CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary of financial data ........................ 2
THE FUND IN DETAIL
The Fund's Investment Objective and Policies .............................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 4
PERFORMANCE TERMS
An explanation of performance terms ....................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open Your Janus Account ............................................ 8
Minimum Investment Policies ............................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JETS(R) ................................................................... 11
Transactions Through Processing Organizations ............................. 11
Taxpayer Identification Number ............................................ 11
Share Certificates ........................................................ 11
Involuntary Redemption .................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager .................................. 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distributions ............................................................. 14
Taxes ..................................................................... 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS FUND
100 Fillmore Street
Denver, CO 80206-4923
1-800-525-3713
February 18, 1996
Janus Fund (the "Fund") is a no-load, diversified mutual fund that seeks
long-term growth of capital by investing primarily in common stocks of a large
number of issuers of any size. Generally, the Fund emphasizes issuers with
larger market capitalizations.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 18, 1996, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND AT A GLANCE
INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term growth of capital in a manner
consistent with the preservation of capital.
PRIMARY HOLDINGS:
A diversified fund that pursues its objective by investing in common stocks of
companies of any size.The Fund generally invests in larger, more established
issuers.
SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in common stocks. The
Fund is not designed as a short-term trading vehicle and should not be relied
upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages more than $30 billion in assets.
FUND MANAGER:
James P. Craig, III
FUND INCEPTION:
February 1970
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
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SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee** None
*There is an $8 service fee for redemptions by wire.
**You may be charged a $5 transaction fee for excessive exchanges . See "How to
Exchange Shares"on page 9.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
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Management Fee 0.65%
Other Expenses 0.22%
Total Fund Operating Expenses 0.87%
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(1) The information in the table above is based on expenses before expense
offset arrangements for the fiscal period ended October 31, 1995.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
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Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $9 $28 $48 $107
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THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
1
<PAGE>
FINANCIAL HIGHLIGHTS
The information below is for fiscal periods ending on October 31 of each year.
The accounting firm of Price Waterhouse LLP has audited the Fund's financial
statements since October 1, 1990. Their report is included in the Fund's Annual
Report, which is incorporated by reference into the SAI. The Fund's financial
statements for fiscal periods prior to October 1, 1990 were audited by other
independent accountants whose reports are not included in the Annual Report.
Expense and income ratios and portfolio turnover rates have been annualized for
periods of less than one year. Total returns for periods of less than one year
are not annualized.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $ 19.62 $ 20.81 $ 18.86 $ 18.27 $ 13.25 $ 16.36
Income from investment operations:
2. Net investment income 0.16 0.17 0.26 0.23 0.25 0.25
3. Net gains or (losses) on securities
(both realized and unrealized) 3.99 (0.03) 2.88 1.46 5.09 (0.67)
4. Total from investment operations 4.15 0.14 3.14 1.69 5.34 (0.42)
Less distributions:
5. Dividends (from net investment income) (.01) (0.39)(1) (0.29) (0.19) (0.31) (0.19)
6. Distributions (from capital gains) (.39) (0.94) (0.90) (0.91) (0.01) (2.50)
7. Total distributions (.40) (1.33) (1.19) (1.10) (0.32) (2.69)
8. Net asset value, end of period $ 23.37 $ 19.62 $ 20.81 $ 18.86 $ 18.27 $ 13.25
9. Total return 21.62% 0.75% 17.41% 9.35% 40.95% (3.68%)
10. Net assets, end of period (in millions) $11,963 $ 9,647 $ 9,098 $ 4,989 $ 2,598 $ 1,049
11. Ratio of expenses to average net assets 0.87%(2) 0.91% 0.92% 0.97% 0.98% 1.02%
12. Ratio of net investment income
to average net assets 1.25% 1.12% 1.55% 1.54% 1.77% 2.11%
13. Portfolio turnover rate 118% 139% 127% 153% 132% 307%
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</TABLE>
<TABLE>
<CAPTION>
1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Net asset value, beginning of period $ 12.11 $ 12.39 $ 14.77 $ 13.42
Income from investment operations:
2. Net investment income 0.22 0.60 0.19 0.42
3. Net gains or (losses) on securities
(both realized and unrealized) 4.59 1.05 0.30 2.20
4. Total from investment operations 4.81 1.65 0.49 2.62
Less distributions:
5. Dividends (from net investment income) (0.56) (0.32) (0.38) (0.47)
6. Distributions (from capital gains) -- (1.61) (2.49) (0.80)
7. Total distributions (0.56) (1.93) (2.87) (1.27)
8. Net asset value, end of period $ 16.36 $ 12.11 $ 12.39 $ 14.77
9. Total return 41.67% 15.83% 4.14% 20.66%
10. Net assets, end of period (in millions) $ 673 $ 391 $ 387 $ 474
11. Ratio of expenses to average net assets 0.92% 0.98% 1.01% 1.00%
12. Ratio of net investment income
to average net assets 1.68% 4.99% 1.55% 2.82%
13. Portfolio turnover rate 205% 175% 214% 254%
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</TABLE>
(1) Distribution in excess of financial statement income of $0.02.
(2) The Fund's expenses may be reduced through the use of brokerage commissions
and uninvested cash balances earning interest with the Fund's custodian. The
expense ratio for the fiscal period ended October 31, 1995, does not reflect
expense reductions, which reduced the expense ratio to 0.86%.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gains (or losses) on securities is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) is the
per share amount that the Fund paid from net realized gains.
Total return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purpose of calculating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. A FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratio of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's total net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed description of investment terms used throughout this Prospectus.
You should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital in a manner
consistent with the preservation of capital. It is a diversified fund that
pursues its objective by investing in common stocks of companies of any size.
The Fund generally invests in larger, more established issuers.
TYPES OF INVESTMENTS
The Fund invests primarily in common stocks selected for their growth potential.
The Fund may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities. Debt
securities that the Fund may purchase include corporate bonds and debentures
(less than 35% of net assets in high-yield/high-risk securities); government
securities; mortgage- and asset-backed securities (not to exceed 25% of assets);
zero-coupon bonds (not to exceed 10% of assets); indexed/structured notes;
high-grade commercial paper; certificates of deposit; and repurchase agreements.
Such securities may offer growth potential because of anticipated changes in
interest rates, credit standing, currency relationships or other factors. The
Fund may also invest in short-term debt securities, including money market funds
managed by Janus Capital, as a means of receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 4. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund invests substantially all of its assets in common stocks to the extent
its portfolio manager believes that the relevant market environment favors
profitable investing in those securities. The portfolio manager generally takes
a "bottom up" approach to building the portfolio. In other words, the manager
seeks to identify individual companies with earnings growth potential that may
not be recognized by the market at large. Although themes may emerge in the
Fund, securities are generally selected without regard to any defined industry
sector or other similarly defined selection procedure. Realization of income is
not a significant investment consideration. Any income realized on the Fund's
investments will be incidental to its objective.
ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies with earnings growth
potential, regardless of country of organization or place of principal business
activity. Foreign securities are generally selected on a stock-by-stock basis
without regard to any defined allocation among countries or geographic regions.
However, certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries, regions or
geographic areas may warrant greater consideration in selecting foreign
securities. See "Additional Risk Factors" on page 4.
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WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors" on page 4.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
3
<PAGE>
HOW DOES THE FUND TRY TO REDUCE RISK?
Diversification of the Fund's assets reduces the effect of any single holding on
its overall portfolio value. The Fund may use futures, options and other
derivative instruments to protect the portfolio from movements in securities
prices and interest rates. The Fund may also use a variety of currency hedging
techniques, including forward currency contracts, to manage exchange rate risk
when investing directly in foreign markets. See "Additional Risk Factors." In
addition, to the extent that the Fund holds a larger cash position, it may not
participate in market declines to the same extent as if it had remained more
fully invested in common stocks.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 75% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above percentage limits. There is no assurance that such permission will be
granted.
ADDITIONAL RISK FACTORS
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
4
<PAGE>
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN GOVERNMENTS,
INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC SECURITIES.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
o Currency Risk. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.
o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Fund's assets from that country.
o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use most derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.
Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
5
<PAGE>
the Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.
HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (Standard & Poor's and
Moody's). The Fund expects that its holdings of lower quality securities, if
any, will consist primarily of bonds rated in the highest two tiers of
noninvestment grade securities.
The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.
See Appendix A for risks associated with certain other investments.
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative total return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
6
<PAGE>
SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. This section also explains in detail the wide
array of services and features you can establish on your account. These services
may be modified or discontinued without shareholder approval.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00
a.m.-10:00 p.m., and Saturday: 10:00 a.m.-7:00 p.m., New York time.
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MINIMUM INVESTMENTS*
To open a new account $2,500
To open a new retirement or UGMA/UTMA account $ 500
To open a new account with an Automatic Investment Program $ 500**
To add to any type of an account $ 100
*The Fund reserves the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
**There is a $100 minimum subsequent investment.
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TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this Prospectus.
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 591/2.
Investors Fiduciary Trust Company serves as custodian for the Retirement Plans
offered by the Fund. There is an annual $12 fee per account to maintain your
retirement account. The maximum annual fee is $24 per taxpayer identification
number. You may pay the fee by check or have it automatically deducted from your
account (usually in December).
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 701/2 with earned income to contribute up to the lesser of $2,000 or
100% of compensation annually. Please refer to the Janus Funds IRA booklet
for complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
7
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HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of the following addresses:
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers two Investor Service Centers for those individuals who would
like to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
MINIMUM INVESTMENT POLICIES
ACCOUNTS ESTABLISHED AFTER FEBRUARY 18, 1996
Any account opened after February 18, 1996, must meet minimum investment
requirements described at page 7.
ACCOUNTS ESTABLISHED ON OR BEFORE FEBRUARY 18, 1996
o The minimum investment requirement remains at $1,000 ($250 for retirement
accounts and UGMA/UTMA accounts) for these accounts only.
o There is no minimum initial investment requirement for Automatic Monthly
Investment Program participants that continue to make subsequent automatic
investments of at least $50.
o Subsequent investments (other than automatic monthly investments) must meet
the $100 minimum.
ALL ACCOUNTS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 annual maintenance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
above or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued and the $10 fee
assessed on the second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you may increase your
account balance to the required minimum.
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards, third party checks and credit card checks will not be
accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares Option" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.
o AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
8
<PAGE>
to your Fund account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach a
"voided" check or deposit slip from your bank account. If your Fund account
is already established, call 1-800-525-3713 to request the appropriate
form.
o PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.
EXCHANGE POLICIES
o Except for Systematic Exchanges, new accounts established by exchange must
meet the $2,500 minimum, or be for the total account value if less than
$2,500.
o Exchanges between existing accounts must meet the $100 subsequent
investment requirement.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges) free of charge. The Fund reserves the
right to have a $5 transaction fee automatically deducted from your account
for each additional exchange.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to your Fund prior to making any exchanges.
o Be sure that you read the prospectus for the Fund into which you are
exchanging.
o The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one Fund and the purchase of
shares of another Fund, which may produce a taxable gain or loss in a
non-tax deferred account.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus QuotelineSM 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o BY CHECK
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
9
<PAGE>
o ELECTRONIC TRANSFER
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o BY WIRE
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must also be
submitted.
o IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
591/2) or premature (before age 591/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE. NAV per share is calculated by
dividing the total value of the Fund's securities and other assets, less
liabilities, by the total number of shares outstanding. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A SIGNATURE GUARANTEE MAY NOT
BE PROVIDED BY A NOTARY PUBLIC.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
10
<PAGE>
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customer, may be the shareholder of
record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmation statements unless monthly statements are
requested. Information regarding the tax status of income dividends and capital
gains distributions will be mailed to shareholders on or before January 31st of
each year. Account tax information will also be sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts with the same
record address. Upon request, such reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
11
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to the Fund since 1970 and
currently serves as investment adviser to all of the Janus funds, as well as
adviser or subadviser to other mutual funds and individual, corporate,
charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
PORTFOLIO MANAGER
James P. Craig, III is Chief Investment Officer of Janus Capital. He is also
Executive Vice President and portfolio manager of the Fund, which he has managed
since 1986. Mr. Craig previously managed Janus Venture Fund from its inception
to December 1993 and Janus Balanced Fund from December 1993 through December
1995. He holds a Bachelor of Arts in Business from the University of Alabama and
a Master of Arts in Finance from the Wharton School of the University of
Pennsylvania.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- ----------------------------------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Over $500 Million .65%
- ----------------------------------------
The actual management fee paid by the Fund for the fiscal year ended October 31,
1995, was .65% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses. Janus Capital will reduce its
management fee to the extent that Fund expenses exceed regulatory limits imposed
by state securities regulators.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
12
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective.
As of the date of this Prospectus, the Trust offers 18 separate series, three of
which currently offer two classes of shares. On June 16, 1986, the Trust assumed
all the assets and liabilities of the Fund's predecessor corporation, Janus
Fund, Inc., which was incorporated under the laws of Maryland on September 18,
1968. All references in this Prospectus to the Fund prior to June 16, 1986 are
to its predecessor entity and all references after such date are to the series
of the Trust.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The shareholders of the Trust of record on April 30, 1992,
and the initial shareholder(s) of all series of the Trust created after April
30, 1992, have voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of the shareholders of the
Fund is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Fund believes that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
13
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND
PAID IN DECEMBER.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Fund reserves the right to reinvest undeliverable and uncashed dividend and
distribution checks that remain outstanding for six months in shares of the Fund
at the NAV next computed after the check is cancelled. Subsequent distributions
may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Distributions by the Fund are subject to federal income tax, regardless of
whether the distribution is made in cash or reinvested in additional shares of
the Fund. In certain states, a portion of the dividends and distributions
(depending on the source of the Fund's income) may be exempt from state and
local taxes. Information regarding the tax status of income dividends and
capital gains distributions will be mailed to shareholders on or before January
31st of each year.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.
The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meet these requirements so that any earnings on your
investment will not be taxed twice.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
14
<PAGE>
APPENDIX A
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.
High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies (PFICs) are any foreign corporations which
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the Fund to
recognize income associated with the PFIC prior to the actual receipt of any
such income.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
15
<PAGE>
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. Strips are debt securities that are stripped of their
interest (usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines in
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
JANUS FUND PROSPECTUS FEBRUARY 18, 1996
16
<PAGE>
CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary of financial data ........................ 2
THE FUND IN DETAIL
The Fund's Investment Objective and Policies .............................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 5
PERFORMANCE TERMS
An explanation of performance terms ....................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open Your Janus Account ............................................ 8
Minimum Investment Policies ............................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JETS(R) ................................................................... 11
Transactions Through Processing Organizations ............................. 11
Taxpayer Identification Number ............................................ 11
Share Certificates ........................................................ 11
Involuntary Redemption .................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager .................................. 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distributions ............................................................. 14
Taxes ..................................................................... 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS MERCURY FUND
100 Fillmore Street
Denver, CO 80206-4923
1-800-525-3713
February 18, 1996
Janus Mercury Fund (the "Fund") is a no-load, nondiversified mutual fund that
seeks long-term growth of capital. The Fund pursues its objective by investing
in common stocks of issuers of any size, which may include larger
well-established issuers and/or smaller emerging growth companies.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 18, 1996, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND AT A GLANCE
INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term growth of capital.
PRIMARY HOLDINGS:
A nondiversified fund that pursues its investment objective by investing
primarily in common stocks of companies of any size.
SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in common stocks. The
Fund is not designed as a short-term trading vehicle and should not be relied
upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages more than $30 billion in assets.
FUND MANAGER:
Warren B. Lammert
FUND INCEPTION:
May 1993
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee** None
*There is an $8 service fee for redemptions by wire.
**You may be charged a $5 transaction fee for excessive exchanges. See "How to
Exchange Shares" on page 9.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
- --------------------------------------------------------------------------------
Management Fee 0.69%
Other Expenses 0.45%
Total Fund Operating Expenses 1.14%
- --------------------------------------------------------------------------------
(1) The information in the table above is based on expenses before expense
offset arrangements for the fiscal period ended October 31, 1995.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $11 $36 $62 $136
- --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
1
<PAGE>
FINANCIAL HIGHLIGHTS
The information below is for fiscal periods ending on October 31 of each year
and has been audited by the accounting firm of Price Waterhouse LLP. Their
report is included in the Fund's Annual Report, which is incorporated by
reference into the SAI. Expense and income ratios and portfolio turnover rates
have been annualized for periods of less than one year. Total returns for
periods of less than one year are not annualized.
1995 1994 1993(1)
- --------------------------------------------------------------------------------
1. Net asset value, beginning of period $14.12 $11.70 $10.00
Income from investment operations:
2. Net investment income (loss) 0.16 0.02 (0.01)
3. Net gains or (losses) on securities
(both realized and unrealized) 3.37 2.40 1.71
4. Total from investment operations 3.53 2.42 1.70
Less distributions:
5. Dividends (from net investment income) (0.16) -- --
6. Distributions (from capital gains) (0.11) -- --
7. Total distributions (0.27) -- --
8. Net asset value, end of period $17.38 $14.12 $11.70
9. Total return 25.53% 20.68% 17.00%
10. Net assets, end of period (in millions) $1,521 $ 596 $ 113
11. Ratio of expenses to average net assets 1.14%(2) 1.33% 1.75%
12. Ratio of net investment income
to average net assets 0.50% 0.25% (0.40%)
13. Portfolio turnover rate 201% 283% 151%
- --------------------------------------------------------------------------------
(1) Fiscal period from May 3, 1993 (inception) to October 31, 1993.
(2) The Fund's expenses may be reduced through the use of brokerage commissions
and uninvested cash balances earning interest with the Fund's custodian. The
expense ratio for the fiscal period ended October 31, 1995, does not reflect
expense reductions, which reduced the expense ratio to 1.12%.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gains (or losses) on securities is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) is the
per share amount that the Fund paid from net realized gains.
Total return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calculating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. A FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratios of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's total net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed description of investment terms used throughout this Prospectus.
You should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital. It is a
non-diversified fund that pursues its objective by investing in common stocks of
issuers of any size, which may include larger well-established issuers and/or
smaller emerging growth companies.
TYPES OF INVESTMENTS
The Fund invests primarily in common stocks selected for their growth potential.
The Fund may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities. Debt
securities that the Fund may purchase include corporate bonds and debentures
(less than 35% of net assets in high-yield/high-risk securities); government
securities; mortgage- and asset-backed securities (not to exceed 25% of assets);
zero-coupon bonds (not to exceed 10% of assets); indexed/structured notes;
high-grade commercial paper; certificates of deposit; and repurchase agreements.
Such securities may offer growth potential because of anticipated changes in
interest rates, credit standing, currency relationships or other factors. The
Fund may also invest in short-term debt securities, including money market funds
managed by Janus Capital, as a means of receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 5. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund invests substantially all of its assets in common stocks to the extent
its portfolio manager believes that the relevant market environment favors
profitable investing in those securities. The portfolio manager generally takes
a "bottom up" approach to building the portfolio. In other words, the manager
generally seeks to identify individual companies with earnings growth potential
that may not be recognized by the market at large. Although themes may emerge in
the Fund, securities are generally selected without regard to any defined
industry sector or other similarly defined selection procedure. Realization of
income is not a significant investment consideration. Any income realized on the
Fund's investments will be incidental to its objective.
ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies with earnings growth
potential, regardless of country of organization or place of principal business
activity. Foreign securities are generally selected on a stock-by-stock basis
without regard to any defined allocation among countries or geographic regions.
However, certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries, regions or
geographic areas may warrant greater consideration in selecting foreign
securities. See "Additional Risk Factors" on page 5.
- --------------------------------------------------------------------------------
WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors" on page 5.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
3
<PAGE>
HOW DOES A DIVERSIFIED FUND DIFFER FROM A NONDIVERSIFIED FUND?
A "nondiversified" fund has the ability to take larger positions in a smaller
number of issuers than a "diversified" fund. Because the appreciation or
depreciation of a single stock may have a greater impact on the NAV of a
nondiversified fund, its share price can be expected to fluctuate more than a
comparable diversified fund.
- --------------------------------------------------------------------------------
HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options and other derivative instruments to protect
the portfolio from movements in securities prices and interest rates. The Fund
may also use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk when investing directly in
foreign markets. See "Additional Risk Factors" on page 5. In addition, to the
extent that the Fund holds a larger cash position, it may not participate in
market declines to the same extent as if it had remained more fully invested in
common stocks.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund is deemed to be a
nondiversified fund under the 1940 Act and is subject to the following
requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 50% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
o The Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above percentage limits. There is no assurance that such permission will be
granted.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
4
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ADDITIONAL RISK FACTORS
INVESTMENTS IN SMALLER COMPANIES
SMALLER OR NEWER COMPANIES MAY SUFFER MORE SIGNIFICANT LOSSES AS WELL AS REALIZE
MORE SUBSTANTIAL GROWTH THAN LARGER OR MORE ESTABLISHED ISSUERS.
The Fund may invest in companies that have relatively small revenues, have a
small share of the market for their products or services, or have limilted
geographic or product markets. Small companies may lack depth of management,
they may be unable to generate internally funds necessary for growth or
potential development or to generate such funds through external financing on
favorable terms, or they may be developing or marketing new products or services
for which markets are not yet established and may never become established. In
addition, such companies may be insignificant factors in their industries and
may become subject to intense competition from larger companies. Securities of
small companies held by the Fund may have limited trading markets that may be
subject to wide price fluctuations. Investments in such companies tend to be
more volatile and somewhat more speculative.
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN GOVERNMENTS,
INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC SECURITIES.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
o Currency Risk. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.
o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Fund's assets from that country.
o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use most derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use most derivative instruments
for non-hedging purposes such as seeking to increase the Fund's income or
otherwise seeking to enhance return. Please refer to Appendix A to this
Prospectus and the SAI for a more detailed discussion of these instruments.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
5
<PAGE>
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.
Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.
HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (Standard & Poor's and
Moody's). The Fund expects that its holdings of lower quality securities, if
any, will consist primarily of bonds rated in the highest two tiers of
noninvestment grade securities.
The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.
See Appendix A for risks associated with certain other investments.
- --------------------------------------------------------------------------------
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative total return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
6
<PAGE>
SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. This section also explains in detail the wide
array of services and features you can establish on your account. These services
may be modified or discontinued without shareholder approval.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00
a.m.-10:00 p.m., and Saturday: 10:00 a.m.-7:00 p.m., New York time.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS*
To open a new account $2,500
To open a new retirement or UGMA/UTMA account $ 500
To open a new account with an Automatic Investment Program $ 500**
To add to any type of an account $ 100
*The Fund reserves the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
**There is a $100 minimum subsequent investment.
- --------------------------------------------------------------------------------
TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this Prospectus.
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 591/2.
Investors Fiduciary Trust Company serves as custodian for the Retirement Plans
offered by the Fund. There is an annual $12 fee per account to maintain your
retirement account. The maximum annual fee is $24 per taxpayer identification
number. You may pay the fee by check or have it automatically deducted from your
account (usually in December).
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 701/2 with earned income to contribute up to the lesser of $2,000 or
100% of compensation annually. Please refer to the Janus Funds IRA booklet
for complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
7
<PAGE>
HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of the following addresses:
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers two Investor Service Centers for those individuals who would
like to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
MINIMUM INVESTMENT POLICIES
ACCOUNTS ESTABLISHED AFTER FEBRUARY 18, 1996
Any account opened after February 18, 1996, must meet minimum investment
requirements described at page 7.
ACCOUNTS ESTABLISHED ON OR BEFORE FEBRUARY 18, 1996
o The minimum investment requirement remains at $1,000 ($250 for retirement
accounts and UGMA/UTMA accounts) for these accounts only.
o There is no minimum initial investment requirement for Automatic Monthly
Investment Program participants that continue to make subsequent automatic
investments of at least $50.
o Subsequent investments (other than automatic monthly investments) must meet
the $100 minimum.
ALL ACCOUNTS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 annual maintenance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
above or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued and the $10 fee
assessed on the second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you may increase your
account balance to the required minimum.
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards, third party checks and credit card checks will not be
accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares Option" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.
o AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
8
<PAGE>
to your Fund account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach a
"voided" check or deposit slip from your bank account. If your Fund account
is already established, call 1-800-525-3713 to request the appropriate
form.
o PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.
EXCHANGE POLICIES
o Except for Systematic Exchanges, new accounts established by exchange must
meet the $2,500 minimum, or be for the total account value if less than
$2,500.
o Exchanges between existing accounts must meet the $100 subsequent
investment requirement.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges) free of charge. The Fund reserves the
right to have a $5 transaction fee automatically deducted from your account
for each additional exchange.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to your Fund prior to making any exchanges.
o Be sure that you read the prospectus for the Fund into which you are
exchanging.
o The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one Fund and the purchase of
shares of another Fund, which may produce a taxable gain or loss in a
non-tax deferred account.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus QuotelineSM 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o BY CHECK
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
9
<PAGE>
o ELECTRONIC TRANSFER
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o BY WIRE
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must also be
submitted.
o IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
591/2) or premature (before age 591/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE. NAV per share is calculated by
dividing the total value of the Fund's securities and other assets, less
liabilities, by the total number of shares outstanding. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A SIGNATURE GUARANTEE MAY NOT
BE PROVIDED BY A NOTARY PUBLIC.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
10
<PAGE>
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customer, may be the shareholder of
record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmation statements unless monthly statements are
requested. Information regarding the tax status of income dividends and capital
gains distributions will be mailed to shareholders on or before January 31st of
each year. Account tax information will also be sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts with the same
record address. Upon request, such reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
11
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
PORTFOLIO MANAGER
Warren B. Lammert is Executive Vice President and portfolio manager of the Fund.
Mr. Lammert joined Janus Capital in 1987 and has managed Janus Mercury Fund
since its inception and Janus Balanced Fund from its inception to December 1993.
He has also co-managed Janus Venture Fund since December 1993. He holds a
Bachelor of Arts in Economics from Yale University and a Master of Science in
Economic History from the London School of Economics and is a Chartered
Financial Analyst.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- -------------------------------------------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Over $500 Million .65%
- -------------------------------------------------
The actual management fee paid by the Fund for the fiscal year ended October 31,
1995, was .69% of the value of the Fund's average daily net assets, which may be
higher than the management fee paid by most other mutual funds. The Fund incurs
expenses not assumed by Janus Capital, including transfer agent and custodian
fees and expenses, legal and auditing fees, printing and mailing costs of
sending reports and other information to existing shareholders, and independent
Trustees' fees and expenses. Janus Capital will reduce its management fee to the
extent that Fund expenses exceed regulatory limits imposed by state securities
regulators.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
12
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective. As of the date of this Prospectus, the Trust offers 18 separate
series, three of which currently offer two classes of shares.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of the other portfolios of the Trust. As
a shareholder, you are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The shareholders of the Trust of record on April 30, 1992,
and the initial shareholder(s) of all series of the Trust created after April
30, 1992, have voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of the shareholders of the
Fund is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Fund believes that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
13
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND
PAID IN DECEMBER.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Fund reserves the right to reinvest undeliverable and uncashed dividend and
distribution checks that remain outstanding for six months in shares of the Fund
at the NAV next computed after the check is cancelled. Subsequent distributions
may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.
The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meets these requirements so that any earnings on your
investment will not be taxed twice.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
14
<PAGE>
APPENDIX A
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality , government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.
High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies ("PFICs") are any foreign corporations
which generate amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the Fund to
recognize income associated with the PFIC prior to the actual receipt of any
such income.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
15
<PAGE>
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. Strips are debt securities that are stripped of their
interest (usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines in
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
JANUS MERCURY FUND PROSPECTUS FEBRUARY 18, 1996
16
<PAGE>
CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary of financial data ........................ 2
THE FUND IN DETAIL
The Fund's Investment Objective and Policies .............................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 5
PERFORMANCE TERMS
An explanation of performance terms ....................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open Your Janus Account ............................................ 8
Minimum Investment Policies ............................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JETS(R) ................................................................... 11
Transactions Through Processing Organizations ............................. 11
Taxpayer Identification Number ............................................ 11
Share Certificates ........................................................ 11
Involuntary Redemption .................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager .................................. 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distributions ............................................................. 14
Taxes ..................................................................... 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS WORLDWIDE FUND
100 Fillmore Street
Denver, CO 80206-4923
1-800-525-3713
February 18, 1996
Janus Worldwide Fund (the "Fund") is a no-load, diversified mutual fund that
seeks long-term growth of capital by investing primarily in common stocks of
foreign and domestic issuers.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 18, 1996, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND AT A GLANCE
INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term growth of capital in a manner
consistent with the preservation of capital.
PRIMARY HOLDINGS:
A diversified fund that pursues its objective primarily through investments in
common stocks of foreign and domestic issuers.
SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in foreign and
domestic common stocks. The Fund is not designed as a short-term trading vehicle
and should not be relied upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages more than $30 billion in assets.
FUND MANAGER:
Helen Young Hayes
FUND INCEPTION:
May 1991
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee** None
*There is an $8 service fee for redemptions by wire.
**You may be charged a $5 transaction fee for excessive exchanges. See "How to
Exchange Shares" on page 9.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
- --------------------------------------------------------------------------------
Management Fee 0.68%
Other Expenses 0.56%
Total Fund Operating Expenses 1.24%
- --------------------------------------------------------------------------------
(1) The information in the table above is based on expenses before expense
offset arrangements for the fiscal period ended October 31, 1995.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $13 $39 $68 $150
- --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
1
<PAGE>
FINANCIAL HIGHLIGHTS
The information below is for fiscal periods ending on October 31 of each year
and has been audited by the accounting firm of Price Waterhouse LLP. Their
report is included in the Fund's Annual Report, which is incorporated by
reference into the SAI. Expense and income ratios and portfolio turnover rates
have been annualized for periods of less than one year. Total returns for
periods of less than one year are not annualized.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $27.00 $24.16 $18.95 $17.45 $15.00
Income from investment operations:
2. Net investment income (loss) 0.81 0.15 0.14 0.16 --
3. Net gains or (losses) on securities
(both realized and unrealized) 1.39 3.34 5.29 1.39 2.45
4. Total from investment operations 2.20 3.49 5.43 1.55 2.45
Less distributions:
5. Dividends (from net investment income) (0.54) (0.27) (0.22) -- --
6. Distributions (from capital gains) (1.01) (0.38) -- (0.05) --
7. Total distributions (1.55) (0.65) (0.22) (0.05) --
8. Net asset value, end of period $27.65 $27.00 $24.16 $18.95 $17.45
9. Total return 8.89% 14.76% 28.79% 9.20% 16.00%
10. Net assets, end of period (in millions) $1,804 $1,587 $ 755 $ 161 $ 18
11. Ratio of expenses to average net assets 1.24%(2) 1.12% 1.32% 1.73% 2.50%
12. Ratio of net investment income
to average net assets 0.99% 0.42% 0.92% 1.74% 0.02%
13. Portfolio turnover rate 142% 158% 124% 147% 40%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from May 15, 1991 (inception) to October 31, 1991.
(2) The Fund's expenses may be reduced through the use of brokerage commissions
and uninvested cash balances earning interest with the Fund's custodian. The
expense ratio for the fiscal period ended October 31, 1995, does not reflect
expense reductions, which reduced the expense ratio to 1.23%.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period, but not its total return.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gains or (losses) on securities is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) is the
per share amount that the Fund paid from net realized gains.
Total return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calculating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. A FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratios of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's total net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed description of investment terms used throughout this Prospectus.
You should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital in a manner
consistent with the preservation of capital. It is a diversified fund that
pursues its objective primarily through investments in common stocks of foreign
and domestic issuers. The Fund has the flexibility to invest on a worldwide
basis in companies and organizations of any size, regardless of country of
organization or place of principal business activity. The Fund normally invests
in issuers from at least five different countries, including the United States.
The Fund may at times invest in fewer than five countries or even a single
country.
TYPES OF INVESTMENTS
The Fund invests primarily in common stocks selected for their growth potential.
The Fund may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities. Debt
securities that the Fund may purchase include corporate bonds and debentures
(less than 35% of net assets in high-yield/high-risk securities); government
securities; mortgage- and asset-backed securities (not to exceed 25% of assets);
zero-coupon bonds (not to exceed 10% of assets); indexed/structured notes;
high-grade commercial paper; certificates of deposit; and repurchase agreements.
Such securities may offer growth potential because of anticipated changes in
interest rates, credit standing, currency relationships or other factors. The
Fund may also invest in short-term debt securities, including money market funds
managed by Janus Capital, as a means of receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 5. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common stocks to the
extent its portfolio manager believes that the relevant market environment
favors profitable investing in those securities. The portfolio manager generally
takes a "bottom up" approach to building the portfolio. In other words, the
manager seeks to identify individual companies with earnings growth potential
that may not be recognized by the market at large. Although themes may emerge in
the Fund, securities are generally selected without regard to any defined
industry sector or other similarly defined selection procedure. Realization of
income is not a significant investment consideration. Any income realized on the
Fund's investments will be incidental to its objective.
- --------------------------------------------------------------------------------
ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies with earnings growth
potential on a worldwide basis, regardless of country of organization or place
of principal business activity. Foreign securities are generally selected on a
stock-by-stock basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected levels of
inflation, government policies influencing business conditions, the outlook for
currency relationships, and prospects for economic growth among countries,
regions or geographic areas may warrant greater consideration in selecting
foreign stocks. The Fund may invest without limit in foreign securities. See
"Additional Risk Factors" on page 5.
- --------------------------------------------------------------------------------
WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
3
<PAGE>
more volatile and more speculative. See "Additional Risk Factors" on page 5.
- --------------------------------------------------------------------------------
HOW DOES THE FUND TRY TO REDUCE RISK?
Diversification of the Fund's assets reduces the effect of any single holding on
its overall portfolio value. The Fund may also use futures, options and other
derivative instruments to protect the portfolio from movements in securities
prices and interest rates. The Fund may also use a variety of currency hedging
techniques, including forward currency contracts, to manage exchange rate risk
when investing directly in foreign markets. See "Additional Risk Factors" on
page 5. In addition, to the extent that the Fund holds a larger cash position,
it may not participate in market declines to the same extent as if it had
remained fully invested in common stock.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 75% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective,
anticipated changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the
investment decision. Changes are made in the Fund's portfolio whenever its
portfolio manager believes such changes are desirable. Portfolio turnover rates
are generally not a factor in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above percentage limits. There is no assurance that such permission will be
granted.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
4
<PAGE>
ADDITIONAL RISK FACTORS
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN GOVERNMENTS,
INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC SECURITIES.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign
markets. The risks of foreign investing include:
o Currency Risk. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.
o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Fund's assets from that country.
o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.
Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
5
<PAGE>
HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (Standard & Poor's and
Moody's). The Fund expects that its holdings of lower quality securities, if
any, will consist primarily of bonds rated in the highest two tiers of
noninvestment grade securities.
The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e. credit risk) than is
the case for higher quality securities. Conversely, the value of higher quality
securities may be more sensitive to interest rate movements than lower quality
securities. Issuers of high-yield securities may not be as strong financially as
those issuing bonds with higher credit ratings. Investments in such companies
are considered to be more speculative than higher quality investments.
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
See Appendix A for risks associated with certain other investments.
- --------------------------------------------------------------------------------
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative total return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
6
<PAGE>
SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. This section also explains in detail the wide
array of services and features you can establish on your account. These services
may be modified or discontinued without shareholder approval.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00
a.m.-10:00 p.m., and Saturday: 10:00 a.m.-7:00 p.m., New York time.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS*
To open a new account $2,500
To open a new retirement or UGMA/UTMA account $ 500
To open a new account with an Automatic Investment Program $ 500**
To add to any type of an account $ 100
*The Fund reserves the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
**There is a $100 minimum subsequent investment.
- --------------------------------------------------------------------------------
TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this Prospectus.
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 591/2.
Investors Fiduciary Trust Company serves as custodian for the Retirement Plans
offered by the Fund. There is an annual $12 fee per account to maintain your
retirement account. The maximum annual fee is $24 per taxpayer identification
number. You may pay the fee by check or have it automatically deducted from your
account (usually in December).
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 70 1/2 with earned income to contribute up to the lesser of $2,000
or 100% of compensation annually. Please refer to the Janus Funds IRA
booklet for complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
7
<PAGE>
HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of the following addresses:
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers two Investor Service Centers for those individuals who would
like to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
MINIMUM INVESTMENT POLICIES
ACCOUNTS ESTABLISHED AFTER FEBRUARY 18, 1996
Any account opened after February 18, 1996, must meet minimum investment
requirements described at page 7.
ACCOUNTS ESTABLISHED ON OR BEFORE FEBRUARY 18, 1996
o The minimum investment requirement remains at $1,000 ($250 for retirement
accounts and UGMA/UTMA accounts) for these accounts only.
o There is no minimum initial investment requirement for Automatic Monthly
Investment Program participants that continue to make subsequent automatic
investments of at least $50.
o Subsequent investments (other than automatic monthly investments) must meet
the $100 minimum.
ALL ACCOUNTS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 annual maintenance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
above or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued and the $10 fee
assessed on the second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you may increase your
account balance to the required minimum.
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards, third party checks and credit card checks will not be
accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares Option" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.
o AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
8
<PAGE>
to your Fund account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach a
"voided" check or deposit slip from your bank account. If your Fund account
is already established, call 1-800-525-3713 to request the appropriate
form.
o PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.
EXCHANGE POLICIES
o Except for Systematic Exchanges, new accounts established by exchange must
meet the $2,500 minimum, or be for the total account value if less than
$2,500.
o Exchanges between existing accounts must meet the $100 subsequent
investment requirement.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges) free of charge. The Fund reserves the
right to have a $5 transaction fee automatically deducted from your account
for each additional exchange.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to your Fund prior to making any exchanges.
o Be sure that you read the prospectus for the Fund into which you are
exchanging.
o The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one Fund and the purchase of
shares of another Fund, which may produce a taxable gain or loss in a
non-tax deferred account.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus QuotelineSM 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o BY CHECK
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
9
<PAGE>
o ELECTRONIC TRANSFER
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o BY WIRE
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must also be
submitted.
o IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
591/2) or premature (before age 591/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE. NAV per share is calculated by
dividing the total value of the Fund's securities and other assets, less
liabilities, by the total number of shares outstanding. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A SIGNATURE GUARANTEE MAY NOT
BE PROVIDED BY A NOTARY PUBLIC.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
10
<PAGE>
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customer, may be the shareholder of
record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmation statements unless monthly statements are
requested. Information regarding the tax status of income dividends and capital
gains distributions will be mailed to shareholders on or before January 31st of
each year. Account tax information will also be sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts with the same
record address. Upon request, such reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
11
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MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
PORTFOLIO MANAGER
Helen Young Hayes is Executive Vice President and portfolio manager of the Fund,
which she has managed or co-managed since its inception. Ms. Hayes joined Janus
Capital in 1987 and has also managed Janus Overseas Fund since its inception.
She holds a Bachelor of Arts in Economics from Yale University and is a
Chartered Financial Analyst.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- -----------------------------------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Next $500 Million .65%
- -----------------------------------------
The actual management fee paid by the Fund for the fiscal year ended October 31,
1995, was .68% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses. Janus Capital will reduce its
management fee to the extent that Fund expenses exceed regulatory limits imposed
by state securities regulators.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
12
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective. As of the date of this Prospectus, the Trust offers 18 separate
series, three of which currently offer two classes of shares.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The shareholders of the Trust of record on April 30, 1992,
and the initial shareholder(s) of all series of the Trust created after April
30, 1992, have voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of the shareholders of the
Fund is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Fund believes that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
13
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND
PAID IN DECEMBER.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Fund reserves the right to reinvest undeliverable and uncashed dividend and
distribution checks that remain outstanding for six months in shares of the Fund
at the NAV next computed after the check is cancelled. Subsequent distributions
may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.
The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meets these requirements so that any earnings on your
investment will not be taxed twice.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
14
<PAGE>
APPENDIX A
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.
High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies ("PFICs") are any foreign corporations
which generate amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the Fund to
recognize income associated with the PFIC prior to the actual receipt of any
such income.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
15
<PAGE>
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. Strips are debt securities that are stripped of their
interest (usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines on
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
JANUS WORLDWIDE FUND PROSPECTUS FEBRUARY 18, 1996
16
<PAGE>
CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary of financial data ........................ 2
THE FUND IN DETAIL
The Fund's Investment Objective and Policies .............................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 5
PERFORMANCE TERMS
An explanation of performance terms ....................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open Your Janus Account ............................................ 8
Minimum Investment Policies ............................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JETS(R) ................................................................... 11
Transactions Through Processing Organizations ............................. 11
Taxpayer Identification Number ............................................ 11
Share Certificates ........................................................ 11
Involuntary Redemption .................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager .................................. 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distributions ............................................................. 14
Taxes ..................................................................... 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS OVERSEAS FUND
100 Fillmore Street
Denver, CO 80206-4923
1-800-525-3713
February 18, 1996
Janus Overseas Fund (the "Fund") is a no-load, diversified mutual fund that
seeks long-term growth of capital by investing primarily in common stocks of
foreign issuers.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 18, 1996, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND AT A GLANCE
INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term growth of capital.
PRIMARY HOLDINGS:
A diversified fund that pursues its investment objective primarily through
investments in common stocks of issuers located outside the United States.
SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for investors who seek growth of capital and who can
tolerate the greater risks associated with investments in common stocks of
foreign issuers. The Fund is not designed as a short-term trading vehicle and
should not be relied upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages more than $30 billion in assets.
FUND MANAGER:
Helen Young Hayes
FUND INCEPTION:
May 1994
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee** None
*There is an $8 service fee for redemptions by wire.
**You may be charged a $5 transaction fee for excessive exchanges. See "How to
Exchange Shares" on page 9.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
- --------------------------------------------------------------------------------
Management Fee 0.85%
Other Expenses 0.91%
Total Fund Operating Expenses 1.76%
- --------------------------------------------------------------------------------
(1) The information in the table above is based on expenses before offset
arrangements for the fiscal period ended October 31, 1995.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $18 $55 $95 $207
- --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
1
<PAGE>
FINANCIAL HIGHLIGHTS
The information below is for the fiscal period ending on October 31 of each year
and has been audited by the accounting firm of Price Waterhouse LLP. Their
report is included in the Fund's Annual Report, which is incorporated by
reference into the SAI. Expense and income ratios and portfolio turnover rates
have been annualized for periods of less than one year. Total returns for
periods of less than one year are not annualized.
1995 1994(1)
- --------------------------------------------------------------------------------
1. Net asset value, beginning of period $10.36 $10.00
Income from investment operations:
2. Net investment income (loss) 0.12 (0.02)
3. Net gains or (losses) on securities
(both realized and unrealized) 1.10 0.38
4. Total from investment operations 1.22 0.36
Less distributions:
5. Dividends (from net investment income) -- --
6. Distributions (from capital gains) -- --
7. Total distributions -- --
8. Net asset value, end of period $11.58 $10.36
9. Total return 11.78% 3.60%
10. Net assets, end of period (in millions) $ 111 $ 64
11. Ratio of expenses to average net assets 1.76%(2) 2.16%
12. Ratio of net investment income
to average net assets 0.36% (0.64%)
13. Portfolio turnover rate 188% 181%
- --------------------------------------------------------------------------------
(1) Fiscal period from May 2, 1994 (inception) to October 31, 1994.
(2) The Fund's expenses may be reduced through the use of brokerage commissions
and uninvested cash balances earning interest with the Fund's custodian. The
expense ratio for the fiscal period ended October 31, 1995, does not reflect
expense reductions, which reduced the expense ratio to 1.73%.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period, but not its total return.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gains or (losses) on securities is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) is the
per share amount that the Fund paid from net realized gains.
Total return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calculating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. THE FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratio of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's total net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed description of investment terms used throughout this Prospectus.
You should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital. It is a
diversified fund that pursues its objective primarily through investments in
common stocks of issuers located outside the United States. The Fund has the
flexibility to invest on a worldwide basis in companies and organizations of any
size, regardless of country of organization or place of principal business
activity. The Fund normally invests at least 65% of its total assets in
securities of issuers from at least five different countries, excluding the
United States. Although the Fund intends to invest substantially all of its
assets in issuers located outside the United States, it may at times invest in
U.S. issuers and it may at times invest all of its assets in fewer than five
countries or even a single country.
TYPES OF INVESTMENTS
The Fund invests primarily in common stocks of foreign issuers selected for
their growth potential. The Fund may invest to a lesser degree in other types of
securities, including preferred stocks, warrants, convertible securities and
debt securities. Debt securities that the Fund may purchase include corporate
bonds and debentures (less than 35% of net assets in high-yield/high-risk
securities); government securities; mortgage- and asset-backed securities (not
to exceed 25% of assets); zero coupon bonds (not to exceed 10% of assets);
indexed/structured securities; high-grade commercial paper; certificates of
deposit; and repurchase agreements. Such securities may offer growth potential
because of anticipated changes in interest rates, credit standing, currency
relationships or other factors. The Fund may also invest in short-term debt
securities, including money market funds managed by Janus Capital, as a means of
receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 5. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common stocks of foreign
issuers to the extent its portfolio manager believes that the relevant market
environment favors profitable investing in those securities. The portfolio
manager generally takes a "bottom up" approach to building the portfolio. In
other words, the manager seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large regardless of
country of organization or place of principal business activity. Although themes
may emerge in the Fund, securities are generally selected without regard to any
defined allocation among countries, geographic regions or industry sectors, or
other similarly defined selection procedure. Realization of income is not a
significant investment consideration. Any income realized on the Fund's
investments will be incidental to its objective.
- --------------------------------------------------------------------------------
DOES THE FUND'S EMPHASIS ON FOREIGN STOCKS CREATE SPECIAL CONSIDERATIONS?
Certain factors such as expected levels of inflation, government policies
influencing business conditions, the outlook for currency relationships, and
prospects for economic growth among countries, regions or geographic areas may
warrant greater consideration in selecting foreign stocks. In addition,
investing primarily in foreign issuers may involve greater risks than investing
in domestic issuers. See "Additional Risk Factors" on page 5. The Fund may
invest without limit in foreign securities.
- --------------------------------------------------------------------------------
WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors" on page 5.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
3
<PAGE>
HOW DOES A DIVERSIFIED FUND DIFFER FROM A NONDIVERSIFIED FUND?
Diversification is a means of reducing risk by investing a fund's assets in a
broad range of stocks or other securities. A "non-diversified" fund has the
ability to take larger positions in a smaller number of issuers. Because the
appreciation or depreciation of a single stock may have a greater impact on the
NAV of a nondiversified fund, its share price can be expected to fluctuate more
than a comparable diversified fund.
- --------------------------------------------------------------------------------
HOW DOES THE FUND TRY TO REDUCE RISK?
Diversification of the Fund's assets reduces the effect of any single holding on
its overall portfolio value. The Fund may also use futures, options and other
derivative instruments to protect the portfolio from movements in securities
prices and interest rates. The Fund may also use a variety of currency hedging
techniques, including forward currency contracts, to manage exchange rate risk
when investing directly in foreign markets. See "Additional Risk Factors" on
page 5. In addition, to the extent that the Fund holds a larger cash position,
it may not participate in market declines to the same extent as if it had
remained fully invested in common stocks.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 75% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective,
anticipated changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the
investment decision. Changes are made in the Fund's portfolio whenever its
portfolio manager believes such changes are desirable. Portfolio turnover rates
are generally not a factor in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above percentage limits. There is no assurance that such permission will be
granted.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
4
<PAGE>
ADDITIONAL RISK FACTORS
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN GOVERNMENTS,
INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC SECURITIES.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
o Currency Risk. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.
o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Fund's assets from that country.
o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use most derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Fund worse off than if it had not entered into the position.
Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
5
<PAGE>
return due to the opportunity losses of foregoing other potential investments
with the segregated assets.
HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (Standard & Poor's and
Moody's). The Fund expects that its holdings of lower quality securities, if
any, will consist primarily of bonds rated in the highest two tiers of
noninvestment grade securities.
The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
See Appendix A for risk associated with certain other investments.
- --------------------------------------------------------------------------------
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative total return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
6
<PAGE>
SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. This section also explains in detail the wide
array of services and features you can establish on your account. These services
may be modified or discontinued without shareholder approval.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00
a.m.-10:00 p.m., and Saturday: 10:00 a.m.-7:00 p.m., New York time.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS*
To open a new account $2,500
To open a new retirement or UGMA/UTMA account $ 500
To open a new account with an Automatic Investment Program $ 500**
To add to any type of an account $ 100
*The Fund reserves the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
**There is a $100 minimum subsequent investment.
- --------------------------------------------------------------------------------
TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this Prospectus.
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 591/2.
Investors Fiduciary Trust Company serves as custodian for the Retirement Plans
offered by the Fund. There is an annual $12 fee per account to maintain your
retirement account. The maximum annual fee is $24 per taxpayer identification
number. You may pay the fee by check or have it automatically deducted from your
account (usually in December).
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 701/2 with earned income to contribute up to the lesser of $2,000 or
100% of compensation annually. Please refer to the Janus Funds IRA booklet
for complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
7
<PAGE>
HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of the following addresses:
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers two Investor Service Centers for those individuals who would
like to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
MINIMUM INVESTMENT POLICIES
ACCOUNTS ESTABLISHED AFTER FEBRUARY 18, 1996
Any account opened after February 18, 1996, must meet minimum investment
requirements described at page 7.
ACCOUNTS ESTABLISHED ON OR BEFORE FEBRUARY 18, 1996
o The minimum investment requirement remains at $1,000 ($250 for retirement
accounts and UGMA/UTMA accounts) for these accounts only.
o There is no minimum initial investment requirement for Automatic Monthly
Investment Program participants that continue to make subsequent automatic
investments of at least $50.
o Subsequent investments (other than automatic monthly investments) must meet
the $100 minimum.
ALL ACCOUNTS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 annual maintenance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
above or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued and the $10 fee
assessed on the second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you may increase your
account balance to the required minimum.
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards, third party checks and credit card checks will not be
accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares Option" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.
o AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
8
<PAGE>
to your Fund account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach a
"voided" check or deposit slip from your bank account. If your Fund account
is already established, call 1-800-525-3713 to request the appropriate
form.
o PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.
EXCHANGE POLICIES
o Except for Systematic Exchanges, new accounts established by exchange must
meet the $2,500 minimum, or be for the total account value if less than
$2,500.
o Exchanges between existing accounts must meet the $100 subsequent
investment requirement.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges) free of charge. The Fund reserves the
right to have a $5 transaction fee automatically deducted from your account
for each additional exchange.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to your Fund prior to making any exchanges.
o Be sure that you read the prospectus for the Fund into which you are
exchanging.
o The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one Fund and the purchase of
shares of another Fund, which may produce a taxable gain or loss in a
non-tax deferred account.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus QuotelineSM 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o BY CHECK
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
9
<PAGE>
o ELECTRONIC TRANSFER
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o BY WIRE
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must also be
submitted.
o IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
591/2) or premature (before age 591/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE. NAV per share is calculated by
dividing the total value of the Fund's securities and other assets, less
liabilities, by the total number of shares outstanding. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A SIGNATURE GUARANTEE MAY NOT
BE PROVIDED BY A NOTARY PUBLIC.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
10
<PAGE>
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customer, may be the shareholder of
record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmation statements unless monthly statements are
requested. Information regarding the tax status of income dividends and capital
gains distributions will be mailed to shareholders on or before January 31st of
each year. Account tax information will also be sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts with the same
record address. Upon request, such reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
11
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
PORTFOLIO MANAGER
Helen Young Hayes is Executive Vice President and portfolio manager of the Fund,
which she has managed since its inception. Ms. Hayes joined Janus Capital in
1987 and has also managed or co-managed Janus Worldwide Fund since its
inception. She holds a Bachelor of Arts in Economics from Yale University and is
a Chartered Financial Analyst.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- ----------------------------------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Next $500 Million .65%
- ----------------------------------------
The actual management fee paid by the Fund for the fiscal year ended October 31,
1995, was .85% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses. Janus Capital will reduce its
management fee to the extent that Fund expenses exceed regulatory limits imposed
by state securities regulators.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
12
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective. As of the date of this Prospectus, the Trust offers 18 separate
series, three of which currently offer two classes of shares.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The shareholders of the Trust of record on April 30, 1992,
and the initial shareholder(s) of all series of the Trust created after April
30, 1992, have voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of the shareholders of the
Fund is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although the Fund believes that the Trustees will not approve an
arrangement that is likely to result in higher costs, no assurance is given that
costs will be materially reduced if this option is implemented.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
13
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND
PAID IN DECEMBER.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Fund reserves the right to reinvest undeliverable and uncashed dividend and
distribution checks that remain outstanding for six months in shares of the Fund
at the NAV next computed after the check is cancelled. Subsequent distributions
may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.
The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meets these requirements so that any earnings on your
investment will not be taxed twice.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
14
<PAGE>
APPENDIX A
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker- dealers
(depositary shares).
Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.
High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies ("PFICs") are any foreign corporations
which generate amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the Fund to
recognize income associated with the PFIC prior to the actual receipt of any
such income.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
15
<PAGE>
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. Strips are debt securities that are stripped of their
interest (usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines on
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
JANUS OVERSEAS FUND PROSPECTUS FEBRUARY 18, 1996
16
<PAGE>
CONTENTS
THE FUND AT A GLANCE
Brief description of the Fund ............................................. 1
EXPENSE INFORMATION
The Fund's annual operating expenses ...................................... 1
Financial Highlights - a summary of financial data ........................ 2
THE FUND IN DETAIL
The Fund's Investment Objective and Policies .............................. 3
General Portfolio Policies ................................................ 4
Additional Risk Factors ................................................... 5
PERFORMANCE TERMS
An explanation of performance terms ....................................... 6
SHAREHOLDER'S MANUAL
Types of Account Ownership ................................................ 7
How to Open Your Janus Account ............................................ 8
Minimum Investment Policies ............................................... 8
How to Purchase Shares .................................................... 8
How to Exchange Shares .................................................... 9
How to Redeem Shares ...................................................... 9
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JETS(R) ................................................................... 11
Transactions Through Processing Organizations ............................. 11
Taxpayer Identification Number ............................................ 11
Share Certificates ........................................................ 11
Involuntary Redemption .................................................... 11
Telephone Transactions .................................................... 11
Making Changes to Your Account ............................................ 11
Statements and Reports .................................................... 11
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager .................................. 12
Management Expenses ....................................................... 12
Portfolio Transactions .................................................... 13
Other Service Providers ................................................... 13
Other Information ......................................................... 13
DISTRIBUTIONS AND TAXES
Distributions ............................................................. 14
Taxes ..................................................................... 14
APPENDIX A
Glossary of Investment Terms .............................................. 15
[LOGO]
JANUS TWENTY FUND
100 Fillmore Street
Denver, CO 80206-4923
1-800-525-3713
February 18, 1996
Janus Twenty Fund (the "Fund") is a no-load, nondiversified mutual fund that
seeks long-term growth of capital by normally concentrating its investments in a
core position of 20-30 common stocks.
For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 7.
The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 18, 1996, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.
<PAGE>
THE FUND AT A GLANCE
INVESTMENT OBJECTIVE:
The Fund seeks long-term growth of capital.
PRIMARY HOLDINGS:
A nondiversified fund that pursues its objective by normally concentrating its
investments in a core position of 20-30 common stocks.
SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in common stocks. The
Fund is not designed as a short-term trading vehicle and should not be relied
upon for short-term financial needs.
FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 25
years and currently manages more than $30 billion in assets.
FUND MANAGER:
Thomas F. Marsico
FUND INCEPTION:
April 30, 1985
EXPENSE INFORMATION
The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Fund Operating Expenses are paid
out of the Fund's assets and include fees for portfolio management, maintenance
of shareholder accounts, shareholder servicing, accounting and other services.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees* None
Exchange fee** None
*There is an $8 service fee for redemptions by wire.
**You may be charged a $5 transaction fee for excessive exchanges. See "How to
Exchange Shares"on page 9.
ANNUAL FUND OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
- --------------------------------------------------------------------------------
Management Fee 0.67%
Other Expenses 0.33%
Total Fund Operating Expenses 1.00%
- --------------------------------------------------------------------------------
(1) The information in the table above is based on expenses before expense
offset arrangements for the fiscal period ended October 31, 1995.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $10 $32 $55 $122
- --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
1
<PAGE>
FINANCIAL HIGHLIGHTS
Unless otherwise noted, the information below is for fiscal periods ending on
October 31 of each year. The accounting firm of Price Waterhouse LLP has audited
the Fund's financial statements since October 1, 1990. Their report is included
in the Fund's Annual Report, which is incorporated by reference into the SAI.
The Fund's financial statements for fiscal periods prior to October 1, 1990,
were audited by other independent accountants whose reports are not included in
the Annual Report. Expense and income ratios and portfolio turnover rates have
been annualized for periods of less than one year. Total returns for periods of
less than one year are not annualized.
<TABLE>
<CAPTION>
1995 1994 1993 1992(1) 1992(2) 1991(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $24.24 $25.85 $22.75 $22.17 $18.88 $16.01
Income from investment operations:
2. Net investment income .01 0.16 0.17 0.09 0.11 0.16
3. Net gains or (losses) on securities
(both realized and unrealized) 5.94 (1.07) 3.31 0.49 3.62 2.90
4. Total from investment operations 5.95 (0.91) 3.48 0.58 3.73 3.06
Less distributions:
5. Dividends (from net investment income) (.07) (0.25) (0.18) -- (0.02) (0.19)
6. Distributions (from capital gains) -- (0.45) (0.20) -- (0.42) --
7. Total distributions (.07) (0.70) (0.38) -- (0.44) (0.19)
8. Net asset value, end of period $30.12 $24.24 $25.85 $22.75 $22.17 $18.88
9. Total return 24.67% (3.52%) 15.39% 2.62% 19.60% 19.43%
10. Net assets, end of period (in millions) $2,996 $2,743 $3,749 $2,434 $2,081 $ 556
11. Ratio of expenses to average net assets 1.00%(3) 1.02% 1.05% 1.12% 1.01% 1.07%
12. Ratio of net investment income
to average net assets 0.62% 0.57% 0.87% 1.27% 1.08% 1.30%
13. Portfolio turnover rate 147% 102% 99% 79% 83% 163%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1990(2) 1989(2) 1988(2) 1987(2) 1986(2)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $13.05 $ 9.66 $13.69 $14.27 $11.57
Income from investment operations:
2. Net investment income 0.05 0.46 0.42 0.30 0.19
3. Net gains or (losses) on securities
(both realized and unrealized) 3.35 3.73 (2.86) 0.74 3.05
4. Total from investment operations 3.40 4.19 (2.44) 1.04 3.24
Less distributions:
5. Dividends (from net investment income) (0.02) (0.80) (0.41) (0.25) (0.23)
6. Distributions (from capital gains) (0.42) -- (1.18) (1.37) (0.31)
7. Total distributions (0.44) (0.80) (1.59) (1.62) (0.54)
8. Net asset value, end of period $16.01 $13.05 $ 9.66 $13.69 $14.27
9. Total return 26.36% 45.89% (17.13%) 8.66% 29.06%
10. Net assets, end of period (in millions) $ 175 $ 20 $ 13 $ 19 $ 10
11. Ratio of expenses to average net assets 1.32% 1.88% 1.70% 1.79% 2.00%
12. Ratio of net investment income
to average net assets 1.28% 0.68% 3.35% 2.98% 3.55%
13. Portfolio turnover rate 228% 220% 317% 202% 152%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from June 1, 1992 to October 31, 1992.
(2) Fiscal year ended on May 31st of each year.
(3) The Fund's expenses may be reduced through the use of brokerage commissions
and uninvested cash balances earning interest with the Fund's custodian. The
expense ratio for the fiscal period ended October 31, 1995, does not reflect
expense reductions, which reduced the expense ratio to 0.99%.
UNDERSTANDING THE FINANCIAL HIGHLIGHTS
This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.
Net asset value ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of the Fund's shares over the
fiscal period, but not its total return.
Net investment income is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. Dividends (from net
investment income) is the per share amount that the Fund paid from net
investment income.
Net gains (or losses) on securities is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) is the
per share amount that the Fund paid from net realized gains.
Total return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calulating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. THE FUND'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM THE
FINANCIAL HIGHLIGHTS TABLE.
Ratio of expenses to average net assets is the total of the Fund's operating
expenses divided by its average net assets for the stated period.
Ratio of net investment income to average net assets is the Fund's net
investment income divided by its average net assets for the stated period.
Portfolio turnover rate is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
2
<PAGE>
THE FUND IN DETAIL
This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Please carefully review the "Additional
Risk Factors" section of this Prospectus for a more detailed discussion of the
risks associated with certain investment techniques and refer to Appendix A for
a more detailed description of investment terms used throughout this Prospectus.
You should carefully consider your own investment goals, time horizon and risk
tolerance before investing in the Fund.
Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Fund's investment objective, are not
fundamental and may be changed by the Fund's Trustees without a shareholder
vote. You will be notified of any such changes that are material. If there is a
material change in the Fund's objective or policies, you should consider whether
the Fund remains an appropriate investment for you.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital. It is a
non-diversified fund that pursues its objective by normally concentrating its
investments in a core position of 20-30 common stocks.
TYPES OF INVESTMENTS
The Fund invests primarily in common stocks selected for their growth potential.
The Fund may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities. Debt
securities that the Fund may purchase include corporate bonds and debentures
(less than 35% of net assets in high-yield/high-risk securities); government
securities; mortgage- and asset-backed securities (not to exceed 25% of assets);
zero coupon bonds (not to exceed 10% of assets); indexed/structured notes;
high-grade commercial paper; certificates of deposit; and repurchase agreements.
Such securities may offer growth potential because of anticipated changes in
interest rates, credit standing, currency relationships or other factors. The
Fund may also invest in short-term debt securities, including money market funds
managed by Janus Capital, as a means of receiving a return on idle cash.
When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, the Fund's investments may
be hedged to a greater degree and/or its cash or similar investments may
increase. In other words, the Fund does not always stay fully invested in stocks
and bonds. Cash or similar investments are a residual - they represent the
assets that remain after the portfolio manager has committed available assets to
desirable investment opportunities. When the Fund's cash position increases, it
may not participate in stock market advances or declines to the extent that it
would if it remained more fully invested in common stocks.
The Fund may invest without limit in foreign equity and debt securities. The
Fund may use options, futures and other types of derivatives for hedging
purposes or as a means of enhancing return. See "Additional Risk Factors" on
page 5. The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.
HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common stocks to the
extent its portfolio manager believes that the relevant market environment
favors profitable investing in those securities. The portfolio manager generally
takes a "bottom up" approach to building the portfolio. In other words, the
portfolio manager seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. Although themes may
emerge in the Fund, securities are generally selected without regard to any
defined industry sector or other similarly defined selection procedure.
Realization of income is not a significant investment consideration. Any income
realized on the Fund's investments will be incidental to its objective.
ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies with earnings growth
potential, regardless of country of organization or place of principal business
activity. Foreign securities are generally selected on a stock-by-stock basis
without regard to any defined allocation among countries or geographic regions.
However, certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries, regions or
geographic areas may warrant greater consideration in selecting foreign
securities. See "Additional Risk Factors" on page 5.
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WHAT IS THE MAIN RISK OF INVESTING IN A COMMON STOCK FUND?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors"on page 5.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
3
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HOW DOES A DIVERSIFIED FUND DIFFER FROM A NONDIVERSIFIED FUND?
A "nondiversified" fund has the ability to take larger positions in a smaller
number of issuers than a "diversified" fund. Because the appreciation or
depreciation of a single stock may have a greater impact on the NAV of a
nondiversified fund, its share price can be expected to fluctuate more than a
comparable diversified fund.
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HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options and other derivative instruments to protect
its portfolio from movements in securities prices and interest rates. The Fund
may also use a variety of currency hedging techniques, including forward
currency contracts, to manage exchange rate risk when investing directly in
foreign markets. See "Additional Risk Factors" on page 5. In addition, to the
extent that the Fund holds a larger cash position, it may not participate in
market declines to the same extent as if it had remained more fully invested in
common stocks.
GENERAL PORTFOLIO POLICIES
In investing its assets, the Fund will follow the general policies listed below.
The percentage limitations included in these policies and elsewhere in this
Prospectus apply only at the time of purchase of the security. For example, if
the Fund exceeds a limit as a result of market fluctuations or the sale of other
securities, it will not be required to dispose of any securities.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund is deemed to be a
nondiversified fund under the 1940 Act and is subject to the following
diversification requirements:
o As a fundamental policy, the Fund may not own more than 10% of the
outstanding voting shares of any issuer.
o As a fundamental policy, with respect to 50% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.
o The Fund will invest no more than 25% of its assets in a single issuer.
o The Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.
INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest more than 25% of its total
assets in any particular industry. This policy does not apply to U.S. government
securities .
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.
To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. Certain tax rules may restrict the Fund's ability to engage in short-term
trading if the security has been held for less than three months.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital may determine that securities that cannot be
sold to the U.S. public but that can be sold to institutional investors (for
example, Rule 144A securities) are liquid. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.
BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:
o The Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
o The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.
o As a fundamental policy, the Fund may lend securities or other assets if,
as a result, no more than 25% of its total assets would be lent to other
parties.
The Fund intends to seek permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above percentage limits. There is no assurance that such permission will be
granted.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
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ADDITIONAL RISK FACTORS
SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES, INCLUDING THOSE OF FOREIGN GOVERNMENTS,
INVOLVE GREATER RISKS THAN INVESTING IN COMPARABLE DOMESTIC SECURITIES.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
o Currency Risk. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar.
When the Fund sells a foreign security, its value may be worth less in U.S.
dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected
by currency risk.
o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Fund's assets from that country.
o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.
o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.
o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.
The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:
o the risk that interest rates, securities prices and currency markets will
not move in the direction that the portfolio manager anticipates;
o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;
o inability to close out certain hedged positions to avoid adverse tax
consequences;
o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;
o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and
o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
5
<PAGE>
obligations, which could leave the Fund worse off than if it had not
entered into the position.
Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.
When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.
HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (Standard & Poor's and
Moody's). The Fund expects that its holdings of lower quality securities, if
any, will consist primarily of bonds rated in the highest two tiers of
noninvestment grade securities.
The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.
See Appendix A for risks associated with certain other investments.
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PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.
Cumulative total return represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.
Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.
THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
6
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SHAREHOLDER'S MANUAL
This section will help you become familiar with the different types of accounts
you can establish with Janus. This section also explains in detail the wide
array of services and features you can establish on your account. These services
may be modified or discontinued without shareholder approval.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00
a.m.-10:00 p.m., and Saturday: 10:00 a.m.-7:00 p.m., New York time.
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MINIMUM INVESTMENTS*
To open a new account $2,500
To open a new retirement or UGMA/UTMA account $ 500
To open a new account with an Automatic Investment Program $ 500**
To add to any type of an account $ 100
*The Fund reserves the right to change the amount of these minimums from time to
time or to waive them in whole or in part for certain types of accounts.
**There is a $100 minimum subsequent investment.
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TYPES OF ACCOUNT OWNERSHIP
If you are investing for the first time, you will need to establish an account.
You can establish the following types of accounts by completing the New Account
Application included with this Prospectus.
o Individual or Joint Ownership. Individual accounts are owned by one person.
Joint accounts have two or more owners.
o A Gift or Transfer to Minor (UGMA or UTMA). An UGMA/UTMA account is a
custodial account managed for the benefit of a minor. To open an UGMA or
UTMA account, you must include the minor's Social Security number on the
application.
o Trust. An established trust can open an account. The names of each trustee,
the name of the trust and the date of the trust agreement must be included
on the application.
o Business Accounts. Corporations and partnerships may also open an account.
The application must be signed by an authorized officer of the corporation
or a general partner of the partnership.
RETIREMENT ACCOUNTS
If you are eligible, you may set up your account under a tax-sheltered
retirement plan. A retirement plan allows you to shelter your investment income
and capital gains from current income taxes. A contribution to these plans may
also be tax deductible. Distributions from retirement plans are generally
subject to income tax and may be subject to an additional tax if withdrawn prior
to age 59 1/2.
Investors Fiduciary Trust Company serves as custodian for the Retirement Plans
offered by the Fund. There is an annual $12 fee per account to maintain your
retirement account. The maximum annual fee is $24 per taxpayer identification
number. You may pay the fee by check or have it automatically deducted from your
account (usually in December).
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
o Individual Retirement Account ("IRA"): An IRA allows individuals under the
age of 70 1/2 with earned income to contribute up to the lesser of $2,000
or 100% of compensation annually. Please refer to the Janus Funds IRA
booklet for complete information regarding IRAs.
o Simplified Employee Pension Plan ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions
for themselves and any eligible employee(s). A SEP requires an IRA (a
SEP-IRA) to be set up for each SEP participant.
o Profit Sharing or Money Purchase Pension Plan: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees
and themselves.
o Section 403(b)(7) Plan: Employees of educational organizations or other
qualifying, tax-exempt organizations may be eligible to participate in a
Section 403(b)(7) Plan.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
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<PAGE>
HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to provide your
Social Security or taxpayer identification number on the application. Make your
check payable to Janus Funds. Send all items to one of the following addresses:
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
INVESTOR SERVICE CENTERS
Janus Funds offers two Investor Service Centers for those individuals who would
like to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
MINIMUM INVESTMENT POLICIES
ACCOUNTS ESTABLISHED AFTER FEBRUARY 18, 1996
Any account opened after February 18, 1996, must meet minimum investment
requirements described at page 7.
ACCOUNTS ESTABLISHED ON OR BEFORE FEBRUARY 18, 1996
o The minimum investment requirement remains at $1,000 ($250 for retirement
accounts and UGMA/UTMA accounts) for these accounts only.
o There is no minimum initial investment requirement for Automatic Monthly
Investment Program participants that continue to make subsequent automatic
investments of at least $50.
o Subsequent investments (other than automatic monthly investments) must meet
the $100 minimum.
ALL ACCOUNTS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 annual maintenance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
above or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued and the $10 fee
assessed on the second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you may increase your
account balance to the required minimum.
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
o Cash, credit cards, third party checks and credit card checks will not be
accepted.
o All purchases must be made in U.S. dollars.
o Checks must be drawn on a U.S. bank and made payable to Janus Funds.
o If a check does not clear your bank, the Fund reserves the right to cancel
the purchase.
o If the Fund is unable to debit your predesignated bank account on the day
of purchase, it may make additional attempts or cancel the purchase.
o The Fund reserves the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation
will accrue to the Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. You may add to your account at any time through any of the
following options:
BY MAIL
Complete the remittance slip attached at the bottom of your confirmation
statement. If you are making a purchase into a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to one
of the addresses listed previously. You may also request a booklet of remittance
slips for non-retirement accounts.
BY TELEPHONE
This service allows you to purchase additional shares quickly and conveniently
through an electronic transfer of money. When you make an additional purchase by
telephone, Janus will automatically debit your predesignated bank account for
the desired amount. To establish the telephone purchase option on your new
account, complete the "Telephone Purchase of Shares Option" section on the
application and attach a "voided" check or deposit slip from your bank account.
If your account is already established, call 1-800-525-3713 to request the
appropriate form. This option will become effective ten days after the form is
received.
BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.
o AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
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<PAGE>
to your Fund account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach a
"voided" check or deposit slip from your bank account. If your Fund account
is already established, call 1-800-525-3713 to request the appropriate
form.
o PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have
all or a portion of your paycheck invested directly into your Fund account.
To obtain information on establishing this option, call 1-800-525-3713.
o BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 10.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus Electronic
Telephone Service (JETS(R)) line at 1-800-525-6125.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.
EXCHANGE POLICIES
o Except for Systematic Exchanges, new accounts established by exchange must
meet the $2,500 minimum, or be for the total account value if less than
$2,500.
o Exchanges between existing accounts must meet the $100 subsequent
investment requirement.
o You may make four exchanges out of the Fund during a calendar year
(exclusive of Systematic Exchanges) free of charge. The Fund reserves the
right to have a $5 transaction fee automatically deducted from your account
for each additional exchange.
o Exchanges between accounts will be accepted only if the registrations are
identical.
o If the shares you are exchanging are held in certificate form, you must
return the certificate to your Fund prior to making any exchanges.
o Be sure that you read the prospectus for the Fund into which you are
exchanging.
o The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time.
o An exchange represents the sale of shares from one Fund and the purchase of
shares of another Fund, which may produce a taxable gain or loss in a
non-tax deferred account.
QUICK ADDRESS AND TELEPHONE REFERENCE
Regular Mail
Janus Funds
P.O. Box 173375
Denver, CO 80217-3375
Express or Certified Mail
Janus Funds
100 Fillmore Street
Denver, CO 80206-4923
Janus Investor Services 1-800-525-3713
To speak to a service representative
JETS(R) 1-800-525-6125
For 24-hour access to account and fund information.
TDD 1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
Janus QuotelineSM 1-800-525-0024
For automated daily quotes on fund share prices, yields and total returns.
Janus Literature Line 1-800-525-8983
To request a prospectus, shareholder reports or marketing materials.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned with or
before your redemption request. Your transaction will be processed at the next
NAV calculated after your order is received and accepted.
IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 10.
BY TELEPHONE
Most accounts have the telephone redemption option, unless this option was
specifically declined on the application or in writing.
This option enables you to redeem up to $100,000 daily from your account by
simply calling 1-800-525-3713 by 4:00 p.m. New York time.
SYSTEMATIC WITHDRAWAL PLAN ("SWP")
SWPs allow you to redeem a specific dollar amount from your account on a regular
basis. For more information on SWPs or to request the appropriate form, please
call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
o BY CHECK
Redemption proceeds will be sent to the shareholder(s) of record at the
address of record within seven days after receipt of a valid redemption
request.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
9
<PAGE>
o ELECTRONIC TRANSFER
If you have established this option, your redemption proceeds will be
electronically transferred to your predesignated bank account on the second
business day after receipt of your redemption request. To establish this
option, call 1-800-525-3713. There is no fee for this option.
o BY WIRE
If you are authorized for the wire redemption service, your redemption
proceeds will be wired directly into your designated bank account on the
next business day after receipt of your redemption request. There is no
limitation on redemptions by wire; however, there is an $8 fee for each
wire and your bank may charge an additional fee to receive the wire. If you
would like to establish this option on an existing account, please call
1-800-525-3713 to request the appropriate form. Wire redemptions are not
available for retirement accounts.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions, your proceeds will
be invested in Janus Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your request should
be sent to one of the addresses listed on page 8 and must include the following
information:
o the name of the Fund,
o the account number,
o the amount of money or number of shares being redeemed,
o the name(s) on the account,
o the signature(s) of all registered account owners, and
o your daytime telephone number.
o SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
o Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
o UGMA or UTMA: Written instructions must be signed by the custodian in
his/her capacity as it appears in the account registration.
o Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
o Corporation, Association: Written instructions must be signed by the
person(s) authorized to act on the account. In addition, a certified copy
of the corporate resolution authorizing the signer to act must accompany
the request.
o Trust: Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days must also be
submitted.
o IRA: Written instructions must be signed by the account owner. If you do
not want federal income tax withheld from your redemption, you must state
that you elect not to have such withholding apply. In addition, your
instructions must state whether the distribution is normal (after age
591/2) or premature (before age 591/2) and, if premature, whether any
exceptions such as death or disability apply with regard to the 10%
additional tax on early distributions.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved. The Fund's NAV is
calculated at the close of the regular trading session of the New York Stock
Exchange (the "NYSE") (normally 4:00 p.m. New York time) each day that the NYSE
is open. In order to receive a day's price, your order must be received by the
close of the regular trading session of the NYSE. NAV per share is calculated by
dividing the total value of the Fund's securities and other assets, less
liabilities, by the total number of shares outstanding. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
o The redemption exceeds $100,000.
o You would like the check made payable to anyone other than the
shareholder(s) of record.
o You would like the check mailed to an address which has been changed within
10 days of the redemption request.
o You would like the check mailed to an address other than the address of
record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A SIGNATURE GUARANTEE MAY NOT
BE PROVIDED BY A NOTARY PUBLIC.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
10
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SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS ELECTRONIC TELEPHONE SERVICE (JETS(R))
JETS, our electronic telephone service line, offers you 24-hour access by
TouchTone(TM) telephone to obtain your account balance, to confirm your last
transaction or dividend posted to your account, to order duplicate account or
tax statements, to reorder money market fund checks or to exchange your shares.
JETS can be accessed by calling 1-800-525-6125. Calls on JETS are limited to
seven minutes.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other qualified plans (a "Processing
Organization"). Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent investments than the
Fund. The Processing Organization may also impose other charges or restrictions
different from those applicable to shareholders who invest in the Fund directly.
The Processing Organization, rather than its customer, may be the shareholder of
record of your shares. The Fund is not responsible for the failure of any
Processing Organization to carry out its obligations to its customers. Certain
Processing Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days. Share certificates cannot
be issued for retirement accounts. In addition, if the certificate is lost,
there may be a replacement charge.
INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise detrimental to the Fund.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone,
please consider sending written instructions, stopping by a Service Center, or
in the case of exchanges, calling the JETS line.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or your account registration. If you are enrolled
in our Automatic Monthly Investment Program and invest on a monthly basis, you
will receive quarterly confirmation statements unless monthly statements are
requested. Information regarding the tax status of income dividends and capital
gains distributions will be mailed to shareholders on or before January 31st of
each year. Account tax information will also be sent to the IRS.
Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. To reduce expenses,
only one copy of most financial reports will be mailed to accounts with the same
record address. Upon request, such reports will be mailed to all accounts in the
same household. Please call 1-800-525-3713 if you would like to receive
additional reports.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
11
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MANAGEMENT OF THE FUND
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4923, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.
Janus Capital has served as investment adviser to certain series of the Trust
since 1970 and currently serves as investment adviser to all of the Janus funds,
as well as adviser or subadviser to other mutual funds and individual,
corporate, charitable and retirement accounts.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
PORTFOLIO MANAGER
Thomas F. Marsico is Executive Vice President and portfolio manager of the Fund,
which he has managed since March 1988. Mr. Marsico is also the portfolio manager
of Janus Growth and Income Fund, which he has managed since its inception. He
holds a Bachelor of Arts in Biology from the University of Colorado and a Master
of Business Administration in Finance from the University of Denver.
- --------------------------------------------------------------------------------
PERSONAL INVESTING
Janus Capital permits investment and other personnel to purchase and sell
securities for their own accounts, subject to Janus Capital's policy governing
personal investing. Janus Capital's policy requires investment and other
personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee which is accrued daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.
Average Daily Net Annual Rate
Assets of Fund Percentage (%)
- ----------------------------------------
First $ 30 Million 1.00%
Next $270 Million .75%
Next $200 Million .70%
Over $500 Million .65%
- ----------------------------------------
The actual management fee paid by the Fund for the fiscal year ended October 31,
1995, was .67% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses. Janus Capital will reduce its
management fee to the extent that Fund expenses exceed regulatory limits imposed
by state securities regulators.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
12
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers. The Fund's Trustees
have authorized Janus Capital to place portfolio transactions on an agency basis
with a broker-dealer affiliated with Janus Capital. When transactions for the
Fund are effected with that broker-dealer, the commissions payable by the Fund
are credited against certain Fund operating expenses. The SAI further explains
the selection of broker-dealers.
OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.
Domestic Custodian
Investors Fiduciary Trust Company
127 W. 10th Street
Kansas City, Missouri 64105
Foreign Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217
Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206
Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital. Investors Fiduciary Trust Company is a
wholly-owned subsidiary of State Street Bank and Trust Company.
OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective.
As of the date of this Prospectus, the Trust offers 18 separate series, three of
which currently offer two classes of shares. The Fund became a series of the
Trust on August 7, 1992. It was previously known as Janus Twenty Fund, Inc., a
Maryland corporation, and was originally incorporated as Janus Value Fund, Inc.
in the state of Maryland. All references in this Prospectus to the Fund prior to
the above date are to its predecessor entities and all references after such
date are to the series of the Trust.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.
SIZE OF THE FUND
The Fund may discontinue sales of its shares if management believes that
continued sales may adversely affect the Fund's ability to achieve its
investment objective. If sales of the Fund are discontinued, it is expected that
existing shareholders of the Fund would be permitted to continue to purchase
shares and to reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the Fund. The Fund's shareholders of record on April 30, 1992, and the
initial shareholder(s) of all series of the Trust created after April 30, 1992,
have voted to vest authority to use this investment structure in the sole
discretion of the Trustees. No further approval of the shareholders of the Fund
is required. You will receive at least 30 days' prior notice of any such
investment. Such investment would be made only if the Trustees determine it to
be in the best interests of the Fund and its shareholders. In making that
determination the Trustees will consider, among other things, the benefits to
shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although management of the Fund believes that the Trustees will
not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will be materially reduced if this option is
implemented.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
13
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET INCOME AND ANY NET
GAINS REALIZED BY ITS INVESTMENTS ANNUALLY. THE FUND'S INCOME FROM DIVIDENDS AND
INTEREST AND ANY NET REALIZED SHORT-TERM CAPITAL GAINS ARE PAID TO SHAREHOLDERS
AS DIVIDENDS. NET REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL
GAINS DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND
PAID IN DECEMBER.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing or calling 1-800-525-3713. The Fund offers the following options:
1. Reinvestment Option. You may reinvest your income dividends and capital
gains distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. Cash Option. You may receive your income dividends and capital gains
distributions in cash.
3. Reinvest And Cash Option. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. Redirect Option. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Fund reserves the right to reinvest undeliverable and uncashed dividend and
distribution checks that remain outstanding for six months in shares of the Fund
at the NAV next computed after the check is cancelled. Subsequent distributions
may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred retirement
accounts, nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax adviser.
Additionally, state or local taxes may apply to your investment, depending upon
the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Distributions by the Fund are subject to federal income tax, regardless of
whether the distribution is made in cash or reinvested in additional shares of
the Fund. In certain states, a portion of the dividends and distributions
(depending on the source of the Fund's income) may be exempt from state and
local taxes. Information regarding the tax status of income dividends and
capital gains distributions will be mailed to shareholders on or before January
31st of each year.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. Any foreign
taxes paid by the Fund will be treated as an expense to the Fund or passed
through to shareholders as a foreign tax credit, depending on particular facts
and circumstances. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.
The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meet these requirements so that any earnings on your
investment will not be taxed twice.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
14
<PAGE>
APPENDIX A
GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.
Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.
Common stock represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.
Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.
Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).
Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.
High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies (BB or lower by Standard & Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."
Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.
Passive foreign investment companies ("PFICs") are any foreign corporations
which generate certain amounts of passive income or hold certain amounts of
assets for the production of passive income. Passive income includes dividends,
interest, royalties, rents and annuities. Income tax regulations may require the
Fund to recognize income associated with the PFIC prior to the actual receipt of
any such income.
Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.
Repurchase agreements involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.
Reverse repurchase agreements involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used to provide cash to satisfy unusually heavy redemption
requests or for other temporary or emergency purposes.
Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.
Standby commitments are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.
U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
15
<PAGE>
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
Warrants are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.
Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. Strips are debt securities that are stripped of their
interest (usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in response to
changes in interest rates than interest-paying securities of comparable
maturity.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Fund may enter into forward currency contracts to hedge against declines in
the value of non-dollar denominated securities or to reduce the impact of
currency appreciation on purchases of non-dollar denominated securities. It may
also enter into forward contracts to purchase or sell securities or other
financial indices.
Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).
Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.
JANUS TWENTY FUND PROSPECTUS FEBRUARY 18, 1996
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