared to a gain of 24.10% for the S&P 500 Index. Both returns include
reinvested dividends.
Though stocks were volatile for much of the year, returns were
substantial. The Fund was virtually in a dead heat with the S&P 500 Index on
September 30, but fell behind in the final month. October's softer returns
resulted from earnings misses at individual companies, EDS (Electronic Data
Systems) in particular. Also, as stocks climbed in September, and many indexes
set new records, it became hard to find bargains, so I was content to let cash
accumulate. Indexes are always fully invested, and they reap the rewards and
run the risks of high valuations.
Large, high-quality growth stocks have fueled the Janus Fund's
performance over the years, and they kept returns competitive this year.
Uncertainty about the rate of economic growth and the outlook for inflation -
and the resulting market volatility - made the consistent earnings of
established, fast-growing companies more attractive.
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Portfolio Profile October 31, 1996 October 31, 1995
Equities 79.0% 90.5%
Foreign 15.5% 19.3%
Europe 13.2% 16.5%
Number of Stocks 120% 105%
Cash & Fixed-Income Securities 21.0% 9.5%
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Top 10 Equity Holdings October 31, 1996 October 31, 1995
Wells Fargo & Co. 4.9% --
MFS Communications Co., Inc. 3.4% 0.2%
First Data Corp. 3.2% 5.0%
Citicorp 3.1% 4.0%
Bank of New York Co., Inc. 2.9% 2.2%
Wolters Kluwer N.V. 2.7% 2.6%
United Technologies Corp. 2.7% 1.2%
UNUM Corp. 2.5% 2.6%
Computer Sciences Corp. 2.5% 0.5%
Barclays PLC 2.3% --
Total 30.2% 18.3%
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6
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Top 5 Industries October 31, 1996 October 31, 1995
Medical - Drugs 8.6% 12.3%
Money Center Banks 8.5% 6.6%
Aerospace and Defense 8.1% 3.1%
Super-Regional Banks 4.9% --
Telecommunication Services 4.8% 0.9%
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The Year In Review
Themes that have dominated the portfolio throughout the year cut across
industries, market sectors, and geographic regions. They represent powerful
long-term business trends. Outsourcing of expensive and complex operations to
outside specialists is one such theme. Consolidation and restructuring in the
banking industry is another, as are stock repurchase programs. Wells Fargo,
for example, is buying back 7% to 8% of its stock every year. Exciting product
pipelines at many pharmaceutical companies continue to provide good investment
opportunities in both the U.S. and Europe. And finally, during the technology
sell off this summer I built positions in several large technology companies,
such as Cisco Systems, that dominate specific markets and have more consistent
earnings streams than the rest of the technology sector.
Stock Highlights
One of the more exciting stocks in the portfolio is MFS Communications,
which is being acquired by WorldCom. Deregulation has increased competition in
the telecommunications industry. With the acquisition of MFS, WorldCom should
be able to underprice the old monopolistic providers by offering customers
end-to-end long-distance and local telephone and internetworking services over
a modern global network.
London-based Barclays is one of the largest financial services companies
in the U.K., and is the largest issuer of credit cards, a business that is
still in its infancy in Britain. In the past, Barclays was burdened by bad
loans, but now it is controlling costs and increasing shareholder value by
repurchasing stock. Barclays is also branching out into the higher-margin
asset management business via its acquisition of Wells Fargo Nikko Investment
Advisors.
Associates 1st Capital, formerly Ford Motor Credit, came public earlier
this year and I have been an enthusiastic buyer. Management is very
conservative and opportunistic in taking advantage of others' mistakes in
consumer and commercial financing. Revenues and earnings should grow at 20%
through 1997, well ahead of comparable financing companies.
AMR, parent of American Airlines, German software developer SAP, and EDS
were either trimmed or sold at a profit. AMR hit its price target and SAP's
growth rate began to slow -- from a very robust 40%. EDS was reduced due to
short-term earnings problems. EDS' earnings shortfall took everyone by
surprise, but the stock has been a longtime holding, and produced good returns
7
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in spite of the October decline. I let W.R. Grace go at a loss when the
company experienced earnings problems in its European packaging operations.
The Current Outlook
With stock prices up, there is not much room for additional gains unless
interest rates decline further. The bottom line is that stocks are ahead of
earnings growth, at least in the short run. If the economy continues to grow
at 2.0% to 2.5% annually, rates could move lower. But if economic growth heats
up, rates are likely to rise and stock prices would be unsustainable at
current levels. Individual stock selection becomes even more critical in this
environment, but I believe that is what we do best at Janus.
Thank you for your investment in Janus Fund.
8
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JANUS FUND Portfolio Manager, James P. Craig
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Fund and the S&P 500 Index. Janus Fund is represented by
a solid green line. The S&P 500 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, February 5, 1970, through
October 31, 1996. The upper right quadrant reflects the ending value of the
hypothetical investment in Janus Fund ($615,487) as compared to the S&P 500
Index ($230,826). There is a legend in the upper left quadrant of the graph
which indicates Janus Fund's one-year, five-year, ten-year and since inception
(February 5, 1970) average annual total returns as 20.31%, 13.61%, 15.95% and
16.65%, respectively.
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 FUND OCTOBER 31, 1996
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Shares or
Principal Amount Market Value
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Common Stock - 78.6%
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Aerospace and Defense - 8.1%
2,298,350 AlliedSignal, Inc. $150,541,925
3,215,675 Boeing Co. 306,695,003
3,811,025 General Motors Corp. - 203,413,460
Class H
116,825 Lockheed Martin Corp. 10,470,441
1,122,875 Northrop Grumman Corp. 90,672,156
727,450 Textron, Inc. 64,561,187
3,197,850 United Technologies Corp. 411,723,187
- --------------------------------------------------------------
1,238,077,359
______________________________________________________________
Appliances - Household - 0.1%
9
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796,550 Singer Company N.V. (The) 15,234,019
- --------------------------------------------------------------
Automotive - Cars and Light Trucks - 1.2%
2,307,850 General Motors Corp. 124,335,419
2,310,000 Honda Motor Co. 55,135,135
- --------------------------------------------------------------
179,470,554
- --------------------------------------------------------------
Automotive - Truck Parts and Equipment - 0.8%
2,419,925 Federal Mogul Corp.# 54,145,822
1,320,575 Magna International, Inc. 66,193,822
- Class A
- --------------------------------------------------------------
120,339,644
- --------------------------------------------------------------
Beverages - Non-Alcoholic - 1.0%
661,750 Coca-Cola Femsa S.A. (ADR) 15,633,844
1,162,250 Panamerican Beverages, 50,703,156
Inc. - Class A#
3,108,625 PepsiCo, Inc. 92,093,016
158,430,016
- --------------------------------------------------------------
Broadcast Media - 0.4%
1,009,650 Heritage Media Corp. - 15,397,162
Class A*
103,850 Univision Communications, 3,504,937
Inc.*
1,290,150 Young Broadcasting Corp. 36,769,275
- Class A*,#
55,671,374
- --------------------------------------------------------------
Broadcast Services and Programming - 0.1%
481,250 Grupo Televisa S.A. de C.V. 12,632,813
(GDR)*
- --------------------------------------------------------------
Building - Heavy Construction - 0.4%
1,050,050 Fluor Corp. 68,778,275
- --------------------------------------------------------------
Cable Television - 0.1%
475,675 Tele-Communications Liberty
Media Group, Inc. - Class A* 12,248,631
- --------------------------------------------------------------
Casino Hotels - 0.9%
3,344,775 Circus Circus Enterprises, 115,394,737
Inc.*
1,208,700 Mirage Resorts, Inc.* 26,591,400
- --------------------------------------------------------------
10
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141,986,137
______________________________________________________________
Casino Services - 0.2%
1,120,500 International Game 23,670,563
Technology
______________________________________________________________
Chemicals - Diversified - 1.5%
3,528,600 Cytec Industries, Inc.*,# 126,147,450
1,469,250 Hercules, Inc. 69,973,031
1,034,600 Monsanto Co. 40,996,025
237,116,506
______________________________________________________________
Chemicals - Specialty - 0.4%
856,975 Minerals Technologies, Inc. 33,636,269
747,350 Praxair, Inc. 33,070,238
66,706,507
______________________________________________________________
Commercial Banks - 0.4%
288,188 Banco Popular Espanol S.A. 55,042,328
______________________________________________________________
Commercial Services - 0.1%
7,434 SGS Societe Generale de
Surveillance
Holdings S.A.** $16,826,167
- --------------------------------------------------------------
Computer Services - 3.7%
356,800 Bell & Howell Co.* 9,544,400
5,054,900 Computer Sciences Corp.*,# 375,326,325
3,511,650 Electronic Data Systems Corp. 158,024,250
431,075 SunGard Data Systems, Inc.* 18,428,456
- --------------------------------------------------------------
561,323,431
- --------------------------------------------------------------
Computer Software - 0.1%
112,275 SAP A.G.** 15,164,300
- --------------------------------------------------------------
Computers - Integrated Systems - 0.7%
1,256,650 Gulfstream Aerospace Corp.* 29,688,356
654,825 Parametric Technology Co.* 32,004,572
2,125,000 Wang Laboratories, Inc.*,# 49,671,875
- --------------------------------------------------------------
111,364,803
- --------------------------------------------------------------
Containers - Paper and Plastic - 0.4%
1,405,725 Sealed Air Corp.* 54,647,559
- --------------------------------------------------------------
Cosmetics and Toiletries - 0.7%
1,188,325 Colgate-Palmolive Co. 109,325,900
11
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Data Processing and Management - 3.2%
6,087,880 First Data Corp. 485,508,430
68,850 First USA Paymentech, Inc.* 2,547,450
- --------------------------------------------------------------
488,055,880
- --------------------------------------------------------------
Diversified Operations - 1.5%
2,149,977 Hays PLC** 17,963,399
490,950 Raychem Corp. 38,355,469
12,636,311 Rentokil Initial PLC** 84,812,234
300,000 Tyco International, Ltd. 14,887,500
500,000 Unilever N.V. (ADR) 76,437,500
- --------------------------------------------------------------
232,456,102
- --------------------------------------------------------------
Electric Products - 0.3%
1,168,850 Sundstrand Corp. 47,046,212
- --------------------------------------------------------------
Finance - Consumer Loans - 1.2%
4,248,850 Associates First Capital Corp. 184,293,869
- --------------------------------------------------------------
Finance - Investment Broker - 0.1%
350,000 Charles Schwab Corp. 8,750,000
- --------------------------------------------------------------
Food - Canned - 0.7%
1,282,925 Campbell Soup Co. 102,634,000
- --------------------------------------------------------------
Food - Confectionary - 0.2%
605,950 Wrigley (Wm.) Jr., Co. 36,508,488
- --------------------------------------------------------------
Food - Diversified - 0.5%
1,323,075 Kellogg Co. 84,015,263
- --------------------------------------------------------------
Hotels and Motels - 0.2%
306,525 Extended Stay America, Inc.* 6,207,132
884,625 La Quinta Inns, Inc. 17,692,500
- --------------------------------------------------------------
23,899,632
- --------------------------------------------------------------
Human Resources - 0.8%
2,980,050 Robert Half International, $ 119,574,506
Inc.*,#
- --------------------------------------------------------------
Internet Software - 0.1%
320,550 Netscape Communications Corp.* 14,184,338
- --------------------------------------------------------------
Life and Health Insurance - 3.2%
1,010,350 AFLAC, Inc. 40,540,294
350,000 PennCorp Financial Group, Inc. 12,118,750
759,300 Protective Life Corp. 26,195,850
12
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1,093,075 UICI* 27,873,412
6,030,800 UNUM Corp.# 379,186,550
- --------------------------------------------------------------
485,914,856
- --------------------------------------------------------------
Linen Supply and Related Items - 0.2%
602,550 Cintas Corp. 35,098,537
- --------------------------------------------------------------
Lottery Services - 0.4%
2,093,425 GTECH Holdings Corp.* 61,756,038
- --------------------------------------------------------------
Machinery - Farm - 0.5%
3,266,025 AGCO Corp.# $ 82,875,384
- --------------------------------------------------------------
Medical - Biomedical and Genetic - 0.1%
515,845 Centocor, Inc.* 15,152,947
- --------------------------------------------------------------
Medical - Drugs - 8.6%
454,650 Bristol-Myers Squibb Co. 48,079,238
52,147 Ciba-Geigy Corp. A.G.*,** 63,744,361
2,708,750 Eli Lilly & Co. 190,966,875
4,735,704 Glaxo Wellcome PLC** 74,126,563
230,675 Glaxo Wellcome PLC (ADR)** 7,266,263
2,240,800 Johnson & Johnson 110,359,400
3,206,325 Pfizer, Inc. 265,323,394
16,478 Roche Holding A.G.** 124,234,763
154,491 Sandoz A.G. - Class R*,** 178,371,312
16,332,427 SmithKline Beecham PLC - Class 201,434,649
A**
934,750 SmithKline Beecham PLC (ADR) - 58,538,719
Class A**
- --------------------------------------------------------------
1,322,445,537
- ---------------------------------------------------------------
Medical - Wholesale Drug Distributors - 1.2%
2,295,275 Cardinal Health, Inc.# 180,179,088
- --------------------------------------------------------------
Medical Instruments - 0.6%
1,008,150 Medtronic, Inc. 64,899,656
572,250 St. Jude Medical, Inc.* 22,603,875
- --------------------------------------------------------------
87,503,531
- --------------------------------------------------------------
Medical Products - 1.1%
1,715,000 Baxter International, Inc. 71,386,875
1,349,000 Boston Scientific Corp.* 73,351,875
902,375 Fresenius Medical Care A.G. 26,845,656
(ADR)*
- --------------------------------------------------------------
171,584,406
- --------------------------------------------------------------
13
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Money Center Banks - 8.5%
13,358,600 Bank of New York Co., Inc. 442,503,625
22,172,973 Barclays PLC** 347,608,104
4,869,125 Citicorp 482,043,375
352,440 CS Holding A.G.*,** 35,091,128
- --------------------------------------------------------------
1,307,246,232
- --------------------------------------------------------------
Multi-line Insurance - 0.4%
1,074,000 Allstate Corp. 60,278,250
- --------------------------------------------------------------
Networking Products - 1.4%
3,449,225 Cisco Systems, Inc.* 213,420,797
- --------------------------------------------------------------
Office Automation and Equipment - 1.6%
1,554,600 Danka Business Systems PLC 61,601,025
(ADR)
479,524 Oce-Van Der Grinten N.V.**,# 51,049,196
2,982,475 Xerox Corp. 138,312,278
- --------------------------------------------------------------
250,962,499
- --------------------------------------------------------------
Office Supplies - 2.6%
7,164,225 Alco Standard Corp.# 332,240,934
236,050 Harland (John H.) Co. 7,347,056
2,000,000 Wallace Computer Services, 58,750,000
Inc.
- --------------------------------------------------------------
398,337,990
- --------------------------------------------------------------
Oil Companies - Exploration and Production - 0.6%
1,934,525 Triton Energy, Ltd.*,# 86,328,178
- --------------------------------------------------------------
Optical Supplies - 0.1%
272,150 Luxottica Group S.p.A. (ADR) 17,281,526
- --------------------------------------------------------------
Pharmacy Services - 0.5%
2,705,600 Omnicare, Inc.# 73,727,600
- --------------------------------------------------------------
Printers and Related Products - 0.2%
394,475 Electronics for Imaging, 28,402,200
Inc.*
- --------------------------------------------------------------
Printing - Commercial - 0.2%
1,255,000 World Color Press, Inc.* 28,080,625
- --------------------------------------------------------------
Publishing - Books - 2.7%
3,254,159 Wolters Kluwer N.V.*,**,# 417,440,347
- --------------------------------------------------------------
Publishing - Newspapers - 0.1%
872,000 Hollinger International, Inc. $10,900,000
14
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- --------------------------------------------------------------
Publishing - Periodicals - 0%
304,700 K-III Communications Corp.* 3,275,525
- --------------------------------------------------------------
Retail - Major Department Stores - 0.3%
1,898,000 Credit Saison Co., Ltd. 43,802,562
- --------------------------------------------------------------
Satellite Telecommunications - 0.2%
2,066,450 U.S. Satellite Broadcasting 33,321,506
Co., Inc.*
- --------------------------------------------------------------
Super-Regional Banks - 4.9%
2,816,000 Wells Fargo & Co. 752,224,001
- --------------------------------------------------------------
Telecommunication Equipment - 0.3%
889,900 ECI Telecommunications Limited 17,798,000
Designs
929,375 L.M. Ericsson Telephone (ADR) 25,673,984
- --------------------------------------------------------------
43,471,984
- --------------------------------------------------------------
Telecommunication Services - 4.8%
1,208,175 Lucent Technologies, Inc. 56,784,225
10,420,160 MFS Communications Co., Inc.*,# 522,310,502
2,086,875 Telecomunicacoes Brasileiras 155,472,188
S.A. (ADR)
- --------------------------------------------------------------
734,566,915
Telephone - Integrated - 0.6%
1,876,025 Cincinnati Bell, Inc. 92,628,734
- --------------------------------------------------------------
Telephone - Long Distance - 0.5%
3,000,000 WorldCom, Inc.* 73,125,000
- --------------------------------------------------------------
Tools - Hand Held - 0.4%
1,716,500 Black & Decker Corp. 64,154,188
- --------------------------------------------------------------
Toys - 0.2%
916,526 Mattel, Inc. 26,464,688
- --------------------------------------------------------------
Transportation - Railroad - 1.0%
1,850,350 Burlington Northern Santa Fe 152,422,581
Corp.
- --------------------------------------------------------------
Wireless Telecommunications - 0.5%
1,544,450 AirTouch Communications, Inc.* 40,348,756
2,276,775 Paging Network, Inc.* 38,989,772
79,338,528
- --------------------------------------------------------------
Total Common Stock (cost $9,140,227,382) 12,029,187,956
- --------------------------------------------------------------
15
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Preferred Stock - 0.4%
Computer Software - 0.4%
467,052 SAP A.G.** (cost $48,088,340) 62,712,608
- --------------------------------------------------------------
Money Market - 0.6%
$85,000,000 Janus Money Market Fund, 5.61%
(cost $85,000,000) 85,000,000
- --------------------------------------------------------------
Repurchase Agreement - 0%
5,000,000 State Street Bank & Trust Co., 4.75%,
dated 10/31/96, maturing 11/1/96,
to be repurchased at $5,000,659,
collateralized by $5,045,000 in U.S.
Treasury Notes 6.125%, due 3/31/98,
value $5,102,846 (cost $5,000,000) 5,000,000
- --------------------------------------------------------------
Short-Term Corporate Notes - 5.2%
AVCO Financial Service
$ 27,000,000 5.32%, 1/8/97 $26,727,030
Coca-Cola Co.:
50,000,000 5.30%, 11/1/96 50,000,000
50,000,000 5.20%, 11/15/96 49,898,889
Ford Motor Credit Corp.:
123,900,000 5.55%, 11/1/96 123,900,000
100,000,000 5.52%, 1/10/97 98,960,000
General Electric Capital
Corp.:
50,000,000 5.25%, 12/20/96 49,642,708
45,000,000 5.35%, 4/9/97 43,929,900
Household Finance Corp.
100,000,000 5.55%, 11/1/96 100,000,000
IBM Corp.
50,000,000 5.25%, 12/10/96 49,715,625
J.P. Morgan and Co.:
50,000,000 5.28%, 11/25/96 49,824,000
50,000,000 5.30%, 1/13/97 49,461,000
Wal-Mart Stores, Inc.:
50,000,000 5.20%, 12/2/96 49,776,111
50,000,000 5.20%, 12/3/96 49,768,889
- --------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $791,580,895) 791,604,152
- --------------------------------------------------------------
U.S. Government Agencies - 13.5%
Federal Farm Credit Bank
25,000,000 5.15%, 12/5/96 24,878,403
Federal Home Loan Bank System:
600,000,000 5.50%, 11/1/96 600,000,000
50,000,000 5.16%, 11/18/96 49,878,167
100,000,000 5.19%, 11/21/96 99,711,667
16
<PAGE>
50,000,000 6.40%, 1/17/97 49,437,500
150,000,000 6.40%, 1/22/97 148,204,500
75,000,000 6.40%, 1/23/97 74,091,000
Federal Home Loan Mortgage Corp.:
50,000,000 5.22%, 11/8/96 49,949,250
50,000,000 5.31%, 11/14/96 49,904,125
100,000,000 5.17%, 11/20/96 99,727,139
100,000,000 5.19%, 11/22/96 99,697,250
35,000,000 5.28%, 11/25/96 34,876,800
50,000,000 5.33%, 12/12/96 49,696,486
50,000,000 5.24%, 12/13/96 49,694,333
50,000,000 6.20%, 12/13/96 49,699,583
50,000,000 5.32%, 12/18/96 49,652,722
50,000,000 5.21%, 12/26/96 49,602,014
100,000,000 6.20%, 12/31/96 99,122,000
50,000,000 6.98%, 2/10/97 49,266,000
Federal National Mortgage Association:
50,000,000 5.20%, 11/20/96 49,862,778
50,000,000 5.22%, 12/27/96 49,594,000
100,000,000 6.40%, 1/15/97 98,910,000
50,000,000 5.21%, 1/16/97 49,448,000
50,000,000 6.40%, 1/21/97 49,412,000
- --------------------------------------------------------------
Total U.S. Government Agencies
(amortized cost $2,074,381,196) 2,074,315,717
- --------------------------------------------------------------
U.S. Government Obligations - 5.1%
U.S. Treasury Bills:
100,000,000 5.10%, 12/19/96 99,320,000
300,000,000 5.125%, 12/19/96 297,951,000
200,000,000 5.025%, 3/13/97 196,274,000
200,000,000 5.07%, 5/1/97 194,901,833
- --------------------------------------------------------------
Total U.S. Government Obligations
(amortized cost $788,487,833) 788,446,833
- --------------------------------------------------------------
Total Investments
(total cost $12,932,765,646) - 103.4% 15,836,267,266
Liabilities, net of Cash,
Receivables and Other Assets - (3.4%) (523,087,331)
Net Assets - 100% $15,313,179,935
Summary of Investments by Country
October 31, 1996
- --------------------------------------------------------------
Country % of Investment Securities Market Value
- -------------------------------------------------------------
Brazil 1.0% $ 155,472,188
Canada 0.4% 66,193,822
17
<PAGE>
Germany 0.7% 104,722,564
Italy 0.1% 17,281,526
Japan 0.6% 98,937,697
Mexico 0.2% 28,266,657
Netherlands 3.4% 544,927,043
Spain 0.3% 55,042,328
Sweden 0.2% 25,673,984
Switzerland 2.6% 418,267,731
United Kingdom 5.4% 853,350,956
United States++ 85.1% 13,468,130,770
Total 100.0% $15,836,267,266
- --------------------------------------------------------------
- --------------------------------------------------------------
++Includes Short-Term Securities (61.4% excluding Short-Term Securities)
Forward Currency Contracts
Open at October 31, 1996
Currency Sold Currency Currency Unrealized
and Settlement Date Units Sold Value in Gain/(Loss)
$ U.S.
- --------------------------------------------------------------
British Pound 11/19/96 130,000,000 $211,432,000 ($15,418,000)
British Pound 1/17/97 83,000,000 134,825,200 (6,316,300)
Dutch Guilder 11/19/96 165,000,000 97,161,701 (65,752)
Dutch Guilder 12/13/96 500,000,000 294,933,050 2,531,953
German Deutschemark 106,000,000 70,031,712 597,285
12/13/96
Swiss Franc 12/18/96 210,000,000 166,389,351 4,277,142
$974,773,014 ($14,393,672)
- --------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
18
<PAGE>
JANUS BALANCED FUND Portfolio Manager, Blaine P. Rollins
Performance
Janus Balanced Fund returned 19.39% for our fiscal year ended October 31,
1996, compared to a return of 24.10% for the S&P 500 and 5.39% for the Lehman
Brothers Government/Corporate Bond Index. All returns include reinvested
dividends.
For the 12-month period, Janus Balanced Fund ranked 20 out of 267
balanced funds (top 8%) tracked by Lipper Analytical Services,(1) a large
mutual fund rating company.
The Fund's equity positions performed well. My strategy is to focus on
companies that generate strong positive cash flow, and that use their
discretionary cash wisely -- often to buy back significant portions of their
own stock. However, as market valuations continued to move higher, it became
more difficult to find solid growth opportunities trading at reasonable
prices.
The Year in Review
I assumed management of Janus Balanced Fund on January 1. My immediate
challenge was to deal with the sharp upturn in interest rates. The economy
picked up steam, and robust employment numbers spooked bond investors. As a
result, bonds suffered price declines across the maturity spectrum, with long-
term securities most strongly affected. To reduce interest rate risk, the
maturities of the portfolio's fixed-income holdings were shortened.
At year end, the portfolio held a conservative mix of Treasury, and
investment-grade and high-yield/high-risk corporate bonds. A modest position
in Canadian bonds also enhanced the Fund's yield.
- ------------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 49.7% 51.7%
Fixed-Income Securities
U.S. Treasury Bonds 22.2% 10.9%
Investment-Grade Corp. Bonds 12.3% 28.4%
High-Yield/High-Risk
Corporate Bonds 7.2% 1.7%
Foreign Corporate Bonds 1.5% 0.8%
Preferred Stock 2.2% 3.7%
Cash & Cash Equivalents 4.9% 2.8%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
19
<PAGE>
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Wells Fargo & Co. 3.7% --
Dionex Corp. 2.8% 0.9%
UNUM Corp. 2.2% 2.0%
Robert Half International, Inc. 1.8% 2.8%
Barclays PLC 1.5% --
Sandoz A.G. - Class R 1.4% --
Wolters Kluwer N.V. 1.3% 1.5%
Campbell Soup Co. 1.2% --
Insignia Financial Group, Inc. 1.2% --
UICI 1.2% --
Total 18.3% 7.2%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Top 5 Industries October 31,1996 October 31, 1995
Aerospace and Defense 6.0% 3.1%
Life and Health Insurance 5.7% 2.0%
Computers - Mainframe 3.9% 8.1%
Super-Regional Banks 3.7% 3.0%
Money Center Banks 3.5% 3.3%
- ------------------------------------------------------------------------------
Stock Highlights
Dionex is an example of a great cash generator. Dionex manufactures ion
chromatography systems used to identify chemical components through color
spectrum analysis. The company dominates its industry with 70% market share.
What Dionex does may seem complex, but the way it manages its business is
straightforward. Dionex does not make unnecessary capital expenditures or
acquisitions. At present, excess cash flow is being used to buy back shares,
adding substantially to the company's earnings per share growth and building
shareholder value.
Barclays PLC contributed significantly to portfolio returns this year.
One of Britain's largest financial services providers, Barclays is refocusing
its operations on retail banking and the higher-margin asset management
business, having recently acquired Wells Fargo Nikko Investment Advisors. The
company is poised to benefit from its position as the largest issuer of credit
cards in the U.K.Barclays is also aggressively repurchasing its stock.
Our MFS Communications convertible debenture also performed well. MFS is
being acquired by WorldCom, and the company will be very competitive post-
merger. WorldCom should be able to underprice competitors in end-to-end long
distance, local telephone, and internetworking services.
U.S. Satellite Broadcasting and General Motors-H/Hughes Electronics
disappointed this year. Neither company met projections for new subscribers in
their satellite TV businesses. Kellogg was reduced after the company fared
20
<PAGE>
poorly in cereal price wars. Kellogg's management also chose not to
aggressively restructure the company, as some of us had expected.
Current Strategy and Outlook
The market's current high levels may make finding stocks with great
upside potential more difficult. High valuations dictate a more opportunistic
approach. But I will continue to focus on uncovering stable companies with
predictable earnings growth and strong free cash flows - stocks that have a
better chance to perform despite the market environment. On the fixed-income
side, my strategy remains conservative in the event that the economy
strengthens or inflationary pressures increase.
Thank you for your continued investment in Janus Balanced Fund.
- ---------
(1) A Balanced Fund is defined by Lipper as one whose "primary objective is to
conserve principal by maintaining at all times a balanced portfolio of both
stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%." This
ranking is based on total return, including reinvestment of dividends and
capital gains for the stated period. Past performance is not predictive of
future results.
21
<PAGE>
JANUS BALANCED FUND Portfolio Manager, Blaine P. Rollins
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Balanced Fund, the S&P 500 Index, the Lehman Brothers Long
Government/Corporate Bond Index and the Lehman Brothers Government/Corporate
Bond Index. Janus Balanced Fund is represented by a solid green line. The
S&P 500 Index is represented by a single dashed black line. The Lehman
Brothers Long Government/Corporate Bond Index is represented by a single
dotted dark gray line. The Lehman Brothers Government/Corporate Bond Index is
represented by a single dashed medium gray line. The "y" axis reflects the
value of the investment. The "x" axis reflects the computation periods from
inception, September 1, 1992, through October 31, 1996. The upper right
quadrant reflects the ending value of the hypothetical investment in Janus
Balanced Fund ($17,771) as compared to the S&P 500 Index ($19,004), the Lehman
Brothers Long Government Corporate Bond Index ($14,270) and the Lehman
Brothers Government/Corporate Bond Index ($13,242). There is a legend in the
upper left quadrant of the graph which indicates Janus Balanced Fund's one-
year and since inception (September 1, 1992) average annual total returns as
19.39% and 14.80%, respectively.
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 BALANCED FUND October 31, 1996
- ---------------------------------------------------------------
Shares or
Principal Amount Market Value
- ---------------------------------------------------------------
Common Stock - 49.7%
- ---------------------------------------------------------------
Aerospace and Defense - 3.0%
15,650 Boeing Co. $1,492,619
37,575 General Motors Corp. - Class H 2,005,565
8,775 Lockheed Martin Corp. 786,459
22,075 Thiokol Corp. 924,391
8,275 United Technologies Corp. 1,065,406
6,274,440
- --------------------------------------------------------------
22
<PAGE>
Broadcast Media - 1.2%
59,050 Heritage Media Corp. - Class 900,513
A*
58,750 Young Broadcasting Corp. - 1,674,375
Class A*
2,574,888
- --------------------------------------------------------------
Casino Hotels - 0.5%
29,675 Circus Circus Enterprises, 1,023,788
Inc.*
- --------------------------------------------------------------
Casino Services - 0.7%
289,354 London Clubs International 1,478,337
PLC**
- --------------------------------------------------------------
Chemicals - Specialty - 0.3%
15,900 Minerals Technologies, Inc. 624,075
- --------------------------------------------------------------
Commercial Banks - 0.4%
3,173 Banco Popular Espanol S.A. 606,026
23,850 Sterling Bancorp 307,069
913,095
- --------------------------------------------------------------
Commercial Services - 0.1%
126 SGS Societe Generale de
Surveillance
Holdings S.A.** 285,189
- --------------------------------------------------------------
Computers - Integrated Systems - 1.0%
83,350 Gulfstream Aerospace Corp.* 1,969,144
- --------------------------------------------------------------
Containers - Paper and Plastic - 0.5%
24,550 Sealed Air Corp.* 954,381
- --------------------------------------------------------------
Cosmetics and Toiletries - 0.9%
19,575 Colgate-Palmolive $1,800,900
Co.
- --------------------------------------------------------------
Data Processing and Management - 0.7%
18,820 First Data Corp. 1,500,895
- --------------------------------------------------------------
Diversified Operations - 1.2%
75,544 Hays PLC** 631,182
147,835 Rentokil Initial 992,237
PLC**
6,200 Unilever N.V. (ADR) 947,825
2,571,244
- --------------------------------------------------------------
Electric Products - 0.8%
38,550 Sundstrand Corp. 1,551,638
23
<PAGE>
- --------------------------------------------------------------
Electronic Safety Devices - 0.5%
20,225 Pittway Corp. - 985,969
Class A
- --------------------------------------------------------------
Finance - Consumer Loans - 1.1%
52,700 Associates First 2,285,863
Capital Corp.
- --------------------------------------------------------------
Financial Guarantee Insurance - 0.7%
7,725 CMAC Investment 533,991
Corp.
14,825 MGIC Investment 1,017,366
Corp.
1,551,357
- --------------------------------------------------------------
Food - Canned - 1.2%
30,850 Campbell Soup Co. 2,468,000
- --------------------------------------------------------------
Food - Confectionary - 0.5%
15,700 Wrigley (Wm.) Jr., Co. 945,925
- --------------------------------------------------------------
Food - Diversified - 0.9%
29,725 Kellogg Co. 1,887,537
- --------------------------------------------------------------
Gas - Distribution - 0.9%
74,350 Southern Union Co.* 1,849,456
- --------------------------------------------------------------
Hotels and Motels - 0.5%
53,500 Extended Stay 1,083,375
America, Inc.*
- --------------------------------------------------------------
Human Resources - 1.8%
90,750 Robert Half 3,641,344
International, Inc.*
- --------------------------------------------------------------
Instruments - Scientific - 2.8%
150,875 Dionex Corp.* 5,770,969
- --------------------------------------------------------------
Life and Health Insurance - 5.7%
26,500 AFLAC, Inc. 1,063,312
25,800 Delphi Financial 722,400
Group, Inc. - Class A
49,375 PennCorp Financial 1,709,609
Group, Inc.
36,850 Protective Life 1,271,325
Corp.
94,575 UICI* 2,411,663
72,600 UNUM Corp. 4,564,725
11,743,034
24
<PAGE>
- -------- --------- --------------------- ---------------------
Machinery - Farm - 0.7%
61,075 AGCO Corp. 1,549,778
- -------- --------- --------------------- ---------------------
Machinery - Pumps - 0.3%
42,100 Pfeiffer Vacuum 673,600
Technology A.G.
(ADR)*,**
- -------- --------- --------------------- ---------------------
Medical - Drugs - 2.6%
62,295 Glaxo Wellcome PLC** 975,085
2,475 Sandoz A.G. - Class 2,857,571
R**
24,050 SmithKline Beecham 1,506,131
PLC (ADR) - Class A**
5,338,787
- -------- --------- --------------------- ---------------------
Medical - Wholesale Drug Distributors - 0.2%
6,450 Cardinal Health, 506,325
Inc.
- -------- --------- --------------------- ---------------------
Medical Instruments - 0.5%
15,125 Medtronics, Inc. 973,672
- -------- --------- --------------------- ---------------------
Money Center Banks - 3.5%
66,775 Bank of New York 2,211,922
Co., Inc.
191,829 Barclays PLC** 3,007,324
20,425 Citicorp 2,022,075
7,241,321
- -------- --------- --------------------- ---------------------
Multi-line Insurance - 0.6%
21,825 Allstate Corp. 1,224,928
- -------- --------- --------------------- ---------------------
Office Automation and Equipment - 0.6%
30,775 Danka Business 1,219,459
Systems PLC (ADR)
- -------- --------- --------------------- ---------------------
Office Supplies - 0.8%
14,575 Alco Standard Corp. 675,916
32,150 Harland (John H.) Co. 1,000,669
1,676,585
- -------- --------- --------------------- ---------------------
Optical Supplies - 0.3%
10,500 Luxottica Group 666,750
S.p.A. (ADR)
- -------- --------- --------------------- ---------------------
Printing - Commercial - 0.2%
25
<PAGE>
19,500 World Color Press, Inc.* 436,313
- -------- --------- --------------------- ---------------------
Property and Casualty Insurance - 0.4%
16,050 Foremost Corp. of America 884,756
- -------- --------- --------------------- ---------------------
Publishing - Books - 1.3%
20,229 Wolters Kluwer N.V.** 2,594,956
- -------- --------- --------------------- ---------------------
Real Estate Investment Trust - 1.7%
152,900 Innkeepers USA Trust 1,796,575
48,650 Redwood Trust, Inc. 1,605,450
3,402,025
- -------- --------- --------------------- ---------------------
Satellite Telecommunications - 0.5%
60,400 U.S. Satellite 973,950
Broadcasting Co., Inc.*
- -------- --------- --------------------- ---------------------
Savings/Loan/Thrifts - 2.2%
40,000 Bank United Corp. - Class A* $ 1,065,000
30,925 First Savings Bank
of Washington Bancorp, Inc. 525,725
69,925 Home BanCorp Elgin, Inc.* 874,062
110,700 Klamath First Bancorp, Inc. 1,556,719
25,225 Ocean Financial Corp.* 614,859
4,636,365
- -------------- ------------ --------------------------------
Super-Regional Banks - 3.7%
28,883 Wells Fargo & Co. 7,715,371
- -------------- ------------ --------------------------------
Telecommunication Services - 0.5%
21,000 Lucent Technologies, Inc. 987,000
295 MFS Communications Co., Inc.* 14,787
1,001,787
- -------------- ------------ --------------------------------
Telephone - Integrated - 0.7%
30,225 Cincinnati Bell, Inc. 1,492,359
- -------------- ------------ --------------------------------
Textile - Apparel - 0.5%
7,337 Wolford A.G. 965,847
- -------------------------------------------------------------
Total Common Stock (cost $89,113,263) 102,909,777
- -------------------------------------------------------------
Corporate Bonds - 19.5%
- -------------------------------------------------------------
26
<PAGE>
Aerospace and Defense - 3.0%
$2,430,000 International Lease
Finance Corp., 7.50%
notes, due 3/1/99 2,499,862
3,700,000 Lockheed Martin
Corp., 6.55% company
guaranteed unsecured notes,
due 5/15/99 3,727,750
6,227,612
- --------------------------------------------------------------
Broadcast Media - 2.2%
2,000,000 Heritage Media
Corp., 8.75%
senior 1,895,000
subordinated notes,
due 2/15/06
3,000,000 Young Broadcasting,
Inc., 9.00%
senior 2,737,500
subordinated notes,
due 1/15/06
4,632,500
Casino Hotels - 1.0%
2,220,000 Circus Circus
Enterprises, Inc.,
6.45%
senior notes, due 2,106,225
2/1/06
Computers - Mainframe - 3.9%
8,000,000 IBM Corp., 6.375%
global notes, due 8,010,000
6/15/00
- --------------------------------------------------------------
Engineering - Research and Development Services - 2.4%
5,000,000 Intertek Finance PLC, 10.25%
senior subordinated notes,
due 11/1/06+ 5,012,500
- --------------------------------------------------------------
Finance - Consumer Loans - 1.4%
3,000,000 Household International
Netherlands N.V.,
6.00% senior notes, due 2,981,250
3/15/99
- --------------------------------------------------------------
Finance - Credit Card - 0.5%
1,000,000 Capital One Bank, 6.875%
notes, due 4/24/00 1,003,750
27
<PAGE>
- --------------------------------------------------------------
Industrial Audio and Video Products - 0.3%
700,000 Unifrax Investment Corp., 10.50%
senior notes, due 11/1/03 712,250
- --------------------------------------------------------------
Medical Labs and Testing Services - 1.3%
2,430,000 Dade International, Inc.,
11.125% senior
subordinated notes, 2,581,875
due 5/1/06
- --------------------------------------------------------------
Multimedia - 1.6%
3,400,000 Walt Disney Co. (The), 6.375%
senior notes, due 3/30/01 3,395,750
- --------------------------------------------------------------
Retail - Major Department Stores - 0.9%
1,800,000 Sears Roebuck Acceptance, 6.50%
notes, due 6/15/00 1,806,750
- --------------------------------------------------------------
Savings/Loan/Thrifts - 1.0%
$ 2,000,000 First Nationwide Holdings,
Inc., 9.125%
senior subordinated notes, $ 2,000,000
due 1/15/03
- --------------------------------------------------------------
Total Corporate Bonds (cost $40,419,373) 40,470,462
- --------------------------------------------------------------
U.S. Government Obligations - 22.2%
U.S. Treasury Notes:
1,500,000 5.00%, due 1/31/98 1,488,765
4,000,000 5.125%, due 2/28/98 3,973,200
3,900,000 6.125%, due 5/15/98 3,926,247
6,950,000 5.50%, due 11/15/98 6,914,069
16,000,000 6.375%, due 5/15/99 16,187,200
5,150,000 5.75%, due 10/31/00 5,097,573
8,500,000 5.625%, due 11/30/00 8,374,115
- --------------------------------------------------------------
Total U.S. Government Obligations (cost $45,874,328)45,961,169
- --------------------------------------------------------------
Foreign Bonds - 1.5%
- --------------------------------------------------------------
Government Obligations - 1.5%
CAD 3,500,000 Canadian Government, 8.75%
debentures, due 12/1/05
(cost $2,803,682) $3,045,826
- --------------------------------------------------------------
Preferred Stock - 2.2%
- -------------------------------------------------------------
Computer Software - 0.2%
3,020 SAP A.G.** 405,505
- --------------------------------------------------------------
28
<PAGE>
Finance - Other Services - 1.2%
47,117 Insignia Financial Group, Inc.+ 2,426,526
- --------------------------------------------------------------
Office Supplies - 0.3%
7,500 Alco Standard Corp., 5.04% 650,625
- --------------------------------------------------------------
Telecommunication Services - 0.5%
13,150 MFS Communications Co., Inc., 1,140,762
8.00%
Total Preferred Stock (cost $4,178,653) 4,623,418
- --------------------------------------------------------------
Short-Term Corporate Notes - 7.1%
General Electric Capital Corp.
$10,000,000 5.55%, 11/1/96 10,000,000
Prudential Funding Corp.
4,600,000 5.50%, 11/1/96 4,600,000
- -------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $14,600,000) 14,600,000
- -------------------------------------------------------------
Total Investments (total cost
$196,989,299) - 102.2% 211,610,652
- --------------------------------------------------------------
Liabilities, net
of Cash, Receivables and Other Assets - (2.2%) (4,566,728)
- --------------------------------------------------------------
Net Assets - 100% $207,043,924
- --------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ---------------------------------------------------------------
Austria 0.5% $ 965,847
Canada 1.4% 3,045,826
Germany 0.5% 1,079,105
Italy 0.3% 666,750
Netherlands 1.2% 2,594,956
Spain 0.3% 606,026
Switzerland 1.5% 3,142,760
United Kingdom 4.6% 9,809,755
United States++ 89.7% 189,699,627
- --------------------------------------------------------------
Total 100.0% $211,610,652
- --------------------------------------------------------------
++Includes Short-Term Securities (82.7% excluding Short-Term Securities)
29
<PAGE>
Forward Currency Contracts
Open at October 31, 1996
- --------------------------------------------------------------
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in Gain/
$U.S. (Loss)
British Pound 11/19/96 1,350,000 $2,195,640 ($160,110)
British Pound 1/17/97 250,000 406,100 (19,025)
Dutch Guilder 11/19/96 1,300,000 765,517 (518)
Dutch Guilder 12/13/96 2,000,000 1,179,732 10,128
German Deutschemark 12/13/96 560,000 369,979 3,155
Swiss Franc 1/8/97 1,900,000 1,508,535 21,872
$6,425,503 ($144,498)
- --------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
30
<PAGE>
JANUS ENTERPRISE FUND Portfolio Manager, James P. Goff
Performance
Janus Enterprise Fund registered a gain of 22.43% for our fiscal year
ended October 31, 1996, compared to a return of 17.35% for the Standard &
Poor's MidCap 400 Index and 24.10% for the S&P 500 Index. All returns include
reinvested dividends.
This year the benchmark index for the Fund was changed from the S&P 500
Index to the S&P 400 MidCap Index, which better reflects the stocks the Fund
holds. Starting in fiscal 1997, the S&P 500 Index will no longer be quoted as
a benchmark.
Janus Enterprise Fund was able to beat the S&P 400 Index because
individual stocks performed well. My strategy is to look hard at one company
at a time. The portfolio is built stock by stock, without regard to industry
or market sectors. I try to find companies that dominate their markets, that
have consistent earnings, and that can perform well independent of economic
conditions.
This year a number of positions posted good returns despite the relative
weakness in mid-cap stocks in the second half. Companies as diverse as lodging
and real estate franchisor HFS, British pub chain J.D. Wetherspoon, Insignia
Financial, the largest manager of real estate partnerships in the U.S.,
computer supplier and marketer Global Direct Mail, and Barnett, a supplier of
electrical and plumbing hardware, contributed to performance.
The Year In Review
Although the portfolio is eclectic, niche pockets of concentration can
develop when our research turns up good companies in the same broad industry.
This year the portfolio contained several wireless communications companies,
primarily in paging services and personal communications systems (PCS). There
was also a small group of restaurant stocks. Industrial suppliers, such as
Fastenal, were added during the second half of the year, and drug delivery
companies were trimmed.
- --------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 97.0% 99.0%
Foreign 19.0% 7.4%
Number of Stocks 37 38
Cash & Fixed-Income Securities 3.1% 1.0%
- --------------------------------------------------------------
- --------------------------------------------------------------
31
<PAGE>
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Fastenal Co. 8.4% --
HFS Inc. 7.6% 7.3%
Paging Network, Inc. 5.9% 8.1%
Pizza Express PLC 5.6% --
Wetherspoon (J.D.) 5.5% 3.7%
Global Direct Mail Corp. 5.1% 0.8%
Insignia Financial Group, Inc. 4.4% 4.7%
Rentokil Initial PLC 4.1% --
Wisconsin Central Transportation 3.6% 2.4%
Petco Animal Supplies Inc. 3.2% 2.5%
- --------------------------------------------------------------
Total 53.4% 29.5%
- --------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Retail - Restaurants 8.5% 6.0%
Building Products 8.4% --
Retail - Mail Order 7.8% --
Hotels and Motels 7.6% 7.3%
Cellular Telecommunications 6.3% 11.8%
- --------------------------------------------------------------
JANUS ENTERPRISE FUND Portfolio Manager, James P. Guff
Stock Highlights
Fastenal was a major new position this year. The company sells nuts and
bolts. There is nothing flashy or unique about Fastenal's product line. But
its exceptional management team has produced a culture dedicated to sales and
customer service. As a result, Fastenal's annual revenues and earnings have
grown at 35% to 40% for the last ten years. The company is also showing
dramatic success in expanding its product offerings into tools, hydraulic
accessories, and janitorial supplies. Higher store volumes, combined with the
opportunity to establish more stores, suggest that Fastenal could continue its
explosive growth for another decade.
PizzaExpress, which owns a chain of sit-down pizza parlors in the U.K.,
has been a good performer this year. PizzaExpress is one of the best-run
restaurant operations in the world. Its 25% operating margins are among the
highest in the business. Combine the company's margins with its high-volume
sales and you get a terrific return on investment. Employee loyalty is also
strong. Turnover is less than 25%, almost unheard of in the restaurant
business.
Petco Animal Supplies owns and operates a chain of pet supply
superstores. The company has boosted margins via efficient distribution, an
emphasis on higher-margin non-pet food items, and effective use of its buying
32
<PAGE>
power. Petco is growing rapidly both internally and through acquisitions. Our
estimates suggest a minimum of 30% earnings growth in the coming year.
Drug delivery companies R.P. Scherer and TheraTech were sold at profits
this year when new product sales were slower than I anticipated. Health South,
which operates a chain of rehabilitation centers, was also sold when it
reached our price target. Matrix Pharmaceutical, Medaphis, and General
Nutrition Centers were disappointing. Matrix Pharmaceutical's new drug
delivery product to treat cancer performed below expectations at clinical
trials. Medaphis' earnings
lagged when it had difficulty integrating recent acquisitions, and General
Nutrition Centers encountered sluggish sales.
Current Strategy and Outlook
As I said earlier, my goal is to find individual companies with
exceptional growth potential that can be consistently realized independent of
economic conditions. I want to buy these companies at reasonable prices. This
is not always an easy combination to find, of course, but I believe over the
long haul this strategy will produce index-beating portfolio performance,
despite any short-term volatility.
Thank you for your continued investment in Janus Enterprise Fund.
33
<PAGE>
JANUS ENTERPRISE FUND Portfolio Manager, James P. Goff
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Enterprise Fund, the S&P 500 Index and the S&P 400 MidCap
Index. Janus Enterprise Fund is represented by a solid green line. The S&P
500 Index is represented by a single dashed black line. The S&P 400 MidCap
Index is represented by a single dotted dark gray line. The "y" axis reflects
the value of the investment. The "x" axis reflects the computation periods
from inception, September 1, 1992, through October 31, 1996. The upper right
quadrant reflects the ending value of the hypothetical investment in Janus
Enterprise Fund ($23,634) as compared to the S&P 500 Index ($19,004) and the
S&P MidCap Index ($18,376). There is a legend in the upper left quadrant of
the graph which indicates Janus Enterprise Fund's one-year and since inception
(September 1, 1992) average annual total returns as 22.43% and 22.93%,
respectively.
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 ENTERPRISE FUND
October 31, 1996
- -------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- -------------------------------------------------------------------------
Common Stock - 95.6%
- -------------------------------------------------------------------------
Auto Parts - Retail and Wholesale - 2.8%
1,000,000 APS Holding Corp. - Class A*,# $20,750,000
- -------------------------------------------------------------------------
Building Products - Retail and Wholesale - 8.4%
1,331,900 Fastenal Co. 61,600,375
- -------------------------------------------------------------------------
Cellular Telecommunications - 6.3%
500,000 CommNet Cellular, Inc.* 13,875,000
373,950 Millicom International Cellular 14,864,512
S.A.*
1,500,000 PriCellular Corp. - Class A*,# 17,250,000
- -------------------------------------------------------------------------
45,989,512
- -------------------------------------------------------------------------
Chemicals - Specialty - 3.1%
34
<PAGE>
572,600 Minerals Technologies, Inc. 22,474,550
- -------------------------------------------------------------------------
Commercial Services - 4.5%
950,650 CUC International, Inc.* 23,290,925
348,550 Profit Recovery Group
International, Inc.
(The)* 5,315,388
138,950 TeleTech Holdings, Inc.* 4,446,400
- -------------------------------------------------------------------------
33,052,713
- -------------------------------------------------------------------------
Containers - Paper and Plastic - 2.1%
386,600 Sealed Air Corp.* 15,029,075
- -------------------------------------------------------------------------
Data Processing and Management - 0.9%
105,725 Concord EFS, Inc.* 3,066,025
102,325 First USA Paymentech, Inc.* 3,786,025
- -------------------------------------------------------------------------
6,852,050
- -------------------------------------------------------------------------
Diversified Operations - 4.1%
4,473,088 Rentokil Initial PLC** 30,022,416
- -------------------------------------------------------------------------
Drug Delivery Systems - 0.9%
397,350` DepoTech Corp.* 6,208,594
- -------------------------------------------------------------------------
Film Processing - 0.7%
32,606 Grand Optical Photoservice 4,729,566
- -------------------------------------------------------------------------
Finance - Investment Broker - 0.5%
148,400 Charles Schwab Corp. 3,710,000
- -------------------------------------------------------------------------
Finance - Other Services - 4.4%
1,500,000 Insignia Financial Group, Inc. 32,437,500
- Class A*,#
- -------------------------------------------------------------------------
Golf - 2.1%
510,100 Family Golf Centers, Inc.*,# 14,984,188
- -------------------------------------------------------------------------
Hotels and Motels - 7.6%
3,900 Choice Hotels Holdings, Inc.* 59,475
758,400 HFS, Inc.* 55,552,800
- -------------------------------------------------------------------------
55,612,275
- -------------------------------------------------------------------------
Human Resources - 0.5%
177,875 Alternative Resources Corp.* 3,579,734
- -------------------------------------------------------------------------
Independent Power Producer - 3.0%
1,000,000 Trigen Energy Corp.# 22,125,000
- -------------------------------------------------------------------------
35
<PAGE>
Life and Health Insurance - 1.1%
231,825 Protective Life Corp. 7,997,962
- -------------------------------------------------------------------------
Medical Products - 1.0%
256,150 Fresenius Medical Care (ADR)* 7,620,462
- -------------------------------------------------------------------------
Pharmacy Services - 0.7%
182,275 Omnicare, Inc. 4,966,994
- -------------------------------------------------------------------------
Retail - Catalog Shopping - 1.6%
500,000 Barnett, Inc.* 11,812,500
- -------------------------------------------------------------------------
Retail - Mail Order - 7.8%
755,350 Global DirectMail Corp.* 37,200,988
673,225 Viking Office Products, Inc. * 19,607,678
- -------------------------------------------------------------------------
56,808,666
- -------------------------------------------------------------------------
Retail - Pet Food and Supplies - 3.6%
668,750 Pet Food Warehouse, Inc.*,# 3,134,766
1,000,000 Petco Animal Supplies, Inc.*,# 23,500,000
- -------------------------------------------------------------------------
26,634,766
- -------------------------------------------------------------------------
Retail - Pubs - 5.5%
2,085,469 Wetherspoon (J.D.) PLC+,**,# $ 40,244,147
- -------------------------------------------------------------------------
Retail - Restaurants - 8.5%
433,200 Papa John's International, Inc.* 21,551,700
4,893,713 PizzaExpress PLC+,**,# 40,847,935
- -------------------------------------------------------------------------
62,399,635
- -------------------------------------------------------------------------
Telecommunication Services - 2.9%
781,600 Omnipoint Corp.* 21,298,600
- -------------------------------------------------------------------------
Transportation - Railroad - 3.6%
739,700 Wisconsin Central 26,629,200
Transportation Corp.*
- -------------------------------------------------------------------------
Water Treatment Services - 1.5%
294,525 Culligan Water Technologies, 11,044,688
Inc.*
- -------------------------------------------------------------------------
Wireless Telecommunications - 5.9%
2,505,800 Paging Network, Inc.* 42,911,825
- -------------------------------------------------------------------------
Total Common Stock (cost $547,658,431) 699,526,993
- -------------------------------------------------------------------------
Warrants - 1.4%
298,550 Littelfuse, Inc. - exp.
36
<PAGE>
12/31/01* (cost $4,522,249) 9,852,150
- -------------------------------------------------------------------------
Short-Term Corporate Notes - 1.1%
Prudential Funding Corp.
$8,300,000 5.50%, 11/1/96
(amortized cost $8,300,000) 8,300,000
- -------------------------------------------------------------------------
U.S. Government Agencies - 1.4%
Federal Home Loan Mortgage Corp.:
5,000,000 5.27%, 11/5/96 4,997,072
5,500,000 5.28%, 11/13/96 5,490,320
- -------------------------------------------------------------------------
Total U.S. Government Agencies
(amortized cost $10,487,392) 10,487,392
- -------------------------------------------------------------------------
Total Investments (total cost $570,968,072) - 99.5% 728,166,535
- -------------------------------------------------------------------------
Cash, Receivables
and Other Assets, net of Liabilities - 0.5% 3,836,678
- -------------------------------------------------------------------------
Net Assets - 100% $732,003,213
- -------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Value
- -------------------------------------------------------------------------
France 0.6% $ 4,729,566
Germany 1.1% 7,620,462
Luxembourg 2.0% 14,864,512
United Kingdom 15.3% 111,114,498
United States++ 81.0% 589,837,497
- -------------------------------------------------------------------------
Total 100.0% $728,166,535
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
++Includes Short-Term Securities (78.4% excluding Short-Term Securities)
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S.Gain/(Loss)
- -------------------------------------------------------------------------
British Pound 11/25/96 9,000,000 $14,635,800 ($1,053,900)
British Pound 12/11/96 4,597,000 7,472,883 (337,880)
British Pound 1/16/97 7,000,000 11,370,800 (450,800)
British Pound 1/24/97 8,000,000 12,993,600 (591,200)
37
<PAGE>
- -------------------------------------------------------------------------
$46,473,083 ($2,433,780)
- -------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
38
<PAGE>
JANUS EQUITY INCOME FUND Portfolio Manager, Blaine P. Rollins
Performance
Since Janus Equity Income Fund's inception on June 28, 1996, it has
returned 13.20% through October 31. The Standard & Poor's 500 Index gained
5.93% for the same period. Both returns include reinvested dividends.
Equity markets were roiled by a strong economy shortly after the Fund
opened, and pulled back 10% (top to bottom) in July. Stocks proved resilient,
however, quickly recovering and reaching new highs in the fall. July's
correction provided a good opportunity to establish growth positions at lower
prices. Several of the portfolio's major holdings appreciated 20% or more when
the market rallied.
The Fund looks to invest primarily in companies that generate exceptional
cash flow and deploy it wisely. Share repurchase is a key theme in the
portfolio because it is one of the easiest and most efficient ways for
companies to add value for shareholders. I also concentrate on companies with
low earnings risk. During the last four months, I found a number of
attractive opportunities in the areas of financial services, banking,
insurance, and pharmaceuticals that met this criteria.
- -------------------------------------------------------------------------
Portfolio Profile October 31, 1996
Equities 88.0%
Fixed-Income Securities
High-Yield/High-Risk Corporate Bonds 5.1%
Preferred Stock 3.3%
Cash & Cash Equivalents 3.6%
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996
Dionex Corp. 5.1%
Wells Fargo Corp. 4.6%
UNUM Corp. 4.1%
Barclays PLC 4.0%
Southern Union Co. 2.7%
Sandoz AG 2.7%
Bank United Corp. 2.6%
Heritage Media Corp. 2.3%
Campbell Soup Company 2.2%
Robert Half International 2.1%
- -------------------------------------------------------------------------
Total 32.4%
- -------------------------------------------------------------------------
Top 5 Industries October 31, 1996
Broadcast Media 7.6%
Life and Health Insurance 6.9%
Savings/Loan/Thrifts 5.9%
Money Center Banks 5.7%
39
<PAGE>
Instrument - Scientific 5.1%
- -------------------------------------------------------------------------
Stock Highlights
Campbell Soup was a top performer. The company has always generated
tremendous free cash flow, due to its dominant position in the soup aisle.
Recently, Campbell announced plans to expand its product lines and to
restructure some of its operations, which will increase cash flow even
further. Campbell plans to use excess cash flow to aggressively repurchase
stock.
Associates 1st Capital, formerly Ford Motor Credit, also put up good
returns. Management has an excellent understanding of the consumer and
commercial financing business, and we anticipate the company will continue to
grow at a faster rate than its competitors.
UICI is a unique insurance company that successfully targets niche
markets where there is little or no competition. For instance, the company
markets indemnity insurance to small, rural businesses and offers life
insurance
policies with borrowing provisions for student loans. UICI also capitalizes on
its ability to acquire good businesses with good people. All UICI employees
own stock in the company, and excess cash is actively reinvested in the
business.
Two of our media holdings underperformed. Heritage Media, which owns
radio and television stations and also operates in-store advertising displays,
declined when a competitor announced plans to take market share in Heritage's
in-store coupon business. Young Broadcasting experienced a temporary
viewership setback when its non-NBC affiliates lost ground during Summer
Olympics coverage. Both Heritage Media and Young Broadcasting have excellent
prospects going forward, and are still in the portfolio.
Current Outlook and Strategy
Whether or not the market is able to maintain its current high levels, my
focus will remain on good individual stock selection: stable companies with
predictable earnings streams and excellent cash flow. These high-quality
companies should perform very well in the long run. They also have a better
chance of riding out any short-term market difficulties.
Thank you for your investment in Janus Equity Income Fund.
40
<PAGE>
JANUS EQUITY INCOME FUND Portfolio Manager, Blaine P. Rollins
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Equity Income Fund and the S&P 500 Index. Janus Equity
Income Fund is represented by a solid green line. The S&P 500 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,
June 28, 1996, through October 31, 1996. The upper right quadrant reflects
the ending value of the hypothetical investment in Janus Equity Income Fund
($11,320) as compared to the S&P 500 Index ($10,593). There is a legend in
the upper left quadrant of the graph which indicates Janus Equity Income
Fund's total return since inception (June 28, 1996) as 13.20%.
Source - Lipper Analytical Services, Inc. 1995. 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 EQUITY INCOME
FUND OCTOBER 31, 1996
- -------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- -------------------------------------------------------------------------
Common Stock - 88.0%
- -------------------------------------------------------------------------
Aerospace and Defense - 3.1%
2,500 AlliedSignal, Inc. 163,750
1,000 Boeing Co. 95,375
5,400 General Motors Corp. - Class H 288,225
9,700 Thiokol Corp. 406,187
- -------------------------------------------------------------------------
953,537
- -------------------------------------------------------------------------
Automotive - Truck Parts and Equipment - 1.0%
14,000 Federal Mogul Corp. 313,250
- -------------------------------------------------------------------------
Beverages - Non-Alcoholic - 0.5%
5,025 PepsiCo, Inc. 148,866
- -------------------------------------------------------------------------
41
<PAGE>
Broadcast Media - 5.6%
45,000 Heritage Media Corp. - Class A* 686,250
40,725 Pegasus Communications Corp. -
Class A* 534,516
17,100 Young Broadcasting Corp. - Class A* 487,350
- -------------------------------------------------------------------------
1,708,116
- -------------------------------------------------------------------------
Building - Heavy Construction - 1.4%
6,300 Fluor Corp. 412,650
- -------------------------------------------------------------------------
Building Products - Retail and Wholesale - 1.5%
9,850 Fastenal Co. 455,563
- -------------------------------------------------------------------------
Casino Services - 0.3%
16,812 London Clubs International PLC** 85,894
- -------------------------------------------------------------------------
Commercial Banks - 0.8%
1,350 Northern Trust Corp. 93,488
11,125 Sterling Bancorp 143,234
- -------------------------------------------------------------------------
236,722
- -------------------------------------------------------------------------
Commercial Services - 0.3%
39 SGS Societe Generale de
Surveillance Holdings S.A.** 88,273
- -------------------------------------------------------------------------
Computers - Integrated Systems - 2.0%
26,175 Gulfstream Aerospace Corp. 618,384
- -------------------------------------------------------------------------
Containers - Paper and Plastic - 1.4%
10,900 Sealed Air Corp.* 423,738
- -------------------------------------------------------------------------
Data Processing and Management - 2.8%
30,000 CCC Information Services Group* 562,500
3,725 First Data Corp. 297,069
- -------------------------------------------------------------------------
859,569
- -------------------------------------------------------------------------
Diversified Financial Services - 1.6%
26,000 National Processing, Inc.* 494,000
- -------------------------------------------------------------------------
Diversified Operations - 4.6%
37,948 Hays PLC** 317,062
89,115 Rentokil Initial PLC** 598,121
3,175 Unilever N.V. (ADR)** 485,378
- -------------------------------------------------------------------------
1,400,561
- -------------------------------------------------------------------------
Finance - Consumer Loans - 0.6%
3,950 Associates First Capital Corp. 171,331
42
<PAGE>
- -------------------------------------------------------------------------
Finance - Investment Broker - 1.0%
12,500 Charles Schwab Corp. 312,500
- -------------------------------------------------------------------------
Finance - Other Services - 0.7%
10,000 Insignia Financial Group, Inc. 216,250
- Class A*
- -------------------------------------------------------------------------
Financial Guarantee Insurance - 1.5%
2,325 CMAC Investment Corp. 160,715
4,475 MGIC Investment Corp. 307,097
467,812
- -------------------------------------------------------------------------
Food - Canned - 2.2%
8,500 Campbell Soup Co. 680,000
- -------------------------------------------------------------------------
Food - Confectionary - 1.2%
6,025 Wrigley (Wm.) Jr., Co. 363,006
- -------------------------------------------------------------------------
Food - Diversified - 0.6%
2,975 Kellogg Co. 188,913
- -------------------------------------------------------------------------
Gas - Distribution - 2.7%
33,450 Southern Union Co.* 832,069
- -------------------------------------------------------------------------
Hotels and Motels - 0.3%
4,025 Extended Stay America, Inc.* 81,506
- -------------------------------------------------------------------------
Human Resources - 2.1%
16,050 Robert Half International, Inc.* 644,006
- -------------------------------------------------------------------------
Instruments - Scientific - 5.1%
40,750 Dionex Corp.* 1,558,687
- -------------------------------------------------------------------------
Lasers - Systems and Components - 1.8%
44,000 Rofin-Sinar Technologies, Inc.* 539,000
- -------------------------------------------------------------------------
Life and Health Insurance - 6.9%
8,050 AFLAC, Inc. 323,006
2,400 PennCorp Financial Group, Inc. 83,100
7,100 Protective Life Corp. 244,950
7,000 UICI* 178,500
20,000 UNUM Corp. 1,257,500
- -------------------------------------------------------------------------
2,087,056
- -------------------------------------------------------------------------
Machinery - Farm - 0.8%
9,550 AGCO Corp. 242,331
- -------------------------------------------------------------------------
Machinery - Pumps - 0.9%
17,850 Pfeiffer Vacuum Technology A.G. 285,600
43
<PAGE>
(ADR)*,**
- -------------------------------------------------------------------------
Medical - Drugs - 3.0%
722 Sandoz A.G. - Class R** 833,602
1,350 SmithKline Beecham PLC (ADR) - 84,544
Class A**
- -------------------------------------------------------------------------
918,146
- -------------------------------------------------------------------------
Money Center Banks - 5.7%
78,450 Barclays PLC** 1,229,869
5,000 Citicorp 495,000
- -------------------------------------------------------------------------
1,724,869
- -------------------------------------------------------------------------
Multi-Line Insurance - 2.1%
6,800 Allstate Corp. 381,650
9,000 Zenith National Insurance Corp. 245,250
- -------------------------------------------------------------------------
626,900
Optical Supplies - 0.9%
4,075 Luxottica Group S.p.A. (ADR) 258,762
- -------------------------------------------------------------------------
Property and Casualty Insurance - 2.1%
5,000 Allmerica Property & Casualty
Companies, Inc. 138,125
10,000 IPC Holdings, Ltd. 215,000
6,000 Mercury General Corp. 292,500
- -------------------------------------------------------------------------
645,625
- -------------------------------------------------------------------------
Publishing - Books - 0.3%
690 Wolters Kluwer N.V.*,** 88,513
- -------------------------------------------------------------------------
Publishing - Periodicals - 0.2%
5,000 K-III Communications Corp.* 53,750
- -------------------------------------------------------------------------
Real Estate Investment Trust - 2.3%
34,875 Innkeepers USA Trust 409,781
9,000 Redwood Trust, Inc. 297,000
- -------------------------------------------------------------------------
706,781
- -------------------------------------------------------------------------
Retail - Diversified - 1.0%
13,838 Eurobike A.G.*,** 305,424
- -------------------------------------------------------------------------
Satellite Telecommunications - 1.5%
28,525 U.S. Satellite Broadcasting 459,966
Co., Inc.*
- -------------------------------------------------------------------------
Savings/Loan/Thrifts - 5.9%
44
<PAGE>
30,000 Bank United Corp. - Class A* 798,750
39,675 Home BanCorp of Elgin, Inc.* 495,938
19,200 Klamath First Bancorp, Inc. 270,000
4,250 Ocean Financial Corp.* 103,594
7,000 Reliance Bancorp 126,000
1,794,282
- -------------------------------------------------------------------------
Super-Regional Banks - 4.6%
5,250 Wells Fargo & Co. 1,402,406
- -------------------------------------------------------------------------
Telecommunication Services - 1.0%
6,325 Lucent Technologies, Inc. 297,275
80 MFS Communications Co., Inc.* 4,010
- -------------------------------------------------------------------------
301,285
- -------------------------------------------------------------------------
Telephone - Integrated - 1.1%
6,675 Cincinnati Bell, Inc. 329,578
- -------------------------------------------------------------------------
Textile - Apparel - 1.0%
2,206 Wolford A.G. 290,399
- -------------------------------------------------------------------------
Total Common Stock (cost $25,820,019) 26,775,876
- -------------------------------------------------------------------------
Preferred Stock - 3.3%
- -------------------------------------------------------------------------
Finance - Other Services - 2.3%
13,208 Insignia Financial Group, Inc.*,+ 680,212
- -------------------------------------------------------------------------
Telecommunication Services - 1.0%
3,600 MFS Communications Co., Inc., 8.00% 312,300
- -------------------------------------------------------------------------
Total Preferred Stock (cost $902,178) 992,512
- -------------------------------------------------------------------------
Corporate Bonds - 5.1%
- -------------------------------------------------------------------------
Broadcast Media - 2.0%
$ 50,000 Heritage Media Corp., 8.75%
senior subordinated notes, 142,125
due 2/15/06
500,000 Young Broadcasting, Inc., 9.00%
senior subordinated notes, 456,250
due 1/15/06
- -------------------------------------------------------------------------
598,375
- -------------------------------------------------------------------------
Engineering - Research and Development Services - 2.3%
700,000 Intertek Finance PLC, 10.25%
senior subordinated notes, 700,000
due 11/1/06+
- -------------------------------------------------------------------------
45
<PAGE>
Industrial Audio and Video Products - 0.3%
100,000 Unifrax Investment Corp.,
10.50% senior notes, due 11/1/03 101,750
- -------------------------------------------------------------------------
Medical Labs and Testing Services - 0.5%
150,000 Dade International, Inc.,
11.125% senior subordinated notes, 159,375
due 5/1/06
Total Corporate Bonds (cost $1,567,353) 1,559,500
- -------------------------------------------------------------------------
Short-Term Corporate Notes - 11.8%
Ford Motor Credit Corp.
1,500,000 5.55%, 11/1/96 1,500,000
General Electric Capital Corp.
1,500,000 5.55%, 11/1/96 1,500,000
Prudential Funding Corp.
600,000 5.50%, 11/1/96 600,000
- -------------------------------------------------------------------------
Total Short-Term Corporate Notes (amortized cost $3,600,000) $ 3,600,000
- -------------------------------------------------------------------------
Total Investments (total cost $31,889,550) - 108.2% 32,927,888
Liabilities, net of Cash, Receivables
and Other Assets - (8.2%) (2,499,275)
- -------------------------------------------------------------------------
Net Assets - 100% $30,428,613
- -------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- -------------------------------------------------------------------------
Austria 0.9% $ 290,399
Germany 1.8% 591,024
Italy 0.8% 258,762
Netherlands 1.7% 573,891
Switzerland 2.8% 921,875
United Kingdom 7.0% 2,315,490
United States++ 85.0% 27,976,447
Total 100.0% $32,927,888
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
++Includes Short-Term Securities (74.0% excluding Short-Term Securities)
46
<PAGE>
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency Currency
Settlement Date Units Value in Unrealized
Sold $ U.S. Gain/(Loss)
- ---------------------------- ------------- ----------- ------------
British Pound 12/4/96 520,000 $ 845,468 ($33,295)
Dutch Guilder 12/4/96 119,000 70,149 (92)
German Deutschemark 2/10/97 165,000 109,431 (145)
German Deutschemark 4/23/97 230,000 153,241 (1,716)
Swiss Franc 1/8/97 550,000 436,681 6,331
$1,614,970 ($28,917)
- ---------------------------- ------------- ----------- ---------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
47
<PAGE>
JANUS GROWTH AND INCOME FUND Portfolio Manager, Thomas F. Marsico
Performance
Janus Growth and Income Fund returned 25.56% for our fiscal year ended
October 31, 1996, outperforming the S&P 500 Index, which gained 24.10%. Both
returns include reinvested dividends.
In the 12 months ended October 31, the Fund's total return ranked 85th
(top 17%) out of 516 growth and income funds tracked by Lipper Analytical
Services, the large mutual fund rating company.(1)
The Fund outperformed the Index because it was tilted toward growth
throughout the year. Given the positive business and interest rate climate, a
strategy of owning primarily large, fast-growing companies produced good
returns. A significant portfolio restructuring, especially in technology,
banking, and pharmaceuticals, also contributed to performance. A number of
special situations were added as well, and increased the portfolio's
diversification.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 94.1% 94.0%
Foreign 7.5% 9.2%
Europe 7.5% 6.3%
Number of Stocks 62 52
Fixed-Income Securities 2.9% 5.3%
Cash & Cash Equivalents 3.0% 0.7%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Lucent Technologies, Inc. 4.5% --
Wells Fargo & Co. 4.1% 1.1%
Cytec Industries, Inc. 3.3% --
Nike, Inc. - Class B 3.2% --
Cisco Systems, Inc. 3.1% --
PepsiCo 3.0% 1.8%
First Data Corp. 3.0% --
Monsanto Co. 2.9% --
Citicorp 2.9% 3.0%
General Electric Co. 2.8% --
- ------------------------------------------------------------------------
Total 32.8% 5.9%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
48
<PAGE>
Top 5 Industries October 31, 1996 October 31, 1995
Medical - Drugs 9.3% 13.2%
Chemicals - Diversified 6.2% 0.9%
Beverages - Non-Alcoholic 6.0% 4.3%
Aerospace and Defense 5.7% 3.2%
Money Center Banks 5.5% 5.9%
- ------------------------------------------------------------------------
The Year in Review
As part of the portfolio's restructuring, a number of technology stocks
were sold and positions were built in major competitors in the Internet,
networking, and semiconductor markets - in companies such as Microsoft, Cisco
Systems, Intel, and more recently, Lucent Technologies.
Money center banks restructured themselves: Chase Manhattan was acquired
by Chemical Banking and Wells Fargo acquired First Interstate. The Fund's
banks, including Citicorp, are pursuing international opportunities and
aggressively developing their higher-margin products. They also have proactive
stock repurchase programs, as do many companies in the portfolio - Merrill
Lynch, Pfizer, and First Data Corporation, to name only a few.
Pharmaceuticals were reorganized around companies with excellent product
pipelines. Eli Lilly and Bristol-Myers Squibb were added to the existing
position in Pfizer. Amgen, Merck, Johnson & Johnson, and Roche were let go at
a profit. Finally, our research effort uncovered a number of special
situations, including Nike, Boeing, GE, UAL (parent of United Airlines),
Monsanto, and chemical company Cytec, all with exciting prospects.
Stock Highlights
Lucent Technologies has over 50% of the U.S. market for
telecommunications equipment, and is aggressively pursuing international
sales. Lucent's earnings should benefit from the deregulation of the domestic
telecom industry and from major cost cutting efforts after it was spun off
from AT&T.
General Electric is reducing costs and emphasizing its high-margin
businesses, namely in its financial services and aerospace divisions. Down the
road, cost reduction alone could save GE a billion dollars annually.
Operations at its NBC subsidiary are improving and GE has an aggressive stock
repurchase program - 10% to 15% of the stock's daily volume is attributable to
GE's share repurchase.
Peco Energy is an electric utility. The stock is currently yielding just
under 7% and carries a PE (price-to-earnings ratio) of less than ten.
Management is extremely entrepreneurial and has found ways to profit from such
disparate operations as wholesaling electric power to leasing its transmission
towers as telecommunications relays.
49
<PAGE>
HFS and EDS (Electronic Data Systems) were sold at profits when they
reached their price objectives. As part of the technology reorganization, Sun
Microsystems, Netscape, Shiva, U.S. Robotics, and Ascend Communications were
also sold at a profit. TWA and FlightSafety were sold at losses.
FlightSafety, which provides aviation training, was losing personnel due to
demand in the booming airline industry. Sadly, the uncertainty surrounding the
tragedy at TWA may affect bookings for some time to come. Rising fuel costs
and management turnover were also a concern.
Current Strategy and Outlook
I continue to view the equity environment as very favorable. Over the
past few years, the opportunities in growth stocks have been compelling, and
the earnings potential of many companies is still very attractive.
Thank you for your investment in Janus Growth and Income Fund.
- ------------
(1) Lipper Analytical Services defines a Growth and Income Fund as one which
"combines a growth of earnings orientation and an income requirement for level
and/or rising dividends." The ranking is based on total return, including
reinvestment of dividends and capital gains for the stated period. Past
performance is not predictive of future results.
50
<PAGE>
JANUS GROWTH AND INCOME FUND Portfolio Manager, Thomas F. Marsico
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Growth and Income Fund and the S&P 500 Index. Janus
Growth and Income Fund is represented by a solid green line. The S&P 500
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 15, 1991, through October 31, 1996. The upper right quadrant
reflects the ending value of the hypothetical investment in Janus Growth and
Income Fund ($24,125) as compared to the S&P 500 Index ($20,881). There is a
legend in the upper left quadrant of the graph which indicates Janus Growth
and Income Fund's one-year, five-year and since inception (May 15, 1991)
average annual total returns as 25.56%, 15.03% and 17.51%, respectively.
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 GROWTH AND INCOME FUND October 31, 1996
- ------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 91.6%
- ------------------------------------------------------------------------
Aerospace and Defense - 5.7%
300,000 Boeing Co. $28,612,500
27,500 Northrop Grumman Corp. 2,220,625
315,325 Textron, Inc. 27,985,094
- ------------------------------------------------------------------------
58,818,219
- ------------------------------------------------------------------------
51
<PAGE>
Apparel Manufacturers - 3.0%
403,025 Gucci Group N.V. 27,808,725
10,900 St. John Knits, Inc. 498,675
181,900 Tag Heuer International 2,910,400
S.A. (ADR)*
- ------------------------------------------------------------------------
31,217,800
- ------------------------------------------------------------------------
Athletic Footwear - 4.0%
111,100 Fila Holdings S.p.A. (ADR) 7,999,200
569,300 Nike, Inc. - Class B 33,517,538
- ------------------------------------------------------------------------
41,516,738
- ------------------------------------------------------------------------
Beverages - Non-Alcoholic - 6.0%
400,000 Coca-Cola Co. 20,200,000
246,150 Coca-Cola Enterprises, Inc. 10,492,144
1,063,100 PepsiCo, Inc. 31,494,337
- ------------------------------------------------------------------------
62,186,481
- ------------------------------------------------------------------------
Building and Construction - 0.1%
122,000 M.D.C. Holdings, Inc. 899,750
- ------------------------------------------------------------------------
Casino Hotels - 1.6%
754,150 Mirage Resorts, Inc.* 16,591,300
- ------------------------------------------------------------------------
Chemicals - Diversified - 6.2%
950,225 Cytec Industries, Inc.* 33,970,544
755,625 Monsanto Co. 29,941,640
63,912,184
- ------------------------------------------------------------------------
Chemicals - Specialty - 1.7%
400,575 Praxair, Inc. 17,725,443
- ------------------------------------------------------------------------
Computer Services - 2.7%
250,000 Computer Sciences Corp.* $18,562,500
290,600 Gartner Group, Inc. - Class 8,935,950
A*
27,498,450
- ------------------------------------------------------------------------
Computer Software - 2.1%
148,000 Microsoft Corp.* 20,313,000
24,225 Transaction Systems 1,005,338
- ------------------------------------------------------------------------
Architects, Inc.*
21,318,338
- ------------------------------------------------------------------------
Computers - Integrated Systems - 0.2%
50,000 Parametric Technology Co.* 2,443,750
- ------------------------------------------------------------------------
52
<PAGE>
Computers - Mainframe - 2.0%
160,100 IBM Corp. 20,652,900
- ------------------------------------------------------------------------
Computers - Micro - 1.9%
239,475 Dell Computer Corp.* 19,487,278
- ------------------------------------------------------------------------
Data Processing and Management - 4.0%
384,848 First Data Corp. 30,691,628
296,200 First USA Paymentech, Inc.* 10,959,400
41,651,028
- ------------------------------------------------------------------------
Diversified Operations - 2.9%
300,000 General Electric Co. 29,025,000
16,400 Raychem Corp. 1,281,250
30,306,250
- ------------------------------------------------------------------------
Electric - Integrated - 2.3%
958,500 Peco Energy Co. 24,202,125
- ------------------------------------------------------------------------
Electronic Components - 1.8%
166,675 Intel Corp. 18,313,416
- ------------------------------------------------------------------------
Finance - Consumer Loans - 1.2%
270,875 Associates First Capital 11,749,203
Corp.
- ------------------------------------------------------------------------
Finance - Investment Banker and Broker - 0.3%
42,950 Merrill Lynch & Co., Inc. 3,017,238
- ------------------------------------------------------------------------
Finance - Mortgage Loan Banker - 3.9%
197,475 Federal Home Loan Mortgage $ 19,944,975
Corp.
519,975 Federal National Mortgage 20,344,022
Association
- ------------------------------------------------------------------------
40,288,997
- ------------------------------------------------------------------------
Hotels and Motels - 1.4%
485,300 Hilton Hotels Corp. 14,740,988
- ------------------------------------------------------------------------
Medical - Biomedical and Genetic - 0.2%
69,600 Centocor, Inc.* 2,044,500
- ------------------------------------------------------------------------
Medical - Drugs - 7.7%
213,600 Bristol-Myers Squibb Co. 22,588,200
369,100 Eli Lilly & Co. 26,021,550
250,000 Glaxo Wellcome PLC (ADR) 7,875,000
282,675 Pfizer, Inc. 23,391,356
53
<PAGE>
- ------------------------------------------------------------------------
79,876,106
- ------------------------------------------------------------------------
Medical Information Systems - 0.4%
71,050 HBO & Co. 4,271,881
- ------------------------------------------------------------------------
Money Center Banks - 5.5%
320,750 Chase Manhattan Corp. 27,504,313
300,000 Citicorp 29,700,000
- ------------------------------------------------------------------------
57,204,313
- ------------------------------------------------------------------------
Networking Products - 3.1%
517,950 Cisco Systems, Inc.* 32,048,156
- ------------------------------------------------------------------------
Office Automation and Equipment - 1.0%
246,275 Danka Business Systems PLC 9,758,647
(ADR)
- ------------------------------------------------------------------------
Oil - Integrated - 2.0%
80,000 British Petroleum Co. PLC 10,290,000
(ADR)
45,000 Mobil Corp. 5,253,750
50,000 Texaco, Inc. 5,081,250
- ------------------------------------------------------------------------
20,625,000
- ------------------------------------------------------------------------
Printers and Related Products - 1.0%
135,000 Electronics for Imaging, 9,720,000
Inc.*
- ------------------------------------------------------------------------
Retail - Discount - 0.8%
320,000 Wal-Mart Stores, Inc. 8,520,000
- ------------------------------------------------------------------------
Retail - Major Department Stores - 0.5%
100,000 J.C. Penney Co., Inc. 5,250,000
- ------------------------------------------------------------------------
Savings/Loan/Thrifts - 1.6%
800,000 Dime Community Bancorp, 10,900,000
Inc.#
289,200 HFNC Financial Corp. 5,133,300
16,033,300
- ------------------------------------------------------------------------
Super-Regional Banks - 4.1%
157,683 Wells Fargo & Co. 42,121,071
- ------------------------------------------------------------------------
Telecommunication Services - 4.5%
994,250 Lucent Technologies, Inc. 46,729,750
- ------------------------------------------------------------------------
Transportation - Airlines - 4.2%
275,000 Northwest Airlines Corp. - 9,109,375
54
<PAGE>
Class A*
720,500 Trans World Airlines, Inc.* 5,764,000
605,625 UAL Corp.* 28,691,484
- ------------------------------------------------------------------------
43,564,859
- ------------------------------------------------------------------------
Total Common Stock (cost $806,200,876) 946,305,459
- ------------------------------------------------------------------------
Corporate and Convertible Bonds - 2.9%
- ------------------------------------------------------------------------
Building and Construction - 1.3%
$13,000,000 M.D.C. Holdings, Inc.,
11.125% notes, due 12/15/03 13,000,000
- ------------------------------------------------------------------------
Medical - Drugs - 1.6%
15,000,000 Sandoz Capital, Ltd.,
2.00% convertible bank
guaranteed notes,
due 10/6/02+ 16,500,000
Total Corporate and
Convertible Bonds (cost $24,629,412) 29,500,000
- ------------------------------------------------------------------------
Preferred Stock - 2.5%
- ------------------------------------------------------------------------
Apparel Manufacturers - 0.2%
15,461 Escada A.G.** $ 2,495,681
- ------------------------------------------------------------------------
Automotive - Cars and Light Trucks - 0.8%
12,216 Porsche A.G.*,** 8,249,704
- ------------------------------------------------------------------------
Network Software - 0.6%
120,000 Vanstar Financing Trust, 6.75%+ 6,465,000
- ------------------------------------------------------------------------
Savings/Loan/Thrifts - 0.5%
178,000 Fidelity Federal Bank - Series 4,939,500
A, 12.00%
- ------------------------------------------------------------------------
Transportation - Airlines - 0.4%
125,000 Trans World Airlines, Inc.*,+ 3,750,000
- ------------------------------------------------------------------------
Total Preferred Stock (cost $25,669,760) 25,899,885
- ------------------------------------------------------------------------
Short-Term Corporate Note - 2.8%
Prudential Funding Corp.
$29,200,000 5.50%, 11/1/96
(amortized cost $29,200,000) 29,200,000
- ------------------------------------------------------------------------
Total Investments (total cost $885,700,048) - 99.8% 1,030,905,344
- ------------------------------------------------------------------------
55
<PAGE>
Cash, Receivables and Other Assets, net
of Liabilities - 0.2% 2,277,798
- ------------------------------------------------------------------------
Net Assets - 100% $1,033,183,142
- ------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Germany 1.0% $10,745,385
Italy 3.5% 35,807,925
Switzerland 0.3% 2,910,400
United Kingdom 2.7% 27,923,647
United States++ 92.5% 953,517,987
- ------------------------------------------------------------------------
Total 100.0% $1,030,905,344
- ----------------------- ------------------------- ------------
++Includes Short-Term Securities (89.7% excluding Short-Term Securities)
Forward Currency Contracts
Open at October 31, 1996
- ------------------------------------------------------------------------
Currency
Currency Sold and Currency Value in
Settlement Date Units Sold $ U.S. Unrealized Gain/(Loss)
- ------------------------------------------------------------------------
German Deutschemark 10,500,000 $6,932,981 $25,544
12/4/96
German Deutschemark 3,500,000 2,312,368 22,989
12/13/96
$9,245,349 $48,533
- --------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
56
<PAGE>
JANUS MERCURY FUND Portfolio Manager, Warren B. Lammert
Performance
For our fiscal year ended October 31, 1996, Janus Mercury Fund
appreciated 18.18%, compared to a gain of 24.10% for the S&P 500 Index. Both
returns included reinvested dividends.
The Fund finished behind the Index because its smaller stocks could not
overcome a weak market for small- and mid-capitalization issues in the latter
half of the year. Smaller issues were heroes in the first half, but were
pummelled by indiscriminate selling when interest rates backed up above 7%.
They then staged only a moderate come-back during the large-cap rally in
August through October. European growth stocks also did not keep up with their
U.S. counterparts. German software developer SAP closed the year unchanged
after announcing disappointing earnings.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 88.3% 87.4%
Foreign 14.6% 22.6%
Europe 11.9% 17.4%
Number of Stocks 116 110
Cash & Fixed-Income Securities 11.7% 12.6%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Wells Fargo & Co. 6.4% --
Eli Lilly & Co. 4.4% 1.3%
MFS Communications Co., Inc. 4.3% --
Cisco Systems, Inc. 3.7% --
Centocor, Inc. 3.5% --
Analog Devices, Inc. 3.1% 2.4%
WorldCom, Inc. 2.6% --
First Data Corp. 2.4% 2.3%
Cincinnati Bell, Inc. 2.1% --
HFS, Inc. 2.1% 3.7%
Total 34.6% 9.7%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Telecommunication Services 7.2% 4.7%
Super-Regional Banks 6.4% 1.9%
Medical - Drugs 6.4% 6.5%
Networking Products 5.6% --
57
<PAGE>
Data Processing and Management 4.9% 0.4%
- ------------------------------------------------------------------------
The Year In Review
This year the portfolio remained organized around several dominant ideas.
One of the most pervasive was business services. As companies increasingly
focus on areas where they have a competitive edge, many have contracted out,
or outsourced, vital but non-core operations such as data processing and
information management. Keane International, Ciber, and IBM provide companies
with systems integration and servicing. First Data, First USA Payment
Technology, and National Processing handle credit card and payroll
transactions. Cincinnati Bell and Teletech process customer calls.
Technology and telecommunications are also heavily represented among
portfolio holdings, mostly by companies that are benefiting from the
infrastructure buildout of public and private data and communications
networks. PeopleSoft, SAP, Netscape, and Oracle have developed powerful off-
the-shelf business applications software for these systems. Cisco Systems,
Ascend Communications, U.S. Robotics, Xylan, and Lucent Technologies develop
and manufacture networking equipment.
Finally, our drug positions are focused on companies with strong product
pipelines. Drug compounds are the least expensive means of treating many
diseases, and in a very cost-conscious health care environment, Eli Lilly,
SmithKline Beecham, Centocor, and Warner-Lambert should do well.
Stock Highlights
Perhaps the most exciting telecommunications stock we own is WorldCom,
which is acquiring MFS Communications, the largest Internet services company.
Industry deregulation will increase competition and should give WorldCom a
strategic advantage. After it acquires MFS, WorldCom can offer customers end-
to-end fully integrated long-distance and local telephone and internetworking
services over a modern global network. WorldCom's competition can offer only
parts of this package. WorldCom will also be able to underprice the old
monopolistic providers, where cost structures and customer pricing often have
little to do with economic realities.
PeopleSoft has developed sophisticated, off-the-shelf business
applications software. These less expensive prepackaged products are rapidly
replacing more expensive, customized applications. PeopleSoft is expanding
internationally and rapidly broadening its product line into financial and
manufacturing software.
Analog Devices is a semiconductor manufacturer whose client base is
primarily networking and telecommunications equipment providers. As such, the
company is benefiting from worldwide demand for digital wireless
telecommunications, such as cellular equipment and cable television. Analog's
customer diversity makes it less vulnerable to pricing cycles than other
58
<PAGE>
semiconductor manufacturers, who sell primarily to the personal computer
market.
Cincinnati Bell has evolved two significant high-growth businesses out of
its roots as a local telephone service provider. Management is very
entrepreneurial. It leveraged Cincinnati Bell's customer service and data
processing operations to provide billing and customer service reps to large
accounts such as Microsoft and AT&T. More than 50% of the company's combined
quarterly revenues are attributable to these high-growth subsidiaries. The
company is also using excess capital to buy back stock.
After outstanding gains, SAP and hotel and real estate franchisor, HFS,
were trimmed, though the portfolio still retains significant positions in both
stocks. Sun Microsystems was sold in its entirety, however, after it reached
our price target. Office Depot was bought by Staples at a price significantly
higher than our cost. Losses included Singer and Baby Superstores. Baby
Superstores had a good concept, but did not manage growth effectively. Singer
did not deliver on earnings estimates.
Current Outlook
I am very encouraged by the decline in interest rates and the continued
absence of higher inflation. After the period ended, rising prices drove
yields below the psychologically significant 6.5% mark on the benchmark 30-
year Treasury bond. So long as economic growth remains at modest, sustainable
levels and the business climate is robust, stocks should continue to produce
good returns.
Thank your for your investment in Janus Mercury Fund.
59
<PAGE>
JANUS MERCURY FUND Portfolio Manager, Warren B. Lammert
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Mercury Fund and the S&P 500 Index. Janus Mercury Fund is
represented by a solid green line. The S&P 500 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 October 31, 1996. The upper right quadrant reflects the ending value
of the hypothetical investment in Janus Mercury Fund ($20,947) as compared to
the S&P 500 Index ($16,506). There is a legend in the upper left quadrant of
the graph which indicates Janus Fund's one-year and since inception (May 3,
1993) average annual total returns as 18.18% and 23.52%, respectively.
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 MERCURY FUND October 31, 1996
- ------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 87.7%
- ------------------------------------------------------------------------
Advertising Services - 0.6%
248,575 Outdoor Systems, Inc.* $11,123,731
- ------------------------------------------------------------------------
Apparel Manufacturers - 2.0%
574,150 Gucci Group N.V. 39,616,350
- ------------------------------------------------------------------------
60
<PAGE>
Applications Software - 2.3%
104,675 HNC Software, Inc. 3,297,263
390,400 PeopleSoft, Inc.* 35,038,400
59,225 Sapient Corp.* 2,739,156
84,950 Siebel Systems, Inc.* 4,629,775
- ------------------------------------------------------------------------
45,704,594
- ------------------------------------------------------------------------
Athletic Footwear - 0.3%
71,875 Fila Holdings S.p.A. (ADR) 5,175,000
27,050 Nike, Inc. - Class B 1,592,569
- ------------------------------------------------------------------------
6,767,569
- ------------------------------------------------------------------------
Beverages - Non-Alcoholic - 0.4%
262,125 PepsiCo, Inc. 7,765,453
- ------------------------------------------------------------------------
Broadcast Media - 0.5%
338,000 Central European Media 9,464,000
Enterprises, Ltd.*
- ------------------------------------------------------------------------
Building Products - Retail and Wholesale - 0.1%
39,350 Fastenal Co. 1,819,938
- ------------------------------------------------------------------------
Casino Hotels - 0.2%
100,825 MGM Grand, Inc.* 3,906,969
- ------------------------------------------------------------------------
Casino Services - 0.8%
8,050 Anchor Gaming* 402,500
762,650 International Game Technology 16,110,981
- ------------------------------------------------------------------------
16,513,481
- ------------------------------------------------------------------------
Cellular Telecommunications - 2.1%
156,650 CommNet Cellular, Inc.* $ 4,347,037
571,827 Korea Mobile
Telecommunications, Inc. (ADR)* 7,147,838
344,575 Millicom International Cellular 13,696,856
S.A.*
571,250 Palmer Wireless, Inc. - Class A* 8,247,422
4,402,643 Telecom Italia Mobile S.p.A.** 9,071,515
- ------------------------------------------------------------------------
42,510,668
- ------------------------------------------------------------------------
Chemicals - Specialty - 0.4%
183,450 Praxair, Inc. 8,117,663
- ------------------------------------------------------------------------
61
<PAGE>
Commercial Banks - 0.1%
164,534 Banca Popolare di Bergamo** 2,586,417
- ------------------------------------------------------------------------
Commercial Services - 1.7%
374,700 IntelliQuest Information Group, 8,243,400
Inc.*
159,100 NCS HealthCare, Inc. - Class A* 4,832,662
421,700 Pharmaceutical Product 8,065,012
Development, Inc.*
435,225 TeleTech Holdings, Inc.* 13,927,200
- ------------------------------------------------------------------------
35,068,274
- ------------------------------------------------------------------------
Computer Services - 1.2%
5,000 ABR Information Services, Inc.* 346,250
366,175 CIBER, Inc.*,# 12,999,212
365,475 Sterling Commerce, Inc.* 10,278,984
- ------------------------------------------------------------------------
23,624,446
- ------------------------------------------------------------------------
Computer Software - 1.3%
114,200 Aspen Technologies, Inc.* 7,679,950
33,375 Baan Co. N.V.* 1,234,875
67,050 Microsoft Corp.* 9,202,613
247,700 Systemsoft Corp.* 6,997,525
- ------------------------------------------------------------------------
25,114,963
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Computers - Integrated Systems - 1.6%
469,250 Parametric Technology Co.* $22,934,594
275,300 Verifone, Inc.* 9,256,962
- ------------------------------------------------------------------------
32,191,556
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Computers - Mainframe - 0.8%
129,500 IBM Corp. 16,705,500
- ------------------------------------------------------------------------
Computers - Memory Devices - 0.4%
669,385 Macronix International Co., 8,534,659
Ltd. (ADR)*
- ------------------------------------------------------------------------
Computers - Micro - 0.5%
119,500 Dell Computer Corp.* 9,724,312
- ------------------------------------------------------------------------
Computers - Peripheral Equipment - 0.4%
129,825 U.S. Robotics Corp.* 8,162,747
- ------------------------------------------------------------------------
62
<PAGE>
Consulting Services - 0%
24,750 Intelligroup, Inc.* 389,812
6,725 Quintiles Transnational Corp.* 442,169
- ------------------------------------------------------------------------
831,981
- ------------------------------------------------------------------------
Data Processing and Management - 4.9%
218,225 Concord EFS, Inc.* 6,328,525
73,300 Documentum, Inc.* 2,730,425
606,625 First Data Corp. 48,378,344
423,475 First USA Paymentech, Inc.* 15,668,575
62,050 Indus Group, Inc.* 1,256,513
100,000 Industri-Matematik 975,000
International Corp.*
177,675 JDA Software Group, Inc.* 6,107,578
339,475 Keane, Inc.* 15,743,153
- ------------------------------------------------------------------------
97,188,113
- ------------------------------------------------------------------------
Diversified Financial Services - 0.5%
480,975 National Processing, Inc.* 9,138,525
- ------------------------------------------------------------------------
Diversified Operations - 3.9%
965,023 Kinnevik A.B. - Class B** 26,174,440
366,980 Metra Oy - Class B** 20,430,397
4,690,560 Rentokil Initial PLC** 31,482,042
- ------------------------------------------------------------------------
78,086,879
- ------------------------------------------------------------------------
Electronic Components - 3.2%
2,401,887 Analog Devices, Inc.* 62,449,062
63,525 Lernout & Hauspie Speech 1,064,044
Products N.V.*
- ------------------------------------------------------------------------
63,513,106
- ------------------------------------------------------------------------
Electronic Measuring Instruments - 0.1%
163,150 Itron, Inc.* 2,712,369
- ------------------------------------------------------------------------
Electronic Safety Devices - 1.4%
560,300 Pittway Corp. - Class A 27,314,625
- ------------------------------------------------------------------------
Fertilizers - 1.3%
363,335 Potash Corporation of 25,751,368
Saskatchewan, Inc.
- ------------------------------------------------------------------------
Finance - Consumer Loans - 1.0%
445,075 Associates First Capital Corp. 19,305,128
- ------------------------------------------------------------------------
63
<PAGE>
Finance - Investment Broker - 0.1%
67,050 Charles Schwab Corp. 1,676,250
- ------------------------------------------------------------------------
Finance - Other Services - 0.3%
1,718,175 Grupo Financiero Inbursa, S.A.
de C.V. - Class B 5,612,129
- ------------------------------------------------------------------------
Food - Diversified - 0.2%
109,691 Cultor Oy - Series l** 5,008,446
- ------------------------------------------------------------------------
Hotels and Motels - 2.2%
107,275 Extended Stay America, Inc.* 2,172,319
560,600 HFS, Inc.* 41,063,950
- ------------------------------------------------------------------------
43,236,269
- ------------------------------------------------------------------------
Internet Software - 0.8%
384,375 Netscape Communications Corp.* 17,008,594
- ------------------------------------------------------------------------
Lasers - Systems and Components - 0.1%
44,525 Coherent, Inc.* 1,736,475
- ------------------------------------------------------------------------
Life and Health Insurance - 3.0%
470,125 CompDent Corp.* 16,160,547
175,300 Sunamerica, Inc. 6,573,750
582,375 UNUM Corp. 36,616,828
- ------------------------------------------------------------------------
59,351,125
- ------------------------------------------------------------------------
Medical - Biomedical and Genetic - 3.7%
2,357,975 Centocor, Inc.* 69,265,516
183,150 IDEC Pharmaceuticals Corp.* 3,960,619
56,400 NeXstar Pharmaceuticals, Inc.* 881,250
- ------------------------------------------------------------------------
74,107,385
- ------------------------------------------------------------------------
Medical - Drugs - 6.4%
33,625 Bristol-Myers Squibb Co. 3,555,844
1,243,325 Eli Lilly & Co. 87,654,412
184,502 Glaxo Wellcome PLC** 2,887,955
190,500 Glaxo Wellcome PLC (ADR)** 6,000,750
590,330 SmithKline Beecham PLC - Class A** 7,280,787
331,100 SmithKline Beecham PLC (ADR) - 20,735,137
Class A**
- ------------------------------------------------------------------------
128,114,885
- ------------------------------------------------------------------------
64
<PAGE>
Medical Information Systems - 1.6%
548,875 HBO & Co. 33,001,109
- ------------------------------------------------------------------------
Medical Instruments - 0.3%
52,800 Heartport, Inc.* 1,392,600
121,425 U.S. Surgical Corp. 5,084,672
- ------------------------------------------------------------------------
6,477,272
- ------------------------------------------------------------------------
Medical Products - 1.2%
121,800 Fresenius Medical Care (ADR)* 3,623,550
525,125 Target Therapeutics, Inc.* 19,429,625
- ------------------------------------------------------------------------
23,053,175
- ------------------------------------------------------------------------
Money Center Banks - 1.0%
237,150 Bank of New York Co., Inc. 7,855,594
724,306 Barclays PLC** 11,355,024
- ------------------------------------------------------------------------
19,210,618
- ------------------------------------------------------------------------
Network Software - 0.1%
66,825 Black Box Corp.* 2,255,344
- ------------------------------------------------------------------------
Networking Products - 5.6%
1,195,900 Cisco Systems, Inc.* 73,996,312
956,700 Xylan Corp.* 38,268,000
- ------------------------------------------------------------------------
112,264,312
- ------------------------------------------------------------------------
Office Automation and Equipment - 0.9%
403,000 Danka Business Systems PLC (ADR) 15,968,875
689,751 Indigo N.V.* 3,190,098
- ------------------------------------------------------------------------
19,158,973
- ------------------------------------------------------------------------
Office Supplies - 1.2%
538,025 Alco Standard Corp. 24,950,909
- ------------------------------------------------------------------------
Oil Companies - Exploration and Production - 1.1%
510,425 Triton Energy, Ltd.* 22,777,716
- ------------------------------------------------------------------------
Pharmacy Services - 1.0%
737,100 Omnicare, Inc. 20,085,975
- ------------------------------------------------------------------------
Respiratory Products - 0.1%
170,725 Respironics, Inc.* 2,560,875
- ------------------------------------------------------------------------
65
<PAGE>
Retail - Apparel and Shoe - 0.7%
244,000 Abercrombie & Fitch Co. - 5,368,000
Class A*
99,775 Nordstrom, Inc. 3,598,136
118,425 The Finish Line, Inc. - Class A* 5,033,063
- ------------------------------------------------------------------------
13,999,199
- ------------------------------------------------------------------------
Retail - Restaurants - 0.1%
51,575 Papa John's International, Inc.* 2,565,856
- ------------------------------------------------------------------------
Satellite Telecommunications - 0.2%
264,200 U.S. Satellite Broadcasting Co., Inc.* 4,260,225
- ------------------------------------------------------------------------
Security Services - 0.4%
305,720 Securitas A.B. - Class B** 7,897,221
- ------------------------------------------------------------------------
Super-Regional Banks - 6.4%
481,941 Wells Fargo & Co. 128,738,490
- ------------------------------------------------------------------------
Telecommunication Equipment - 0.6%
172,625 Ascend Communications, Inc. 11,285,359
- ------------------------------------------------------------------------
Telecommunication Services - 7.2%
237,675 Cascade Communications Corp.* 17,261,147
204,750 CPT Telefonica del Peru S.A. 4,222,969
(ADR)
247,600 Lucent Technologies, Inc. 11,637,200
1,710,674 MFS Communications Co., Inc.* 85,747,534
1,185,660 NetCom Systems A.B. - Class B*,** 14,953,394
132,075 Telecomunicacoes Brasileiras 9,839,587
S.A. (ADR)
- ------------------------------------------------------------------------
143,661,831
- ------------------------------------------------------------------------
Telephone - Integrated - 2.1%
856,575 Cincinnati Bell, Inc. 42,293,391
- ------------------------------------------------------------------------
Telephone - Long Distance - 2.6%
2,138,600 WorldCom, Inc.* 52,128,375
- ------------------------------------------------------------------------
66
<PAGE>
Tools - Hand Held - 0.5%
247,600 Black & Decker Corp. 9,254,050
- ------------------------------------------------------------------------
Transportation - Railroads - 0.7%
410,925 Wisconsin Central 14,793,300
Transportation Corp.*
- ------------------------------------------------------------------------
Travel Services - 0.2%
111,675 Sabre Group Holdings, Inc.* 3,406,088
- ------------------------------------------------------------------------
Wireless Telecommunications - 1.1%
105,250 Lightbridge, Inc.* 1,013,031
1,229,125 Paging Network, Inc.* 21,048,766
- ------------------------------------------------------------------------
22,061,797
- ------------------------------------------------------------------------
Total Common Stock (cost $1,587,418,493) 1,756,858,402
- ------------------------------------------------------------------------
Preferred Stock - 0.6%
- ------------------------------------------------------------------------
Computer Software - 0.4%
63,369 SAP A.G.** 8,508,764
- ------------------------------------------------------------------------
Telecommunication Services - 0.2%
66,825 Nokia Corp. (ADR) - Class A 3,099,009
- ------------------------------------------------------------------------
Total Preferred Stock (cost $11,462,495) 11,607,773
- ------------------------------------------------------------------------
Money Market - 4.2%
$85,000,000 Janus Money Market Fund, 5.61%
(cost $85,000,000) 85,000,000
- ------------------------------------------------------------------------
Repurchase Agreement - 0.3%
5,000,000 State Street Bank & Trust Co., 4.75%,
dated 10/31/96, maturing 11/1/96,
to be repurchased at $5,000,659,
collateralized by $5,045,000 in U.S.
Treasury Notes 6.125%, due 3/31/98,
value $5,102,846 (cost $5,000,000) 5,000,000
- ------------------------------------------------------------------------
67
<PAGE>
Short-Term Corporate Notes - 6.6%
AVCO Financial Service
25,000,000 5.30%, 11/12/96 24,959,514
Coca-Cola Co.
25,000,000 5.29%, 11/4/96 24,988,979
Ford Motor Credit Corp.
20,350,000 5.31%, 4/10/97 19,860,175
General Electric Capital Corp.
63,000,000 5.55%, 11/1/96 63,000,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $132,818,233) 132,808,668
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
U.S. Government Agency - 1.3%
Federal Home Loan Mortgage Corp.
$25,000,000 5.25%, 11/6/96
(amortized cost $24,981,771) 24,981,771
- ------------------------------------------------------------------------
Total Investments
(total cost $1,846,680,992) - 100.7% 2,016,256,614
- ------------------------------------------------------------------------
Liabilities, net of Cash,
Receivables and Other Assets - (0.7%) (13,906,471)
- ------------------------------------------------------------------------
Net Assets - 100% $2,002,350,143
- ------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Market Value
Securities
- ------------------------------------------------------------------------
Brazil 0.5% $ 9,839,587
Canada 1.3% 25,751,368
Finland 1.4% 28,537,852
Germany 0.4% 8,508,764
Italy 2.8% 56,449,282
Korea 0.4% 7,147,838
Mexico 0.3% 5,612,129
Netherlands 0.2% 4,424,973
Peru 0.2% 4,222,969
Sweden 2.4% 49,025,055
United Kingdom 4.7% 95,710,570
United States++ 85.4% 1,721,026,227
- ------------------------------------------------------------------------
68
<PAGE>
Total 100.0% $2,016,256,614
- ------------------------------------------------------------------------
++Includes Short-Term Securities (73.1% excluding Short-Term Securities)
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- ------------------------------------------------------------------------
British Pound 12/4/96 7,048,000 $11,459,343 ($603,170)
British Pound 1/16/97 8,500,000 13,807,400 (547,400)
Finnish Markka 12/11/96 11,057,000 2,439,493 (50,339)
Finnish Markka 1/27/97 28,892,000 6,395,431 37,879
Finnish Markka 4/22/97 6,000,000 1,335,143 (18,199)
German Deutschemark 12/4/96 4,013,000 2,649,720 6,138
German Deutschemark 2/12/97 6,630,000 4,397,718 127,879
Italian Lira 2/10/97 13,000,000,000 8,513,443 (52,105)
Swedish Krona 11/25/96 50,972,000 7,748,742 (216,583)
Swedish Krona 12/11/96 13,665,000 2,078,074 (34,495)
Swedish Krona 1/17/97 207,000,000 31,507,329 (110,393)
- ------------------------------------------------------------------------
$92,331,836 ($1,460,788)
- ------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
69
<PAGE>
JANUS OLYMPUS FUND Portfolio Manager, Scott W. Schoelzel
Performance
I would like to preface my remarks by again thanking all of the Fund's
investors for their continued confidence and support.
Janus Olympus Fund opened on December 29, 1995. For the ten months ended
October 31, 1996, the Fund gained 23.83%, versus a gain of 16.63% for the S&P
500 Index. All returns include reinvested dividends.
The Fund outperformed the Index because we got off to a fast start and
then were reasonably successful at preserving our capital when the market
became more difficult during the summer months. The uncertainties surrounding
the interest rate environment, GDP growth, and the Congressional elections
were particularly unnerving and caused some severe corrections in the higher-
growth sectors of the market.
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996
Equities 85.0%
Foreign 2.6%
Number of Stocks 51
Cash & Fixed-Income Securities 13.7%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996
IBM Corp. 8.1%
Nike, Inc. - Class B 6.8%
Cascade Communications Corp. 6.5%
HBO & Co. 4.2%
Lucent Technologies, Inc. 3.9%
Citicorp 3.4%
Cisco Systems, Inc. 3.3%
Tellabs, Inc. 3.3%
Microsoft Corp. 3.2%
HFS, Inc. 3.0%
- ------------------------------------------------------------------------
Total 45.7%
- ------------------------------------------------------------------------
70
<PAGE>
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996
Telecommunications Services 10.4%
Telecommunications Equipment 8.2%
Computers - Mainframe 8.1%
Applications Software 8.0%
Athletic Footwear 6.8%
- ------------------------------------------------------------------------
Portfolio Strategy
While I am very pleased by our good start this year, I would continue to
encourage you, as I did in my first shareholder letter, to view your
investment in Janus Olympus Fund with at least a three- to five-year horizon.
Although I take short-term performance very seriously, ultimately my view is
long-term, because in my experience the best returns lie in finding companies
with truly superior management teams, and with new products and services, that
will lead to new revenue streams and accelerating earnings. These are the
precursors to a successful investment.
Therefore, I continue to look for companies that will benefit from long-
term economic, demographic, and social trends that are emerging both here in
the U.S. and overseas. These in turn lead to industries with some very dynamic
growth characteristics. The rate of change in the areas of health care,
telecommunications, pharmaceuticals, financial services, technology, and
retailing continues to accelerate at a stunning pace. Of course, companies
that are in a phase of rapid growth and thus sport higher price-to-earnings
multiples (PEs) are more vulnerable to short-term declines than more mature
companies. But, I believe our fundamental, "bottom-up," approach to research
will enable us to sift through the vagaries of the broad market and find the
investments that will provide superior returns for our shareholders.
Stock Highlights
The infrastructure of business is rapidly changing due to networking and
the Internet phenomenon. Microsoft is clearly one of the dominant franchises
in all technology. The company has refocused its business on networking
software and the Internet, and just released a new version of its office suite
of applications. Its new NT operating system and Windows 95 products have set
the standard for many networking and operating system software applications.
Networking hardware standards continue to be dominated by equipment
manufacturers such as Cisco Systems, Ascend Communications, and Cascade
Communications. A new entrant is Lucent Technologies, which was recently spun
off by AT&T.
Nike is fast becoming the dominant designer and manufacturer of athletic
footwear and apparel globally. The company has proven itself to be very adept
at hiring the right professional athletes as spokespersons, and is now
invading the soccer market in Europe and South America with both footwear and
apparel. The company has also introduced specialized athletic clothing
designed to handle the conditions encountered in individual sports, from
71
<PAGE>
running to biking to skiing. Nike's chairman has said the global
opportunities for his company are now as great as they were in the 1980s, when
Nike's growth was explosive.
I took profits in Oakley, a designer of premium sunglasses, when Nike
entered the market. Software developers PeopleSoft, Red Brick Systems, and
Shiva Corp. were sold when they reached their price targets. Sun Microsystems
and Intuit were let go at a loss after their earnings slowed. I also took a
loss in Informix because its next-generation database was not as far along as
I originally estimated.
Strategy Going Forward
Janus Olympus Fund's investment strategy of finding high-growth companies
participating in strong secular business trends should continue to generate
competitive long-term returns. The current business climate is very
encouraging. Companies are investing for the future and focusing on cost
savings, productivity, and share-holder value. As long as economic growth
remains moderate and inflation is low, financial markets should perform well.
Once again, thank you for your investment in Janus Olympus Fund.
72
<PAGE>
JANUS OLYMPUS FUND Portfolio Manager, Scott W. Schoelzel
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Olympus Fund and the S&P 500 Index. Janus Olympus Fund is
represented by a solid green line. The S&P 500 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 October 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Olympus Fund ($12,383) as
compared to the S&P 500 Index ($11,663). There is a legend in the upper left
quadrant of the graph which indicates Janus Olympus Fund's total return since
inception (December 29, 1995) as 23.83%.
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 OLYMPUS FUND
- ------------------------------------------------------------------------
Shares or Principal Amount
October 31, 1996 Market Value
- ------------------------------------------------------------------------
Common Stock - 85.0%
- ------------------------------------------------------------------------
Apparel Manufacturers - 1.9%
95,675 Gucci Group N.V. $ 6,601,575
36,825 St. John Knits, Inc. 1,684,744
- ------------------------------------------------------------------------
8,286,319
- ------------------------------------------------------------------------
73
<PAGE>
Applications Software - 8.0%
114,300 Applix, Inc.* 2,771,775
146,000 Citrix Systems, Inc.* 8,066,500
179,100 Clarify, Inc.* 8,641,575
117,700 HNC Software, Inc.* 3,707,550
75,000 Siebel Systems, Inc.* 4,087,500
150,000 Viasoft, Inc.* 7,387,500
- ------------------------------------------------------------------------
34,662,400
- ------------------------------------------------------------------------
Athletic Footwear - 6.8%
501,850 Nike, Inc. - Class B 29,546,419
- ------------------------------------------------------------------------
Casino Services - 0.2%
53,250 Sodak Gaming, Inc.* 965,156
- ------------------------------------------------------------------------
Computer Services - 0.3%
29,725 Technology Solutions Co.* 1,155,559
- ------------------------------------------------------------------------
Computer Software - 4.9%
65,000 Aurum Software, Inc.* 2,063,750
553,000 JBA Holdings PLC** 4,633,899
21,000 McAfee Associates, Inc.* 955,500
100,300 Microsoft Corp.* 13,766,175
- ------------------------------------------------------------------------
21,419,324
- ------------------------------------------------------------------------
Computers - Mainframe - 8.1%
270,000 IBM Corp. 34,830,000
- ------------------------------------------------------------------------
Computers - Micro - 1.4%
75,000 Dell Computer Corp.* 6,103,125
- ------------------------------------------------------------------------
Computers - Peripheral Equipment - 1.5%
100,000 U.S. Robotics Corp.* 6,287,500
- ------------------------------------------------------------------------
Consulting Services - 1.3%
87,800 Quintiles Transnational Corp.* 5,772,850
- ------------------------------------------------------------------------
Data Processing and Management - 2.0%
55,000 Documentum, Inc.* 2,048,750
150,000 i2 Technologies, Inc.* 5,700,000
25,000 Pegasystems, Inc.* 753,125
- ------------------------------------------------------------------------
8,501,875
- ------------------------------------------------------------------------
Health Care Services - 0.9%
102,700 Pediatrix Medical Group, Inc.* 4,043,813
- ------------------------------------------------------------------------
74
<PAGE>
Hotels and Motels - 3.0%
177,775 HFS, Inc.* 13,022,019
- ------------------------------------------------------------------------
Internet Software - 1.6%
99,300 Edify Corp.* 1,383,994
126,275 Netscape Communications Corp.* 5,587,669
- ------------------------------------------------------------------------
6,971,663
- ------------------------------------------------------------------------
Medical - Biomedical and Genetic - 2.7%
130,000 Biogen, Inc.* 9,685,000
50,000 Incyte Pharmaceuticals, Inc.* 2,025,000
- ------------------------------------------------------------------------
11,710,000
- ------------------------------------------------------------------------
Medical - Drugs - 2.7%
72,000 Eli Lilly & Co. 5,076,000
130,450 Medicis Pharmaceutical Corp. -
Class A* 6,555,112
- ------------------------------------------------------------------------
11,631,112
- ------------------------------------------------------------------------
Medical - Wholesale Drug Distributors - 0.5%
25,000 Cardinal Health, Inc. 1,962,500
- ------------------------------------------------------------------------
Medical Information Systems - 4.2%
301,200 HBO & Co. 18,109,650
- ------------------------------------------------------------------------
Money Center Banks - 3.4%
150,700 Citicorp 14,919,300
- ------------------------------------------------------------------------
Networking Products - 5.3%
230,000 Cisco Systems, Inc.* 14,231,250
100,000 International Network Services* 3,575,000
25,000 VideoServer, Inc.* 1,184,375
96,850 Xylan Corp.* 3,874,000
- ------------------------------------------------------------------------
22,864,625
- ------------------------------------------------------------------------
Pharmaceuticals - Research and Development - 0.9%
171,775 Applied Analytical
Industries, Inc.* 3,736,106
- ------------------------------------------------------------------------
Printers and Related Products - 0.7%
45,000 Electronics for Imaging, Inc.* 3,240,000
- ------------------------------------------------------------------------
75
<PAGE>
Retail - Apparel and Shoe - 1.5%
164,300 Abercrombie & Fitch Co. - Class A*3,614,600
67,250 The Finish Line, Inc. - Class A* 2,858,125
- ------------------------------------------------------------------------
6,472,725
- ------------------------------------------------------------------------
Retail - Coffee - 0.6%
75,000 Starbucks Corp.* 2,437,500
- ------------------------------------------------------------------------
Retail - Jewelry - 0.9%
100,000 Tiffany & Co. 3,700,000
- ------------------------------------------------------------------------
Telecommunication Equipment - 8.2%
30,000 Advanced Fibre Communications* 1,713,750
144,500 Ascend Communications, Inc.* 9,446,687
35,000 PairGain Technologies, Inc.* 2,410,625
155,000 Premisys Communications, Inc.* 7,750,000
165,600 Tellabs, Inc.* 14,096,700
- ------------------------------------------------------------------------
35,417,762
- ------------------------------------------------------------------------
Telecommunication Services - 10.4%
389,800 Cascade Communications Corp.* 28,309,225
352,875 Lucent Technologies, Inc. 16,585,125
- ------------------------------------------------------------------------
44,894,350
- ------------------------------------------------------------------------
Transportation - Airlines - 1.1%
97,250 UAL Corp.* 4,607,219
- ------------------------------------------------------------------------
Total Common Stock (cost $332,473,257) 367,270,871
- ------------------------------------------------------------------------
Short-Term Corporate Notes - 11.1%
Avco Financial Services
$15,000,000 5.30%, 11/6/96 14,988,958
Coca-Cola Co.
10,000,000 5.27%, 11/19/96 9,973,650
Ford Motor Credit Corp.
21,200,000 5.55%, 11/1/96 21,200,000
Prudential Funding Corp.
2,000,000 5.50%, 11/1/96 2,000,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(total amortized cost $48,162,608) 48,162,608
- ------------------------------------------------------------------------
76
<PAGE>
U.S. Government Agency - 2.3%
Federal National Mortgage Association
10,000,000 5.23%, 11/27/96
(amortized cost $9,962,228) 9,962,228
- ------------------------------------------------------------------------
Total Investments
(total cost $390,598,093) - 98.4% 425,395,707
- ------------------------------------------------------------------------
Cash, Receivables and Other Assets,
net of Liabilities - 1.6% 6,978,814
- ------------------------------------------------------------------------
Net Assets - 100% $432,374,521
- ------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Italy 1.5% $ 6,601,575
United Kingdom 1.1% 4,633,899
United States++ 97.4% 414,160,233
- ------------------------------------------------------------------------
Total 100.0% $425,395,707
- ----------------------- -------------------------- ------------------------
- ------------------------------------------------------------------------
++Includes Short-Term Securities (83.7% excluding Short-Term Securities)
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency Currency Value Unrealized Gain/(Loss)
Settlement Date Units Sold in $ U.S.
- ---------------------- -------------- ----------------- -------------------
British Pound
11/19/96 2,500,000 $4,066,000 ($297,625)
- ---------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
77
<PAGE>
JANUS OVERSEAS FUND Portfolio Manager, Helen Young Hayes
Performance
Janus Overseas Fund appreciated 30.19% during our fiscal year ended
October 31, 1996, versus a gain of 10.47% for the Morgan Stanley International
EAFE Index (EAFE stands for Europe, Australasia, and the Far East). Both
returns include reinvested net dividends.(1)
For the 12 months ending October 31, Janus Overseas Fund ranked number 1
out of 324 international funds tracked by Lipper Analytical Services, a large
mutual fund rating company.(2)
The Fund outperformed the EAFE Index by such a wide margin because our
research turned up some excellent individual opportunities, many of which were
off the beaten track. Underfollowed stocks often present the greatest
opportunities because the future potential of their earnings is not yet
reflected in the price. When the stock is "discovered" by other investors,
gains can come quickly. We were not the first to get there on every
exceptional performer this year, but we got there early on many of them.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 73.6% 83.0%
Foreign 72.4% 78.9%
Number of Stocks 190 113
Cash & Fixed-Income Securities 27.6% 21.1%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Rentokil Initial PLC 3.7% --
Hays PLC 2.3% --
Fresenius Medical Care (ADR) 1.9% --
Lagardere Groupe 1.8% --
Ciba-Geigy Corp. A.G. 1.6% 2.1%
Assa-Abloy A.B. - Class B 1.4% 0.7%
Huhtamaki Group - Series I 1.4% 1.1%
London Clubs International PLC 1.3% --
Securitas A.B. - Class B 1.3% 2.1%
Adidas A.G. 1.2% --
- ------------------------------------------------------------------------
Total 17.9% 6.0%
- ------------------------------------------------------------------------
78
<PAGE>
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Diversified Operations 9.9% 4.5%
Computer Services 5.6% 3.6%
Medical - Drugs 5.3% 9.1%
Money Center Banks 3.3% 0.3%
Computer Software 3.3% 6.3%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 5 Countries October 31, 1996 October 31, 1995
United Kingdom 15.0% 4.2%
Sweden 7.2% 14.3%
Germany 7.2% 9.1%
Switzerland 4.6% 6.9%
Netherlands 4.4% 4.7%
- ------------------------------------------------------------------------
The Year in Review
The portfolio remained highly diversified and eclectic throughout the
year. But there were niche ideas that helped performance. One such idea was
outsourcing. Axime, Hays, Capita Corp., Addeco, and Randstad are contract
suppliers of white-collar management services, from financial accounting to
information technology. Business software was another niche area. Companies
around the world are striving to become more productive via computerization.
Misys, Mercantile Data, and WM Data develop and market software applications
for this broad market. High-end retailers form a third, smaller grouping.
Wolford, Harvey Nichols, and Gucci are benefiting from a burgeoning consumer
demand for luxury goods.
Stock Highlights
A new management team at German-based Adidas has revamped the company's
product line to emphasize technical performance athletic footwear. Adidas has
already claimed significant market share from the decline of Reebok. Adidas
holds a strong position in soccer clothing and footwear in Europe and Latin
America, and is beginning to make inroads into the women's athletic apparel
market as well.
Tomra is a Norwegian supplier of machines that collect aluminum
containers for recycling. Stationed primarily in supermarkets, Tomra's
machines provide consumers with instant cash returns for their recyclable cans
and are a much cheaper alternative to curbside collection. Tomra has little
competition in Europe, where 50% to 60% of aluminum is currently recycled.
Norway boasts a 90%-plus aluminum can return rate. The company also sees
opportunities in Latin America and Asia.
Frontec is a Swedish producer of products for electronic commerce.
Frontec's products link companies via the Internet and allow them to purchase
goods, place orders, make payments and bill customers electronically. Frontec
79
<PAGE>
has been very successful in Scandinavia and Europe and is now launching its
products in the U.S.
London Clubs is a casino operator that is benefiting from the gradual
deregulation of U.K. gaming regulations. The company has excellent management,
which intends to leverage its experience serving foreign customers in London
into selected international markets.
We took profits in outsourcer Addeco, a Swiss temporary personnel
provider, and reduced SGL Carbon, a German producer of graphite electrodes,
and Randstad, the Dutch commercial services provider, when all reached their
valuation targets. Italian magazine publisher, Aldo Mondadori, and Indonesian
shrimp farmer, Sekar Bumi, were sold at a loss when both took longer than
expected to execute new projects. Indonesian Satellite was also sold due to
increased competition and start-up losses from several of its subsidiaries.
Current Outlook and Strategy
The rapid growth of foreign economies continues to produce excellent
individual investment opportunities. Deregulation and privatization are part
of a positive trend toward increased economic freedom and diversification
overseas. Many foreign companies are also becoming increasingly shareholder-
friendly. These trends should keep the wind at our back as we enter 1997, and
I expect our research effort will continue to uncover a broad range of
attractive individual ideas.
Thank you for your continued investment in Janus Overseas Fund.
- ------------------------------------------------------------------------
(1) Net dividends reinvested are the dividends that remain to be reinvested
after foreign tax obligations have been met. Such obligations vary from
country to country.
(2) An International Fund is defined by Lipper as one which "invests its
assets in securities whose primary trading markets are outside the
United States." This ranking is based on total return, including
reinvested dividends and capital gains for the stated period. Past
performance is not predictive of future results.
80
<PAGE>
JANUS OVERSEAS FUND Portfolio Manager, Helen Young Hayes
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Overseas Fund and the MSCI EAFE Net Index. Janus Overseas
Fund is represented by a solid green line. The MSCI EAFE Net 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 2, 1994, through October 31, 1996. The upper right quadrant reflects the
ending value of the hypothetical investment in Janus Overseas Fund ($15,076)
as compared to the S&P 500 Index ($11,478). There is a legend in the upper
left quadrant of the graph which indicates Janus Fund's one-year and since
inception (May 2, 1994) average annual total returns as 30.19% and 17.85%,
respectively.
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 OVERSEAS FUND October 31, 1996
- ------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 71.6%
- ------------------------------------------------------------------------
Advertising Services - 0.3%
681,962 WPP Group PLC** $2,529,934
- ------------------------------------------------------------------------
Aerospace and Defense - 0.2%
196,000 Mitsubishi Heavy
Industries, Ltd.** 1,504,914
- ------------------------------------------------------------------------
Apparel Manufacturers - 0.8%
94,360 Gucci Group N.V. 6,510,840
- ------------------------------------------------------------------------
Appliances - Household - 0%
11,493 Moulinex S.A.** 219,884
- ------------------------------------------------------------------------
81
<PAGE>
Audio and Video Products - 0.2%
21,500 Sony Corp.** 1,288,566
- ------------------------------------------------------------------------
Automotive - Cars and Light Trucks - 0.9%
140,000 Honda Motor Co.** 3,341,523
58,117 Mahindra & Mahindra (GDR) 581,170
70,525 Tata Engineering & Locomotive
Co., Ltd. 872,747
166,464 Tata Engineering & Locomotive Co.,
Ltd.(GDR)+ 2,059,992
21,000 Yamaha Motor Co., Ltd.** 187,961
- ------------------------------------------------------------------------
7,043,393
- ------------------------------------------------------------------------
Automotive - Medium and Heavy Duty Trucks - 0.1%
202,000 Isuzu Motors, Ltd.** 997,947
- ------------------------------------------------------------------------
Automotive - Truck Parts and Equipment - 0.2%
415,000 LucasVarity PLC*,** 1,681,364
- ------------------------------------------------------------------------
Brewery - 0.1%
92,300 Quilmes Industrial S.A. (ADR) 969,150
- ------------------------------------------------------------------------
Broadcast Media - 0.3%
95,550 CanWest Global Communications
Corp. 1,015,219
32,790 Central European Media
Enterprises, Ltd.* 918,120
- ------------------------------------------------------------------------
1,933,339
- ------------------------------------------------------------------------
Broadcast Services and Programming - 0.5%
139,425 Grupo Televisa S.A.
de C.V. (GDR)* $3,659,906
- ------------------------------------------------------------------------
Building - Construction Products - 0.7%
126,932 Cimpor-Cimentos de Portugal S.A. 2,661,064
495,600 Fortune Cement Corp.* 254,977
8,607,000 HI Cement Corp.*,+ 2,656,886
- ------------------------------------------------------------------------
5,572,927
- ------------------------------------------------------------------------
Building - Heavy Construction - 0%
30,200 New World Infrastructure, Ltd.*,+ 75,189
- ------------------------------------------------------------------------
Casino Hotels - 0.4%
1,492,283 Crown, Ltd.* 3,235,511
- ------------------------------------------------------------------------
82
<PAGE>
Casino Services - 2.1%
1,976,447 Aristocrat Leisure, Ltd.+ 5,864,859
1,888,327 London Clubs International PLC** 9,647,640
- ------------------------------------------------------------------------
15,512,499
- ------------------------------------------------------------------------
Cellular Telecommunications - 1.2%
260,611 Korea Mobile Telecommunications,
Inc. (GDR)* 3,257,638
106,000 Millicom International
Cellular S.A.* 4,213,500
877,609 Telecom Italia Mobile S.p.A. 1,808,287
- ------------------------------------------------------------------------
9,279,425
- ------------------------------------------------------------------------
Chemicals - Diversified - 0.6%
125,970 Hoechst A.G.** 4,726,572
- ------------------------------------------------------------------------
Chemicals - Specialty - 0.4%
20,734 SGL Carbon A.G.**,+ 2,329,126
171,611 Victrex PLC** 829,308
- ------------------------------------------------------------------------
3,158,434
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Commercial Banks - 0.5%
487,475 Banca Popolare di Milano 2,406,067
5,068 Kookmin Bank (ADR) 105,795
55,945 Nordbanken A.B.** 1,470,649
10,029 Sparbanken Sverige A.B. - Class A** 158,487
11,000 Sumitomo Trust & Banking Co., Ltd.**121,622
- ------------------------------------------------------------------------
4,262,620
- ------------------------------------------------------------------------
Commercial Services - 0.6%
85,988 BTG PLC** 3,287,910
7,967 Sophus Berendsen A/S - Class B 981,474
- ------------------------------------------------------------------------
4,269,384
- ------------------------------------------------------------------------
Communications Software - 0.6%
64,348 TT Tieto Oy - Class B** 4,300,250
- ------------------------------------------------------------------------
83
<PAGE>
Computer Services - 5.5%
29,401 Axime S.A.*,** 3,139,673
2,869 Cap Gemini Sogeti S.A.*,** 139,465
941,633 Capita Group PLC** 6,358,344
342,473 CMG PLC 4,209,908
81,784 Enator A.B.*,** 1,814,357
509,888 Frontec A.B. - Class B*,** 7,282,897
275,804 Getronics N.V. 6,764,514
423,530 Misys PLC** 6,253,815
8,519 Sligos S.A.** 931,347
77,204 WM-Data A.B. - Class B** 5,513,650
- ------------------------------------------------------------------------
42,407,970
- ------------------------------------------------------------------------
Computer Software - 2.7%
52,133 Ark A.S.A. 1,254,744
417,142 JBA Holdings PLC** 3,495,469
401,662 Merkantildata A/S 6,151,891
276 NTT Data Communications
Systems Corp.** 8,161,811
139,380 SEMA Group PLC** 2,020,656
- ------------------------------------------------------------------------
21,084,571
- ------------------------------------------------------------------------
Computers - Integrated Systems - 0.2%
34,050 Dassault Systemes S.A. (ADR)* 1,476,919
- ------------------------------------------------------------------------
Cosmetics and Toiletries - 0.3%
3,467 Wella A.G.** 1,959,867
- ------------------------------------------------------------------------
Diamonds and Precious Stones - 0.2%
51,141 De Beers Centenary A.G.** 1,508,954
- ------------------------------------------------------------------------
84
<PAGE>
Diversified Operations - 9.9%
99,000 Amer-Yhtymae Oy - Class A** 2,232,919
27,135 Barco N.V.* 4,453,484
173,925 C.G. Smith, Ltd.** 837,389
342,000 First Pacific Co. 471,080
59,743 Grupo Carso S.A. de C.V.
- Series Al 273,947
2,098,887 Hays PLC** 17,536,534
238,235 Huhtamaki Group - Series l** 10,337,758
177,987 Kinnevik A.B. - Class B** 4,827,564
38,500 Metra Oy - Class B** 2,143,360
4,254,583 Rentokil Initial PLC 28,555,857
88,539 South African Breweries Ltd.**,+ 2,301,184
4,849 Sulzer A.G.** 2,749,551
- ------------------------------------------------------------------------
76,720,627
- ------------------------------------------------------------------------
Drug Delivery Systems - 0.5%
138,525 Elan Corp. PLC* 3,844,069
- ------------------------------------------------------------------------
Electric - Integrated - 0.5%
42,600 Centrais Electricas de Santa
Catarina S.A.+ 3,589,050
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Electronic Components - 1.2%
63,850 Lernout & Hauspie Speech Products N.V.*$ 1,069,488
69,750 Philips Electronics N.V. 2,453,270
139,350 Philips Electronics N.V. (ADR) 4,912,088
3,000 Rohm Co.** 177,694
25,100 SAES Getters S.p.A.* 288,650
- ------------------------------------------------------------------------
8,901,190
- ------------------------------------------------------------------------
Electronic Measuring Instruments - 0.1%
96,550 Elbit Vision Systems, Ltd.* 579,300
- ------------------------------------------------------------------------
Equipment Rental - 0.3%
414,673 Thorn PLC*,** 2,327,765
- ------------------------------------------------------------------------
Film Processing - 0.5%
1,003 Fotolabo S.A.** 390,759
24,671 Grand Optical Photoservice** 3,578,579
- ------------------------------------------------------------------------
3,969,338
- ------------------------------------------------------------------------
85
<PAGE>
Finance - Other Services - 0%
2,084 Grupo Financiero Inbursa, S.A. de C.V. -
Class B 6,807
- ------------------------------------------------------------------------
Food - Baking - 1.0%
55,432 Nutricia Verenidge Bedrijven N.V. 7,759,567
- ------------------------------------------------------------------------
Food - Catering - 0.2%
115,000 Compass Group PLC** 1,139,539
- ---------
Food - Dairy Products - 0.6%
3,144,620 Parmalat Finanziaria S.p.A. 4,492,906
- ------------------------------------------------------------------------
Food - Diversified - 0.3%
35,526 Raision Tehtaat** 2,188,861
- ------------------------------------------------------------------------
Food - Retail - 0.5%
23,000 Ito-Yokado Co., Ltd.** 1,146,367
17,000 Pao De Acucar S.A.+ 331,500
88,750 Santa Isabel S.A. 2,496,094
- ------------------------------------------------------------------------
3,973,961
- ------------------------------------------------------------------------
Footwear and Related Apparel - 1.2%
105,191 Adidas A.G.** 8,995,778
- ------------------------------------------------------------------------
Healthcare Safety Devices - 0.2%
711,845 London International Group PLC** 1,806,859
- ------------------------------------------------------------------------
Home Furnishings - 0.5%
36,372 Hunter Douglas N.V. 2,567,133
315,000 Pagnossin S.p.A. 1,146,002
- ------------------------------------------------------------------------
3,713,135
Hotels and Motels - 0.4%
19,800 East India Hotels, Ltd. (GDR)+ 356,400
31,119 Indian Hotels Co., Ltd.+ 739,076
1,623,000 Mandarin Oriental
International, Ltd. 2,191,050
- ------------------------------------------------------------------------
3,286,526
- ------------------------------------------------------------------------
Human Resources - 0.3%
212,134 Michael Page Group PLC** 1,453,137
9,686 Randstad Holdings N.V. 781,625
- ------------------------------------------------------------------------
2,234,762
- ------------------------------------------------------------------------
86
<PAGE>
Industrial Automation and Robotics - 1.7%
423,859 Lagardere Groupe** 13,363,768
- ------------------------------------------------------------------------
Investment Companies - 0.2%
120,993 Bure Investment A.B.** 1,296,137
- ------------------------------------------------------------------------
Lasers - Systems and Components - 0.6%
393,025 Rofin-Sinar Technologies, Inc. 4,814,556
- ------------------------------------------------------------------------
Leisure - Recreation and Gaming - 0%
10,968 TABCORP Holdings, Ltd. 51,640
- ------------------------------------------------------------------------
Leisure and Recreation Services - 0%
2,282 Club Mediterranee S.A.** $ 143,407
- ------------------------------------------------------------------------
Machine Tools and Related Products - 0.1%
229,337 Gildemeister Italiana S.p.A. 694,915
- ------------------------------------------------------------------------
Machinery - Construction and Mining - 0.8%
609,761 Powerscreen International PLC** 6,032,224
- ------------------------------------------------------------------------
Machinery - General Industrial - 0%
22,475 Toolex Alpha N.V.* 210,703
- -----------------------------------------------------------------------
Machinery - Pumps - 0.4%
201,550 Pfeiffer Vacuum Technology
A.G. (ADR)* 3,224,800
- ------------------------------------------------------------------------
Medical - Drugs - 5.3%
9,754 Ciba-Geigy Corp. A.G.** 11,923,265
153,150 Eisai Co., Ltd.** 2,741,541
171,172 Glaxo Wellcome PLC** 2,679,304
625,946 Oy Tambro A.B.**,+ 4,545,322
1,017 Roche Holding A.G.** 7,667,603
4,071 Sandoz A.G. - Class R** 4,700,271
348,613 SmithKline Beecham PLC - Class A** 4,299,590
14,650 SmithKline Beecham PLC (ADR)
- Class A** 917,456
74,000 Takeda Chemical Industries** 1,266,234
- ------------------------------------------------------------------------
40,740,586
- ------------------------------------------------------------------------
Medical - Wholesale Drug Distributors - 0.7%
37,064 Gehe A.G.** 2,490,795
150,375 Grupo Casa Autrey S.A.
de C.V. (ADR) 2,838,328
- ------------------------------------------------------------------------
5,329,123
- ------------------------------------------------------------------------
87
<PAGE>
Medical Instruments - 0.2%
59,292 Althin Medical A.B. - Class B** 1,193,750
34,632 Getinge Industrier A.B. - Class B** 631,481
- ------------------------------------------------------------------------
1,825,231
- ------------------------------------------------------------------------
Medical Products - 2.6%
476,550 Fresenius Medical Care (ADR)* 14,177,363
246,567 Nobel Biocare A.B.**,+ 4,158,718
648,116 Smith & Nephew PLC** 1,977,280
- ------------------------------------------------------------------------
20,313,361
- ------------------------------------------------------------------------
Metal Processors and Fabricators - 1.4%
713,781 Assa-Abloy A.B. - Class B** 10,954,382
- ------------------------------------------------------------------------
Money Center Banks - 3.3%
117,400 Bangkok Bank Co., Ltd. 1,251,825
296,881 Barclays PLC** 4,654,236
80,879 CS Holding A.G.** 8,052,818
139,484 Deutsche Bank A.G.** 6,445,782
34,400 HSBC Holdings PLC 700,742
546,034 Lloyds TSB Group PLC** 3,464,962
9,000 Mitsui Trust and Banking, Co., Inc. 86,873
98,467 Skandinaviska
Enskilda Banken - Class A** 822,915
- ------------------------------------------------------------------------
25,480,153
- ------------------------------------------------------------------------
Motorcycle and Motor Scooter Manufacturing - 0.1%
22,320 Bajaj Auto, Ltd. (GDR)+ 714,240
- ------------------------------------------------------------------------
Multilevel Direct Selling - 0.1%
325 Amway Asia Pacific, Ltd. 11,659
26,800 Amway Japan Pacific, Ltd.** 1,067,673
- ------------------------------------------------------------------------
1,079,332
- ------------------------------------------------------------------------
Office Automation and Equipment - 0.5%
34,512 Oce-Van Der Grinten N.V. 3,674,081
- ------------------------------------------------------------------------
Oil Companies - Exploration and Production - 0.5%
163,550 YPF Sociedad Anonima S.A. (ADR) 3,720,762
- ------------------------------------------------------------------------
Oil Companies - Integrated - 0.4%
32,535 Omv A.G. 3,179,425
- ------------------------------------------------------------------------
88
<PAGE>
- ------------------------------------------------------------------------
Photo Equipment and Supplies - 0.2%
44,286 Leica Camera A.G.*,**,+ $ 1,488,066
- ------------------------------------------------------------------------
Pipelines - 0.2%
100,000 Gazprom (ADR)*,+ 1,875,000
- ------------------------------------------------------------------------
Publishing - Books - 0.6%
97,208 Dorling Kindersley Holdings PLC** 862,011
27,909 Wolters Kluwer N.V. 3,580,139
- ------------------------------------------------------------------------
4,442,150
- ------------------------------------------------------------------------
Publishing - Newspapers - 0.1%
86,777 Pearson PLC** 1,075,905
- ------------------------------------------------------------------------
Publishing - Periodicals - 0%
32,676 EMAP PLC 380,145
- ------------------------------------------------------------------------
Real Estate Development - 0.5%
196,000 Mitsubishi Estate Co., Ltd.** 2,442,260
102,000 Mitsui Fudosan Co.** 1,262,022
- ------------------------------------------------------------------------
3,704,282
- ------------------------------------------------------------------------
Real Estate Investment and Management - 0.8%
9,846 Diligentia A.B.*,** 126,421
452,089 Tornet Fastighets A.B.*,** 5,736,037
- ------------------------------------------------------------------------
5,862,458
- ------------------------------------------------------------------------
Recycling - 0.8%
451,425 Tomra Systems A/S 6,384,928
- ------------------------------------------------------------------------
Reinsurance - 0.2%
1,628 Swiss Reinsurance Co.** 1,740,984
- ------------------------------------------------------------------------
Retail - Apparel and Shoe - 0.6%
852,069 Harvey Nichols PLC**,+ 4,644,445
- ------------------------------------------------------------------------
Retail - Diversified - 1.6%
205,327 Eurobike A.G.*,** 4,531,858
513,278 Kesko** 7,883,553
- ------------------------------------------------------------------------
12,415,411
- ------------------------------------------------------------------------
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<PAGE>
Retail - Major Department Stores - 0.7%
139,600 Credit Saison Co., Ltd.** 3,221,727
41,000 Daimaru, Inc.** 246,806
62,000 Hankyu Department Store** 739,909
84,000 Isetan Co.** 1,120,393
- ------------------------------------------------------------------------
5,328,835
- ------------------------------------------------------------------------
Retail - Pubs - 0.5%
183,206 Wetherspoon (J.D.) PLC** 3,535,401
- ------------------------------------------------------------------------
Security Services - 1.4%
190,765 Prosegur Companhia de
Seguridad S.A.* 1,538,668
372,584 Securitas A.B. - Class B** 9,624,421
- ------------------------------------------------------------------------
11,163,089
- ------------------------------------------------------------------------
Shipbuilding - 0.3%
434,000 Kawasaki Heavy Industries** 1,984,152
- ------------------------------------------------------------------------
Steel - Producers - 0%
114,000 NKK Corp.*,** 286,100
6,211 SSAB Svenskt Stal A.B. - Series A** 90,601
- ------------------------------------------------------------------------
376,701
- ------------------------------------------------------------------------
Telecommunication Equipment - 1.1%
176,775 L.M. Ericsson Telephone (ADR) 4,883,409
12,000 Nokia A.B. - Class A** 553,196
122,274 Tandberg A.S.A. 3,057,567
- ------------------------------------------------------------------------
8,494,172
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Telecommunication Services - 2.2%
52,625 Asia Satellite Telecommunications,
Ltd. (ADR)* $ 1,407,719
238,975 CPT Telefonica del Peru
S.A. (ADR) 4,928,859
1,061,970 CPT Telefonica del Peru S.A.
- Class B 2,251,789
776,802 Telecom Italia S.p.A. 1,735,665
59,025 Telecomunicacoes Brasileiras
S.A. (ADR) 4,397,363
61,937 Telinfo S.A.* 2,417,479
- ------------------------------------------------------------------------
17,138,874
- ------------------------------------------------------------------------
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<PAGE>
Telephone - Integrated - 0.4%
55,700 Portugal Telecom S.A. (ADR) 1,441,238
1,050 Telecom Argentina Stet S.A. (ADR) 39,638
53,150 Telefonica de Argentina S.A. (ADR)1,235,738
- ------------------------------------------------------------------------
2,716,614
- ------------------------------------------------------------------------
Textile - Apparel - 0.8%
48,746 Wolford A.G. 6,416,952
- ------------------------------------------------------------------------
Tobacco - 0.7%
252,500 PT Hanjaya Mandala Sampoerna 2,347,904
288,000 Souza Cruz S.A. 1,732,542
445,320 Swedish Match A.B.*,** 1,326,263
- ------------------------------------------------------------------------
5,406,709
- ------------------------------------------------------------------------
Transportation - Airlines - 0.3%
2,704 SwissAir A.G.** 2,100,505
- ------------------------------------------------------------------------
Transportation - Railroad - 0%
4,100 Tranz Rail Holdings, Ltd. (ADR)* 67,138
- ------------------------------------------------------------------------
Transportation - Services - 0.9%
26,085 Koninklijke Nedlloyd Group N.V. 653,583
653,946 Stagecoach Holdings PLC** 6,043,722
- ------------------------------------------------------------------------
6,697,305
- ------------------------------------------------------------------------
Total Common Stock (cost $491,351,273) 552,983,416
- ------------------------------------------------------------------------
Preferred Stock - 2.0%
- ------------------------------------------------------------------------
Apparel Manufacturers - 0%
2,191 Escada A.G.** 353,666
- ------------------------------------------------------------------------
Automotive - Cars and Light Trucks - 0.1%
1,042 Porsche A.G.*,** 703,683
- ------------------------------------------------------------------------
Brewery - 0.3%
3,090,000 Companhia Cervejaria Brahma 1,910,007
- ------------------------------------------------------------------------
Commercial Banks - 0%
589,467 Banco Bradesco S.A.* 5,027
- ------------------------------------------------------------------------
Computer Software - 0.5%
29,218 SAP A.G.** 3,923,197
- ------------------------------------------------------------------------
91
<PAGE>
Drug Delivery Systems - 0.7%
25,853 Fresenius A.G.** 5,578,375
- ------------------------------------------------------------------------
Electric - Distribution - 0.2%
43,208,000 Companhia Energetica de
Minas Gerais 1,375,354
- ------------------------------------------------------------------------
Multimedia - 0%
49,958 News Corp., Ltd. 219,401
- ------------------------------------------------------------------------
Telecommunication Services - 0.2%
33,750 Nokia Corp. (ADR) - Class A 1,565,156
- ------------------------------------------------------------------------
Telephone - Integrated - 0%
5,000 Telecomunicacoes Brasileiras S.A. 371
- ------------------------------------------------------------------------
Total Preferred Stock (cost $13,971,914) 15,634,237
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Short-Term Corporate Notes - 8.9%
Bell South
$ 10,000,000 5.20%, 11/5/96 $ 9,994,222
Coca-Cola Corp.:
10,000,000 5.22%, 11/12/96 9,984,050
20,000,000 5.20%, 11/14/96 19,962,444
Ford Motor Credit Co.
28,600,000 5.55%, 11/1/96 28,600,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $68,540,716) 68,540,716
- ------------------------------------------------------------------------
U.S. Government Agencies - 16.2%
Federal Home Loan Bank System
100,000,000 5.50%, 11/1/96 100,000,000
Federal National Mortgage
Association
25,000,000 5.17%, 11/26/96 24,910,243
- ------------------------------------------------------------------------
Total U.S. Government Agencies
(amortized cost $124,910,243) 124,910,243
- ------------------------------------------------------------------------
U.S. Government Obligation - 12.8%
U.S. Treasury Bill,
100,000,000 5.125%, 12/19/96
(amortized cost $99,317,000) 99,317,000
- ------------------------------------------------------------------------
Total Investments
(total cost $798,091,146) - 111.5% 861,385,612
- ------------------------------------------------------------------------
92
<PAGE>
Liabilities, net of Cash, Receivables
and Other Assets - (11.5%) (88,755,256)
Net Assets - 100% $772,630,356
- ------------------------------------------------------------------------
93
<PAGE>
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Argentina 0.6% $ 4,996,139
Australia 1.1% 9,371,411
Austria 1.1% 9,596,377
Belgium 0.9% 7,940,451
Brazil 1.5% 13,341,214
Canada 0.1% 1,015,219
Chile 0.3% 2,496,094
Denmark 0.1% 981,474
Finland 4.2% 35,750,375
France 2.7% 22,993,042
Germany 7.2% 61,847,048
Hong Kong 0.6% 4,857,439
India 0.6% 5,323,625
Indonesia 0.3% 2,347,904
Ireland 0.4% 3,844,069
Israel 0.1% 579,300
Italy 2.2% 19,083,332
Japan 3.9% 33,394,095
Korea 0.4% 3,257,638
Luxembourg 0.1% 969,150
Mexico 0.8% 6,778,988
Netherlands 4.4% 37,566,611
New Zealand 0.0% 67,138
Norway 2.0% 16,849,130
Peru 0.8% 7,180,648
Philippines 0.3% 2,911,863
Portugal 0.5% 4,102,302
Russia 0.2% 1,875,000
Spain 0.2% 1,538,668
South Africa 0.5% 4,647,527
South Korea 0.0% 105,795
Sweden 7.2% 61,912,138
Switzerland 4.6% 39,325,756
Thailand 0.1% 1,251,825
United Kingdom 15.0% 129,490,812
United States++ 35.0% 301,796,015
- ------------------------------------------------------------------------
Total 100.0% $861,385,612
- ------------------------------------------------------------------------
++Includes Short-Term Securities (1.0% excluding Short-Term Securities)
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<PAGE>
Forward Currency Contracts
Open at October 31, 1996
- ------------------------------------------------------------------------
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- --------------------------------
British Pound 11/19/96 5,000,000 $ 8,132,000 ($595,250)
British Pound 1/16/97 1,000,000 1,624,400 (64,400)
British Pound 1/17/97 3,650,000 5,929,060 (277,765)
British Pound 1/27/97 3,358,000 5,453,728 (242,306)
Finnish Markka 11/12/96 3,751,000 825,939 (37,913)
Finnish Markka 1/16/97 1,700,000 376,015 (1,533)
Finnish Markka 1/27/97 850,000 188,153 1,114
French Franc 12/12/96 2,220,000 434,442 (1,441)
French Franc 1/16/97 4,000,000 784,406 (3,156)
German Deutschemark 12/11/96 800,000 528,471 35
German Deutschemark 1/17/97 7,000,000 4,635,455 36,507
German Deutschemark 1/24/97 9,323,000 6,176,626 187,283
German Deutschemark 1/27/97 2,800,000 1,855,411 49,351
Japanese Yen 12/11/96 150,000,000 1,316,325 87,512
Japanese Yen 12/12/96 514,000,000 4,510,616 228,022
Japanese Yen 12/17/96 270,000,000 2,369,406 106,068
Japanese Yen 1/16/97 750,000,000 6,581,973 298,351
Japanese Yen 1/17/97 160,000,000 1,404,155 102,436
South African Rand 11/3/97 11,000,000 2,113,474 (7,001)
Swedish Krona 1/17/97 84,500,000 12,861,687 (45,064)
Swedish Krona 1/27/97 46,000,000 7,003,334 10,681
Swiss Franc 11/12/96 1,671,000 1,319,176 51,620
Swiss Franc 1/16/97 8,500,000 6,754,609 109,696
Swiss Franc 1/27/97 4,000,000 3,181,927 162,275
- ------------------------------------------------------------------------
$86,360,788 $155,122
- ------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
95
<PAGE>
JANUS TWENTY FUND Portfolio Manager, Thomas F. Marsico
Performance
Janus Twenty Fund gained 27.59% during our fiscal year ended October 31,
1996, outperforming the S&P 500 Index, which was up 24.10%. Both returns
include reinvested dividends.
For the 12 months ended October 31, Janus Twenty Fund was ranked 29th out
of 184 capital appreciation funds (top 16%) tracked by Lipper Analytical
Services, a large mutual fund rating company.(1)
Janus Twenty Fund's good returns this year resulted from its ongoing
commitment to stocks, even during the sharp correction in July. In short, we
stayed the course. However, the Fund's priorities were reorganized, especially
its technology, banking, and pharmaceuticals. A large number of special
situations were also added, and the portfolio's composition grew more
concentrated, with fewer, but more compelling, ideas.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 97.4% 96.0%
Foreign 5.6% 13.9%
Top 20 Equity Holdings 86.9% 72.7%
Number of Stocks 28 38
Cash & Fixed-Income Securities 2.6% 4.0%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Wells Fargo 10.3% --
Citicorp 6.4% 5.9%
Chase Manhattan 6.3% --
PepsiCo 5.9% 3.0%
UAL 5.7% --
Lucent Technologies 4.9% --
Nike Inc. 4.6% --
Boeing 4.5% --
Pfizer 4.2% 3.8%
Monsanto 4.0% --
- ------------------------------------------------------------------------
Total 56.8% 12.7%
- ------------------------------------------------------------------------
96
<PAGE>
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Money Center Banks 12.7% 11.5%
Super-Regional Banks 10.3% 2.5%
Beverage - Non-Alcoholic 8.9% 6.1%
Medical - Drug 7.1% 3.8%
Transportation - Airlines 5.7% --
- ------------------------------------------------------------------------
The Year in Review
A major reorganization occurred in technology, which fell to
approximately 13% of assets from over 25% when the year began. Most
semiconductor and equipment manufacturers were sold and replaced by Internet
and network (client server) providers, such as Microsoft, Ascend
Communications, and more recently, Lucent Technologies.
The money center banks reorganized themselves. Chase Manhattan was
acquired by Chemical Banking and Wells Fargo acquired First Interstate. Our
money center banks, including Citicorp, are pursuing higher-margin products
and international opportunities. They are also using excess capital to
repurchase their own stock. Wells Fargo is buying in 7% to 8% of its shares
annually. Many of the Fund's other holdings - Merrill Lynch and First Data
Corporation to name just two - also have proactive stock repurchase programs.
In the pharmaceutical sector, the strategy was to build positions in
companies with the strongest product pipelines. Thus Eli Lilly was added to
existing positions in Pfizer and SmithKline Beecham. Amgen, Merck, and Roche
were let go at a profit.
Finally, our research effort uncovered a number of special situations,
including Nike, Boeing, GE, Monsanto, and Danka Business Systems, all with
exciting prospects.
Stock Highlights
The potential of the Internet is enormous. Microsoft's NT and Windows 95
operating systems should set the software standard for both the Internet and
broad networking communications in general. Cisco, Ascend, and Lucent
Technologies are likely to be among the dominant franchises on the equipment
side. Their products encompass a huge share of the networking and
telecommunications hardware spectrum. These companies also have the size and
flexibility to stay out front in new product development.
Danka Business Systems climbed over 35% this year. The stock serves as an
example of how patience and detailed research can pay off. Danka markets and
services copiers and other office equipment. The company stands to be one of
the dominant competitors in an industry that is consolidating and that is also
benefiting from a growing trend toward outsourcing copier and printing
operations. Costs associated with the company's rapid growth impacted second
quarter results, however, and the stock declined. Our research indicated the
97
<PAGE>
setback was temporary, and I added to the position while the stock was down.
We estimate that Danka should grow 25% to 30% annually over the next three
years.
In the loss column, I sold Micron and Texas Instruments as technology
stocks declined. Growth at the companies was slowing due to lower DRAM
(dynamic random access memory) demand, and opportunities in the networking
area seemed more attractive.
Current Strategy and Outlook
The positive interest rate environment is currently a strong pillar
supporting equity valuations. Rapid earnings growth should also support
expansions in price-to-earnings multiples (PEs) at the companies we own. These
companies have the ability to dominate large markets, both global and
domestic. As long as economic growth remains moderate, inflation low, and U.S.
business continues to be cost-conscious and aggressive, I expect solid returns
from equities. Until these conditions change, I intend to stay the course.
Thank you for your investment in Janus Twenty Fund.
- ------------------------------------------------------------------------
(1) A Capital Appreciation Fund is defined by Lipper as one which "aims at
maximum capital appreciation, frequently by means of 100% or more
portfolio turnover, leveraging, purchasing unregistered securities,
purchasing options, etc. The fund may take large cash positions." As of
October 31, 1996, Janus Twenty Fund ranked 43/81 Capital Appreciation
Funds for the 5-year period, and was 7/55 for the 10-year period. This
ranking is based on total return, including reinvestment of dividends and
capital gains for the stated period. Past performance is not predictive of
future results.
98
<PAGE>
JANUS TWENTY FUND Portfolio Manager, Thomas F. Marsico
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Twenty Fund and the S&P 500 Index. Janus Twenty Fund is
represented by a solid green line. The S&P 500 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, April 30, 1985,
through October 31, 1996. The upper right quadrant reflects the ending value
of the hypothetical investment in Janus Twenty Fund ($57,857) as compared to
the S&P 500 Index ($52,556). There is a legend in the upper left quadrant of
the graph which indicates Janus Twenty Fund's one-year, five-year, ten-year
and since inception (April 30, 1985) average annual total returns as 27.59%,
13.52%, 16.20% and 16.49%, respectively.
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 TWENTY FUND October 31, 1996
- ------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 97.4%
- ------------------------------------------------------------------------
Aerospace and Defense - 4.5%
1,862,800 Boeing Co. $177,664,550
- ------------------------------------------------------------------------
Apparel Manufacturers - 1.7%
984,875 Gucci Group N.V. 67,956,375
- ------------------------------------------------------------------------
Athletic Footwear - 5.3%
407,850 Fila Holdings S.p.A. (ADR) 29,365,200
3,066,480 Nike, Inc. - Class B 180,539,010
- ------------------------------------------------------------------------
209,904,210
99
<PAGE>
- ------------------------------------------------------------------------
Beverages - Non-Alcoholic - 8.9%
2,374,200 Coca-Cola Co. 119,897,100
7,796,800 PepsiCo, Inc. 230,980,200
- ------------------------------------------------------------------------
350,877,300
- ------------------------------------------------------------------------
Building - Heavy Construction - 0.2%
100,000 Fluor Corp. 6,550,000
- ------------------------------------------------------------------------
Casino Hotels - 2.4%
4,353,875 Mirage Resorts, Inc.* 95,785,250
- ------------------------------------------------------------------------
Chemicals - Diversified - 4.0%
3,991,175 Monsanto Co. 158,150,309
- ------------------------------------------------------------------------
Computer Software - 3.0%
860,700 Microsoft Corp.* 118,131,075
- ------------------------------------------------------------------------
Computers - Mainframe - 1.6%
475,100 IBM Corp. 61,287,900
- ------------------------------------------------------------------------
Data Processing and Management - 3.5%
1,750,498 First Data Corp. 139,602,215
- ------------------------------------------------------------------------
Diversified Operations - 3.0%
1,203,400 General Electric Co. 116,428,950
- ------------------------------------------------------------------------
Electronic Components - 2.6%
939,875 Intel Corp. 103,268,766
- ------------------------------------------------------------------------
Finance - Consumer Loans - 1.7%
1,558,550 Associates First Capital Corp. 67,602,106
- ------------------------------------------------------------------------
Finance - Investment Banker and Broker - 2.8%
1,558,750 Merrill Lynch & Co., Inc. 109,502,187
- ------------------------------------------------------------------------
Finance - Mortgage Loan Banker - 2.0%
2,051,775 Federal National Mortgage
Association 80,275,697
- ------------------------------------------------------------------------
Medical - Drugs - 7.1%
1,644,875 Eli Lilly & Co. 115,963,688
1,985,020 Pfizer, Inc. 164,260,405
- ------------------------------------------------------------------------
280,224,093
- ------------------------------------------------------------------------
100
<PAGE>
Money Center Banks - 12.7%
2,869,450 Chase Manhattan Corp. 246,055,338
2,551,350 Citicorp 252,583,650
- ------------------------------------------------------------------------
498,638,988
- ------------------------------------------------------------------------
Networking Products - 3.9%
2,472,150 Cisco Systems, Inc.* 152,964,281
- ------------------------------------------------------------------------
Office Automation and Equipment - 3.1%
3,078,675 Danka Business
Systems PLC (ADR)# 121,992,497
- ------------------------------------------------------------------------
Printers and Related Products - 1.5%
815,850 Electronics for Imaging, Inc.* 58,741,200
- ------------------------------------------------------------------------
Super-Regional Banks - 10.3%
1,512,200 Wells Fargo & Co. 403,946,425
- ------------------------------------------------------------------------
Telecommunication Equipment - 1.0%
582,300 Ascend Communications, Inc.* 38,067,863
- ------------------------------------------------------------------------
Telecommunication Services - 4.9%
4,075,600 Lucent Technologies, Inc. 191,553,200
- ------------------------------------------------------------------------
Transportation - Airlines - 5.7%
4,773,600 UAL Corp.*,# 226,149,300
- ------------------------------------------------------------------------
Total Common Stock (cost $3,235,621,744) 3,835,264,737
- ------------------------------------------------------------------------
Corporate Bonds - 1.3%
- ------------------------------------------------------------------------
Building and Construction - 1.3%
$51,000,000 M.D.C. Holdings, Inc., 11.125% notes,
due 12/15/03
(cost $47,714,048) 51,000,000
- ------------------------------------------------------------------------
Short-Term Corporate Notes - 1.1%
Coca-Cola Co.
25,000,000 5.29%, 11/1/96 25,000,000
Prudential Funding Corp.
18,900,000 5.50%, 11/1/96 18,900,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $43,900,000) 43,900,000
- ------------------------------------------------------------------------
Total Investments
(total cost $3,327,235,792) - 99.8% 3,930,164,737
- ------------------------------------------------------------------------
101
<PAGE>
Cash, Receivables and
Other Assets, net of Liabilities - 0.2% 7,279,276
- ------------------------------------------------------------------------
Net Assets - 100% $3,937,444,013
- ------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Italy 2.5% $ 97,321,575
United Kingdom 3.1% 121,992,497
United States++ 94.4% 3,710,850,665
- ------------------------------------------------------------------------
Total 100.0% $3,930,164,737
- ------------------------------------------------------------------------
++Includes Short-Term Securities (93.3% excluding Short-Term Securities)
See Notes to Schedule of Investments
- ------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
102
<PAGE>
JANUS VENTURE FUND Portfolio Manager, James P. Goff and Warren B. Lammert
Performance
Janus Venture Fund gained 9.28% during our fiscal year ended October 31,
1996, versus a gain of 16.61% for the Russell 2000 Index. Both returns include
reinvested dividends.
Janus Venture Fund was competitive with the Index for much of the year,
but fell behind when individual earnings disappointments hurt results in
October. Several health care positions declined when new products failed to
develop as expected. Wireless communications companies did not perform well
either due to concerns about competition from personal communications systems
(PCS) - even though the fundamentals of companies like Paging Network are
right on track. In retrospect, we underestimated the impact of negative
investor psychology on the wireless group.
We are very disappointed with the Fund's performance this year. Every
portfolio manager hits a cold spell from time to time, and we did in fiscal
1996. Beginning in calendar 1997, Jim will take over management of Janus
Venture Fund. This will allow Warren to focus on Janus Mercury Fund, which he
also manages and which has grown considerably in size over the past two years.
Janus Venture Fund has a very good long-term record. Jim and our research team
at Janus are dedicated to maintaining that record. In the long run, intensive,
hands-on research is the key to finding good companies and beating the market
averages. Janus' research discipline is dedicated to that effort.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 97.8% 93.9%
Foreign 10.0% 11.0%
Number of Stocks 177 183
Cash & Fixed-Income Securities 2.2% 6.1%
- ------------------------------------------------------------------------
103
<PAGE>
- ------------------------------------------------------------------------
Top 10 Equity Holdings October 31, 1996 October 31, 1995
Wisconsin Central 6.9% 4.2%
Fastenal Corp. 4.6% --
Paging Network 3.6% 4.3%
Papa Johns 3.1% 1.6%
Global DirectMail 2.9% --
Mineral Technologies 2.8% 2.9%
Rentokil Initial 2.6% --
Culligan Water 2.2% --
Omnipoint Corp. 1.9% --
Wetherspoon (J.D.) 1.7% 0.7%
- ------------------------------------------------------------------------
Total 32.3% 13.7%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Transportation - Railroad 7.2% 4.2%
Computer Services 6.1% 8.8%
Building Products 4.6% --
Retail - Mail Order 4.3% 0.7%
Retail - Restaurants 4.3% 4.2%
- ------------------------------------------------------------------------
The Year In Review
Small-cap equities have been very volatile this year. In the spring, when
larger stocks hesitated, small stocks surged ahead. But the July downdraft hit
small-caps hardest. They were pounded by indiscriminate selling when interest
rates backed up above 7%. When the broad market recovered and went on to
rally, small-caps staged only a moderate comeback.
The portfolio remained diversified throughout the year, with modest
weightings in restaurants, technology, industrial suppliers, and as we
mentioned earlier, wireless communications and health care. We also owned a
number of special situations.
Stock Highlights
One the portfolio's best performers this year was Wisconsin Central, the
short-haul railroad. Wisconsin Central's rail system is especially lucrative
because it contains points of origin and terminus, which generate higher fees,
along the Canadian border. The railroad's management has also made some very
astute investments. When New Zealand and Britain privatized their freight rail
systems, Wisconsin Central was the buyer. The company intends to acquire other
privatizing rail systems, and is also in the market for rail lines contiguous
to its present tracks.
Papa John's, which owns a chain of pizza take-out and delivery
restaurants, also performed well. The company maintains excellent quality
104
<PAGE>
control by serving a limited menu with the highest-quality ingredients of any
quick-service pizza operator. Papa John's is rapidly opening new stores across
the Western U.S. Earnings are growing at an annual clip of 35%-plus.
Premier Parks owns and operates amusement parks. Premier acquires single-
owner parks, which typically cannot afford larger rides, then upgrades the
rides and facilities. Revenues and earnings are growing 20%-plus annually.
This year we took profits in lodging and real estate franchisor HFS,
which has been a great performer but got ahead of itself. Several technology
stocks also did well and were sold: Growth slowed at German business software
developer SAP; StataCom was purchased by Cisco Systems; and Westell
Technologies, a manufacturer of telecommunications equipment, hit our price
target after more than doubling in value. Arch Communications, Sunglass Hut,
Exogen, and Baby Superstores were let go at losses. Arch was sold because its
product line lacked exposure to voice paging, which we expect to be a major
driver of growth in the paging industry. Sunglass Hut suffered earnings
disappointments. Exogen's new product to accelerate the healing of broken
bones was slow to ramp up sales, and Baby Superstores, which had a very good
concept, did not execute on it.
Strategy Going Forward
Intensive, fundamental research can add a lot to performance in the
small-cap sector. Many small companies are either under-followed by Wall
Street or not followed at all, so detailed analysis can turn up very good
opportunities. In the long run, if we do our homework, Janus Venture Fund
should post solid results.
Thank you for your continued investment in Janus Venture Fund.
105
<PAGE>
JANUS VENTURE FUND Portfolio Managers, James P. Goff and Warren B. Lammert
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Venture Fund and the Russell 2000 Index. Janus Venture
Fund is represented by a solid green line. The Russell 2000 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,
April 30, 1985, through October 31, 1996. The upper right quadrant reflects
the ending value of the hypothetical investment in Janus Venture Fund
($59,518) as compared to the Russell 2000 Index ($36,700). There is a legend
in the upper left quadrant of the graph which indicates Janus Fund's one-year,
five-year, ten-year and since inception (April 30, 1985) average annual total
returns as 9.28%, 12.32%, 15.23% and 16.78%, respectively.
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 VENTURE FUND October 31, 1996
- ------------------------------------------------------------------------
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 97.6%
- ------------------------------------------------------------------------
Advertising Services - 0.3%
83,875 Outdoor Systems, Inc.* $ 3,753,406
76,500 Universal Outdoor Holdings, Inc.* 2,247,188
- ------------------------------------------------------------------------
6,000,594
- ------------------------------------------------------------------------
Aerospace and Defense - 0.2%
50,000 Ducommun, Inc.* 956,250
- ------------------------------------------------------------------------
Applications Software - 0.1%
50,000 Clarify, Inc.* 2,412,500
- ------------------------------------------------------------------------
Athletic Footwear - 0%
30,000 Vans, Inc.* 498,750
- ------------------------------------------------------------------------
106
<PAGE>
Auto Parts - Retail and Wholesale - 2.7%
1,057,500 APS Holding Corp. - Class A*,# 21,943,125
692,500 O'Reilly Automotive, Inc.*,# 24,497,188
- ------------------------------------------------------------------------
46,440,313
- ------------------------------------------------------------------------
Automotive - Cars and Light Trucks - 0.5%
246,400 United Auto Group, Inc.* 8,470,000
- ------------------------------------------------------------------------
Automotive - Truck Parts and Equipment - 0.3%
250,000 Federal Mogul Corp.* 5,593,750
- ------------------------------------------------------------------------
Broadcast Media - 1.4%
1,500,000 Heritage Media Corp.
- Class A*,# 22,875,000
- ------------------------------------------------------------------------
Building - Construction Products - 0.2%
300,000 Dayton Superior Corp.*,# 3,150,000
- ------------------------------------------------------------------------
Building - Mobile and Manufactured Homes - 0.2%
248,563 Southern Energy Homes,Inc.*,# 3,697,367
- ------------------------------------------------------------------------
Building Products - Retail and Wholesale - 4.6%
1,714,175 Fastenal Co. 79,280,594
- ------------------------------------------------------------------------
Cable Television - 0.3%
192,725 Heartland Wireless
Communications, Inc.* 4,191,769
- ------------------------------------------------------------------------
Casino Services - 1.4%
138,000 Anchor Gaming* 6,900,000
973,375 Sodak Gaming, Inc.* 17,642,422
- ------------------------------------------------------------------------
24,542,422
- ------------------------------------------------------------------------
Cellular Telecommunications - 3.0%
800,000 CommNet Cellular, Inc.*,# 22,200,000
269,650 Millicom International
Cellular S.A.* 10,718,588
1,539,543 PriCellular Corp. - Class A*,# 17,704,744
200,000 Rural Cellular Corp. - Class A* 2,000,000
- ------------------------------------------------------------------------
52,623,332
- ------------------------------------------------------------------------
Chemicals - Specialty - 2.8%
1,232,845 Minerals Technologies, Inc.# 48,389,166
- ------------------------------------------------------------------------
107
<PAGE>
Commercial Banks - 1.1%
75,000 First Empire State Corp. 19,256,250
- ------------------------------------------------------------------------
Commercial Services - 3.9%
198,600 Central Parking Corp. $ 6,876,525
150,175 Cohr, Inc.* 3,679,288
1,095,963 CUC International, Inc.* 26,851,081
75,000 IntelliQuest Information
Group, Inc.* 1,650,000
171,750 NCS HealthCare, Inc. - Class A* 5,216,906
587,775 Profit Recovery Group
International, Inc. (The)* 8,963,569
125,000 Snyder Communications, Inc.* 2,437,500
391,750 TeleTech Holdings, Inc.* 12,536,000
- ------------------------------------------------------------------------
68,210,869
- ------------------------------------------------------------------------
Computer Services - 6.1%
840,000 Analysts International Corp.# 21,000,000
650,000 Bell & Howell Co.*,# 17,387,500
75,250 CIBER, Inc.* 2,671,375
125,000 Envoy Corp.* 4,593,750
100,000 Gartner Group, Inc. - Class A* 3,075,000
807,616 Getronics N.V.** 19,808,015
97,450 Renaissance Solutions, Inc.* 3,922,363
493,525 Safeguard Scientifics, Inc.* 19,617,619
383,662 Technology Solutions Co.* 14,914,860
- ------------------------------------------------------------------------
106,990,482
- ------------------------------------------------------------------------
Computer Software - 0.4%
20,000 Claremont Technology Group, Inc.* 610,000
78,600 Integrated Systems, Inc.* 2,122,200
24,509 SAP A.G.** 3,290,904
5,000 Transaction Systems
Architects, Inc.* 207,500
- ------------------------------------------------------------------------
6,230,604
- ------------------------------------------------------------------------
Consulting Services - 0.1%
30,000 High Co.* 1,317,767
- ------------------------------------------------------------------------
Containers - Paper and Plastic - 1.9%
222,200 Intertape Polymer Group, Inc. 5,110,600
731,650 Sealed Air Corp.* 28,442,894
- ------------------------------------------------------------------------
33,553,494
- ------------------------------------------------------------------------
108
<PAGE>
Data Processing and Management - 1.9%
55,787 Concord EFS, Inc.* 1,617,823
132,500 First USA Paymentech, Inc.* 4,902,500
579,575 Keane, Inc.*,# 26,877,791
- ------------------------------------------------------------------------
33,398,114
- ------------------------------------------------------------------------
Diagnostic Kits - 0%
30,900 Meridian Diagnostics, Inc. 324,450
- ------------------------------------------------------------------------
Diversified Financial Services - 0.4%
361,975 National Processing, Inc.* 6,877,525
- ------------------------------------------------------------------------
Diversified Operations - 2.9%
116,126 Metra Oy - Class B** 6,464,931
6,689,183 Rentokil Initial PLC** 44,896,375
- ------------------------------------------------------------------------
51,361,306
- ------------------------------------------------------------------------
Drug Delivery Systems - 0.9%
216,900 Atrix Laboratories, Inc.* 2,033,438
600,000 DepoTech Corp.*,# 9,375,000
403,000 TheraTech, Inc.* 4,458,187
- ------------------------------------------------------------------------
15,866,625
- ------------------------------------------------------------------------
Educational Software - 0.6%
385,000 Computer Learning Centers,
Inc.*,# $10,298,750
- ------------------------------------------------------------------------
Electric - Integrated - 0.3%
300,000 Tucson Electric Power Co.* 5,925,000
- ------------------------------------------------------------------------
Electric Products - 1.3%
561,925 Littelfuse, Inc.*,# 23,179,406
- ------------------------------------------------------------------------
Electronic Components - 0.2%
277,600 Channell Commercial Corp.* 3,244,450
- ------------------------------------------------------------------------
Electronic Measuring Instruments - 0.1%
95,050 Itron, Inc.* 1,580,206
- ------------------------------------------------------------------------
Electronic Parts Distributors - 0.1%
105,700 American Residential Services,
Inc.* 2,008,300
- ------------------------------------------------------------------------
Electronic Safety Devices - 0.4%
151,762 Pittway Corp. - Class A* 7,398,397
- ------------------------------------------------------------------------
109
<PAGE>
Equipment Rental - 1.7%
527,600 Coinmach Laundry Corp.*,# 9,496,800
190,700 Prime Service, Inc.* 4,481,450
856,200 Renters Choice, Inc.* 16,267,800
- ------------------------------------------------------------------------
30,246,050
- ------------------------------------------------------------------------
Extended Service Contracts - 0.2%
238,200 Warrantech Corp.* 2,917,950
- ------------------------------------------------------------------------
Fiber Optics - 0.1%
73,000 Galileo Electro-Optics Corp.* 1,606,000
- ------------------------------------------------------------------------
Film Processing - 0.9%
34,758 Fotolabo S.A.** 13,541,366
12,589 Grand Optical Photoservice 1,826,060
- ------------------------------------------------------------------------
15,367,426
- ------------------------------------------------------------------------
Finance - Auto Loans - 1.1%
577,000 AmeriCredit Corp.* 10,963,000
628,750 Jayhawk Acceptance Corp.* 8,959,688
- ------------------------------------------------------------------------
19,922,688
- ------------------------------------------------------------------------
Finance - Consumer Loans - 0.1%
62,500 Central Financial Acceptance
Corp.* 1,343,750
- ------------------------------------------------------------------------
Finance - Mortgage Loan Banker - 0.3%
176,000 First Financial Caribbean Corp. 4,532,000
- ------------------------------------------------------------------------
Finance - Other Services - 0.8%
200,000 AMRESCO, Inc.* 4,225,000
165,375 Insignia Financial Group, Inc.
- Class A* 3,576,234
391,825 Medallion Financial Corp.* 5,632,484
41,875 Metris Companies, Inc.* 994,531
- ------------------------------------------------------------------------
14,428,249
- ------------------------------------------------------------------------
Food Items - Wholesale - 1.2%
928,550 J.P. Foodservice, Inc.*,# 20,660,238
- ------------------------------------------------------------------------
Footwear and Related Apparel - 0.5%
328,524 Wolverine World Wide, Inc. 8,130,969
- ------------------------------------------------------------------------
110
<PAGE>
Funeral Services - 0%
45,000 York Group, Inc. (The) 753,750
- ------------------------------------------------------------------------
Golf - 1.0%
571,100 Family Golf Centers, Inc.* 16,776,062
65,000 MetroGolf, Inc.* 394,063
- ------------------------------------------------------------------------
17,170,125
- ------------------------------------------------------------------------
Health Care Services - 0.3%
145,500 Pediatrix Medical Group, Inc.* 5,729,062
- ------------------------------------------------------------------------
Home Furnishings - 0.1%
634,782 Pagnossin S.p.A.** 2,309,401
- ------------------------------------------------------------------------
Hotels and Motels - 0.6%
245,800 Homegate Hospitality, Inc.* 2,150,750
66,650 Interstate Hotels Co.* 1,799,550
165,800 Renaissance Hotel Group N.V.* 3,046,575
182,100 StudioPLUS Hotels, Inc.* 3,209,513
- ------------------------------------------------------------------------
10,206,388
- ------------------------------------------------------------------------
Human Resources - 1.1%
549,875 Alternative Resources Corp.* 11,066,234
100,000 Barrett Business Services, Inc.* 1,650,000
479,175 Labor Ready, Inc.* 6,888,141
- ------------------------------------------------------------------------
19,604,375
- ------------------------------------------------------------------------
Lasers - Systems and Components - 0.2%
85,100 Coherent, Inc.* 3,318,900
- ------------------------------------------------------------------------
Leisure and Recreation Services - 0.2%
1,000,000 Q-Zar, Inc.* 4,125,000
- ------------------------------------------------------------------------
Life and Health Insurance - 2.5%
277,525 CompDent Corp.* $ 9,539,922
100,000 PennCorp Financial Group, Inc. 3,462,500
525,275 Protective Life Corp. 18,121,987
1,662,000 PT Lippo Life Insurance 1,284,886
438,950 UICI* 11,193,225
- ------------------------------------------------------------------------
43,602,520
- ------------------------------------------------------------------------
Lighting Products and Systems - 0.3%
155,000 Chicago Miniature Lamp, Inc.* 4,611,250
- ------------------------------------------------------------------------
111
<PAGE>
Machine Tools and Related Products - 0.4%
2,277,688 Gildemeister Italiana S.p.A.**,# 6,901,630
- ------------------------------------------------------------------------
Machinery - General Industrial - 0.3%
198,150 Rental Service Corp.* 4,557,450
- ------------------------------------------------------------------------
Machinery - Pumps - 0.1%
129,725 Pfeiffer Vacuum Technology
A.G. (ADR)*,** 2,075,600
- ------------------------------------------------------------------------
Medical - Biomedical and Genetic - 0.6%
165,000 Curative Technologies, Inc.* 3,753,750
231,050 NeXstar Pharmaceuticals, Inc.* 3,610,156
162,750 QLT Phototherapeutics, Inc.* 2,909,156
- ------------------------------------------------------------------------
10,273,062
- ------------------------------------------------------------------------
Medical - Drugs - 0.3%
772,000 Matrix Pharmaceutical, Inc.* 5,838,250
- ------------------------------------------------------------------------
Medical Instruments - 1.3%
192,500 Arterial Vascular Engineering,
Inc.* 2,983,750
489,700 Biopsys Medical, Inc.*,# 8,386,112
50,000 CardioGenesis Corp.* 612,500
100,000 Heartport, Inc.* 2,637,500
269,700 Intelligent Medical Imaging,
Inc.* 1,685,625
227,100 MiniMed, Inc.* 5,961,375
- ------------------------------------------------------------------------
22,266,862
- ------------------------------------------------------------------------
Medical Labs and Testing Services - 0%
20,000 Collaborative Clinical
Research, Inc.* 280,000
- ------------------------------------------------------------------------
Medical Products - 2.7%
276,900 Arrow International, Inc. 8,099,325
211,300 KeraVision, Inc.* 3,275,150
245,100 Sterile Recoveries, Inc.* 3,553,950
430,000 STERIS Corp.* 16,232,500
210,375 Suburban Ostomy Supply
Co., Inc.* 2,563,945
289,725 Target Therapeutics, Inc.* 10,719,825
335,000 Uroquest Medical Corp.* 2,010,000
- ------------------------------------------------------------------------
46,454,695
- ------------------------------------------------------------------------
112
<PAGE>
Metal - Diversified - 0.2%
1,354,000 Recycling Industries, Inc.*,# 4,146,625
- ------------------------------------------------------------------------
Motion Pictures and Services - 0.3%
150,000 Imax Corp.* 5,400,000
- ------------------------------------------------------------------------
Network Software - 0.8%
400,000 Black Box Corp.* 13,500,000
- ------------------------------------------------------------------------
Networking Products - 0.5%
207,575 Xylan Corp.* 8,303,000
- ------------------------------------------------------------------------
Office Automation and Equipment - 0.3%
50,000 General Binding Corp. 1,237,500
689,750 Indigo N.V.* 3,190,094
- ------------------------------------------------------------------------
4,427,594
- ------------------------------------------------------------------------
Optical Recognition Software - 0.1%
280,000 Optimal Robotics Corp. - Class A* 1,540,000
- ------------------------------------------------------------------------
Optical Supplies - 0%
50,000 Gargoyles, Inc.* 662,500
- ------------------------------------------------------------------------
Pharmacy Services - 0.8%
64,075 MIM Corp.* 352,413
485,450 Omnicare, Inc. 13,228,512
- ------------------------------------------------------------------------
13,580,925
- ------------------------------------------------------------------------
Pollution Control - 0.5%
374,274 Lydall, Inc.* 8,280,812
- ------------------------------------------------------------------------
Property and Casualty Insurance - 0.4%
139,375 Foremost Corp. of America 7,683,047
- ------------------------------------------------------------------------
Racetracks - 0.3%
225,000 Speedway Motorsports, Inc.* 5,146,875
- ------------------------------------------------------------------------
Resorts and Theme Parks - 1.5%
719,400 Premier Parks, Inc.*,# 22,840,950
100,000 Signature Resorts, Inc.* 3,525,000
- ------------------------------------------------------------------------
26,365,950
- ------------------------------------------------------------------------
Respiratory Products - 0.2%
211,450 Respironics, Inc.* $ 3,171,750
- ------------------------------------------------------------------------
113
<PAGE>
Retail - Apparel and Shoe - 0.6%
124,375 Abercrombie & Fitch Co.
- Class A* 2,736,250
451,225 Stage Stores, Inc.* 8,234,856
- ------------------------------------------------------------------------
10,971,106
- ------------------------------------------------------------------------
Retail - Catalog Shopping - 0.4%
267,400 Barnett, Inc.* 6,317,325
- ------------------------------------------------------------------------
Retail - Diversified - 0.5%
297,184 Eurobike A.G.*,**,# 6,559,273
125,000 Mail Boxes Etc.* 2,546,875
- ------------------------------------------------------------------------
9,106,148
- ------------------------------------------------------------------------
Retail - Home Furnishings - 0.2%
313,900 Rent-Way, Inc.*,# 3,688,325
- ------------------------------------------------------------------------
Retail - Mail Order - 4.3%
1,024,725 Global DirectMail Corp.* 50,467,706
386,075 MSC Industrial Direct Co.,
Inc. - Class A*,# 14,284,775
100,000 Viking Office Products, Inc.* 2,912,500
296,350 Wilmar Industries, Inc.* 6,371,525
- ------------------------------------------------------------------------
74,036,506
- ------------------------------------------------------------------------
Retail - Pet Food and Supplies - 0.4%
314,488 Petco Animal Supplies, Inc.* 7,390,456
- ------------------------------------------------------------------------
Retail - Pubs - 1.8%
1,567,155 Wetherspoon (J.D.) PLC** 30,242,026
- ------------------------------------------------------------------------
Retail - Restaurants - 4.3%
1,069,163 Papa John's International,
Inc.*,# 53,190,859
651,546 PizzaExpress PLC** 5,438,470
791,600 Pizza Co., Ltd. 5,275,471
164,075 PJ America, Inc.* 2,625,200
371,100 Quality Dining, Inc.*,# 7,978,650
- ------------------------------------------------------------------------
74,508,650
- ------------------------------------------------------------------------
114
<PAGE>
Retirement and Aged Care - 1.0%
295,925 ARV Assisted Living, Inc.* 3,625,081
252,200 Karrington Health, Inc.* 3,972,150
455,275 Sunrise Assisted Living, Inc.* 10,471,325
- ------------------------------------------------------------------------
18,068,556
- ------------------------------------------------------------------------
Savings/Loan/Thrifts - 0.5%
232,100 Home Bancorp of Elgin, Inc.* 2,901,250
406,225 Klamath First Bancorp, Inc.# 5,712,539
- ------------------------------------------------------------------------
8,613,789
- ------------------------------------------------------------------------
Schools - 0.6%
270,000 Education Management Corp.* 4,421,250
590,000 Educational Medical, Inc.*,# 5,918,438
- ------------------------------------------------------------------------
10,339,688
- ------------------------------------------------------------------------
Telecommunication Services - 3.5%
87,500 Clearnet Communications, Inc.
- Class A* 1,290,625
190,947 MFS Communications Co., Inc.* 9,571,218
1,240,525 Omnipoint Corp.* 33,804,306
339,025 Premiere Technologies, Inc.* 5,509,156
284,475 Teleport Communications Group,
Inc. - Class A* 6,969,638
317,100 Transaction Network Services,
Inc.* 4,320,487
- ------------------------------------------------------------------------
61,465,430
- ------------------------------------------------------------------------
Telephone - Integrated - 0.5%
169,900 Cincinnati Bell, Inc. 8,388,813
- ------------------------------------------------------------------------
Theaters - 0.2%
129,650 Regal Cinemas, Inc.* 3,370,900
- ------------------------------------------------------------------------
Transportation - Airlines - 0.1%
66,200 Atlas Air, Inc.* 2,441,125
- ------------------------------------------------------------------------
115
<PAGE>
Transportation - Railroad - 7.2%
194,600 ABC Rail Products Corp.*,# 2,943,325
92,000 Genesee & Wyoming, Inc. -
Class A* 2,852,000
3,328,000 Wisconsin Central
Transportation Corp.*,# 119,808,000
- ------------------------------------------------------------------------
125,603,325
- ------------------------------------------------------------------------
Veterinary Diagnostics - 0.1%
127,900 Veterinary Centers of
America, Inc.* 2,350,163
- ------------------------------------------------------------------------
Water Treatment Services - 2.4%
1,035,700 Culligan Water Technologies,
Inc.*,# 38,838,750
200,000 Cuno, Inc.* 3,200,000
- ------------------------------------------------------------------------
42,038,750
- ------------------------------------------------------------------------
Wireless Telecommunications - 3.6%
3,702,725 Paging Network, Inc.* 63,409,165
- ------------------------------------------------------------------------
Total Common Stock (cost $1,357,723,302) 1,699,936,766
- ------------------------------------------------------------------------
Warrants - 0.2%
105,125 Littelfuse, Inc. - exp.
12/31/01* (cost $1,822,564) 3,469,125
- ------------------------------------------------------------------------
Short-Term Corporate Notes - 1.7%
Coca-Cola Co.
$25,000,000 5.30%, 11/7/96 24,977,917
General Electric Capital Corp.
4,400,000 5.55%, 11/1/96 4,400,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $29,377,917) 29,377,917
- ------------------------------------------------------------------------
U.S Government Agency - 0.9%
Federal Home Loan Mortgage Corp.
15,000,000 5.27%, 11/25/96
(amortized cost $14,947,300) 14,947,300
- ------------------------------------------------------------------------
Total Investments (total cost $1,403,871,083)
- 100.4% 1,747,731,108
- ------------------------------------------------------------------------
Liabilities, net of Cash,
Receivables and Other Assets - (0.4%) (6,415,025)
- ------------------------------------------------------------------------
116
<PAGE>
Net Assets - 100% $1,741,316,083
- ------------------------------------------------------------------------
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Canada 0.3% $ 5,110,600
Finland 0.4% 6,464,931
France 0.2% 3,143,827
Germany 0.7% 11,925,777
Indonesia 0.1% 1,284,886
Italy 0.5% 9,211,031
Luxembourg 0.6% 10,718,588
Netherlands 1.3% 22,998,109
Puerto Rico 0.2% 4,532,000
Switzerland 0.8% 13,541,366
Thailand 0.3% 5,275,471
United Kingdom 4.6% 80,576,871
United States++ 90.0% 1,572,947,651
- ------------------------------------------------------------------------
Total 100.0% $1,747,731,108
- ------------------------------------------------------------------------
++Includes Short-Term Securities (87.4% excluding Short-Term Securities)
- ------------------------------------------------------------------------
117
<PAGE>
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- ------------------------------------------------------------------------
British Pound 11/25/96 7,700,000 $12,521,740 ($ 901,670)
British Pound 12/4/96 2,977,000 4,840,304 (253,640)
British Pound 12/11/96 6,925,000 11,257,280 (508,988)
British Pound 1/24/97 1,000,000 1,624,200 (73,900)
Dutch Guilder 1/24/97 1,400,000 828,255 23,559
Dutch Guilder 3/12/97 13,650,000 8,100,890 146,844
Finnish Markka 11/12/96 6,916,000 1,522,845 (71,428)
Finnish Markka 1/24/97 2,000,000 442,615 4,812
Finnish Markka 1/27/97 13,285,000 2,940,721 19,804
German Deutschemark 7,277,000 4,804,886 9,537
12/4/96
German Deutschemark 2,936,000 1,947,208 56,888
2/10/97
German Deutschemark 1,000,000 663,306 19,288
2/12/97
Italian Lira 1/24/97 1,750,000,000 1,146,924 (1,373)
Italian Lira 1/27/97 900,000,000 589,747 (3,141)
Italian Lira 3/12/97 5,975,000,000 3,908,132 673
Swiss Franc 3/12/97 11,800,000 9,427,179 406,154
- ------------------------------------------------------------------------
$66,566,232 ($1,126,581)
- ------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
118
<PAGE>
JANUS WORLDWIDE FUND Portfolio Manager, Helen Young Hayes
Performance
Janus Worldwide Fund gained 31.0% for our fiscal year ended October 31,
1996, substantially outperforming the Morgan Stanley Capital International
World Index, which returned 9.24%. Both returns include net dividends
reinvested.(1)
For the period ending October 31, Janus Worldwide Fund ranked 4th out of
153 global funds (top 3%) tracked by Lipper Analytical Services,(2) a large
mutual fund rating company.
The Fund outperformed the Morgan Stanley Index by such a wide margin
because our research found a large number of excellent individual
opportunities, many of which were underfollowed by global investors. As a
result, we were often able to establish a position early, while the stock was
still inexpensive. We also uncovered niche pockets of faster growth in Europe,
in areas such as software development, information technology and management,
and pharmaceuticals. And finally, we bought well during the July decline,
especially in the U.S., where many stocks declined to attractive prices.
- ------------------------------------------------------------------------
Portfolio Profile October 31, 1996 October 31, 1995
Equities 80.3% 93.7%
Foreign 71.0% 79.0%
Number of Stocks 186 130
Cash & Fixed-Income Securities 18.3% 6.3%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 10 Holdings October 31, 1996 October 31, 1995
Rentokil Initial PLC 4.5% --
Hays PLC 3.2% --
Wells Fargo & Co. 2.3% --
Securitas A.B. - Class B 2.1% 1.9%
N.V. Bedrijven 2.0% 0.4%
Lagardere Groupe 1.8% --
Kennevik A.B. - Class B 1.6% 5.1%
Adidas A.G. 1.6% --
Ciba-Geigy Corp. A.G. 1.5% 2.3%
Getronics N.V. 1.5% 2.1%
- ------------------------------------------------------------------------
Total 22.1% 11.8%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 5 Industries October 31, 1996 October 31, 1995
Diversified Operations 12.1% 7.8%
Medical - Drugs 6.6% --
Money Center Banks 5.3% 3.8%
119
<PAGE>
Computer Services 4.1% 6.1%
Food - Dairy Products 3.0% 0.4%
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Top 5 Countries October 31, 1996 October 31, 1995
United Kingdom 14.0% 2.1%
United States 10.5% 16.3%
Germany 8.0% 9.5%
Sweden 7.6% 12.5%
Netherlands 7.1% 6.2%
- ------------------------------------------------------------------------
The Year in Review
The Fund was widely diversified throughout the year. Individual
stockpicking determined portfolio contents. However, several powerful secular
trends, such as outsourcing, linked selected positions. Our outsourcing
companies contract to supply other businesses with a wide array of specialized
services, from pest control to white-collar management and information
technology. The trend toward computerization is increasing productivity. Many
of our holdings develop software and equipment for the fast-growing global
systems and networking markets. The ability of new drugs to deliver
inexpensive treatments for a variety of serious diseases is another exciting
trend. Our drug stocks have good earnings potential and exciting product
pipelines.
Stock Highlights
Rentokil has performed well this year. A beneficiary of the outsourcing
trend, the company provides a variety of commercial services, from plants and
pest control to hospital waste management and disposal. The company is
extremely well-managed. Its strong performance the last three months was
driven by its acquisition of a major competitor, whose operations it is
quickly streamlining. The market has also awakened to the fact that Rentokil
is producing a powerful and consistent earnings stream through its expanding
global operations.
Danka Business Systems, a British marketer of copier and other office
equipment, was up over 35%. The company is fast becoming a dominant competitor
in a consolidating industry and is also benefiting from a growing trend toward
outsourcing copier and printing operations. Costs associated with the
company's rapid growth impacted second quarter results, however, and the stock
declined. We determined that the setback was temporary, and I was able to
build a position at lower prices. Our estimates suggest Danka should grow 25%
to 30% annually over the next three years.
Wells Fargo has the best return on equity of any major U.S. bank. The
company has kept its costs low by opening branches in supermarkets and other
high-traffic locations. It was one of the first to utilize ATM machines and
other forms of low-cost electronic banking. Wells Fargo's acquisition of First
120
<PAGE>
Interstate earlier in the year combined a number of complementary divisions
and allows for further significant cost savings.
I took profits in long-time holding Astra, the Swedish pharmaceutical
manufacturer. After two major product launches, earnings slowed. Sun
Microsystems was sold when it met our price targets. Toolex Alpha, a leading
manufacturer of CD ROMs and CD ROM manufacturing equipment, and Japanese
cellular phone producer, DDI, were sold at a loss after earnings
disappointments.
Current Strategy and Outlook
Foreign markets are increasingly diverse. This trend is likely to become
even more pronounced as countries develop stronger, more complex economies.
Foreign markets are also less efficient, and therefore more congenial to
individual stock selection. Going forward, these factors are very positive for
global investing.
Thank you for your continued investment in Janus Worldwide Fund.
- ------------------------------------------------------------------------
(1) Net dividends reinvested are the dividends that remain to be reinvested
after foreign tax obligations have been met. Such obligations vary from
country to country.
(2) A Global Fund is defined by Lipper as one which "invests at least 25% of
its portfolio in securities traded outside the United States and may own U.S.
securities as well." This ranking is based on total return, including
reinvested dividends and capital gains for the stated period. Past performance
is not predictive of future results.
121
<PAGE>
JANUS WORLDWIDE FUND Portfolio Manager, Helen Young Hayes
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical $10,000
investment in Janus Worldwide Fund and the Morgan Stanley International World
Index. Janus Worldwide Fund is represented by a solid green line. The Morgan
Stanley International World 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 15, 1991, through
October 31, 1996. The upper right quadrant reflects the ending value of the
hypothetical investment in Janus Worldwide Fund ($26,707) as compared to the
Morgan Stanley International World Index ($16,189). There is a legend in the
upper left quadrant of the graph which indicates Janus Worldwide Fund's one-
year, five-year and since inception (May 15, 1991) average annual total
returns as 31.00%, 18.15% and 19.72%, respectively.
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 WORLDWIDE FUND October 31, 1996
Shares or
Principal Amount Market Value
- ------------------------------------------------------------------------
Common Stock - 80.3%
- ------------------------------------------------------------------------
Aerospace and Defense - 0.9%
153,125 Boeing Co. $14,604,297
2,226,000 Mitsubishi Heavy
Industries, Ltd.** 17,091,523
66,750 United Technologies Corp. 8,594,063
- ------------------------------------------------------------------------
40,289,883
- ------------------------------------------------------------------------
Apparel Manufacturers - 1.1%
680,875 Gucci Group N.V. 46,980,375
- ------------------------------------------------------------------------
Appliances - Household - 0%
94,244 Moulinex S.A.** 1,803,079
- ------------------------------------------------------------------------
Athletic Footwear - 0%
12,775 Fila Holdings S.p.A. (ADR) 919,800
122
<PAGE>
- ------------------------------------------------------------------------
Audio and Video Products - 0.4%
229,200 Sony Corp.** 13,736,715
47,150 Sony Corp. (ADR)** 2,846,681
- ------------------------------------------------------------------------
16,583,396
- ------------------------------------------------------------------------
Automotive - Cars and Light Trucks - 1.4%
986,000 Honda Motor Co.** 23,533,872
621,367 Mahindra & Mahindra (GDR) 6,213,670
853,300 Tata Engineering &
Locomotive Co., Ltd. 10,559,588
1,474,654 Tata Engineering & Locomotive Co.,
Ltd. (GDR)+ 18,248,843
329,000 Yamaha Motor Co., Ltd.** 2,944,717
- ------------------------------------------------------------------------
61,500,690
- ------------------------------------------------------------------------
Automotive - Medium and Heavy Duty Trucks - 0.3%
2,304,000 Isuzu Motors, Ltd.** 11,382,520
- ------------------------------------------------------------------------
Automotive - Truck Parts and Equipment - 0.2%
2,422,230 LucasVarity PLC*,** 9,813,397
- ------------------------------------------------------------------------
Beverages - Non-Alcoholic - 0.6%
893,375 PepsiCo, Inc. 26,466,234
- ------------------------------------------------------------------------
Brewery - 0.2%
597,300 Quilmes Industrial S.A. (ADR)** 6,271,650
- ------------------------------------------------------------------------
Broadcast Media - 0.3%
874,425 CanWest Global
Communications Corp. 9,290,766
28,747 Central European Media
Enterprises, Ltd.* 804,916
283,000 Heritage Media Corp. - Class A* 4,315,750
- ------------------------------------------------------------------------
14,411,432
- ------------------------------------------------------------------------
Broadcast Services and Programming - 0.6%
1,065,500 Grupo Televisa S.A.
de C.V. (GDR)* 27,969,375
- ------------------------------------------------------------------------
Building - Construction Products - 0.4%
781,986 Cimpor-Cimentos de Portugal S.A. 16,393,933
- ------------------------------------------------------------------------
Building - Heavy Construction - 0%
523,600 New World Infrastructure,
Ltd.*,+ 1,303,616
- ------------------------------------------------------------------------
Casino Services - 0%
123
<PAGE>
85,996 London Clubs International PLC** 439,362
- ------------------------------------------------------------------------
Cellular Telecommunications - 0.9%
1,668,525 Korea Mobile Telecommunications,
Inc. (ADR)*,# $20,856,563
197,700 Millicom International
Cellular S.A.* 7,858,575
6,190,805 Telecom Italia Mobile S.p.A. 12,755,970
- ------------------------------------------------------------------------
41,471,108
- ------------------------------------------------------------------------
Chemicals - Diversified - 1.0%
105,075 Cytec Industries, Inc.* 3,756,431
1,040,070 Hoechst A.G.** 39,024,896
- ------------------------------------------------------------------------
42,781,327
- ------------------------------------------------------------------------
Chemicals - Specialty - 0.4%
145,779 SGL Carbon A.G.**,+ 16,375,886
- ------------------------------------------------------------------------
Commercial Banks - 0.5%
35,297 Kookmin Bank (ADR) 736,825
522,742 Nordbanken A.B.** 13,741,527
205,859 Sparbanken Sverige A.B. -
Class A** 3,253,155
175,000 Sumitomo Trust &
Banking Co., Ltd.** 1,934,889
- ------------------------------------------------------------------------
19,666,396
- ------------------------------------------------------------------------
Commercial Services - 0.4%
334,875 CUC International, Inc.* 8,204,438
82,309 Sophus Berendsen A/S - Class B** 10,139,463
- ------------------------------------------------------------------------
18,343,901
- ------------------------------------------------------------------------
Computer Services - 4.1%
355,061 Axime S.A.*,**,# 37,916,242
17,216 Cap Gemini Sogeti S.A.*,** 836,887
112,050 Electronic Data Systems Corp. 5,042,250
667,719 Enator A.B.*,** 14,813,173
664,958 Frontec A.B. - Class B*,** 9,497,749
2,745,022 Getronics N.V. 67,325,854
993,692 Misys PLC** 14,672,789
250,925 Sterling Commerce, Inc.* 7,057,266
69,250 SunGard Data Systems, Inc. 2,960,438
344,510 WM-Data A.B. - Class B** 24,603,744
- ------------------------------------------------------------------------
184,726,392
- ------------------------------------------------------------------------
Computer Software - 2.0%
124
<PAGE>
6,300 Computer Associates
International, Inc. 372,488
2,712,996 JBA Holdings PLC**,# 22,733,726
1,997 NTT Data Communications
Systems Corp.** 59,054,844
472,415 SEMA Group PLC** 6,848,818
- ------------------------------------------------------------------------
89,009,876
- ------------------------------------------------------------------------
Computers - Integrated Systems - 0.4%
225,150 Dassault Systemes S.A. (ADR)* 9,765,881
153,150 Parametric Technology Co.* 7,485,206
- ------------------------------------------------------------------------
17,251,087
- ------------------------------------------------------------------------
Cosmetics and Toiletries - 0.5%
35,523 Wella A.G.** 20,080,863
- ------------------------------------------------------------------------
Data Processing and Management - 0.2%
116,950 First Data Corp. 9,326,763
- ------------------------------------------------------------------------
Diamonds and Precious Stones - 0.3%
435,736 De Beers Centenary A.G.** 12,856,718
14,000 De Beers Consolidated Mines,
Ltd.** 413,000
- ------------------------------------------------------------------------
13,269,718
- ------------------------------------------------------------------------
Diversified Operations - 12.1%
704,407 Amer-Yhtymae Oy - Class A** 15,887,714
269,182 Barco N.V.* 44,179,021
5,612,000 First Pacific Co.** 7,730,128
1,275,465 Grupo Carso S.A.
de C.V. - Series A 5,848,552
16,847,126 Hays PLC** 140,760,408
2,626,156 Kinnevik A.B. - Class B**,# 71,229,558
35,000 Lonrho PLC** 85,423
245,000 Metra Oy - B** 13,639,564
29,833,111 Rentokil Initial PLC** 200,233,502
749,657 South African
Breweries, Ltd.**,+ 19,484,055
41,588 Sulzer A.G.** 23,581,839
- ------------------------------------------------------------------------
$542,659,764
- ------------------------------------------------------------------------
Drug Delivery Systems - 0.7%
1,075,300 Elan Corp. PLC*,** 29,839,575
- ------------------------------------------------------------------------
Electric - Integrated - 0%
6,000 BSES, Ltd. (GDR)+ 111,000
- ------------------------------------------------------------------------
125
<PAGE>
Electronic Components - 1.6%
33,875 Lernout & Hauspie Speech
Products N.V.* $ 567,406
522,475 Philips Electronics N.V. 18,376,665
965,525 Philips Electronics N.V. (ADR) 34,034,756
22,000 Rohm Co.** 1,303,089
470,850 UCAR International, Inc.* 18,422,006
- ------------------------------------------------------------------------
72,703,922
- ------------------------------------------------------------------------
Engineering - Research and Development Services - 0%
1,000 Abb A.B. (ADR)** 111,625
- ------------------------------------------------------------------------
Equipment Rental - 0.4%
3,137,251 Thorn PLC*,** 17,610,943
- ------------------------------------------------------------------------
Fertilizers - 0.3%
12,000 Freeport McMoRan, Inc. 382,500
206,560 Potash Corp. of Saskatchewan, Inc.14,639,940
- ------------------------------------------------------------------------
15,022,440
- ------------------------------------------------------------------------
Film Processing - 0.2%
60,973 Grand Optical Photoservice** 8,844,257
- ------------------------------------------------------------------------
Finance - Consumer Loans - 0.3%
260,800 Associates First Capital Corp. 11,312,200
- ------------------------------------------------------------------------
Finance - Other Services - 0.7%
9,249,277 Grupo Financiero Inbursa, S.A.
de C.V. - Class B 30,211,212
- ------------------------------------------------------------------------
Food - Catering - 0.2%
928,000 Compass Group PLC** 9,195,588
- ------------------------------------------------------------------------
Food - Dairy Products - 3.0%
624,855 Nutricia Verenidge Bedrijven N.V.87,469,409
31,905,198 Parmalat Finanziaria S.p.A. 45,584,859
- ------------------------------------------------------------------------
133,054,268
- ------------------------------------------------------------------------
Food - Diversified - 0.4%
280,948 Raision Tehtaat** 17,310,032
- ------------------------------------------------------------------------
Food - Retail - 0.6%
370,450 Disco S.A. (ADR)* 8,335,125
268,000 Ito-Yokado Co., Ltd.** 13,357,669
308,000 Pao De Acucar S.A.+ 6,006,000
- ------------------------------------------------------------------------
27,698,794
- ------------------------------------------------------------------------
126
<PAGE>
Footwear and Related Apparel - 1.6%
809,948 Adidas A.G.** 69,265,549
- ------------------------------------------------------------------------
Healthcare Safety Devices - 0.3%
5,641,993 London International Group PLC** 14,320,935
- ------------------------------------------------------------------------
Home Furnishings - 0%
9,443 Hunter Douglas N.V. 666,486
- ------------------------------------------------------------------------
Hotels and Motels - 1.1%
240,150 East India Hotels, Ltd. (GDR)+ 4,322,700
428,225 HFS, Inc.* 31,367,481
321,010 Indian Hotels Co., Ltd.+ 7,623,988
254,275 Renaissance Hotel Group N.V.* 4,672,303
- ------------------------------------------------------------------------
47,986,472
- ------------------------------------------------------------------------
Human Resources - 0.2%
110,729 Randstad Holdings N.V. 8,935,430
- ------------------------------------------------------------------------
Industrial Automation and Robotics - 1.8%
2,551,588 Lagardere Groupe** 80,448,522
- ------------------------------------------------------------------------
Investment Companies - 0.3%
1,081,229 Bure Investment A.B.** 11,582,660
- ------------------------------------------------------------------------
Leisure - Recreation and Gaming - 0%
323,133 TABCORP Holdings, Ltd. 1,521,386
- ------------------------------------------------------------------------
Leisure and Recreation Services - 0.2%
154,735 Club Mediterranee S.A. 9,723,990
- ------------------------------------------------------------------------
Machine Tools and Related Products - 0%
5,000 Sandvik A.B. - Class A** 117,761
- ------------------------------------------------------------------------
Machinery - General Industrial - 0%
84,825 Toolex Alpha N.V.* 795,234
- ------------------------------------------------------------------------
Machinery - Pumps - 0%
93,000 Pfeiffer Vacuum
Technology A.G. (ADR)*,** 1,488,000
- ------------------------------------------------------------------------
Medical - Drugs - 6.6%
56,370 Ciba-Geigy Corp. A.G.** 68,906,546
1,895,950 Eisai Co., Ltd.** 33,939,435
1,362,744 Glaxo Wellcome PLC** 21,330,626
80,825 Pfizer, Inc. 6,688,269
7,436 Roche Holding A.G.** 56,063,218
46,579 Sandoz A.G. - Class R** 53,778,909
2,253,755 SmithKline Beecham
PLC - Class A** 27,796,502
127
<PAGE>
218,575 SmithKline Beecham PLC
(ADR) - Class A** 13,688,259
847,000 Takeda Chemical Industries** 14,493,243
- ------------------------------------------------------------------------
296,685,007
- ------------------------------------------------------------------------
Medical - Wholesale Drug Distributors - 1.1%
449,013 Gehe A.G.** 30,174,810
1,056,950 Grupo Casa Autrey S.A.
de C.V. (ADR) 19,949,931
- ------------------------------------------------------------------------
50,124,741
- ------------------------------------------------------------------------
Medical Instruments - 0.2%
406,480 Getinge Industrier A.B. - Class B**7,411,770
- ------------------------------------------------------------------------
Medical Products - 1.9%
2,118,675 Fresenius Medical Care (ADR)*,# 63,030,581
1,323,968 Nobel Biocare A.B.**,+ 22,330,682
- ------------------------------------------------------------------------
85,361,263
- ------------------------------------------------------------------------
Metal Processors and Fabricators - 1.0%
2,862,650 Assa-Abloy A.B. - Class B**,# 43,933,028
- ------------------------------------------------------------------------
Mining - 0%
5,000 Inco, Ltd. 158,750
- ------------------------------------------------------------------------
Money Center Banks - 5.3%
757,800 Bangkok Bank Co., Ltd. 8,080,348
2,303,445 Barclays PLC** 36,111,357
318,425 Citicorp 31,524,075
618,194 CS Holding A.G.** 61,551,256
1,080,253 Deutsche Bank A.G.** 49,920,243
415,300 HSBC Holdings PLC 8,459,835
4,414,499 Lloyds TSB Group PLC** 28,013,042
138,000 Mitsui Trust and Banking
Co., Inc.** 1,332,046
1,450,504 Skandinaviska Enskilda Banken -
Class A** 12,122,247
- ------------------------------------------------------------------------
237,114,449
- ------------------------------------------------------------------------
Motorcycle and Motor Scooter Manufacturing - 0.2%
232,536 Bajaj Auto, Ltd. (GDR)*,+ 7,441,152
- ------------------------------------------------------------------------
Multilevel Direct Selling - 0.4%
392,600 Amway Asia Pacific, Ltd.** 15,640,611
- ------------------------------------------------------------------------
Networking Products - 0.4%
318,800 Cisco Systems, Inc.* 19,725,750
128
<PAGE>
- ------------------------------------------------------------------------
Office Automation and Equipment - 1.9%
1,313,000 Danka Business Systems
PLC (ADR)** 52,027,625
290,333 Oce-Van Der Grinten N.V. 30,908,289
- ------------------------------------------------------------------------
82,935,914
- ------------------------------------------------------------------------
Office Supplies - 1.3%
1,079,150 Alco Standard Corp. 50,045,581
194,050 Harland (John H.) Co. 6,039,806
- ------------------------------------------------------------------------
56,085,387
- ------------------------------------------------------------------------
Oil Companies - Exploration and Production - 0.5%
989,975 YPF Sociedad Anonima S.A. (ADR) 22,521,931
- ------------------------------------------------------------------------
Pipelines - 0.2%
594,700 Gazprom (ADR)*,+ 11,150,625
- ------------------------------------------------------------------------
Publishing - Books - 1.6%
622,144 Dorling Kindersley Holdings
PLC** $ 5,516,901
513,643 Wolters Kluwer N.V. 65,889,624
- ------------------------------------------------------------------------
71,406,525
- ------------------------------------------------------------------------
Publishing - Newspapers - 0.2%
675,781 Pearson PLC** 8,378,672
- ------------------------------------------------------------------------
Publishing - Periodicals - 0.1%
372,961 EMAP PLC** 4,338,941
- ------------------------------------------------------------------------
Real Estate Development - 0.5%
1,298,000 Mitsubishi Estate Co., Ltd.** 16,173,745
675,000 Mitsui Fudosan Co.** 8,351,615
- ------------------------------------------------------------------------
24,525,360
- ------------------------------------------------------------------------
Real Estate Investment and Management - 0%
145,050 Diligentia A.B.*,** 1,862,418
- ------------------------------------------------------------------------
Recycling - 0.4%
1,278,890 Tomra Systems A/S 18,088,543
- ------------------------------------------------------------------------
Reinsurance - 0.3%
12,439 Swiss Reinsurance Co.** 13,302,274
- ------------------------------------------------------------------------
Retail - Diversified - 0.7%
2,088,407 Kesko** 32,076,314
- ------------------------------------------------------------------------
129
<PAGE>
Retail - Home Furnishings - 0.2%
149,150 Industrie Natuzzi S.p.A. (ADR) 6,767,681
- ------------------------------------------------------------------------
Retail - Major Department Stores - 1.2%
1,537,100 Credit Saison Co., Ltd.** 35,473,614
497,000 Hankyu Department Store** 5,931,204
954,000 Isetan Co.** 12,724,465
- ------------------------------------------------------------------------
54,129,283
- ------------------------------------------------------------------------
Retail - Regional Department Stores - 0%
326,000 Daimaru, Inc.** 1,962,408
- ------------------------------------------------------------------------
Satellite Telecommunications - 0.1%
130,725 Asia Satellite Telecommunications,
Ltd. (ADR)* 3,496,894
- ------------------------------------------------------------------------
Security Services - 2.5%
2,320,710 Prosegur Companhia
de Seguridad S.A.* 18,718,334
3,620,824 Securitas A.B. - Class B**,# 93,531,489
- ------------------------------------------------------------------------
112,249,823
- ------------------------------------------------------------------------
Steel - Producers - 0.1%
1,306,000 NKK Corp.*,** 3,277,606
120,578 SSAB Svenskt Stal A.B. -
Series A** 1,758,899
- ------------------------------------------------------------------------
5,036,505
- ------------------------------------------------------------------------
Super-Regional Banks - 2.3%
385,791 Wells Fargo & Co. 103,054,421
- ------------------------------------------------------------------------
Telecommunication Equipment - 0.5%
785,075 L.M. Ericsson Telephone (ADR) 21,687,697
- ------------------------------------------------------------------------
Telecommunication Services - 2.6%
1,328,800 CPT Telefonica del Peru
S.A. (ADR) 27,406,500
709,825 MFS Communications Co., Inc.* 35,579,978
198,375 Nokia Corp. (ADR) - Class A** 9,199,641
5,313,970 Telecom Italia S.p.A. 11,873,385
458,075 Telecomunicacoes Brasileiras
S.A. (ADR) 34,126,588
- ------------------------------------------------------------------------
118,186,092
- ------------------------------------------------------------------------
Telephone - Integrated - 0.6%
503,600 Portugal Telecom S.A. (ADR) 13,030,650
10,675 Telecom Argentina Stet S.A.
130
<PAGE>
(ADR) 402,981
500,750 Telefonica de Argentina S.A.
(ADR) 11,642,438
- ------------------------------------------------------------------------
25,076,069
- ------------------------------------------------------------------------
Textile - Apparel - 0.1%
35,390 Wolford A.G.** 4,658,760
- ------------------------------------------------------------------------
Tobacco - 0.9%
2,468,000 PT Hanjaya Mandala Sampoerna 22,949,019
870,000 Souza Cruz S.A. 5,233,719
4,416,016 Swedish Match A.B.*,** 13,151,892
- ------------------------------------------------------------------------
41,334,630
- ------------------------------------------------------------------------
Toys - 0.4%
681,656 Mattel, Inc. 19,682,817
- ------------------------------------------------------------------------
Transportation - Airlines - 0.7%
42,348 SwissAir A.G.** 32,896,514
- ------------------------------------------------------------------------
Transportation - Railroad - 0%
36,250 Tranz Rail Holdings, Ltd. (ADR)* 593,594
- ------------------------------------------------------------------------
Transportation - Services - 0.1%
182,513 Koninklijke Nedlloyd Group N.V. 4,573,023
- ------------------------------------------------------------------------
Wireless Telecommunications - 0.1%
200,850 AirTouch Communications, Inc.* 5,247,206
14,700 Paging Network, Inc. 251,738
- ------------------------------------------------------------------------
5,498,944
- ------------------------------------------------------------------------
Total Common Stock (cost $3,047,639,183) 3,588,524,684
- ------------------------------------------------------------------------
Preferred Stock - 2.2%
- ------------------------------------------------------------------------
Automative - Cars and Light Trucks - 0.1%
6,489 Porsche A.G.*,**,# 4,382,149
- ------------------------------------------------------------------------
Brewery - 0.2%
17,190,000 Compaghnia Cervejaria Brahma 10,625,572
- ------------------------------------------------------------------------
Commercial Banks - 0%
5,343,588 Banco Bradesco S.A.* 45,566
- ------------------------------------------------------------------------
Computer Software - 0.6%
183,282 SAP A.G.** 24,609,878
- ------------------------------------------------------------------------
Drug Delivery Systems - 1.0%
131
<PAGE>
201,752 Fresenius A.G. 43,532,600
- ------------------------------------------------------------------------
Electric - Integrated - 0.2%
301,088,000 Companhia Energetica de
Minas Gerais 9,583,936
- ------------------------------------------------------------------------
Multimedia - 0%
428,392 News Corp., Ltd.** 1,881,798
- ------------------------------------------------------------------------
Telecommunication Equipment - 0.1%
68,900 Nokia A.B. - Class A** 3,176,268
- ------------------------------------------------------------------------
Telephone - Integrated - 0%
91,000 Telecomunicacoes Brasileiras S.A. 6,759
- ------------------------------------------------------------------------
Total Preferred Stock (cost $66,711,205) 97,844,526
- ------------------------------------------------------------------------
Money Market - 1.9%
$85,000,000 Janus Money Market Fund, 5.61%
(cost $85,000,000) 85,000,000
- ------------------------------------------------------------------------
Repurchase Agreement - 0.1%
4,300,000 State Street Bank & Trust Co.,
4.75%, dated 10/31/96, maturing
11/1/96, to be repurchased at
$4,300,567, collateralized by
$4,340,000 in U.S. Treasury Notes
6.125%, due 3/31/98, value
$4,389,762 (cost $4,300,000) 4,300,000
- ------------------------------------------------------------------------
Short-Term Corporate Notes - 4.8%
Coca-Cola Co.
25,000,000 5.20%, 12/20/96 24,823,056
General Electric Capital Corp.
164,600,000 5.55% 11/1/96 164,600,000
IBM Corp.
25,000,000 5.29%, 1/13/97 24,729,000
- ------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $214,154,882) 214,152,056
- ------------------------------------------------------------------------
U.S. Government Agencies - 9.5%
Federal Home Loan Bank System:
200,000,000 5.50%, 11/1/96 200,000,000
50,000,000 5.26%, 11/20/96 49,861,194
25,000,000 6.40%, 1/17/97 24,718,750
Federal Home Loan Mortgage Corp.:
50,000,000 5.18%, 11/13/96 49,913,667
50,000,000 5.15%, 11/19/96 49,871,250
Federal National Mortgage Association
50,000,000 5.21%, 1/16/97 49,448,000
132
<PAGE>
- ------------------------------------------------------------------------
Total U.S. Government Agencies
(amortized cost $423,819,181) 423,812,861
- ------------------------------------------------------------------------
U.S. Government Obligation - 2.2%
U.S. Treasury Bills,
100,000,000 5.125%, 12/19/96
(amortized cost $99,317,000) 99,317,000
- ------------------------------------------------------------------------
Total Investments (total cost $3,940,941,451) -
101.0% 4,512,951,127
- ------------------------------------------------------------------------
Liabilities, net of Cash,
Receivables and Other Assets - (1.0%) (45,765,926)
- ------------------------------------------------------------------------
Net Assets - 100% $4,467,185,201
- ------------------------------------------------------------------------
133
<PAGE>
Summary of Investments by Country
October 31, 1996
Country % of Investment Securities Market Value
- ------------------------------------------------------------------------
Argentina 0.9% $ 42,902,475
Australia 0.1% 3,403,184
Austria 0.1% 4,658,760
Belgium 1.0% 44,746,427
Brazil 1.5% 65,628,139
Canada 0.5% 24,089,456
Denmark 0.2% 10,139,463
Finland 2.0% 91,289,554
France 3.3% 149,338,858
Germany 8.0% 361,202,369
Hong Kong 0.5% 20,990,547
India 1.1% 48,307,270
Indonesia 0.5% 22,949,018
Ireland 0.7% 29,839,575
Italy 2.8% 124,882,070
Japan 6.6% 296,486,510
Korea 0.5% 21,593,388
Luxembourg 0.3% 12,485,320
Mexico 1.9% 83,979,070
Netherlands 7.1% 318,974,771
New Zealand 0.0% 593,594
Norway 0.4% 18,088,543
Peru 0.6% 27,406,500
Portugal 0.6% 29,424,582
Russia 0.2% 11,150,625
South Africa 0.7% 32,753,773
Spain 0.4% 18,718,334
Sweden 7.6% 345,053,376
Switzerland 6.9% 310,080,555
Thailand 0.2% 8,080,348
United Kingdom 14.0% 633,916,816
United States++ 28.8% 1,299,797,857
- ------------------------------------------------------------------------
Total 100.0% $4,512,951,127
- ------------------------------------------------------------------------
++Includes Short-Term Securities (10.5% excluding Short-Term Securities)
- ------------------------------------------------------------------------
Forward Currency Contracts
Open at October 31, 1996
Currency Sold and Currency
134
<PAGE>
Settlement Date Currency Value in Unrealized
Units Sold $ U.S. Gain/(Loss)
- ------------------------------------------------------------------------
British Pound 11/19/96 45,000,000 $73,188,000 ($5,357,250)
British Pound 1/17/97 11,000,000 17,868,400 (837,100)
British Pound 1/27/97 13,061,000 21,212,370 (947,251)
Finnish Markka 11/12/96 4,520,000 995,266 (45,686)
Finnish Markka 1/16/97 8,500,000 1,880,073 (7,662)
French Franc 12/12/96 72,635,000 14,214,286 (47,131)
German Deutschemark 12/11/96 48,000,000 31,708,284 2,095
German Deutschemark 1/17/97 125,000,000 82,775,975 651,910
German Deutschemark 1/24/97 75,269,000 49,866,835 1,512,024
Japanese Yen 12/11/96 1,400,000,000 12,285,702 816,778
Japanese Yen 12/12/96 3,763,400,000 33,025,781 1,669,527
Japanese Yen 12/17/96 5,000,000,000 43,877,893 1,964,227
Japanese Yen 1/16/97 7,000,000,000 61,431,746 2,784,608
Japanese Yen 1/17/97 1,406,000,000 12,339,016 900,155
South African Rand 11/3/97 76,695,000 14,735,720 (48,818)
Swedish Krona 1/27/97 964,886,000 146,900,415 156,739
Swiss Franc 11/12/96 35,188,000 27,779,268 1,087,015
- ------------------------------------------------------------------------
$646,085,030 $4,254,180
- ------------------------------------------------------------------------
See Notes to Schedule of Investments
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
135
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
For the fiscal year or period
ended October 31, 1996 (all
numbers in thousands) Janus Janus Janus Equity Janus Growth
Janus Fund Balanced Fund Enterprise Fund Income Fund(1) and Income Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 78,399 $ 4,488 $ 910 $ 78 $ 3,845
Dividends 167,220 1,188 1,246 269 9,659
Foreign Tax Withheld (3,788) (24) (106) (2) (100)
______________________________________________________________________________________________________________
241,831 5,652 2,050 345 13,404
______________________________________________________________________________________________________________
Expenses:
Advisory fees 89,849 1,265 4,349 72 5,502
Transfer agent fees
and expenses 22,338 498 1,782 21 2,032
Registration fees 480 47 100 11 147
Postage and mailing
expenses 1,771 55 250 4 239
Custodian fees 3,090 54 168 13 117
Printing expenses 115 14 71 -- 64
Audit fees 70 9 15 5 15
Trustees' fees and expenses 177 2 7 -- 5
Other expenses 364 11 47 3 37
______________________________________________________________________________________________________________
Total expenses 118,254 1,955 6,789 129 8,158
______________________________________________________________________________________________________________
Expense and fee offsets (1,296) (33) (96) (6) (172)
______________________________________________________________________________________________________________
Net expenses 116,958 1,922 6,693 123 7,986
______________________________________________________________________________________________________________
Net investment income/(loss) 124,873 3,730 (4,643) 222 5,418
______________________________________________________________________________________________________________
Net Realized and Unrealized
Gain/(Loss) on Investments:
Net realized gain/(loss)
from securities 1,638,055 18,761 37,157 950 93,759
transactions
Net realized gain/(loss)
from foreign currency 30,639 180 (418) -- 1,798
transactions
Net realized gain/(loss)
from futures contracts -- -- (404) -- 447
Change in net unrealized
appreciation or 685,129 4,979 72,341 1,010 64,283
depreciation of investments
______________________________________________________________________________________________________________
Net gain on investments 2,353,823 23,920 108,676 1,960 160,287
______________________________________________________________________________________________________________
136
<PAGE>
Net increase in net assets
resulting from operations $2,478,696 $27,650 $104,033 $2,182 $165,705
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
</TABLE>
<TABLE>
For the fiscal year or period
ended October 31, 1996 (all Janus Janus Janus Janus Janus
numbers in thousands) Janus Olympus Overseas Twenty Venture Worldwide
Mercury Fund Fund (2) Fund Fund Fund Fund
______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $ 14,210 $ 4,019 $ 2,414 $ 12,519 $ 4,838 $ 14,094
Dividends 13,036 2,402 4,698 41,589 5,471 41,285
Foreign Tax Withheld (593) (6) (539) (361) (250) (4,232)
______________________________________________________________________________________________________________
26,653 6,415 6,573 53,747 10,059 51,147
______________________________________________________________________________________________________________
Expenses:
Advisory fees 12,408 1,783 2,528 22,478 12,316 19,646
Transfer agent fees
and expenses 5,038 563 953 7,347 3,034 6,455
Registration fees 29 165 220 211 57 569
Postage and mailing
expenses 680 82 101 645 269 550
Custodian fees 424 52 352 463 369 2,610
Printing expenses 158 19 27 284 132 207
Audit fees 20 11 15 26 31 22
Trustees' fees and
expenses 9 3 4 29 22 32
Other expenses 64 16 17 125 73 99
______________________________________________________________________________________________________________
Total expenses 18,830 2,694 4,217 31,608 16,303 30,190
______________________________________________________________________________________________________________
Expense and fee offsets (396) (45) (82) (521) (188) (461)
______________________________________________________________________________________________________________
Net expenses 18,434 2,649 4,135 31,087 16,115 29,729
______________________________________________________________________________________________________________
Net investment
income/(loss) 8,219 3,766 2,438 22,660 (6,056) 21,418
Net Realized and
Unrealized Gain/(Loss)
on Investments:
Net realized gain/(loss)
from securities 220,813 (9,510) 11,875 639,612 153,032 235,374
transactions
Net realized gain/(loss)
from foreign currency 2,448 179 3,091 16,897 2,821 47,668
transactions
137
<PAGE>
Net realized gain/(loss)
from futures contracts 20,340 -- -- -- -- 6,279
Change in net unrealized
appreciation or deprecia- 31,715 34,500 53,555 152,559 10,400 374,380
tion of investments
______________________________________________________________________________________________________________
Net gain on investments 275,316 25,169 68,521 809,068 166,253 663,701
______________________________________________________________________________________________________________
Net increase in net
assets resulting $283,535 $28,935 $70,959 $831,728 $160,197 $685,119
from operations
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
</TABLE>
An Explanation of the Statement of Operations
This financial statement details the Funds' income, expenses, 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 the dividends earned from stocks and
interest earned from interest-bearing securities 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, shareholder servicing expenses, 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' portfolios. 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
As of October 31, 1996 Janus Janus
(all numbers in Janus Janus Equity Growth and
thousands except Balanced Enterprise Income Income
net asset value Janus Fund Fund Fund Fund Fund
per share)
<S> <C> <C> <C> <C> <C>
Assets:
Investments at cost $12,932,766 $196,989 $570,968 $31,890 $ 885,700
Investments at value $15,836,267 $211,611 $728,167 $32,928 $1,030,905
Cash 4,877 568 627 622 585
Receivables:
138
<PAGE>
Investments sold 172,869 2,098 11,632 157 52
Fund shares sold 27,353 521 4,808 712 3,049
Interest 23 1,869 -- 24 567
Dividends 16,253 132 576 20 807
Forward currency contracts -- -- -- -- 49
Other assets 140 1 3 -- 6
Total Assets 16,057,782 216,800 745,813 34,463 1,036,020
Liabilities:
Payables:
Investments purchased 694,192 9,280 9,971 3,910 1,337
Fund shares repurchased 23,502 87 468 43 489
Advisory fee 8,554 133 445 25 600
Transfer agent fee 2,759 70 280 9 252
Accrued expenses 1,201 41 212 18 159
Forward currency contracts 14,394 145 2,434 29 --
Total Liabilities 744,602 9,756 13,810 4,034 2,837
Net Assets $15,313,180 $207,044 $732,003 $30,429 $1,033,183
Shares Outstanding,
$0.01 Par Value 574,704 13,618 23,466 2,695 51,529
(unlimited shares authorized)
Net Asset Value Per Share $26.65 $15.20 $31.19 $11.29 $20.05
</TABLE>
<TABLE>
As of October 31, 1996 Janus Janus Janus Janus Janus Janus
(all numbers in Mercury Olympus Overseas Twenty Venture Worldwide
thousands except net Fund Fund Fund Fund Fund Fund
asset value per share)
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at cost $1,846,681 $390,598 $798,091 $3,327,236 $1,403,871 $3,940,941
Investments at value $2,016,257 $425,396 $861,386 $3,930,165 $1,747,731 $4,512,951
Cash 3,812 592 546 1,591 3,954 531
Receivables:
Investments sold 14,864 10,418 5,530 89 38,333 44,743
Fund shares sold 5,332 3,114 13,064 11,334 680 27,274
Interest 13 -- -- 2,143 -- 23
Dividends 1,428 79 675 3,971 586 7,212
Forward currency
contracts -- -- 155 -- -- 4,254
Other assets 8 -- -- 47 23 12
Total Assets 2,041,714 439,599 881,356 3,949,340 1,791,307 4,597,000
Liabilities:
Payables:
Investments
purchased 33,700 5,886 107,043 7,346 44,902 122,571
Fund shares
repurchased 2,027 485 857 1,317 2,491 2,330
Advisory fee 1,169 282 429 2,189 1,045 2,430
139
<PAGE>
Transfer agent fee 667 97 177 669 284 1,026
Accrued expenses 340 176 220 375 142 1,458
Forward currency
contracts 1,461 298 -- -- 1,127 --
Total Liabilities 39,364 7,224 108,726 11,896 49,991 129,815
Net Assets $2,002,350 $432,375 $772,630 $3,937,444 $1,741,316 $4,467,185
Shares Outstanding, 110,006 29,101 52,184 123,438 30,463 129,112
$0.01 Par Value
(unlimited shares
authorized)
Net Asset Value Per
Share $18.20 $14.86 $14.81 $31.90 $57.16 $34.60
_____________________________________________________________________________________________
_____________________________________________________________________________________________
(1) Period from June 28, 1996 (inception) to October 31, 1996
(2) Period from December 29, 1995 (inception) to October 31, 1996
See Notes to Financial Statements
</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 Funds 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, but not yet received, on stocks owned, 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.
There may be other assets and liabilities such as forward currency
contracts.
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' net assets (assets minus liabilities) by the number of
shares outstanding.
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
140
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
For the fiscal year or
period ended October 31 Janus Janus Janus Janus
(all numbers in Fund Balanced Fund Enterprise Fund Equity Income
thousands) 1996 1995 1996 1995 1996 1995 1996(1)
<S> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income/loss) $ 124,873 $ 132,179 $ 3,730 $ 2,708 $(4,643) $ 91 $ 222
Net realized gain/
(loss) from investment
transactions 1,668,694 539,152 18,941 7,481 36,335 30,791 950
Change in unrealized
net appreciation or
depreciation 685,129 1,433,338 4,979 8,194 72,341 29,273 1,010
of investments
___________________________________________________________________________________________________________
Net increase/(decrease)
in net assets resulting
from operations 2,478,696 2,104,669 27,650 18,383 104,033 60,155 2,182
___________________________________________________________________________________________________________
Dividends and
Distributions to
Shareholders from:
Net investment income* (70,555) (4,024) (2,801) (4,692) -- (7,697) (75)
Net realized gain from
investment transactions* (581,254) (190,268) (7,702) -- (30,845) (5,604) --
___________________________________________________________________________________________________________
Net decrease from
dividends and
distributions (651,809) (194,292) (10,503) (4,692) (30,845) (13,301) (75)
___________________________________________________________________________________________________________
Capital Share
Transactions:
Shares sold 3,005,157 2,147,778 116,988 44,222 588,531 362,414 40,622
Reinvested dividends
and distributions 628,657 186,387 10,173 4,464 30,326 12,981 68
Shares repurchased (2,110,491) (1,928,817) (61,809) (31,378) (419,412) (332,907) (12,368)
___________________________________________________________________________________________________________
Net increase/(decrease)
from capital share
transactions 1,523,323 405,348 65,352 17,308 199,445 42,488 28,322
___________________________________________________________________________________________________________
Net increase/(decrease)
in net assets 3,350,210 2,315,725 82,499 30,999 272,633 89,342 30,429
Net Assets:
141
<PAGE>
Beginning of period 11,962,970 9,647,245 124,545 93,546 459,370 370,028 30,429
___________________________________________________________________________________________________________
End of Period $15,313,180 $11,962,970 $207,044 $124,545 $732,003 $459,370 $30,429
___________________________________________________________________________________________________________
Net Assets consist of:
Capital(par value and
paid-in surplus)* $10,609,062 $ 9,085,739 $172,106 $106,754 $546,012 $346,567 $28,322
Undistributed net
investment income/
(distribution in
excess)* 173,997 66,492 1,570 356 -- -- 119
Undistributed net
realized gain/(loss)
from investments* 1,640,921 606,668 18,889 7,935 31,206 30,358 978
Unrealized appreciation
of investments and
foreign currency 2,889,200 2,204,071 14,479 9,500 154,785 82,445 1,010
___________________________________________________________________________________________________________
$15,313,180 $11,962,970 $207,044 $124,545 $732,003 $459,370 $30,429
___________________________________________________________________________________________________________
Transactions in Fund
Shares:
Shares sold 120,626 103,296 8,113 3,512 19,462 15,200 3,793
Reinvested
distributions 27,285 9,925 733 371 1,105 565 6
Total 147,911 113,221 8,846 3,883 20,567 15,765 3,799
Shares repurchased (85,075) (92,980) (4,304) (2,493) (14,026) (13,986) (1,104)
___________________________________________________________________________________________________________
Net increase/(decrease) 62,836 20,241 4,542 1,390 6,541 1,779 2,695
___________________________________________________________________________________________________________
Shares outstanding
beginning of period 511,868 491,627 9,076 7,686 16,925 15,146 3,793
Shares outstanding end
of period 574,704 511,868 13,618 9,076 23,466 16,925 6
___________________________________________________________________________________________________________
Purchases and Sales of
Investment Securities:
(excluding Short-Term
Securities)
Purchases of Securities $12,620,553 $11,575,417 $218,807 $173,144 $684,287 $774,127 3,799
Proceeds from Sales of
Securities 13,659,045 10,339,397 200,065 151,167 541,498 716,403 (1,104)
Purchases of Long-Term
U.S. Government
Obligations 52,837 99,172 64,006 29,427 -- -- --
Proceeds from Sales of
Long-Term U.S.
Government 155,889 102,063 31,633 21,157 -- -- --
Obligations
142
<PAGE>
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
</TABLE>
<TABLE>
For the fiscal year or Janus
period ended October 31 Growth Janus Janus
(all numbers in and Income Fund Mercury Fund Olympus Fund
thousands)
1996 1995 1996 1995 1996(2)
____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income/
(loss) $ 5,418 $ 5,533 $ 8,219 $ 5,552 $ 3,766
Net realized gain/
(loss) from investment
transactions 96,004 84,111 243,601 178,502 (9,331)
Change in unrealized net
appreciation or
depreciation 64,283 20,058 31,715 83,666 34,500
of investments
Net increase/(decrease)
in net assets resulting
from operations 165,705 109,702 283,535 267,720 28,935
Dividends and Distributions
to Shareholders from:
Net investment income* (3,323) (3,346) -- (8,192) --
Net realized gain from
investment transactions* (73,130) -- (182,852) (5,231) --
Net decrease from dividends
and distributions (76,453) (3,346) (182,852) (13,423) --
Capital Share Transactions:
Shares sold 495,936 113,855 1,232,319 1,329,738 638,135
Reinvested dividends and
distributions 74,420 3,214 176,985 12,799 --
Shares repurchased (209,388) (130,404) (1,028,405) (672,396) (234,695)
Net increase/(decrease)
from capital share
transactions 360,968 (13,335) 380,899 670,141 403,440
Net increase/(decrease)
in net assets 450,220 93,021 481,582 924,438 432,375
Net Assets:
Beginning of period 582,963 489,942 1,520,768 596,330 --
End of Period $1,033,183 $582,963 $2,002,350 $1,520,768 $432,375
Net Assets consist of:
Capital (par value and
paid-in surplus)* $ 789,372 $428,405 $1,580,406 $1,199,506 $403,440
Undistributed net
investment income/
143
<PAGE>
(distribution in 5,340 607 15,395 -- 3,647
excess)*
Undistributed net
realized gain/(loss)
from investments* 93,217 72,981 238,429 184,857 (9,212)
Unrealized appreciation
of investments and
foreign 145,254 80,970 168,120 136,405 34,500
currency
$1,033,183 $582,963 $2,002,350 $1,520,768 $432,375
Transactions in
Fund Shares:
Shares sold 26,416 7,113 70,853 88,118 45,233
Reinvested distributions 4,445 212 11,034 940 --
Total 30,861 7,325 81,887 89,058 45,233
Shares repurchased (11,490) (8,529) (59,376) (43,801) (16,132)
Net increase/(decrease) 19,371 (1,204) 22,511 45,257 29,101
Shares outstanding
beginning of period 32,158 33,362 87,495 42,238 --
Shares outstanding end
of period 51,529 32,158 110,006 87,495 29,101
Purchases and Sales of
Investment Securities:
(excluding Short-Term
Securities)
Purchases of Securities $1,415,291 $857,522 $2,994,725 $2,539,449 $866,966
Proceeds from Sales of
Securities 1,150,323 883,780 2,804,270 1,894,699 525,025
Purchases of Long-Term
U.S. Government
Obligations -- 75,020 -- -- --
Proceeds from Sales of
Long-Term U.S.
Government -- 78,554 -- -- --
Obligations
</TABLE>
<TABLE>
For the fiscal year or
period ended October 31 Janus Janus Janus Janus
(all numbers in Overseas Fund Twenty Fund Venture Fund Worldwide Fund
thousands)
1996 1995 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
144
<PAGE>
income/(loss) $ 2,438 $ 282 $ 22,660 $ 16,905 $(6,056) $ 4,753 21,418 $ 16,062
Net realized gain/
(loss) from
investment 14,966 2,519 656,509 533,237 155,853 214,176 289,321 55,175
transactions
Change in unrealized
net appreciation
or 53,555 6,447 152,559 47,686 10,400 67,671 374,380 65,211
depreciation
of investments
Net increase/
(decrease) in net
assets 70,959 9,248 831,728 597,828 160,197 286,600 685,119 136,448
resulting from
operations
Dividends and
Distributions to
Shareholders from:
Net investment
income* (1,175) -- -- (7,400) (185) (862) (17,455) (32,032)
Net realized gain
from investment (1,110) -- (524,809) -- (218,108) (82,645) (71,145) (60,061)
transactions*
Net decrease from
dividends and (2,285) -- (524,809) (7,400) (218,293) (83,507) (88,600) (92,093)
distributions
Capital Share
Transactions:
Shares sold 923,886 128,820 1,058,035 387,080 142,893 145,222 2,938,234 788,071
Reinvested dividends
and distributions 2,204 -- 512,051 7,202 212,018 81,200 86,150 88,948
Shares repurchased (333,000) (91,267) (935,312) (731,771) (308,700) (226,790) (958,072) (704,140)
Net increase/
(decrease) from
capital 593,090 37,553 634,774 (337,489) 46,211 (368) 2,066,312 172,879
share transactions
Net increase/
(decrease) in net
assets 661,764 46,801 941,693 252,939 (11,885) 202,725 2,662,831 217,234
Net Assets:
Beginning of period 110,866 64,065 2,995,751 2,742,812 1,753,201 1,550,476 1,804,354 1,587,120
End of Period $772,630 $110,866 $3,937,444 $2,995,751 $1,741,316 $1,753,201 $4,467,185 $1,804,354
Net Assets consist of:
Capital(par value and
paid-in surplus)* $691,931 $98,841 $2,650,066 $2,015,292 $1,245,431 $1,199,220 $3,590,919 $1,524,605
Undistributed net
investment 5,739 1,174 46,083 -- -- 185 64,560 17,449
income/(distribution
in excess)*
Undistributed net
145
<PAGE>
realized gain/(loss) 11,504 951 638,364 530,087 153,138 221,449 235,401 60,375
from investments*
Unrealized appreciation
of investments 63,456 9,900 602,931 450,372 342,747 332,347 576,305 201,925
and foreign currency
$772,630 $110,866 $3,937,444 $2,995,751 $1,741,316 $1,753,201 $4,467,185 $1,804,354
Transactions in
Fund Shares:
Shares sold 66,683 11,936 36,639 14,963 2,490 2,726 90,631 30,276
Reinvested
distributions 183 -- 19,948 317 3,919 1,668 3,033 3,647
Total 66,866 11,936 56,587 15,280 6,409 4,394 93,664 33,923
Shares repurchased (24,253) (8,547) (32,594) (28,999) (5,399) (4,273) (29,807 (27,454)
Net increase/
(decrease) 42,613 3,389 23,993 (13,719) 1,010 121 63,857 6,469
Shares outstanding
beginning of
period 9,571 6,182 99,445 113,164 29,453 29,332 65,255 58,786
Shares outstanding
end of period 52,184 9,571 123,438 99,445 30,463 29,453 129,112 65,255
Purchases and Sales
of Investment
Securities:
(excluding
Short-Term
Securities)
Purchases of
Securities $621,472 $141,411 $4,729,450 $3,795,717 $2,393,103 $1,633,385 $3,434,902 $2,232,128
Proceeds from
Sales of
Securities 210,188 117,541 4,542,826 4,044,252 2,522,326 1,605,945 2,161,421 1,920,061
Purchases of
Long-Term U.S.
Government -- -- -- -- -- -- -- --
Obligations
Proceeds from Sales
of Long-Term U.S. -- -- -- -- -- -- -- --
Government Obligations
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
(1) Period from June 28, 1996 (inception) to October 31, 1996
(2) Period from December 29, 1995 (inception) to October 31, 1996
*See Note 3 in Notes to Financial Statements
</TABLE>
146
<PAGE>
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' net 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 gains
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 Funds' "Net decrease from
dividends and distributions" to the "Reinvested dividends and
distributions," you'll notice that dividend distributions had
little effect on each Funds' 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 Funds through purchases or withdraw
via redemptions. The Funds' 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.
- --------------------------------------------------------------
See Notes to Financial Statements
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
147
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding
throughout each fiscal year Janus Fund
or period ended October 31 1996 1995 1994 1993 1992
_____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $23.37 $19.62 $20.81 $18.86 $18.27
_____________________________________________________________________________________________
Income from investment
operations
Net investment income .31 .16 .17 .26 .23
Net gains or (losses) on
securities (both
realized and unrealized) 4.23 3.99 (.03) 2.88 1.46
Total from investment
operations 4.54 4.15 .14 3.14 1.69
_____________________________________________________________________________________________
Less distributions
Dividends (from net
investment income) (.13) (.01) (.39) (.29) (.19)
Distributions (from
capital gains) (1.13) (.39) (.94) (.90) (.91)
Total distributions (1.26) (.40) (1.33) (1.19) (1.10)
Net asset value, end of
period $26.65 $23.37 $19.62 $20.81 $18.86
_____________________________________________________________________________________________
Total return* 20.31% 21.62% 0.75% 17.41% 9.35%
_____________________________________________________________________________________________
Net assets, end of
period (in thousands) $15,313,180 $11,962,970 $9,647,245 $9,098,000 $4,989,299
Average net assets for
the period (in thousands) $13,753,157 $10,559,806 $9,338,807 $7,335,871 $3,870,923
Ratio of gross expenses to
average net assets**(2) 0.86% 0.87% NA NA NA
Ratio of net expenses to
average net assets**(2) 0.85% 0.86% 0.91% 0.92% 0.97%
Ratio of net investment
income to average net
assets** 0.91% 1.25% 1.12% 1.55% 1.54%
Portfolio turnover rate** 104% 118% 139% 127% 153%
Average commission per share $.0558 NA NA NA NA
</TABLE>
<TABLE>
For a share outstanding Janus Balanced Fund
throughout each fiscal year
or period ended October 31 1996 1995 1994 1993 1992
148
<PAGE>
_____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $13.72 $12.17 $12.23 $10.64 $10.00
_____________________________________________________________________________________________
Income from investment
operations
Net investment income .33 .61 .27 .19 --
Net gains or (losses)
on securities (both
realized and unrealized) 2.22 1.52 (.09) 1.56 .64
Total from investment
operations 2.55 2.13 .18 1.75 .64
_____________________________________________________________________________________________
Less distributions
Dividends (from net
investment income) (.26) (.58) (.24) (.16) --
Distributions
(from capital gains) (.81) -- -- -- --
Total distributions (1.07) (.58) (.24) (.16) --
Net asset value, end
of period $15.20 $13.72 $12.17 $12.23 $10.64
_____________________________________________________________________________________________
Total return* 19.39% 18.26% 1.51% 16.54% 6.40%*
_____________________________________________________________________________________________
Net assets, end of
period (in thousands) $207,044 $124,545 $93,546 $72,547 $2,130
Average net assets for
the period (in thousands) $158,607 $107,259 $86,361 $43,522 $563
Ratio of gross expenses
to average net assets**(2) 1.23% 1.35% NA NA NA
Ratio of net expenses to
average net assets**(2) 1.21% 1.32% 1.42% 1.70% 2.50%
Ratio of net investment
income/(loss) to average
net assets** 2.35% 2.52% 2.28% 2.15% (0.12%)
Portfolio turnover rate** 151% 185% 167% 131% 130%
Average commission per share $.0428 NA NA NA NA
</TABLE>
<TABLE>
For a share outstanding
throughout each fiscal year Janus Enterprise Fund
or period ended October 31 1996 1995 1994 1993 1992(1)
_____________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $27.14 $24.43 $21.87 $17.09 $15.00
Income from investment
operations
149
<PAGE>
Net investment income/(loss) -- .52 (.06) .04 --
Net gains or (losses) on
securities (both
realized and unrealized) 5.85 3.09 3.18 4.76 2.09
_____________________________________________________________________________________________
Total from investment
operations 5.85 3.61 3.12 4.80 2.09
_____________________________________________________________________________________________
Less distributions
Dividends (from net
investment income) -- (.52) (.02) (.02) --
Distributions (from
capital gains) (1.80) (.38) (.54) -- --
Total distributions (1.80) (.90) (.56) (.02) --
Net asset value, end of
period $31.19 $27.14 $24.43 $21.87 $17.09
_____________________________________________________________________________________________
Total return* 22.43% 15.46% 14.56% 28.09% 13.93%*
_____________________________________________________________________________________________
Net assets, end of
period (in thousands) $732,003 $459,370 $370,028 $239,334 $8,320
Average net assets for the
period (in thousands) $596,313 $407,791 $269,595 $188,345 $1,560
Ratio of gross expenses to
average net assets**(2) 1.14% 1.26% NA NA NA
Ratio of net expenses to
average net assets**(2) 1.12% 1.23% 1.25% 1.36% 2.50%
Ratio of net investment
income/(loss) to average
net assets** (0.78%) 0.02% (0.32%) 0.14% (0.81%)
Portfolio turnover rate** 93% 194% 193% 201% 53%
Average commission per share $.0333 NA NA NA NA
_______________________________________________________________________________________________
(1) Fiscal period from September 1, 1992 *Total return not annualized for
(inception) to October 31, 1992. for periods of less than one year.
(2) See "Explanation of the Financial" **Annualized for periods of less than
NA - Disclosure not applicable to one full year.
prior periods
_______________________________________________________________________________________________
See Notes to Financial Statements
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
</TABLE>
150
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding
throughout each fiscal year Janus Growth and Income Fund
or period ended October 31 1996 1995 1994 1993 1992
_______________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $18.13 $14.69 $15.24 $12.95 $12.13
Income from investment
operations
Net investment income .16 .11 .19 .14 .17
Net gains or (losses) on
securities (both realized
and unrealized) 4.01 3.43 (.31) 2.29 . 80
Total from investment
operations 4.17 3.54 (.12) 2.43 .97
Less distributions
Dividends (from net
investment income) (.08) (.10) (.10) (.14) (.15)
Distributions (from
capital gains) (2.17) -- (.33) -- --
Total distributions (2.25) (.10) (.43) (.14) (.15)
Net asset value, end
of period $20.05 $18.13 $14.69 $15.24 $12.95
________________________________________________________________________________________________
Total return* 25.56% 24.20% (0.76%) 18.81% 7.98%
________________________________________________________________________________________________
Net assets, end of
period (in thousands) $1,033,183 $582,963 $ 489,942 $518,963 $243,509
Average net assets for the
period (in thousands) $773,343 $498,442 $499,831 $404,285 $156,815
Ratio of gross expenses to
average net assets**(5) 1.05% 1.19% NA NA NA
Ratio of net expenses to
average net assets**(5) 1.03% 1.17% 1.22% 1.28% 1.52%
Ratio of net investment
income to average net assets** 0.70% 1.11% 1.26% 1.13% 1.61%
Portfolio turnover rate** 153% 195% 123% 138% 120%
Average commission per share $.0520 NA NA NA NA
</TABLE>
<TABLE>
For a share outstanding Janus Equity
throughout each fiscal year or Income Fund Janus Mercury Fund
period ended October 31 1996 (1) 1996 1995 1994 1993(2)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
151
<PAGE>
period $10.00 $17.38 $14.12 $11.70 $10.00
_______________________________________________________________________________________________
Income from investment
operations
Net investment income/(loss) .07 .14 .16 .02 (.01)
Net gains or (losses) on
securities (both realized and 1.25 2.74 3.37 2.40 1.71
unrealized)
________________________________________________________________________________________________
Total from investment operations 1.32 2.88 3.53 2.42 1.70
Less distributions
Dividends (from net investment
income) (.03) -- (.16) -- --
Distributions (from capital
gains) -- (2.06) (.11) -- --
Total distributions (.03) (2.06) (.27) -- --
Net asset value, end of period $11.29 $18.20 $17.38 $14.12 $11.70
________________________________________________________________________________________________
Total return* 13.20% 18.18% 25.53% 20.68% 17.00%*
________________________________________________________________________________________________
Net assets, end of period
(in thousands) $30,429 $2,002,350 $1,520,768 $596,330 $112,725
Average net assets for the
period (in thousands) $21,424 $1,838,593 $1,116,377 $257,726 $ 67,462
Ratio of gross expenses to
average net assets**(5) 1.79% 1.02% 1.14% NA NA
Ratio of net expenses to
average net assets**(5) 1.71% 1.00% 1.12% 1.33% 1.75%
Ratio of net investment
income/(loss) to average net 3.09% 0.45% 0.50% 0.25% (0.40%)
assets**
Portfolio turnover rate** 325% 177% 201% 283% 151%
Average commission per share $.0350 $.0383 NA NA NA
</TABLE>
<TABLE>
For a share outstanding Janus
throughout each fiscal year Olympus Fund Janus Overseas Fund
or period ended October 31 1996 (3) 1996 1995 1994 (4)
_________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $12.00 $11.58 $10.36 $10.00
_________________________________________________________________________________________________
Income from investment
operations
Net investment income/(loss) .13 .10 .12 (.02)
Net gains or (losses) on securities
(both realized and unrealized) 2.73 3.34 1.10 .38
Total from investment operations 2.86 3.44 1.22 .36
152
<PAGE>
Less distributions
Dividends (from net investment income) -- (.11) -- --
Distributions (from capital gains) -- (.10) -- --
Total distributions -- (.21) -- --
Net asset value, end of period $14.86 $14.81 $11.58 $10.36
________________________________________________________________________________________________
Total return* 23.83% 30.19% 11.78% 3.60%*
________________________________________________________________________________________________
Net assets, end of period
(in thousands) $432,375 $772,630 $110,866 $64,065
Average net assets for the
period (in thousands) $276,006 $335,098 $ 77,668 $36,645
Ratio of gross expenses to
average net assets**(5) 1.17% 1.26% 1.76% NA
Ratio of net expenses to
average net assets**(5) 1.15% 1.23% 1.73% 2.16%
Ratio of net investment
income/(loss) to average
net assets** 1.64% 0.73% 0.36% (0.64%)
Portfolio turnover rate** 303% 71% 188% 181%
Average commission per share $.0336 $.0234 NA NA
_________________________________________________________________________________________________
(1) Fiscal period from June 28, 1996 (inception) to October 31, 1996
(2) Fiscal period from May 3, 1993 (inception) to October 31, 1993
(3) Fiscal period from December 29, 1995 (inception) to October 31, 1996
(4) Fiscal period from May 2, 1994 (inception) to October 31, 1994
(5) See "Explanation of the Financial Highlights"
*Total return not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
(NA-Disclosure not applicable to prior periods
_________________________________________________________________________________________________
See Notes to Financial Statements
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
</TABLE>
153
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding
throughout each fiscal year Janus Twenty Fund
or period ended October 31 1996 1995 1994 1993 1992 (1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $30.12 $24.24 $25.85 $22.75 $22.17
______________________________________________________________________________________________
Income from investment
operations
Net investment income .37 .01 .16 .17 .09
Net gains or (losses) on
securities (both realized
and unrealized) 6.68 5.94 (1.07) 3.31 .49
Total from investment
operations 7.05 5.95 (.91) 3.48 .58
______________________________________________________________________________________________
Less distributions
Dividends (from net
investment income) -- (.07) (.25) (.18) --
Distributions (from capital
gains) (5.27) -- (.45) (.20) --
Total distributions (5.27) (.07) (.70) (.38) --
______________________________________________________________________________________________
Net asset value, end of
period $31.90 $30.12 $24.24 $25.85 $22.75
______________________________________________________________________________________________
Total return* 27.59% 24.67% (3.52%) 15.39% 2.62%*
______________________________________________________________________________________________
Net assets, end of period
(in thousands) $3,937,444 $2,995,751 $2,742,812 $3,748,796 $2,434,245
Average net assets for the
period (in thousands) $3,385,561 $2,716,278 $3,051,194 $3,545,727 $2,221,065
Ratio of gross expenses to
average net assets**(3) 0.93% 1.00% NA NA NA
Ratio of net expenses to
average net assets**(3) 0.92% 0.99% 1.02% 1.05% 1.12%
Ratio of net investment income
to average net assets** 0.67% 0.62% 0.57% 0.87% 1.27%
Portfolio turnover rate** 137% 147% 102% 99% 79%
Average commission per share $.0571 NA NA NA NA
</TABLE>
<TABLE>
For a share outstanding
154
<PAGE>
throughout each fiscal year Janus Venture Fund
or period ended October 31 1996 1995 1994 1993 1992 (2)
__________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $59.53 $52.86 $53.25 $47.74 $45.96
Income from investment
operations
Net investment income/(loss) -- .05 .11 .66 .17
Net gains or (losses) on
securities (both realized
and unrealized) 5.09 9.49 4.40 6.72 1.61
Total from investment operations 5.09 9.54 4.51 7.38 1.78
Less distributions
Dividends (from net investment
income) (.01) (.03) (.53) (1.16) --
Distributions (from capital
gains) (7.45) (2.84) (4.37) (.71) --
Total distributions (7.46) (2.87) (4.90) (1.87) --
Net asset value, end of period $57.16 $59.53 $52.86 $53.25 $47.74
Total return* 9.28% 19.24% 9.23% 15.76% 3.87%*
________________________________________________________________________________________________
Net assets, end of period
in thousands) $1,741,316 $1,753,201 $1,550,476 $1,836,657 $1,544,531
Average net assets for the
period (in thousands) $1,822,801 $1,612,514 $1,562,521 $1,792,532 $1,496,106
Ratio of gross expenses to
average net assets**(3) 0.89% 0.92% NA NA NA
Ratio of net expenses to
average net assets**(3) 0.88% 0.91% 0.96% 0.97% 1.07%
Ratio of net investment
income/(loss) to average
net assets** (0.33%) 0.29% 0.27% 1.29% 1.32%
Portfolio turnover rate** 136% 113% 114% 139% 124%
Average commission per share $.0382 NA NA NA NA
</TABLE>
<TABLE>
For a share outstanding
throughout each fiscal year Janus Worldwide Fund
or period ended October 31 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $27.65 $27.00 $24.16 $18.95 $17.45
Income from investment
operations
Net investment income .49 .81 .15 .14 .16
Net gains or (losses) on
securities (both
realized and unrealized) 7.79 1.39 3.34 5.29 1.39
155
<PAGE>
Total from investment
operations 8.28 2.20 3.49 5.43 1.55
Less distributions
Dividends (from net
investment income) (.26) (.54) (.27) (.22) --
Distributions (from
capital gains) (1.07) (1.01) (.38) -- (.05)
Total distributions (1.33) (1.55) (.65) (.22) (.05)
Net asset value, end of period $34.60 $27.65 $27.00 $24.16 $18.95
Total return* 31.00% 8.89% 14.76% 28.79% 9.20%
Net assets, end of period
(in thousands) $4,467,185 $1,804,354 $1,587,120 $754,608 $160,672
Average net assets for the
period (in thousands) $2,953,495 $1,622,142 $1,244,194 $379,259 $ 79,518
Ratio of gross expenses
to average net assets**(3) 1.02% 1.24% NA NA NA
Ratio of net expenses to
average net assets**(3) 1.01% 1.23% 1.12% 1.32% 1.73%
Ratio of net investment income
to average net assets** 0.73% 0.99% 0.42% 0.92% 1.74%
Portfolio turnover rate** 80% 142% 158% 124% 147%
Average commission per share $.0311 NA NA NA NA
__________________________________________________________________________________________________
(1) Fiscal period June 1, 1992 to October 31, 1992
(2) Fiscal period August 1, 1992 to October 31, 1992
(3) See "Explanation of the Financial Highlights"
*Total return not annualized for periods of one full year.
**Annualized for periods of less than one full year.
NA - Disclosure not applicable to prior periods.
__________________________________________________________________________________________________
See Notes to Financial Statements
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
</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 Funds. Following is the total of
gains, realized and unrealized. Dividends and distributions are then
subtracted to arrive at the NAV per share at the end of the fiscal period.
156
<PAGE>
Also included in the Financial Highlights are the Funds' expense ratios,
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 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 starting in 1995.
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'
portfolios. 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 in 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.
NOTES TO SCHEDULE OF INVESTMENTS
CAD - Canadian Dollar
Adjustable Rate Preferred Stock Dividend Rates are as of October 31, 1996.
*Non-Income producing security
157
<PAGE>
**A portion of this security has been segregated by the custodian to cover
margin or segregation requirements on open futures contracts and/or forward
currency contracts.
+Securities are registered pursuant to Rule 144A and may be deemed to be
restricted for resale.
#The Investment Company Act of 1940 defines affiliates as those companies in
which a fund holds 5% or more of the outstanding voting securities. Following
is a summary of the transactions with each such affiliate for the period ended
October 31, 1996:
Repurchase Agreements held by the Fund are fully collateralized and such
collateral is in the possession of the Fund's custodian. The collateral is
evaluated daily to ensure its market value exceeds the current market value of
the repurchase agreements including accrued interest.
<TABLE>
Purchase Sales Realized Dividend Market Value
Shares Cost Shares Cost Gain/Loss Income at 10/31/96
______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Janus Fund
AGCO Corp.(1) 1,791,075 $ 43,787,548 1,747,050 $ 41,402,447 $ 2,715,791 $ 100,646 $ 82,875,384
Alco Standard Corp.(2) 5,064,175 228,526,286 100,000 5,900,574 537,511 2,375,04 332,240,934
Cardinal Health, Inc. 2,789,650 156,261,167 779,375 48,753,609 12,432,575 279,188 180,179,088
Computer Sciences Corp. 4,235,398 301,129,179 -- -- -- -- 375,326,325
Crown Cork & Seal Co., Inc. -- -- 4,910,175 226,460,016 (4,853,013) 540,044 --
Cytec Industries, Inc.(3) 2,465,100 60,470,775 -- -- -- -- 126,147,450
Federal Mogul Corp. 2,354,800 52,564,986 -- -- -- -- 54,145,822
MFS Communications Co.,
Inc.(4) 9,511,060 328,746,605 -- -- -- 22 522,310,502
Oce-Van Der Grinten
N.V.(5) 291,809 25,874,229 512,285 26,055,888 24,058,098 1,147,541 51,049,196
Omnicare, Inc.(6) 3,164,050 91,566,563 458,450 21,390,063 2,388,461 84,168 73,727,600
Panamerican Beverages,
Inc. - 2,275,450 84,119,165 1,113,200 41,969,518 5,129,943 409,334 50,703,156
Class A
Robert Half International, 2,256,700 50,084,976 629,250 16,969,878 7,010,056 -- 119,574,506
Inc.(7)
Triton Energy, Ltd. 1,097,025 56,245,493 -- -- -- -- 86,328,178
UNUM Corp. 190,000 10,914,622 50,000 2,994,271 178,548 6,570,347 379,186,550
Wang Laboratories, Inc. 2,125,000 49,510,822 -- -- -- -- 49,671,875
Wolters Kluwer N.V.(8) 353,157 34,039,227 511,250 20,636,146 36,357,780 4,219,482 417,440,347
Young Broadcasting Corp. - 1,290,150 42,910,717 -- -- -- -- 36,769,275
Class A
______________________________________________________________________________________________________________________________
1,616,752,360 452,532,410 85,955,750 15,725,813 2,937,676,188
______________________________________________________________________________________________________________________________
158
<PAGE>
Janus Enterprise Fund
APS Holding Corp. - Class A -- -- -- -- -- -- 20,750,000
Family Golf Centers, Inc. 510,100 8,841,143 -- -- -- -- 14,984,188
Insignia Financial Group,
Inc. -- -- 100,000 943,750 1,289,817 -- 32,437,500
- - Class A(9)
Pet Food Warehouse, Inc. 668,750 3,537,705 -- -- -- -- 3,134,766
Petco Animal Supplies, Inc.(10) 1,000,000 18,541,074 -- -- -- -- 23,500,000
PizzaExpress PLC 5,359,411 30,252,835 465,698 2,853,257 916,997 -- 40,847,935
PriCellular Corp. - Class A(11) 1,550,000 12,250,000 50,000 490,000 23,020 -- 17,250,000
TheraTech, Inc.(12) -- -- 950,000 9,245,412 2,773,938 -- --
Trigen Energy Corp. 100,000 1,705,500 -- -- -- 140,000 22,125,000
Wetherspoon (J.D.) PLC(13) 508,896 5,637,536 123,427 1,545,417 832,723 372,135 40,244,147
______________________________________________________________________________________________________________________________
80,765,793 15,077,836 5,836,495 512,135 215,273,536
______________________________________________________________________________________________________________________________
Janus Growth & Income Fund
Dime Community Bancorp, Inc. 800,000 9,493,750 -- -- -- -- 10,900,000
______________________________________________________________________________________________________________________________
Janus Mercury Fund
CIBER, Inc.(14) 300,000 3,691,875 423,675 1,728,557 11,293,631 -- 12,999,212
Summa Four, Inc. 503,675 9,309,390 503,675 9,309,390 (2,834,093) -- --
13,001,265 11,037,947 8,459,538 -- 12,999,212
______________________________________________________________________________________________________________________________
Janus Twenty Fund
Danka Business Systems PLC 3,078,675 106,274,268 -- -- -- 76,397 121,992,497
(ADR)
Lone Star Steakhouse & Saloon, 278,975 10,424,219 1,919,040 46,126,225 18,203,046 -- --
Inc.
UAL Corp.(15) 4,773,600 228,276,591 -- -- -- -- 226,149,300
______________________________________________________________________________________________________________________________
344,975,078 46,126,225 18,203,046 76,397 348,141,797
______________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
______________________________________________________________________________________________________________________________
Purchases Sales Realized Dividend Market Value
Shares Cost Shares Cost Gain/(Loss) Income at 10/31/96
______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Janus Venture Fund
ABC Rail Products Corp. -- -- 290,400 $ 6,875,274 $ 1,245,411 -- $ 2,943,325
All American Communications, Inc. 500,000 $ 5,250,000 500,000 5,250,000 (2,087,119) -- --
- - Class B
159
<PAGE>
Analysts International Corp.(16) 100,000 1,462,500 20,450 214,963 500,788 $ 21,000,000
273,803
APS Holding Corp. - Class A -- -- 264,172 4,474,118 (389,758) -- 21,943,125
Arch Communications Group, Inc. 125,000 2,938,480 1,385,725 30,868,024 (9,934,165) -- --
Ashbourne PLC -- -- 2,991,816 7,209,160 (1,203,707) 127,477 --
Bell & Howell Co. 286,525 7,599,687 326,500 6,278,024 3,880,617 -- 17,387,500
Biopsys Medical, Inc. 489,700 7,409,859 -- -- -- -- 8,386,112
California Amplifier, Inc. -- -- 335,700 3,870,259 9,017,727 -- --
Children's Broadcasting Corp. 450,000 4,500,000 450,000 4,500,000 (1,934,388) -- --
Coinmach Laundry Corp. 527,600 7,707,208 -- -- -- -- 9,496,800
CommNet Cellular, Inc. 68,800 2,172,353 -- -- -- -- 22,200,000
Computer Learning Centers 385,000 10,453,483 -- -- -- -- 10,298,750
Culligan Water Technologies, Inc. 1,035,700 33,814,816 -- -- -- -- 38,838,750
DavCo Restaurants, Inc. -- -- 528,950 6,279,673 (2,438,888) -- --
Dayton Superior Corp. 300,000 3,976,913 -- -- -- -- 3,150,000
DepoTech Corp. 540,000 11,910,259 -- -- -- -- 9,375,000
Dignity Partners, Inc. 202,000 2,461,500 202,000 2,461,500 107,454 -- --
Educational Medical, Inc. 590,000 5,909,690 -- -- -- -- 5,918,438
Eurobike A.G. 218,184 4,840,970 -- -- -- -- 6,559,273
Exide Corp. 143,000 6,161,098 1,250,065 58,546,550 (19,275,482) 39,415 --
Felcor Suite Hotels, Inc. 250,000 6,625,000 250,000 6,625,000 851,863 -- --
Gildemeister Italiana S.p.A. 2,324,000 8,416,835 46,312 163,576 (5,460) 42,885 6,901,630
Heritage Media Corp. - Class A(17) -- -- 150,000 2,544,489 2,459,239 -- 22,875,000
ICU Medical, Inc. 652,150 9,848,597 776,525 11,324,397 (2,749,592) -- --
J. P. Foodservice, Inc. 244,925 4,479,308 -- -- -- -- 20,660,238
Keane, Inc. 99,000 3,965,819 378,250 3,569,936 5,851,159 -- 26,877,791
Klamath First Bancorp, Inc. 172,000 2,250,416 462,775 5,825,180 481,657 147,275 5,712,539
Landauer, Inc. -- -- 428,300 6,466,647 2,157,216 185,625 --
Littelfuse, Inc. 47,625 1,873,656 -- -- -- -- 23,179,406
Minerals Technologies, Inc. -- -- 25,000 764,000 91,746 125,159 48,389,166
Motorcar Parts & Accessories, Inc. 300,000 4,300,625 300,000 4,300,625 (444,410) -- --
MSC Industrial Direct Co., Inc. - 391,300 10,442,176 5,225 153,955 19,306 -- 14,284,775
Class A
O'Reilly Automotive, Inc. 526,450 16,547,616 44,775 1,298,475 435,733 -- 24,497,188
Papa John's International, Inc.(18) 176,538 6,035,739 114,887 2,859,754 2,860,999 -- 53,190,859
PIA Merchandising Services, Inc. 204,000 2,970,250 204,000 2,970,250 1,226,996 -- --
Premier Parks, Inc. 719,400 15,898,656 -- -- -- -- 22,840,950
PriCellular Corp. - Class A(19) 1,387,317 12,053,187 -- -- -- -- 17,704,744
Quality Dining, Inc. 492,250 11,865,334 743,050 12,894,879 7,480,265 -- 7,978,650
Recycling Industries, Inc. 1,500,000 6,187,500 146,000 602,250 (95,056) -- 4,146,625
Rent-Way, Inc. 315,500 3,215,812 1,600 14,450 5,518 -- 3,688,325
R.P. Scherer Corp. 30,600 1,293,027 1,479,950 50,583,660 8,719,220 -- --
Scientific Games Holdings Corp. 674,400 24,696,161 674,400 24,696,161 (4,704,314) -- --
Simula, Inc. -- -- 524,400 6,778,385 1,287,987 -- --
Southern Energy Homes, Inc.(20) -- -- 367,150 3,382,629 2,955,996 -- 3,697,367
Wisconsin Central Transportation 69,300 2,039,598 261,150 2,832,420 8,897,456 -- 119,808,000
Corp.(21)
World Acceptance Corp. -- -- 1,723,875 11,677,083 624,561 -- --
______________________________________________________________________________________________________________________________
160
<PAGE>
273,574,128 299,155,746 15,896,575 941,639 603,930,326
______________________________________________________________________________________________________________________________
Janus Worldwide Fund
Assa-Abloy A.B. - Class B(22) 553,524 2,662,814 -- -- -- 419,805 43,933,028
Axime S.A. 355,061 32,500,955 -- -- -- -- 37,916,242
Fresenius Medical Care (ADR) 2,118,675 48,251,469 -- -- -- -- 63,030,581
JBA Holdings PLC 2,584,429 17,962,297 -- -- -- 148,349 22,733,726
Kinnevik A.B. - Class B -- -- 693,983 18,933,251 2,728,792 1,990,684 71,229,558
Korea Mobile Telecommunications, 1,174,800 17,389,250 434,225 4,169,314 3,848,423 9,359 20,856,563
Inc. (ADR)(23)
NetCom Systems A.B.(24) 666,170 25,711,034 666,170 25,711,034 4,634,480 -- --
Securitas A.B. - Class B(25) 1,050,157 20,431,371 22,705 238,309 379,201 1,083,127 93,531,489
______________________________________________________________________________________________________________________________
164,909,190 49,051,908 11,590,896 3,651,324 353,231,187
_____________________________________________________________________________________________________________________________
(1) Adjusted for 2 for 1 stock split 2/1/96
(2) Adjusted for 2 for 1 stock split 11/10/95
(3) Adjusted for 3 for 1 stock split 7/24/96
(4) Adjusted for 2 for 1 stock split 4/29/96
(5) Includes stock option on dividend 4/29/96
(6) Adjusted for 2 for 1 stock split 6/28/96
(7) Adjusted for 2 for 1 stock split 6/10/96
(8) Includes stock option on dividend 6/10/96
(9) Adjusted for 2 for 1 stock split 6/10/96
(10) Adjusted for 3 for 2 stock
split 4/16/96
(11) Adjusted for 5 for 4 stock split 3/26/96 and 10/21/96
(12) Adjusted for 3 for 2 stock split 7/1/96
(13) Includes stock option on dividend 1/5/96
(14) Adjusted for 2 for 1 stock split 6/17/96
(15) Adjusted for 4 for 1 stock split 5/21/96
(16) Adjusted for 2 for 1 stock split 10/1/96
(17) Adjusted for 2 for 1 stock split 8/13/96
(18) Adjusted for 3 for 2 stock split 3/26/96
(19) Adjusted for 5 for 4 stock split 3/29/96 and 10/21/96
(20) Adjusted for 3 for 2 stock split 7/5/96
(21) Adjusted for 3 for 1 stock split 6/3/96
(22) Includes Rights Issue: 1 share for 5 rights 4/10/96
(23) 1 (GDR) exchanged for 3 (ADR's) 6/27/96
(24) 1 for 1 spinoff for each Kinnevik share held 5/8/96
(25) Adjusted for 3 for 1 stock split 6/10/96
______________________________________________________________________________
See Notes to Financial Statements
JANUS EQUITY FUNDS OCTOBER 31, 1996 ANNUAL REPORT
</TABLE>
161
<PAGE>
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.
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. Eleven series of shares ("Equity Funds" or "Funds")
included in this report invest primarily in equity securities. Each Fund is
diversified as defined in the 1940 Act, with the exception of the Janus
Enterprise, Janus Olympus and Janus Twenty Funds, which are non-diversified.
Janus Olympus Fund and Janus Equity Income Fund began operations on December
29, 1995 and June 28, 1996, respectively. Organization costs were borne by
Janus Capital Corp. (Janus Capital).
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 obtained from one or
more dealers, making a market for such securities or by a pricing service
approved by the Funds' Trustees. Short-term securities maturing within 60 days
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 their 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. Certain dividends
from foreign securities will be recorded as soon as the Trust is informed of
the dividend if such information is obtained subsequent to the ex-dividend
date. Interest income is recorded on the accrual basis and includes
amortization of discounts and premiums. Gains and losses are determined on the
identified cost basis, which is the same basis used for federal income tax
purposes.
162
<PAGE>
Forward 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 from foreign currency
transactions.
Forward currency contracts held by the Funds are fully collateralized by
other securities which are denoted in the accompanying schedule of
investments.
Such collateral is in the possession of the Fund's custodian. The
collateral is evaluated daily to ensure its market value equals or exceeds the
current market value of the corresponding forward currency contracts.
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 resultant 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 (i.e., treated as realized and subject to
distribution) 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 indexes 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.
163
<PAGE>
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.
Dividend Distributions and Expenses
Dividends for Janus Balanced, Janus Equity Income and Janus Growth and
Income Funds are declared and distributed quarterly and capital gains (if any)
are distributed annually. The remaining eight Equity Funds declare and
distribute dividends and capital gains (if any) annually. Each 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.
2. Investment Advisory Agreement and Other Transactions with Affiliates
The advisory agreement with the Funds spells out the expenses that the
Funds must pay. Each of the Funds is subject to the following schedule:
Average Daily Net Annual Rate
Fee Schedule Assets of Fund Percentage (%)
_____________________________________________________________________________
Equity Funds First $ 30 Million 1.00
Next $270 Million .75
Next $200 Million .70
Over $500 Million .65
_____________________________________________________________________________
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 1/2% of the first $30 million, 2% of the next $70 million and 1 1/2%
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, receives an annual fee of 0.16% of average net assets per fund,
plus $4.00 per shareholder account (excluding Janus and Venture Funds) for
transfer agent services plus reimbursement of certain out of pocket expenses
(primarily postage and telephone charges).
164
<PAGE>
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 share-holder accounting systems
to the Funds. DST Securities Inc., a wholly owned subsidiary of DST, is
designated as an introductory broker on certain portfolio transactions.
Brokerage commissions paid to DST Securities Inc. serve to reduce transfer
agent fees and expenses. Brokerage commissions paid, fees reduced, and the net
fees paid to DST for the year or period ended October 31, 1996, are noted
below.
DST Securities Inc. Fund
Commissions Expense
Paid* Reduction* DST Fees
_____________________________________________________________________________
Janus Fund $470,414 $352,810 $2,265,828
Janus Balanced Fund 9,591 7,194 74,648
Janus Enterprise Fund 11,030 8,273 292,047
Janus Equity Income Fund 83 62 3,217
Janus Growth and Income Fund 79,006 59,254 248,828
Janus Mercury Fund 88,645 66,483 687,053
Janus Olympus Fund 1,117 838 72,202
Janus Overseas Fund 5,123 3,842 123,936
Janus Twenty Fund 183,255 137,441 1,111,540
Janus Venture Fund 64,665 48,499 466,217
Janus Worldwide Fund 104,173 78,130 652,034
_____________________________________________________________________________
*The difference between commissions paid to DST Securities, Inc. and expenses
reduced constituted commissions paid to an unaffiliated clearing broker.
3. Federal Income Tax
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to
differing treatments for items such as deferral of wash sales, foreign
currency transactions, net operating losses and capital loss carryforwards.
Permanent items identified in the period ended October 31, 1996, have been
reclassified among the components of net assets as follows:
Undistributed Undistributed
Net Investment Net Realized Paid-In
Income Gains and Losses Capital
_____________________________________________________________________________
Janus Fund $53,186,317 ($53,186,317) --
Janus Balanced Fund 284,522 (284,522) --
Janus Enterprise Fund 4,643,424 (4,643,424) --
Janus Equity Income Fund (28,636) 28,636 --
165
<PAGE>
Janus Growth and Income Fund 2,638,635 (2,638,635) --
Janus Mercury Fund 7,176,431 (7,176,431) --
Janus Olympus Fund (118,932) 118,932 --
Janus Overseas Fund 3,302,048 (3,302,048) --
Janus Twenty Fund 23,422,904 (23,422,904) --
Janus Venture Fund 6,055,726 (6,055,796) $70
Janus Worldwide Fund 43,148,118 (43,148,118) --
_____________________________________________________________________________
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
October 31, 1996.
Net capital loss carryovers noted below, if any, as of October 31,1996,
are available to offset future realized capital gains and thereby reduce
future taxable gains distributions. The aggregate cost of investments and the
composition of unrealized appreciation and depreciation of investment
securities for federal income tax purposes as of October 31, 1996, are as
follows:
<TABLE>
at October 31, 1996 at October 31, 1996
Net
Currency Capital Federal Net
Gains/ loss Tax Unrealized Unrealized Appreciation/
(Losses) Carryovers Cost Appreciation (Depreciation) Depreciation
_________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Janus Fund 53,186,317 -- $12,943,131,306 $3,038,868,598 ($145,732,638) $2,893,135,960
Janus Balanced
Fund 284,522 -- 196,989,299 17,324,498 (2,703,145) 14,621,353
Janus Enterprise
Fund (2,619,926) -- 572,025,947 174,912,989 (18,772,401) 156,140,588
Janus Equity
Income Fund (28,636) -- 31,960,566 1,825,665 (858,343) 967,322
Janus Growth
and Income Fund 2,638,635 -- 887,744,649 163,759,510 (20,598,815) 143,160,695
Janus Mercury
Fund 7,176,431 -- 1,852,255,924 235,032,357 (71,031,667) 164,000,690
Janus Olympus
Fund (118,932) (7,767,016) 392,340,968 40,493,198 (7,438,459) 33,054,739
Janus Overseas
Fund 3,302,048 -- 798,659,908 78,145,298 (15,419,594) 62,725,704
Janus Twenty
Fund 23,422,904 -- 3,328,742,146 662,699,927 (61,277,336) 601,422,591
Janus Venture
Fund 5,508,892 -- 1,406,912,870 417,315,024 (76,496,786) 340,818,238
Janus Worldwide
166
<PAGE>
Fund 43,148,118 -- 3,943,517,943 654,076,611 (84,643,427) 569,433,184
_________________________________________________________________________________________________
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of Janus Investment Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Janus Fund, Janus
Balanced Fund, Janus Enterprise Fund, Janus Equity Income Fund, Janus Growth
and Income Fund, Janus Mercury Fund, Janus Olympus Fund, Janus Overseas Fund,
Janus Twenty Fund, Janus Venture Fund, and Janus Worldwide Fund (eleven of the
portfolios constituting the Janus Investment Fund, hereafter referred to as
the "Funds") at October 31, 1996, the results of each of their operations, the
changes in each of their net assets and the financial highlights for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1996 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
for unsettled security transactions, provide a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
/s/ Price Waterhouse LLP
Denver, Colorado
December 2, 1996
167
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