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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre- Effective Amendment No. [ ]
Post-Effective Amendment No. 85 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
Amendment No. 68 [X]
(Check appropriate box or boxes.)
JANUS INVESTMENT FUND
(Exact Name of Registrant as Specified in Charter)
100 Fillmore Street, Denver, Colorado 80206-4928
Address of Principal Executive Offices (Zip Code)
Registrant's Telephone No., including Area Code: 303-333-3863
Thomas A. Early - 100 Fillmore Street, Denver, Colorado 80206-4928
(Name and Address of Agent for Service)
Approximate Date of Proposed Offering: December 31, 1998
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[X] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
JANUS INVESTMENT FUND
(Janus Global Life Sciences Fund
and Janus Global Technology Fund)
Cross Reference Sheet
Between the Prospectus and Statement of
Additional Information and Form N-1A Item
(Cross Reference Sheets for other series of Janus Investment Fund
are included in previous post-effective amendments related to those series)
FORM N-1A ITEM CAPTION IN PROSPECTUS
PART A
1. Front and Bank Cover Pages Cover Pages
2. Risk/Return Summary: Risk/return summary
Investments, Risks, and
Performance
3. Risk/Return Summary: Fee Risk/return summary
Table
4. Investment Objectives, Investment objective, principal
Principal Investment investment strategies, and risks
Strategies, and Related Risks
5. Management's Discussion of Not Applicable
Fund Performance
6. Management, Organization, and Management of the Funds
Capital Structure
7. Shareholder Information Shareholder's Manual; Distributions
and Taxes
8. Distribution Arrangements Not Applicable
9. Financial Highlights Not Applicable
Information
<PAGE>
FORM N-1A ITEM CAPTION IN PROSPECTUS
PART B
10. Cover Page and Table of Cover Page; Table of Contents
Contents
11. Fund History Miscellaneous Information
12. Description of the Fund and Classification, Investment
Its Investments and Risks Restrictions, Investment
Strategies and Risks;
Appendix A
13. Management of the Fund Investment Adviser; Trustees and
Officers
14. Control Persons and Principal Not Applicable
Holders of Securities
15. Investment Advisory and Other Investment Adviser; Custodian,
Services Transfer Agent, and Certain
Affiliations; Portfolio
Transactions and Brokerage;
Trustees and Officers;
Miscellaneous Information
16. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
17. Capital Stock and Other Purchase of Shares; Redemption
Securities of Shares; Miscellaneous
Information
18. Purchase, Redemption, and Purchase of Shares; Redemption
Pricing of Shares of Shares; Miscellaneous
Information
19. Taxation of the Fund Tax-Deferred Accounts; Income
Dividends, Capital Gains
Distributions, and Tax Status
<PAGE>
20. Underwriters Custodian, Transfer Agent, and
Certain Affiliations
21. Calculation of Performance Performance Information
Data
22. Financial Statements Not Applicable
<PAGE>
[JANUS LOGO]
Janus Global Life Sciences Fund
Janus Global Technology Fund
PROSPECTUS
NOVEMBER 24, 1998
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
RISK/RETURN SUMMARY
Janus Global Life Sciences Fund........................................ page 1
Janus Global Technology Fund........................................... page 2
Performance Information................................................ page 3
Fees and expenses...................................................... page 3
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND RISKS
Investment Objective................................................... page 4
Principal Investment Strategies........................................ page 4
General Portfolio Policies............................................. page 6
Risks.................................................................. page 8
SHAREHOLDER'S MANUAL
Minimum Investments.................................................... page 15
Types of Account Ownership............................................. page 15
How to Open Your Janus Account......................................... page 17
How to Purchase Shares................................................. page 17
How to Exchange Shares................................................. page 19
How to Redeem Shares................................................... page 20
Shareholder Services and Account Policies.............................. page 24
MANAGEMENT OF THE FUNDS
Investment Adviser..................................................... page 27
Portfolio Managers..................................................... page 27
Other Information...................................................... page 28
DISTRIBUTIONS AND TAXES
Distributions.......................................................... page 29
Taxes.................................................................. page 30
GLOSSARY
Glossary of Investment Terms........................................... page 32
<PAGE>
RISK/RETURN SUMMARY
JANUS GLOBAL LIFE SCIENCES FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS GLOBAL LIFE SCIENCES FUND?
The Fund seeks long-term growth of capital.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS GLOBAL LIFE SCIENCES FUND?
The Fund invests primarily in equity securities of foreign and U.S. companies
selected for their growth potential. Under normal circumstances, it invests at
least 65% of its total assets in securities of companies that the portfolio
manager believes have a life science orientation and at least 25% of its total
assets in the following industry groups: health care; pharmaceuticals;
agriculture; cosmetics/personal care; and biotechnology.
The portfolio manager applies a "bottom up" approach in choosing investments. In
other words, he looks for companies with earnings growth potential one at a
time. If the portfolio manager is unable to find investments with earnings
growth potential, a significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS GLOBAL LIFE SCIENCES FUND?
Perhaps the biggest risk of investing in this Fund is that its returns may vary
and you could lose money. If you're considering investing in the Fund, keep in
mind that it is designed for long-term investors who can accept the risks of
investing in a portfolio with significant common stock holdings and concentrated
exposure to related industry groups.
The value of securities in the Fund's portfolio may decrease in response to the
activities of an individual company or general market and/or economic
conditions. If this occurs, the Fund's net asset value (NAV) may also decrease.
Because the Fund concentrates its investments in related industry groups, its
portfolio securities may share common characteristics and react similarly to
market developments. The Fund may also invest in smaller or newer companies,
which tend to be more volatile than securities issued by larger or more
established companies. As a result, the Fund's returns may be more volatile than
a less concentrated portfolio or one holding securities of large, established
companies. The Fund may invest without limit in foreign securities, so its
returns and NAV may be affected by fluctuations in currency exchange rates or
political and economic conditions in foreign markets.
The Fund is nondiversified. In other words, it may hold larger positions in a
smaller number of securities than a diversified fund. As a result, a single
security's increase or decrease in value may have a greater impact on the Fund's
share price.
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JANUS GLOBAL TECHNOLOGY FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS GLOBAL TECHNOLOGY FUND?
The Fund seeks long-term growth of capital.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS GLOBAL TECHNOLOGY FUND?
The Fund invests primarily in equity securities of foreign and U.S. companies
selected for their growth potential. Under normal circumstances, it invests at
least 65% of its total assets in securities of companies that the portfolio
manager believes will benefit significantly from advances or improvements in
technology. These companies generally fall into two categories:
a. Companies that the portfolio manager believes have or will develop products,
processes or services that will provide significant technological
advancements or improvements; and
b. Companies that the portfolio manager believes have products, processes or
services that will benefit significantly from anticipated technological
advancements or improvements.
The portfolio manager applies a "bottom up" approach in choosing investments. In
other words, he looks for companies with earnings growth potential one at a
time. If the portfolio manager is unable to find investments with earnings
growth potential, a significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS GLOBAL TECHNOLOGY FUND?
Perhaps the biggest risk of investing in this Fund is that its returns may vary
and you could lose money. If you're considering investing in the Fund, keep in
mind that it is designed for long-term investors who can accept the risks of
investing in a portfolio with significant common stock holdings and exposure to
a relatively volatile market segment.
The value of securities in the Fund's portfolio may decrease in response to the
activities of an individual company or general market and/or economic
conditions. If this occurs, the Fund's NAV may also decrease. Although the Fund
does not intend to concentrate in a specific group of industries, it may invest
in companies related in such a way that they react similarly to perceived market
changes. In addition, companies in which the Fund invests may be small or newly
formed and their products may quickly become obsolete or have relatively short
product cycles. As a result, the Fund's returns may be considerably more
volatile than a Fund with a more diversified portfolio of established companies.
The Fund may invest without limit in foreign securities, so its returns and NAV
may be affected by fluctuations in currency exchange rates or political and
economic conditions in foreign markets.
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The Fund is nondiversified. In other words, it may hold larger positions in a
smaller number of securities than a diversified fund. As a result, a single
security's increase or decrease in value may have a greater impact on the Fund's
share price.
PERFORMANCE INFORMATION
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. These Funds are recently organized and have a limited performance history.
FEES AND EXPENSES
SHAREHOLDER FEES, such as sales loads, redemption fees or exchange fees, are
charged directly to an investor's account. All Janus funds are no-load
investments, so you will not pay any shareholder fees when you buy or sell
shares of the Funds.
ANNUAL FUND OPERATING EXPENSES are paid out of a Fund's assets and include fees
for portfolio management, maintenance of shareholder accounts, shareholder
servicing, accounting and other services. You do not pay these fees directly
but, as the example below shows, these costs are borne indirectly by
shareholders.
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY
AND HOLD SHARES OF THE FUNDS.
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL ANNUAL FUND
FEE EXPENSES(1) OPERATING EXPENSES
<S> <C> <C> <C>
Janus Global Life Sciences
Fund 0.75% 0.50%() 1.25%
Janus Global Technology Fund 0.75% 0.50%() 1.25%
----------------------------------------------
</TABLE>
(1) "Other Expenses" are based on the estimated expenses that the Funds
expect to incur in their initial fiscal year.
- ------------------------------------------------------------------------------
Example
This example is intended to help you compare the cost of investing in the
Funds with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in each of the Funds for the time periods
indicated then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and
that the Funds' operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
------------------------------
Janus Global Life Sciences Fund $127 $397
Janus Global Technology Fund $127 $397
</TABLE>
An investment in these Funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
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INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
This section takes a closer look at the investment objective of each of the
Funds, their principal investment strategies and certain risks of investing in
the Funds. Strategies and policies that are noted as "fundamental" cannot be
changed without a shareholder vote.
Please carefully review the "Risks" section of this Prospectus on pages 8-12 for
a discussion of risks associated with certain investment techniques. We've also
included a Glossary with descriptions of investment terms used throughout this
Prospectus.
INVESTMENT OBJECTIVE
The investment objective of each Fund is long-term growth of capital. The Funds'
Trustees may change this objective without a shareholder vote and the Funds will
notify you of any changes that are material. If there is a material change in a
Fund's objective or policies, you should consider whether that Fund remains an
appropriate investment for you. There is no guarantee that either Fund will meet
its objective.
PRINCIPAL INVESTMENT STRATEGIES
JANUS GLOBAL LIFE SCIENCES FUND
Under normal circumstances, Janus Global Life Sciences Fund pursues its
objective by investing at least 65% of its total assets in securities of
companies that the portfolio manager believes have a life science orientation.
As a fundamental policy, the Fund normally invests at least 25% of its total
assets in the following industry groups: health care; pharmaceuticals;
agriculture; cosmetics/personal care; and biotechnology.
JANUS GLOBAL TECHNOLOGY FUND
Under normal circumstances, Janus Global Technology Fund pursues its objective
by investing at least 65% of its total assets in securities of companies that
the portfolio manager believes will benefit significantly from advances or
improvements in technology. These companies generally fall into two categories:
a. Companies that the portfolio manager believes have or will develop products,
processes or services that will provide significant technological
advancements or improvements; and
b. Companies that the portfolio manager believes have products, processes or
services that will benefit significantly from anticipated technological
advancements or improvements.
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THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND THE FUNDS'
PRINCIPAL INVESTMENT STRATEGIES.
1. HOW ARE COMMON STOCKS SELECTED?
Each of the Funds may invest substantially all of its assets in common stocks if
its portfolio manager believes that common stocks will appreciate in value. The
portfolio managers generally take a "bottom up" approach to selecting companies.
In other words, they seek to identify individual companies with earnings growth
potential that may not be recognized by the market at large. They make this
assessment by looking at companies one at a time, regardless of size, country of
organization, place of principal business activity, or other similar selection
criteria. Realization of income is not a significant investment consideration
and any income realized on the Funds' investments will be incidental to their
objectives.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio managers seek companies that meet their selection
criteria, regardless of where a company is located. 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. There are no limitations on the
countries in which the Funds may invest and the Funds may at times have
significant foreign exposure.
3. WHAT DOES "LIFE SCIENCE ORIENTATION" MEAN?
Generally speaking, the "life sciences" relate to maintaining or improving
quality of life. So, for example, companies with a "life science orientation"
include companies engaged in research, development, production or distribution
of products or services related to health and personal care, medicine or
pharmaceuticals. Life science oriented companies also include companies that the
portfolio manager believes have growth potential primarily as a result of
particular products, technology, patents or other market advantages in the life
sciences. Life sciences encompass a variety of industries, including health
care, nutrition, personal hygiene, medical diagnostics, nuclear and biochemical
research and development and health care facilities ownership and operation.
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4. HOW DOES JANUS GLOBAL TECHNOLOGY FUND'S INDUSTRY POLICY DIFFER FROM THAT OF
JANUS GLOBAL LIFE SCIENCES FUND?
Unlike Janus Global Life Sciences Fund, Janus Global Technology Fund will not
concentrate its investments in any particular industry or group of related
industries. As a result, its portfolio manager may have more flexibility to find
companies that he believes will benefit from advances or improvements in
technology in a number of industries. Nevertheless, the Fund may hold a
significant portion of its assets in industries such as: aerospace/defense;
biotechnology; computers; office/business equipment; semiconductors; software;
telecommunications; and telecommunications equipment.
GENERAL PORTFOLIO POLICIES
Unless otherwise stated, each of the following policies applies to each of the
Funds. The percentage limitations included in these policies and elsewhere in
this Prospectus apply at the time of purchase of the security. So, for example,
if a Fund exceeds a limit as a result of market fluctuations or the sale of
securities, it will not be required to dispose of any securities.
CASH POSITION
When a Fund's portfolio manager believes that market conditions are unfavorable
for profitable investing, or when he is otherwise unable to locate attractive
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
Funds do not always stay fully invested in stocks. Cash and similar investments
generally are a residual - they represent the assets that remain after a
portfolio manager has committed available assets to desirable investment
opportunities. However, a portfolio manager may also temporarily increase a
Fund's cash position to protect its assets or maintain liquidity. Partly because
the portfolio managers act independently of each other, the cash positions of
the Funds may vary significantly. When a Fund's investments in cash or similar
investments increase, it may not participate in market advances or declines to
the same extent that it would if the Fund remained more fully invested in
stocks.
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OTHER TYPES OF INVESTMENTS
The Funds invest primarily in a global portfolio of equity securities, which may
include preferred stocks, common stocks, warrants and securities convertible
into common or preferred stocks, but they may also invest to a lesser degree in
other types of securities. These securities (which are described in the
Glossary) may include:
- - debt securities;
- - indexed/structured securities;
- - high-yield/high-risk debt securities (less than 35% of each Fund's assets);
- - options, futures and other types of derivatives for hedging purposes or for
non-hedging purposes such as seeking to enhance return; and
- - securities purchased on a when-issued, delayed delivery or forward commitment
basis.
ILLIQUID INVESTMENTS
Each Fund may invest up to 15% of its net assets in illiquid investments. An
illiquid investment is a security or other position that cannot be disposed of
quickly in the normal course of business. For example, some securities are not
registered under U.S. securities laws and cannot be sold to the U.S. public
because of SEC regulations (these are known as "restricted securities").
FOREIGN SECURITIES
The Funds may invest without limit in foreign equity and debt securities. The
Funds may invest directly in foreign securities denominated in a foreign
currency and not publicly traded in the United States. Other ways of investing
in foreign securities include depositary receipts or shares, and passive foreign
investment companies.
SPECIAL SITUATIONS
The Funds may invest in special situations from time to time. A special
situation arises when, in the opinion of a 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 risk of loss to a Fund's
performance in the event that the anticipated development does not occur or does
not attract the expected attention.
7
<PAGE>
PORTFOLIO TURNOVER
The Funds generally intend to purchase securities for long-term investment
although, to a limited extent, a Fund may purchase securities in anticipation of
relatively short-term price gains. Short-term transactions may also 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. A
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. Changes are made in a 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.
Janus Global Technology Fund may invest in companies with relatively short
product cycles, for example, 6 to 9 months. Consequently, its portfolio turnover
may be more frequent than other growth funds. 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. Higher costs
associated with increased portfolio turnover may offset gains in a Fund's
performance.
RISKS
Because the Funds may invest substantially all of their assets in common stocks,
the main risk is the risk that the value of the stocks they hold might decrease
in response to the activities of an individual company or in response to general
market and/or economic conditions. If this occurs, a Fund's share price may also
decrease. The Funds' performance may also be affected by industry risk and risks
specific to certain types of investments, such as foreign securities, derivative
investments, non-investment grade debt securities or companies with relatively
small market capitalizations.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND SOME OF THE
RISKS OF INVESTING IN THE FUNDS.
1. WHAT IS "INDUSTRY RISK"?
Industry risk is the possibility that a group of related stocks will decline in
price due to industry-specific developments. Companies in the same or similar
industries may share common characteristics and are more likely to react
similarly to industry-specific market or economic developments. In the life
sciences, for example, many companies are subject to government regulation and
approval of their products and services, which may affect their price or
availability. In addition, the products and services offered by these companies
may quickly become obsolete in the face of scientific or
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<PAGE>
technological developments. The economic outlook of such companies may fluctuate
dramatically due to changes in regulatory or competitive environments. In
technology-related industries, competitive pressures may have a significant
effect on the performance of companies in which Janus Global Technology Fund may
invest. In addition, technology and technology-related companies often progress
at an accelerated rate, and these companies may be subject to short product
cycles and aggressive pricing which may increase their volatility.
Janus Global Life Sciences Fund invests in a concentrated portfolio, which may
result in greater exposure to related industries. As a result, the Fund may be
more volatile than a less concentrated portfolio. Although Janus Global
Technology Fund does not "concentrate" in a specific group of industries, it may
at times have significant exposure to companies in a variety of
technology-related industries.
2. THE FUNDS MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Particularly in the area of technology, many attractive investment opportunities
may be smaller, start-up companies offering emerging products or services.
Smaller or newer companies may suffer more significant losses as well as realize
more substantial growth than larger or more established issuers because they may
lack depth of management, be unable to generate funds necessary for growth or
potential development, or 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 or more established
companies. Securities of smaller or newer companies may have more limited
trading markets than the markets for securities of larger or more established
issuers, and may be subject to wide price fluctuations. Investments in such
companies tend to be more volatile and somewhat more speculative.
3. HOW DOES THE NONDIVERSIFIED STATUS OF THE FUNDS AFFECT THEIR RISK?
Diversification is a means of reducing risk by investing in a broad range of
stocks or other securities. A "nondiversified" 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. This fluctuation, if significant, may affect the
performance of a Fund.
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<PAGE>
4. I'VE HEARD A LOT ABOUT HOW THE CHANGE TO THE YEAR 2000 COULD AFFECT COMPUTER
SYSTEMS. DOES THIS CREATE ANY SPECIAL RISKS?
The portfolio managers carefully research each potential investment before
making an investment decision and, among other things, consider Year 2000
readiness when selecting portfolio holdings. However, there is no guarantee that
the information a portfolio manager receives regarding a company's Year 2000
readiness is completely accurate. If a company is not compliant with Year 2000
issues, the Fund's performance could be negatively impacted.
5. HOW COULD THE FUNDS' INVESTMENTS IN FOREIGN SECURITIES AFFECT THEIR
PERFORMANCE?
The Funds may invest without limit in foreign securities either indirectly
(e.g., depositary receipts) or directly in foreign markets. Investments in
foreign securities, including those of foreign governments, may involve greater
risks than investing in domestic securities, because the Funds' performance may
depend on issues other than the performance of a particular company. These
issues include:
- - CURRENCY RISK. As long as a Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar. When
a Fund sells a foreign denominated security, its value may be worth less in
U.S. dollars even if the security increases in value in its home country. U.S.
dollar denominated securities of foreign issuers may also be affected by
currency risk.
- - POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to heightened
political and economic risks, particularly in emerging markets which may have
relatively unstable governments, immature economic structures, national
policies restricting investments by foreigners, different legal systems, 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 a Fund's
assets from that country.
- - REGULATORY RISK. There may be less government supervision of foreign markets.
As a result, foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers and there may be less publicly available information about
foreign issuers.
- - MARKET RISK. Foreign securities markets, particularly those of emerging market
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.
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- - 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.
6. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN 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 such as Standard & Poor's
Ratings Services and Moody's Investors Service, Inc. The value of lower quality
securities generally is more dependent on credit risk, or the ability of the
issuer to meet interest and principal payments, than investment grade debt
securities. Issuers of high-yield securities may not be as strong financially as
those issuing bonds with higher credit ratings and are more vulnerable to real
or perceived economic changes, political changes or adverse developments
specific to the issuer.
Please refer to the SAI for a description of bond rating categories.
7. HOW DO THE FUNDS TRY TO REDUCE RISK?
The Funds may use futures, options and other derivative instruments to "hedge"
or protect their portfolios from adverse movements in securities prices and
interest rates. The Funds may also use a variety of currency hedging techniques,
including forward currency contracts, to manage exchange rate risk. The Funds
believe the use of these instruments will benefit the Funds, however, a Fund's
performance could be worse than if the Fund had not used such instruments if a
portfolio manager's judgement proves incorrect. Risks inherent in the use of
derivative instruments include:
- - the risk that interest rates, securities prices and currency markets will not
move in the direction that the portfolio manager anticipates;
- - an imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies being
hedged;
- - the fact that skills needed to use these strategies are different from those
needed to select portfolio securities;
- - inability to close out certain hedged positions to avoid adverse tax
consequences;
- - 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;
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- - leverage risk, that is, the risk that adverse price movements in an instrument
can result in a loss substantially greater than a Fund's initial investment in
that instrument (in some cases, the potential loss is unlimited); and
- - particularly in the case of privately-negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave a
Fund worse off than if it had not entered into the position.
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13
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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. It also explains in detail the wide
array of services and features you can establish
on your account, as well as account policies and
fees that may apply to your account. Account
policies (including fees), services and features
may be modified or discontinued without
shareholder approval or prior notice.
[LOGO]
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SHAREHOLDER'S MANUAL
MINIMUM INVESTMENTS*
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TO OPEN A NEW ACCOUNT $2,500
TO OPEN A NEW RETIREMENT, EDUCATION 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+
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* THE FUNDS RESERVE 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.
** AN AUTOMATIC INVESTMENT PROGRAM REQUIRES A $100 MINIMUM AUTOMATIC
INVESTMENT PER MONTH UNTIL THE ACCOUNT BALANCE REACHES $2,500.
+ THE MINIMUM SUBSEQUENT INVESTMENT FOR IRA OR UGMA/UTMA ACCOUNTS IS $50.
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.-8:00 p.m., and Saturday: 10:00 a.m.-4:00 p.m., New York time.
The Quick Address and Telephone Reference below includes other ways to get
in touch with Janus.
QUICK ADDRESS AND TELEPHONE REFERENCE
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MAILING ADDRESS JANUS XPRESS
JANUS LINE(TM) 1-888-979-7737
P.O. BOX 173375 FOR 24-HOUR ACCESS TO ACCOUNT
DENVER, CO 80217-3375 AND FUND INFORMATION,
EXCHANGES AND PURCHASES,
FOR OVERNIGHT CARRIER AUTOMATED DAILY QUOTES ON
JANUS FUND SHARE PRICES, YIELDS AND
SUITE 101 TOTAL RETURNS.
3773 CHERRY CREEK NORTH DRIVE
DENVER, CO 80209-3811 TDD 1-800-525-0056
A TELECOMMUNICATIONS DEVICE
JANUS INTERNET ADDRESS FOR OUR HEARING- AND
JANUS.COM SPEECH-IMPAIRED SHAREHOLDERS.
JANUS LITERATURE
LINE 1-800-525-8983
TO REQUEST A PROSPECTUS,
SHAREHOLDER REPORTS OR
MARKETING MATERIALS.
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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 a New Account
Application. To request an application, call 1-800-525-3713.
- - INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one person.
Joint accounts have two or more owners.
- - 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.
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- - 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.
- - 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.
TAX-DEFERRED ACCOUNTS
If you are eligible, you may set up one or more tax-deferred accounts. A
tax-deferred account allows you to shelter your investment income and capital
gains from current income taxes. A contribution to certain of these plans may
also be tax deductible. Tax-deferred accounts include retirement plans and the
Education IRA. Distributions from these plans are generally subject to income
tax and may be subject to an additional tax if withdrawn prior to age 59 1/2 or
used for a nonqualifying purpose. Investors should consult their tax adviser or
legal counsel before selecting a tax-deferred account.
Investors Fiduciary Trust Company serves as custodian for the tax-deferred
accounts offered by the Funds. You will be charged an annual account maintenance
fee of $12 for each Fund account, up to a maximum of $24 for two or more Fund
accounts registered under the same taxpayer identification number. Each Janus
fund you own under your IRA account number is considered a separate "Fund
account." You may pay the fee by check or have it automatically deducted from
your account (usually in December). The Funds reserve the right to change the
amount of this fee or to waive it in whole or in part for certain types of
accounts.
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
- - REGULAR AND ROTH INDIVIDUAL RETIREMENT ACCOUNTS: Both types of IRAs allow most
individuals with earned income to contribute up to the lesser of $2,000
($4,000 for most married couples) or 100% of compensation annually. Please
refer to the Janus IRA booklet for more complete information regarding the
different types of IRAs.
- - EDUCATION IRA: This plan allows individuals, subject to certain income
limitations, to contribute up to $500 annually on behalf of any child under
the age of 18. Please refer to the Janus IRA booklet for more complete
information regarding the Education IRA.
- - SIMPLIFIED EMPLOYEE PENSION PLAN: 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.
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- - PROFIT SHARING OR MONEY PURCHASE PENSION PLAN: These plans are open to
corporations, partnerships and sole proprietors to benefit their employees and
themselves.
- - 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.
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 and make
your check payable to Janus. The Funds are available only to U.S. citizens or
residents, and your application will be returned if you do not meet these
criteria. Send all items to one of the following addresses:
For Overnight Carrier
- ----------------------
Janus
Suite 101
3773 Cherry Creek North Drive
Denver, CO 80209-3811
For All Other Inquiries
- ------------------------
Janus
P.O. Box 173375
Denver, CO 80217-3375
INVESTOR SERVICE CENTERS
Janus 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 Monday-Friday 7:00 a.m. to 6:00
p.m. Mountain time and Saturday 9:00 a.m. to 1:00 p.m. Mountain time:
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
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:
- - Cash, credit cards, third party checks and credit card checks will not be
accepted.
- - All purchases must be made in U.S. dollars.
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- - Checks must be drawn on a U.S. bank and made payable to Janus.
- - If a check does not clear your bank, the Funds reserve the right to cancel the
purchase.
- - If the Funds are unable to debit your predesignated bank account on the day of
purchase, they may make additional attempts or cancel the purchase.
- - The Funds reserve 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 Funds (or their agents) have 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
Funds.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100 ($50 FOR IRAS OR UGMA/UTMA ACCOUNTS). 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. To purchase shares by telephone, call
an Investor Service Representative at 1-800-525-3713 during normal business
hours or call the Janus Xpress Line, 1-888-979-7737, for access to this option
24 hours a day. 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.
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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.
BY WEB
You must pre-establish the "Telephone Purchase of Shares Option" to make a
purchase on our Web site at janus.com.
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.
- - AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will be
electronically transferred from your bank account 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.
- - PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you may have all
or a portion of your paycheck ($100 minimum) invested directly into your Fund
account. To obtain information on establishing this option, call
1-800-525-3713.
- - 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 22.
BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
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1-800-525-3713 during normal business hours or call the Janus Xpress Line,
1-888-979-7737, for access to this option 24 hours a day.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as little as $100
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.
BY WEB
Exchanges may also be made on our Web site at janus.com.
EXCHANGE POLICIES
- - Except for Systematic Exchanges, new accounts established by exchange must be
opened with $2,500 or the total account value if the value of the account you
are exchanging from is less than $2,500.
- - Exchanges between existing accounts must meet the $100 subsequent investment
requirement.
- - You may make four exchanges out of each Fund during a calendar year (exclusive
of Systematic Exchanges). Exchanges in excess of this limit may be subject to
an exchange fee or may result in termination of the exchange privilege.
- - The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time. For example, the Funds may
reject exchanges from accounts engaged in or known to engage in excessive
trading (including market timing transactions).
- - Exchanges between accounts will be accepted only if the registrations are
identical.
- - If the shares you are exchanging are held in certificate form, you must return
the certificate to your Fund prior to making any exchanges.
- - Be sure that you read the prospectus for the fund into which you are
exchanging.
- - An exchange represents the sale of shares from one fund and the purchase of
shares of another fund, which may produce a taxable gain or loss in a non-tax
deferred account.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your shares. If the
shares are held in certificate form, the certificate must be returned
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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 22.
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 request redemptions daily from your account by calling 1-800-525-3713 by the
close of the regular trading session of the New York Stock Exchange ("NYSE")
normally 4:00 p.m. New York time. You may also use Janus Xpress Line,
1-888-979-7737, for access to this option 24 hours a day. Redemption requests
received through Janus Xpress Line will be processed at the NAV next calculated
after receipt and acceptance of the request. (There is a daily limit of $100,000
per account for redemptions payable by check).
BY WEB
Redemptions may also be made on our Web site at janus.com.
SYSTEMATIC REDEMPTION OPTION
The Systematic Redemption Option allows you to redeem a specific dollar amount
from your account on a regular basis. For more information or to request the
appropriate form, please call 1-800-525-3713.
PAYMENT OF REDEMPTION PROCEEDS
- - 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.
- - BY ELECTRONIC TRANSFER
If you have established the electronic redemption option, your redemption
proceeds can be electronically transferred to your predesignated bank account
on the next bank business day after receipt of your redemption request (wire
transfer) or the second bank business day after receipt of your redemption
request (ACH transfer). Wire transfers will be charged an $8 fee per wire and
your bank may charge an additional fee to receive the wire. ACH transfers are
made free of charge. Wire redemptions are not available for retirement
accounts.
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If you would like to establish the electronic redemption option on an existing
account, please call 1-800-525-3713 to request the appropriate form.
IF THE SHARES BEING REDEEMED WERE PURCHASED BY CHECK, TELEPHONE, ON OUR WEB
SITE, OR THROUGH THE AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUNDS 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 17 and must include the following
information:
- - the name of the Fund(s),
- - the account number(s),
- - the amount of money or number of shares being redeemed,
- - the name(s) on the account,
- - the signature(s) of all registered account owners, and
- - your daytime telephone number.
SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
- - Individual, Joint Tenants, Tenants in Common: Written instructions must be
signed by each shareholder, exactly as the names appear in the account
registration.
- - UGMA or UTMA: Written instructions must be signed by the custodian in his/her
capacity as it appears in the account registration.
- - Sole Proprietor, General Partner: Written instructions must be signed by an
authorized individual in his/her capacity as it appears on the account
registration.
- - 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.
- - 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.
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- - IRA: Written instructions must be signed by the account owner. If you do not
want federal income tax withheld from your redemption, you must state that you
elect not to have such withholding apply. In addition, your instructions must
state whether the distribution is normal (after age 59 1/2) or premature
(before age 59 1/2) and, if premature, whether any exceptions such as death or
disability apply with regard to the 10% additional tax on early distributions.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE IS ALSO
REQUIRED if any of the following is applicable:
- - You request a redemption that exceeds $100,000.
- - You would like the check made payable to anyone other than the shareholder(s)
of record.
- - You would like the check mailed to an address which has been changed within 10
days of the redemption request.
- - You would like the check mailed to an address other than the address of
record.
THE FUNDS RESERVE 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.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved by a Fund (or its
designated agent). A Fund's NAV is calculated at the close of the regular
trading session of the NYSE (normally 4:00 p.m. New York time) each day that the
NYSE is open. The NAV of Fund shares is not
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determined on days the NYSE is closed (generally, New Year's Day, Martin Luther
King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas). In order to receive a day's price, your order
must be received by the close of the regular trading session of the NYSE.
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.
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS XPRESS LINE(TM)
Janus Xpress Line, our electronic telephone service, offers you 24-hour access
by TouchTone(TM) telephone to obtain information on account balances, Fund
performance or dividends. You can also make exchanges, purchases, redemptions
and electronic transfers in existing accounts, request literature about any
Janus fund, or order duplicate statements. Janus Xpress Line is accessed by
calling 1-888-979-7737. Calls are limited to five minutes.
JANUS WEB SITE
Janus maintains a Web site located at janus.com. You can purchase, exchange and
redeem shares and access information such as your account balance and the Funds'
NAVs through the Web site. In order to engage in transactions on our Web site,
you must authorize us to transmit account information online and accept online
instructions (see janus.com and follow the procedures accordingly). You may also
need to have bank account information, wire instructions or other options
established on your account. The Funds and their agents will not be responsible
for any losses resulting from unauthorized transactions on our Web site when
procedures designed for engaging in such transactions are followed. In addition,
you may request and/or download a prospectus for any Janus fund.
ACCOUNT MINIMUMS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 minimum balance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
on page 15 or 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
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fluctuations. It is expected that, for purposes of this policy, accounts will be
valued in September, and the $10 fee will be 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.
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 employee benefit 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 Funds. Processing Organizations may also impose other
charges or restrictions different from those applicable to shareholders who
invest in the Funds directly. A Processing Organization, rather than its
customer, may be the shareholder of record of your shares. The Funds are 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 Funds 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 number, the IRS requires the Funds 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 Funds 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 Funds. The Funds 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 and will not be issued for
accounts that do not meet the minimum investment requirements. Share
certificates cannot be issued for retirement accounts. In addition, if the
certificate is lost, there may be a replacement charge.
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INVOLUNTARY REDEMPTION
The Funds reserve the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Funds.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Funds and their 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 an Investor Service Representative 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 purchases, exchanges,
redemptions and electronic transfers, calling the Janus Xpress Line or visiting
our Web site.
TEMPORARY SUSPENSION OF SERVICES
The Funds or their 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 your Fund(s), 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
Investors participating in an automatic investment program will receive
quarterly confirmations of all transactions. (Dividend information will be
distributed annually.) In addition, the Funds will send you an immediate
transaction confirmation statement after every non-systematic transaction.
Financial reports for the Funds, which include a list of the Funds' portfolio
holdings, will be mailed semiannually to all shareholders. You will receive an
updated prospectus annually. To reduce expenses, only one copy of most financial
reports and prospectuses will be mailed to your household, even if more than one
person in the household has a Fund account. Please call 1-800-525-3713 if you
would like to receive additional reports or prospectuses.
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MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Janus Capital Corporation, 100 Fillmore Street, Denver, Colorado 80206-4928, is
the investment adviser to the Funds and is responsible for the day-to-day
management of their investment portfolios and other business affairs.
Janus Capital began serving as investment adviser to Janus Fund at its inception
in 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.
Janus Capital furnishes continuous advice and recommendations concerning the
Funds' investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Funds, and may be reimbursed by the
Funds 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 Funds and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
The Funds pay Janus Capital a management fee which is calculated daily and paid
monthly. The advisory agreement with the Funds spells out the management fee and
other expenses that the Funds must pay. The Funds' management fee schedule is
set out below.
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS OF FUNDS ANNUAL RATE PERCENTAGE (%)
<S> <C>
- ------------------------------------------------------------------------------
FIRST $300 MILLION 0.75
NEXT $200 MILLION 0.70
OVER $500 MILLION 0.65
</TABLE>
- ------------------------------------------------------------------------------
PORTFOLIO MANAGERS
C. MIKE LU is Executive Vice President and portfolio manager of Janus Global
Technology Fund, which he has managed since inception. He joined Janus in 1991
as a research analyst and has consistently focused on companies in the
technology industry. Mr. Lu has a Bachelor of Arts in History and a Bachelor of
Arts in Economics from Yale University. He is a Chartered Financial Analyst.
THOMAS R. MALLEY is Executive Vice President and portfolio manager of Janus
Global Life Sciences Fund, which he has managed since inception. He joined Janus
in 1991 as a research analyst and has focused on companies in the health care,
pharmaceutical and biotechnology industries. Mr. Malley has a Bachelor of
Science in Biology from Stanford University. He is a Chartered Financial
Analyst.
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OTHER INFORMATION
SIZE OF THE FUNDS
Although there is no present intention to do so, the Funds may discontinue sales
of their shares if management believes that continued sales may adversely affect
a Fund's ability to achieve its investment objective. If sales of a Fund are
discontinued, it is expected that existing shareholders of that Fund would be
permitted to continue to purchase shares and to reinvest any dividends or
capital gains distributions, absent highly unusual circumstances.
YEAR 2000
Preparing for Year 2000 is a high priority for Janus Capital, which has
established a dedicated group to address this issue. Janus Capital has entered
into a consulting arrangement with one of the foremost experts in Year 2000
compliance to help Janus Capital successfully achieve Year 2000 compliance.
Janus Capital does not anticipate that the move to Year 2000 will have a
material impact on its ability to continue to provide the Funds with service at
current levels.
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DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
TO AVOID TAXATION, THE INTERNAL REVENUE CODE REQUIRES EACH FUND TO DISTRIBUTE
NET INCOME AND ANY NET CAPITAL GAINS REALIZED ON ITS INVESTMENTS ANNUALLY. A
FUND'S INCOME FROM DIVIDENDS AND INTEREST AND ANY NET REALIZED SHORT-TERM
CAPITAL GAINS ARE PAID TO SHAREHOLDERS AS ORDINARY INCOME DIVIDENDS. NET
REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL GAINS
DISTRIBUTIONS. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS ARE NORMALLY 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 a Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in each Fund's daily NAV. The
share price of a Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, Janus
Global Life Sciences Fund declared a dividend in the amount of $0.25 per share.
If Janus Global Life Sciences 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.
Shareholders should be aware that distributions from a taxable mutual fund are
not value-enhancing and may create income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of a 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 Funds offer 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.
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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 Funds reserve the right to reinvest into your account undeliverable and
uncashed dividend and distribution checks that remain outstanding for six months
in shares of the applicable 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 Funds. Any time you sell or exchange shares of a Fund in a taxable account,
it is considered a taxable event. Depending on the purchase price and the sale
price, you may have a gain or a loss on the transaction. Any tax liabilities
generated by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts, nor is it a
complete analysis of the federal tax implications of investing in the Funds. 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 of the Funds are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of a Fund. Distributions may be taxable at different rates
depending on the length of time a Fund holds a security. In certain states, a
portion of the dividends and distributions (depending on the sources of a 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. Account tax information
will also be sent to the IRS.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Funds on foreign
securities may be subject to tax withholding or other foreign taxes. The Funds
may from year to year make the election permitted under section 853 of the
Internal Revenue Code to pass through such taxes to shareholders as a foreign
tax credit. If such election is not made, any
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foreign taxes paid or accrued will represent an expense to the Funds which will
reduce their investment income.
The Funds do not expect to pay any federal income or excise taxes because they
intend to meet certain requirements of the Internal Revenue Code. It is
important that the Funds meet these requirements so that any earnings on your
investment will not be taxed twice.
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GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Funds may invest. The Funds may
invest in these instruments to the extent permitted by their investment
objectives and policies. The Funds are 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 of the bond) 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 Funds may purchase commercial paper issued in
private placements under Section 4(2) of the Securities Act of 1933.
COMMON STOCKS are equity securities representing shares of ownership in a
company, and usually carry 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.
DEBT SECURITIES are securities representing money borrowed that must be repaid
at a later date. Such securities have specific maturities and usually a specific
rate of interest or an original purchase discount.
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.
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HIGH-YIELD/HIGH-RISK SECURITIES are securities that are rated below investment
grade by the primary rating agencies (e.g., 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. To avoid taxes and interest that the
Funds must pay if these investments are profitable, the Funds may make various
elections permitted by the tax laws. These elections could require that the
Funds recognize taxable income, which in turn must be distributed, before the
securities are sold and before cash is received to pay distributions.
PREFERRED STOCKS are equity securities that generally pay dividends at a
specified rate and have 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 a 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, a 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 a 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 primarily to provide cash to satisfy unusually heavy
redemption requests, or for other temporary or emergency purposes.
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U.S. GOVERNMENT SECURITIES include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.
WARRANTS are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
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 Funds do 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.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified amount of a
financial instrument 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 Funds may enter into forward currency contracts to hedge
against declines in the value of securities denominated in, or whose value is
tied to, a currency other than the U.S. dollar or to reduce the impact of
currency appreciation on purchases of such 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 Funds 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 Funds may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to
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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. A Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
OPTIONS are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Funds may purchase and write put and call options on securities,
securities indices and foreign currencies.
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[JANUS LOGO]
1-800-525-3713
P.O. Box 173375
Denver, Colorado 80217-3375
janus.com
You can request other information, including a Statement of Additional
Information, free of charge, by contacting Janus at 1-800-525-3713 or visiting
our website at janus.com. Other information is also available from financial
intermediaries that sell Shares of the Funds.
The Statement of Additional Information provides detailed information about the
Funds and is incorporated into this Prospectus by reference. You may review the
Funds' Statement of Additional Information at the Public Reference Room of the
SEC or get text only copies for a fee, by writing to or calling the Public
Reference Room, Washington, D.C. 20549-6009 (1-800-SEC-0330). You may obtain the
Statement of Additional Information for free from the SEC's website at
http://www.sec.gov.
Investment Company Act File No. 811-1879
<PAGE>
JANUS INVESTMENT FUND
JANUS GLOBAL LIFE SCIENCES FUND
JANUS GLOBAL TECHNOLOGY FUND
100 Fillmore Street
Denver, CO 80206-4928
(800) 525-3713
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 24, 1998
This Statement of Additional Information pertains to the funds listed above,
each of which is a separate series of Janus Investment Fund, a Massachusetts
business trust.
This SAI is not a Prospectus and should be read in conjunction with the Funds'
Prospectus dated November 24, 1998, which is incorporated by reference into this
SAI and may be obtained from the Trust at the above phone number or address.
This SAI contains additional and more detailed information about the Funds'
operations and activities than the Prospectus.
[JANUS LOGO]
<PAGE>
JANUS GLOBAL LIFE SCIENCES FUND
JANUS GLOBAL TECHNOLOGY FUND
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Classification, Investment Restrictions, Investment Strategies
and Risks............................................................. page 3
Classification..................................................... page 3
Investment Restrictions............................................ page 3
Investment Strategies and Risks.................................... page 6
Cash Position................................................... page 6
Illiquid Investments............................................ page 6
Short Sales..................................................... page 6
Zero Coupon, Pay-In-Kind and Step Coupon Securities............. page 7
Pass-Through Securities......................................... page 7
Investment Company Securities................................... page 9
Depositary Receipts............................................. page 9
Municipal Obligations........................................... page 10
Other Income-Producing Securities............................... page 10
Repurchase and Reverse Repurchase Agreements.................... page 11
High-Yield/High-Risk Securities................................. page 12
Futures, Options and Other Derivative Instruments............... page 13
Investment Adviser...................................................... page 25
Custodian, Transfer Agent and Certain Affiliations...................... page 27
Portfolio Transactions and Brokerage.................................... page 28
Trustees and Officers................................................... page 30
Purchase of Shares...................................................... page 33
Net Asset Value Determination...................................... page 33
Reinvestment of Dividends and Distributions........................ page 34
Redemption of Shares.................................................... page 34
Shareholder Accounts.................................................... page 35
Telephone Transactions............................................. page 35
Systematic Redemptions............................................. page 35
Tax-Deferred Accounts................................................... page 36
Income Dividends, Capital Gains Distributions and Tax Status............ page 37
Miscellaneous Information............................................... page 37
Shares of the Trust................................................ page 38
Shareholder Meetings............................................... page 38
Voting Rights...................................................... page 38
Master/Feeder Option............................................... page 39
Independent Accountants............................................ page 39
Registration Statement............................................. page 39
Performance Information................................................. page 39
Appendix A.............................................................. page 41
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CLASSIFICATION, INVESTMENT RESTRICTIONS, INVESTMENT STRATEGIES AND RISKS
CLASSIFICATION
The Funds are open-end, management investment companies. The Investment Company
Act of 1940 ("1940 Act") classifies investment companies as either diversified
or nondiversified, and each of the Funds are deemed to be nondiversified funds.
Each Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.
INVESTMENT RESTRICTIONS
The Funds are subject to certain fundamental policies and restrictions that may
not be changed without shareholder approval. Shareholder approval means approval
by the lesser of (i) more than 50% of the outstanding voting securities of the
Trust (or a particular Fund if a matter affects just that Fund), or (ii) 67% or
more of the voting securities present at a meeting if the holders of more than
50% of the outstanding voting securities of the Trust (or a particular Fund) are
present or represented by proxy. As fundamental policies, each of the Funds may
not:
(1) Own more than 10% of the outstanding voting securities of any one issuer
and, as to fifty percent (50%) of the value of its total assets, purchase the
securities of any one issuer (except cash items and "government securities" as
defined under the 1940 Act, as amended), if immediately after and as a result of
such purchase, the value of the holdings of a Fund in the securities of such
issuer exceeds 5% of the value of such Fund's total assets. With respect to the
other 50% of the value of their total assets, the Funds may invest in the
securities of as few as two issuers.
(2) Invest directly in real estate or interests in real estate; however, the
Funds may own debt or equity securities issued by companies engaged in those
businesses.
(3) Purchase or sell physical commodities other than foreign currencies unless
acquired as a result of ownership of securities (but this limitation shall not
prevent the Funds from purchasing or selling options, futures, swaps and forward
contracts or from investing in securities or other instruments backed by
physical commodities).
(4) Lend any security or make any other loan if, as a result, more than 25% of a
Fund's total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or repurchase
agreements).
(5) Act as an underwriter of securities issued by others, except to the extent
that a Fund may be deemed an underwriter in connection with the disposition of
portfolio securities of such Fund.
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As a fundamental policy, Janus Global Life Sciences Fund will normally invest at
least 25% of its total assets in the following industry groups: health care;
pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. Janus
Global Technology Fund will not invest 25% or more of the value of its total
assets in any particular industry (other than U.S. government securities).
As a fundamental policy, each Fund may, notwithstanding any other investment
policy or limitation (whether or not fundamental), invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
limitations as such Fund.
The Trustees have adopted additional investment restrictions for the Funds.
These restrictions are operating policies of the Funds and may be changed by the
Trustees without shareholder approval. The additional investment restrictions
adopted by the Trustees to date include the following:
(a) A Fund will not (i) enter into any futures contracts and related options for
purposes other than bona fide hedging transactions within the meaning of
Commodity Futures Trading Commission ("CFTC") regulations if the aggregate
initial margin and premiums required to establish positions in futures contracts
and related options that do not fall within the definition of bona fide hedging
transactions will exceed 5% of the fair market value of a Fund's net assets,
after taking into account unrealized profits and unrealized losses on any such
contracts it has entered into; and (ii) enter into any futures contracts if the
aggregate amount of such Fund's commitments under outstanding futures contracts
positions would exceed the market value of its total assets.
(b) The Funds do not currently intend to sell securities short, unless they own
or have the right to obtain securities equivalent in kind and amount to the
securities sold short without the payment of any additional consideration
therefor, and provided that transactions in futures, options, swaps and forward
contracts are not deemed to constitute selling securities short.
(c) The Funds do not currently intend to purchase securities on margin, except
that the Funds may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments and other deposits
in connection with transactions in futures, options, swaps and forward contracts
shall not be deemed to constitute purchasing securities on margin.
(d) A Fund may not mortgage or pledge any securities owned or held by such Fund
in amounts that exceed, in the aggregate, 15% of that Fund's net asset value,
provided that this limitation does not apply to reverse repurchase agreements,
deposits of assets to margin, guarantee positions in futures, options, swaps or
forward contracts, or the segregation of assets in connection with such
contracts.
(e) The Funds may borrow money for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 25% of the value of their
respective total assets (including the amount borrowed) less liabilities (other
than borrowings). If borrowings exceed 25% of the value of a Fund's
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total assets by reason of a decline in net assets, the Fund will reduce its
borrowings within three business days to the extent necessary to comply with the
25% limitation. This policy shall not prohibit reverse repurchase agreements,
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts.
(f) The Funds do not currently intend to purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of their respective net
assets would be invested in repurchase agreements not entitling the holder to
payment of principal and interest within seven days and in securities that are
illiquid by virtue of legal or contractual restrictions on resale or the absence
of a readily available market. The Trustees, or the Funds' investment adviser
acting pursuant to authority delegated by the Trustees, may determine that a
readily available market exists for securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 ("Rule 144A Securities"), or any
successor to such rule, Section 4(2) commercial paper and municipal lease
obligations. Accordingly, such securities may not be subject to the foregoing
limitation.
(g) The Funds may not invest in companies for the purpose of exercising control
of management.
Under the terms of an exemptive order received from the Securities and Exchange
Commission ("SEC"), each of the Funds may borrow money from or lend money to
other funds that permit such transactions and for which Janus Capital serves as
investment adviser. All such borrowing and lending will be subject to the above
limits. A Fund will borrow money through the program only when the costs are
equal to or lower than the cost of bank loans. Interfund loans and borrowings
normally extend overnight, but can have a maximum duration of seven days. A Fund
will lend through the program only when the returns are higher than those
available from other short-term instruments (such as repurchase agreements). A
Fund may have to borrow from a bank at a higher interest rate if an interfund
loan is called or not renewed. Any delay in repayment to a lending Fund could
result in a lost investment opportunity or additional borrowing costs.
For the purposes of each Fund's policies on investing in particular industries,
the Funds will rely primarily on industry and industry group classifications
published by Bloomberg L.P. To the extent that Bloomberg L.P. industry
classifications are so broad that the primary economic characteristics in a
single industry are materially different, the Funds may further classify issuers
in accordance with industry classifications as published by the SEC.
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INVESTMENT STRATEGIES AND RISKS
CASH POSITION
As discussed in the Prospectus, when a Fund's portfolio manager believes that
market conditions are unfavorable for profitable investing, or when he is
otherwise unable to locate attractive investment opportunities, the Fund's
investment in cash and similar investments may increase. Securities that the
Funds may invest in as a means of receiving a return on idle cash include high-
grade commercial paper, certificates of deposit, repurchase agreements or other
short-term debt obligations. The Fund may also invest in money market funds,
including funds managed by Janus Capital. (See "Investment Company Securities"
on page 9.)
ILLIQUID INVESTMENTS
Each Fund may invest up to 15% of its net assets in illiquid investments (i.e.,
securities that are not readily marketable). The Trustees have authorized Janus
Capital to make liquidity determinations with respect to certain securities,
including Rule 144A Securities, commercial paper and municipal lease obligations
purchased by the Funds. Under the guidelines established by the Trustees, Janus
Capital will consider the following factors: 1) the frequency of trades and
quoted prices for the obligation; 2) the number of dealers willing to purchase
or sell the security and the number of other potential purchasers; 3) the
willingness of dealers to undertake to make a market in the security; and 4) the
nature of the security and the nature of marketplace trades, including the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer. In the case of commercial paper, Janus Capital will
also consider whether the paper is traded flat or in default as to principal and
interest and any ratings of the paper by a nationally recognized statistical
rating organization ("NRSRO"). A foreign security that may be freely traded on
or through the facilities of an offshore exchange or other established offshore
securities market is not deemed to be a restricted security subject to these
procedures.
If illiquid securities exceed 15% of a Fund's net assets after the time of
purchase the Fund will take steps to reduce in an orderly fashion its holdings
of illiquid securities. Because illiquid securities may not be readily
marketable, a portfolio manager may not be able to dispose of them in a timely
manner. As a result, a Fund may be forced to hold illiquid securities while
their price depreciates. Depreciation in the price of illiquid securities may
negatively affect the net asset value of a Fund.
SHORT SALES
Each Fund may engage in "short sales against the box." This technique involves
selling either a security that a Fund owns, or a security equivalent in kind and
amount to the security sold short that the Fund has the right to obtain, for
delivery at a specified date in the future. A Fund may enter into a short sale
against the box to hedge against anticipated declines in the market price of
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portfolio securities. If the value of the securities sold short increases prior
to the scheduled delivery date, a Fund loses the opportunity to participate in
the gain.
ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES
Each Fund may invest up to 10% of its assets in zero coupon, pay-in-kind and
step coupon securities. Zero coupon bonds are issued and traded at a discount
from their face value. They do not entitle the holder to any periodic payment of
interest prior to maturity. Step coupon bonds trade at a discount from their
face value and pay coupon interest. The coupon rate is low for an initial period
and then increases to a higher coupon rate thereafter. The discount from the
face amount or par value depends on the time remaining until cash payments
begin, prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer. Pay-in-kind bonds normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the security a
similar bond with the same coupon rate and a face value equal to the amount of
the coupon payment that would have been made.
Current federal income tax law requires holders of zero coupon securities and
step coupon securities to report the portion of the original issue discount on
such securities that accrues during a given year as interest income, even though
the holders receive no cash payments of interest during the year. In order to
qualify as a "regulated investment company" under the Internal Revenue Code of
1986 and the regulations thereunder (the "Code"), a Fund must distribute its
investment company taxable income, including the original issue discount accrued
on zero coupon or step coupon bonds. Because a Fund will not receive cash
payments on a current basis in respect of accrued original-issue discount on
zero coupon bonds or step coupon bonds during the period before interest
payments begin, in some years that Fund may have to distribute cash obtained
from other sources in order to satisfy the distribution requirements under the
Code. A Fund might obtain such cash from selling other portfolio holdings which
might cause that Fund to incur capital gains or losses on the sale.
Additionally, these actions are likely to reduce the assets to which Fund
expenses could be allocated and to reduce the rate of return for that Fund. In
some circumstances, such sales might be necessary in order to satisfy cash
distribution requirements even though investment considerations might otherwise
make it undesirable for a Fund to sell the securities at the time.
Generally, the market prices of zero coupon, step coupon and pay-in-kind
securities are more volatile than the prices of securities that pay interest
periodically and in cash and are likely to respond to changes in interest rates
to a greater degree than other types of debt securities having similar
maturities and credit quality.
PASS-THROUGH SECURITIES
The Funds may invest in various types of pass-through securities, such as
mortgage-backed securities, asset-backed securities and participation interests.
A pass-through security is a share or certificate of interest in a pool of debt
obligations that have been repackaged by an intermediary, such as a bank or
broker-dealer. The purchaser of a pass-through security receives an undivided
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interest in the underlying pool of securities. The issuers of the underlying
securities make interest and principal payments to the intermediary which are
passed through to purchasers, such as the Funds. The most common type of
pass-through securities are mortgage-backed securities. Government National
Mortgage Association ("GNMA") Certificates are mortgage-backed securities that
evidence an undivided interest in a pool of mortgage loans. GNMA Certificates
differ from bonds in that principal is paid back monthly by the borrowers over
the term of the loan rather than returned in a lump sum at maturity. A Fund will
generally purchase "modified pass-through" GNMA Certificates, which entitle the
holder to receive a share of all interest and principal payments paid and owned
on the mortgage pool, net of fees paid to the "issuer" and GNMA, regardless of
whether or not the mortgagor actually makes the payment. GNMA Certificates are
backed as to the timely payment of principal and interest by the full faith and
credit of the U.S. government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semiannually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest but it is not guaranteed by the full faith and credit of the U.S.
government.
The Federal National Mortgage Association ("FNMA") issues guaranteed mortgage
pass-through certificates ("FNMA Certificates"). FNMA Certificates resemble GNMA
Certificates in that each FNMA Certificate represents a pro rata share of all
interest and principal payments made and owned on the underlying pool. This type
of security is guaranteed by FNMA as to timely payment of principal and interest
but it is not guaranteed by the full faith and credit of the U.S. government.
Except for GMCs, each of the mortgage-backed securities described above is
characterized by monthly payments to the holder, reflecting the monthly payments
made by the borrowers who received the underlying mortgage loans. The payments
to the security holders (such as the Funds), like the payments on the underlying
loans, represent both principal and interest. Although the underlying mortgage
loans are for specified periods of time, such as 20 or 30 years, the borrowers
can, and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the principal that is
part of the regular monthly payments. A portfolio manager will consider
estimated prepayment rates in calculating the average weighted maturity of a
Fund. A borrower is more likely to prepay a mortgage that bears a relatively
high rate of interest. This means that in times of declining interest rates,
higher yielding mortgage-backed securities held by a Fund might be converted to
cash and that Fund will be forced to accept lower interest rates
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when that cash is used to purchase additional securities in the mortgage-backed
securities sector or in other investment sectors. Additionally, prepayments
during such periods will limit a Fund's ability to participate in as large a
market gain as may be experienced with a comparable security not subject to
prepayment.
Asset-backed securities represent interests in pools of consumer loans and are
backed by paper or accounts receivables originated by banks, credit card
companies or other providers of credit. Generally, the originating bank or
credit provider is neither the obligor or guarantor of the security and interest
and principal payments ultimately depend upon payment of the underlying loans by
individuals. Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales agreements
that may be created when a municipality enters into an installment purchase
contract or lease with a vendor. Such securities may be secured by the assets
purchased or leased by the municipality; however, if the municipality stops
making payments, there generally will be no recourse against the vendor. The
market for tax-exempt asset-backed securities is still relatively new. These
obligations are likely to involve unscheduled prepayments of principal.
INVESTMENT COMPANY SECURITIES
From time to time, the Funds may invest in securities of other investment
companies, subject to the provisions of Section 12(d)(1) of the 1940 Act. The
Funds may invest in securities of money market funds managed by Janus Capital in
excess of the limitations of Section 12(d)(1) under the terms of an SEC
exemptive order obtained by Janus Capital and the Janus funds.
DEPOSITARY RECEIPTS
The Funds may invest in sponsored and unsponsored American Depositary Receipts
("ADRs"), which are receipts issued by an American bank or trust company
evidencing ownership of underlying securities issued by a foreign issuer. ADRs,
in registered form, are designed for use in U.S. securities markets. Unsponsored
ADRs may be created without the participation of the foreign issuer. Holders of
these ADRs generally bear all the costs of the ADR facility, whereas foreign
issuers typically bear certain costs in a sponsored ADR. The bank or trust
company depositary of an unsponsored ADR may be under no obligation to
distribute shareholder communications received from the foreign issuer or to
pass through voting rights. The Funds may also invest in European Depositary
Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and in other similar
instruments representing securities of foreign companies. EDRs are receipts
issued by a European financial institution evidencing an arrangement similar to
that of ADRs. EDRs, in bearer form, are designed for use in European securities
markets.
Depositary Receipts are generally subject to the same sort of risks as direct
investments in a foreign country, for example, currency risk, political and
economic risk, and market risk, because their values depend on the performance
of a foreign security denominated in its home currency. The risks of foreign
investing are addressed in some detail in the Funds' prospectus.
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MUNICIPAL OBLIGATIONS
The Funds may invest in municipal obligations issued by states, territories and
possessions of the United States and the District of Columbia.
The value of municipal obligations can be affected by changes in their actual or
perceived credit quality. The credit quality of municipal obligations can be
affected by among other things, the financial condition of the issuer or
guarantor, the issuer's future borrowing plans and sources of revenue, the
economic feasibility of the revenue bond project or general borrowing purpose,
political or economic developments in the region where the security is issued,
and the liquidity of the security. Because municipal securities are generally
traded over-the-counter, the liquidity of a particular issue often depends on
the willingness of dealers to make a market in the security. The liquidity of
some municipal obligations may be enhanced by demand features, which would
enable a Fund to demand payment on short notice from the issuer or a financial
intermediary.
OTHER INCOME-PRODUCING SECURITIES
Other types of income producing securities that the Funds may purchase include,
but are not limited to, the following types of securities:
VARIABLE AND FLOATING RATE OBLIGATIONS. These types of 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. These
types of securities are relatively long-term instruments that often carry demand
features permitting the holder to demand payment of principal at any time or at
specified intervals prior to maturity.
In order to most effectively use these investments, a portfolio manager must
correctly assess probable movements in interest rates. This involves different
skills than those used to select most portfolio securities. If the portfolio
manager incorrectly forecasts such movements, a Fund could be adversely affected
by the use of variable or floating rate obligations.
STANDBY COMMITMENTS. These instruments, which are similar to a put, give a Fund
the option to obligate a broker, dealer or bank to repurchase a security held by
that Fund at a specified price.
TENDER OPTION BONDS. Tender option bonds are relatively long-term bonds that are
coupled with the agreement of a third party (such as a broker, dealer or bank)
to grant the holders of such securities the option to tender the securities to
the institution at periodic intervals.
INVERSE FLOATERS. Inverse floaters are debt instruments whose interest bears an
inverse relationship to the interest rate on another security. The Funds will
not invest more than 5% of their respective assets in inverse floaters. Similar
to variable and floating rate obligations, effective use of inverse floaters
requires skills different from those needed to select most portfolio securities.
If
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movements in interest rates are incorrectly anticipated, a Fund could be
adversely affected by the use of inverse floaters.
STRIP BONDS. Strip bonds 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.
The Funds will purchase standby commitments, tender option bonds and instruments
with demand features primarily for the purpose of increasing the liquidity of
their portfolios.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
In a repurchase agreement, a Fund purchases a security and simultaneously
commits to resell that security to the seller at an agreed upon price on an
agreed upon date within a number of days (usually not more than seven) from the
date of purchase. The resale price reflects the purchase price plus an agreed
upon incremental amount that is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price, which obligation is in effect secured by the value
(at least equal to the amount of the agreed upon resale price and marked-to-
market daily) of the underlying security or "collateral." A risk associated with
repurchase agreements is the failure of the seller to repurchase the securities
as agreed, which may cause a Fund to suffer a loss if the market value of such
securities declines before they can be liquidated on the open market. In the
event of bankruptcy or insolvency of the seller, a Fund may encounter delays and
incur costs in liquidating the underlying security. Repurchase agreements that
mature in more than seven days will be subject to the 15% limit on illiquid
investments. While it is not possible to eliminate all risks from these
transactions, it is the policy of the Funds to limit repurchase agreements to
those parties whose creditworthiness has been reviewed and found satisfactory by
Janus Capital.
A Fund may use reverse repurchase agreements to provide cash to satisfy
unusually heavy redemption requests or for other temporary or emergency purposes
without the necessity of selling portfolio securities, or to earn additional
income on portfolio securities, such as Treasury bills or notes. In a reverse
repurchase agreement, a Fund sells a portfolio security to another party, such
as a bank or broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase agreement
is outstanding, a Fund will maintain cash and appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. The
Funds will enter into reverse repurchase agreements only with parties that Janus
Capital deems creditworthy. Using reverse repurchase agreements to earn
additional income involves the risk that the interest earned on the invested
proceeds is less than the expense of the reverse repurchase agreement
transaction. This technique may also have a leveraging effect on the Fund's
portfolio, although the Fund's intent to segregate assets in the amount of the
reverse repurchase agreement minimizes this effect.
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HIGH-YIELD/HIGH-RISK SECURITIES
The Funds intend to invest less than 35% of their respective net assets in debt
securities that are rated below investment grade (e.g., securities rated BB or
lower by Standard & Poor's Ratings Services or Ba or lower by Moody's Investors
Service, Inc. Lower rated securities involve a higher degree of credit risk,
which is the risk that the issuer will not make interest or principal payments
when due. In the event of an unanticipated default, a Fund would experience a
reduction in its income, and could expect a decline in the market value of the
securities so affected.
Each Fund may also invest in unrated debt securities of foreign and domestic
issuers. Unrated debt, while not necessarily of lower quality than rated
securities, may not have as broad a market. Because of the size and perceived
demand of the issue, among other factors, certain municipalities may not incur
the costs of obtaining a rating. A Fund's portfolio manager will analyze the
creditworthiness of the issuer, as well as any financial institution or other
party responsible for payments on the security, in determining whether to
purchase unrated municipal bonds. Unrated debt securities will be included in
the 35% limit of each Fund unless its portfolio manager deems such securities to
be the equivalent of investment grade securities.
Subject to the above limits, each Fund may purchase defaulted securities only
when their portfolio managers believe, based upon their analysis of the
financial condition, results of operations and economic outlook of an issuer,
that there is potential for resumption of income payments and that the
securities offer an unusual opportunity for capital appreciation.
Notwithstanding the respective portfolio manager's belief as to the resumption
of income, however, the purchase of any security on which payment of interest or
dividends is suspended involves a high degree of risk. Such risk includes, among
other things, the following:
Financial and Market Risks. Investments in securities that are in default
involve a high degree of financial and market risks that can result in
substantial or, at times, even total losses. Issuers of defaulted securities may
have substantial capital needs and may become involved in bankruptcy or
reorganization proceedings. Among the problems involved in investments in such
issuers is the fact that it may be difficult to obtain information about the
condition of such issuers. The market prices of such securities also are subject
to abrupt and erratic movements and above average price volatility, and the
spread between the bid and asked prices of such securities may be greater than
normally expected.
Disposition of Portfolio Securities. Although these Funds generally will
purchase securities for which their portfolio managers expect an active market
to be maintained, defaulted securities may be less actively traded than other
securities and it may be difficult to dispose of substantial holdings of such
securities at prevailing market prices. The Funds will limit holdings of any
such securities to amounts that the portfolio managers believe could be readily
sold, and holdings of such securities would, in any event, be limited so as not
to limit the Funds' ability to readily dispose of securities to meet
redemptions.
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Other. Defaulted securities require active monitoring and may, at times, require
participation in bankruptcy or receivership proceedings on behalf of the Funds.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
FUTURES CONTRACTS. The Funds may enter into contracts for the purchase or sale
for future delivery of fixed-income securities, foreign currencies or contracts
based on financial indices, including indices of U.S. government securities,
foreign government securities, equity or fixed-income securities. U.S. futures
contracts are traded on exchanges which have been designated "contract markets"
by the CFTC and must be executed through a futures commission merchant ("FCM"),
or brokerage firm, which is a member of the relevant contract market. Through
their clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange.
The buyer or seller of a futures contract is not required to deliver or pay for
the underlying instrument unless the contract is held until the delivery date.
However, both the buyer and seller are required to deposit "initial margin" for
the benefit of the FCM when the contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or
certain other liquid assets by the Funds' custodian for the benefit of the FCM.
Initial margin payments are similar to good faith deposits or performance bonds.
Unlike margin extended by a securities broker, initial margin payments do not
constitute purchasing securities on margin for purposes of the Fund's investment
limitations. If the value of either party's position declines, that party will
be required to make additional "variation margin" payments for the benefit of
the FCM to settle the change in value on a daily basis. The party that has a
gain may be entitled to receive all or a portion of this amount. In the event of
the bankruptcy of the FCM that holds margin on behalf of a Fund, that Fund may
be entitled to return of margin owed to such Fund only in proportion to the
amount received by the FCM's other customers. Janus Capital will attempt to
minimize the risk by careful monitoring of the creditworthiness of the FCMs with
which the Funds do business and by depositing margin payments in a segregated
account with the Funds' custodian.
The Funds intend to comply with guidelines of eligibility for exclusion from the
definition of the term "commodity pool operator" adopted by the CFTC and the
National Futures Association, which regulate trading in the futures markets. The
Funds will use futures contracts and related options primarily for bona fide
hedging purposes within the meaning of CFTC regulations. To the extent that the
Funds hold positions in futures contracts and related options that do not fall
within the definition of bona fide hedging transactions, the aggregate initial
margin and premiums required to establish such positions will not exceed 5% of
the fair market value of a Fund's net assets, after taking into account
unrealized profits and unrealized losses on any such contracts it has entered
into.
Although a Fund will segregate cash and liquid assets in an amount sufficient to
cover its open futures obligations, the segregated assets would be available to
that Fund immediately upon closing out the futures position, while settlement of
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securities transactions could take several days. However, because a Fund's cash
that may otherwise be invested would be held uninvested or invested in other
liquid assets so long as the futures position remains open, such Fund's return
could be diminished due to the opportunity losses of foregoing other potential
investments.
A Fund's primary purpose in entering into futures contracts is to protect that
Fund from fluctuations in the value of securities or interest rates without
actually buying or selling the underlying debt or equity security. For example,
if the Fund anticipates an increase in the price of stocks, and it intends to
purchase stocks at a later time, that Fund could enter into a futures contract
to purchase a stock index as a temporary substitute for stock purchases. If an
increase in the market occurs that influences the stock index as anticipated,
the value of the futures contracts will increase, thereby serving as a hedge
against that Fund not participating in a market advance. This technique is
sometimes known as an anticipatory hedge. To the extent a Fund enters into
futures contracts for this purpose, the segregated assets maintained to cover
such Fund's obligations with respect to the futures contracts will consist of
other liquid assets from its portfolio in an amount equal to the difference
between the contract price and the aggregate value of the initial and variation
margin payments made by that Fund with respect to the futures contracts.
Conversely, if a Fund holds stocks and seeks to protect itself from a decrease
in stock prices, the Fund might sell stock index futures contracts, thereby
hoping to offset the potential decline in the value of its portfolio securities
by a corresponding increase in the value of the futures contract position. A
Fund could protect against a decline in stock prices by selling portfolio
securities and investing in money market instruments, but the use of futures
contracts enables it to maintain a defensive position without having to sell
portfolio securities.
If a Fund owns Treasury bonds and the portfolio manager expects interest rates
to increase, that Fund may take a short position in interest rate futures
contracts. Taking such a position would have much the same effect as that Fund
selling Treasury bonds in its portfolio. If interest rates increase as
anticipated, the value of the Treasury bonds would decline, but the value of
that Fund's interest rate futures contract will increase, thereby keeping the
net asset value of that Fund from declining as much as it may have otherwise.
If, on the other hand, a portfolio manager expects interest rates to decline,
that Fund may take a long position in interest rate futures contracts in
anticipation of later closing out the futures position and purchasing the bonds.
Although a Fund can accomplish similar results by buying securities with long
maturities and selling securities with short maturities, given the greater
liquidity of the futures market than the cash market, it may be possible to
accomplish the same result more easily and more quickly by using futures
contracts as an investment tool to reduce risk.
The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions
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which could distort the normal price relationship between the cash and futures
markets. Second, the liquidity of the futures market depends on participants
entering into offsetting transactions rather than making or taking delivery of
the instrument underlying a futures contract. To the extent participants decide
to make or take delivery, liquidity in the futures market could be reduced and
prices in the futures market distorted. Third, from the point of view of
speculators, the margin deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may cause temporary price
distortions. Due to the possibility of the foregoing distortions, a correct
forecast of general price trends by a portfolio manager still may not result in
a successful use of futures.
Futures contracts entail risks. Although the Funds believe that use of such
contracts will benefit the Funds, a Fund's overall performance could be worse
than if such Fund had not entered into futures contracts if the portfolio
manager's investment judgement proves incorrect. For example, if a Fund has
hedged against the effects of a possible decrease in prices of securities held
in its portfolio and prices increase instead, that Fund will lose part or all of
the benefit of the increased value of these securities because of offsetting
losses in its futures positions. In addition, if a Fund has insufficient cash,
it may have to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at increased
prices which reflect the rising market and may occur at a time when the sales
are disadvantageous to such Fund.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to a
Fund will not match exactly such Fund's current or potential investments. A Fund
may buy and sell futures contracts based on underlying instruments with
different characteristics from the securities in which it typically
invests -- for example, by hedging investments in portfolio securities with a
futures contract based on a broad index of securities -- which involves a risk
that the futures position will not correlate precisely with the performance of
such Fund's investments.
Futures prices can also diverge from the prices of their underlying instruments,
even if the underlying instruments closely correlate with a Fund's investments.
Futures prices are affected by factors such as current and anticipated
short-term interest rates, changes in volatility of the underlying instruments
and the time remaining until expiration of the contract. Those factors may
affect securities prices differently from futures prices. Imperfect correlations
between a Fund's investments and its futures positions also may result from
differing levels of demand in the futures markets and the securities markets,
from structural differences in how futures and securities are traded, and from
imposition of daily price fluctuation limits for futures contracts. A Fund may
buy or sell futures contracts with a greater or lesser value than the securities
it wishes to hedge or is considering purchasing in order to attempt to
compensate for differences in historical volatility between the futures contract
and the securities,
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although this may not be successful in all cases. If price changes in a Fund's
futures positions are poorly correlated with its other investments, its futures
positions may fail to produce desired gains or result in losses that are not
offset by the gains in that Fund's other investments.
Because futures contracts are generally settled within a day from the date they
are closed out, compared with a settlement period of three days for some types
of securities, the futures markets can provide superior liquidity to the
securities markets. Nevertheless, there is no assurance that a liquid secondary
market will exist for any particular futures contract at any particular time. In
addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached, it may be impossible for a Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, a Fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, such Fund's access to other assets held to cover its futures positions
also could be impaired.
OPTIONS ON FUTURES CONTRACTS. The Funds may buy and write put and call options
on futures contracts. An option on a future gives a Fund the right (but not the
obligation) to buy or sell a futures contract at a specified price on or before
a specified date. The purchase of a call option on a futures contract is similar
in some respects to the purchase of a call option on an individual security.
Depending on the pricing of the option compared to either the price of the
futures contract upon which it is based or the price of the underlying
instrument, ownership of the option may or may not be less risky than ownership
of the futures contract or the underlying instrument. As with the purchase of
futures contracts, when a Fund is not fully invested it may buy a call option on
a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial hedge
against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures' price at the expiration of the option is below the exercise price, a
Fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in that Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures' price at expiration of the option is higher than the exercise
price, a Fund will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which that Fund is
considering buying. If a call or put option a Fund has written is exercised,
such Fund will incur a loss which will be reduced by the amount of the premium
it received. Depending on the degree of correlation between the change in the
value of its portfolio securities and changes in the value of the futures
positions, a Fund's losses from existing
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options on futures may to some extent be reduced or increased by changes in the
value of portfolio securities.
The purchase of a put option on a futures contract is similar in some respects
to the purchase of protective put options on portfolio securities. For example,
a Fund may buy a put option on a futures contract to hedge its portfolio against
the risk of falling prices or rising interest rates.
The amount of risk a Fund assumes when it buys an option on a futures contract
is the premium paid for the option plus related transaction costs. In addition
to the correlation risks discussed above, the purchase of an option also entails
the risk that changes in the value of the underlying futures contract will not
be fully reflected in the value of the options bought.
FORWARD CONTRACTS. A forward contract is an agreement between two parties in
which one party is obligated to deliver a stated amount of a stated asset at a
specified time in the future and the other party is obligated to pay a specified
amount for the assets at the time of delivery. The Funds may enter into forward
contracts to purchase and sell government securities, equity or income
securities, foreign currencies or other financial instruments. Forward contracts
generally are traded in an interbank market conducted directly between traders
(usually large commercial banks) and their customers. Unlike futures contracts,
which are standardized contracts, forward contracts can be specifically drawn to
meet the needs of the parties that enter into them. The parties to a forward
contract may agree to offset or terminate the contract before its maturity, or
may hold the contract to maturity and complete the contemplated exchange.
The following discussion summarizes the Funds' principal uses of forward foreign
currency exchange contracts ("forward currency contracts"). A Fund may enter
into forward currency contracts with stated contract values of up to the value
of that Fund's assets. A forward currency contract is an obligation to buy or
sell an amount of a specified currency for an agreed price (which may be in U.S.
dollars or a foreign currency). A Fund will exchange foreign currencies for U.S.
dollars and for other foreign currencies in the normal course of business and
may buy and sell currencies through forward currency contracts in order to fix a
price for securities it has agreed to buy or sell ("transaction hedge"). A Fund
also may hedge some or all of its investments denominated in a foreign currency
or exposed to foreign currency fluctuations against a decline in the value of
that currency relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency (or a proxy currency whose
performance is expected to replicate or exceed the performance of that currency
relative to the U.S. dollar) approximating the value of some or all of its
portfolio securities denominated in that currency ("position hedge") or by
participating in options or futures contracts with respect to the currency. A
Fund also may enter into a forward currency contract with respect to a currency
where the Fund is considering the purchase or sale of investments denominated in
that currency but has not yet selected the specific investments ("anticipatory
hedge"). In any of these circumstances a Fund may, alternatively, enter into a
forward currency contract to purchase or sell one foreign currency for a second
currency that is expected to perform more favorably relative to the
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U.S. dollar if the portfolio manager believes there is a reasonable degree of
correlation between movements in the two currencies ("cross-hedge").
These types of hedging minimize the effect of currency appreciation as well as
depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on a Fund's foreign
currency denominated portfolio securities. The matching of the increase in value
of a forward contract and the decline in the U.S. dollar equivalent value of the
foreign currency denominated asset that is the subject of the hedge generally
will not be precise. Shifting a Fund's currency exposure from one foreign
currency to another removes that Fund's opportunity to profit from increases in
the value of the original currency and involves a risk of increased losses to
such Fund if its portfolio manager's projection of future exchange rates is
inaccurate. Proxy hedges and cross-hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which hedged
securities are denominated. Unforeseen changes in currency prices may result in
poorer overall performance for a Fund than if it had not entered into such
contracts.
The Funds will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in or whose value is tied to, the
currency underlying the forward contract or the currency being hedged. To the
extent that a Fund is not able to cover its forward currency positions with
underlying portfolio securities, the Funds' custodian will segregate cash or
other liquid assets having a value equal to the aggregate amount of such Fund's
commitments under forward contracts entered into with respect to position
hedges, cross-hedges and anticipatory hedges. If the value of the securities
used to cover a position or the value of segregated assets declines, a Fund will
find alternative cover or segregate additional cash or liquid assets on a daily
basis so that the value of the covered and segregated assets will be equal to
the amount of such Fund's commitments with respect to such contracts. As an
alternative to segregating assets, a Fund may buy call options permitting such
Fund to buy the amount of foreign currency being hedged by a forward sale
contract or a Fund may buy put options permitting it to sell the amount of
foreign currency subject to a forward buy contract.
While forward contracts are not currently regulated by the CFTC, the CFTC may in
the future assert authority to regulate forward contacts. In such event, the
Funds' ability to utilize forward contracts may be restricted. In addition, a
Fund may not always be able to enter into forward contracts at attractive prices
and may be limited in its ability to use these contracts to hedge Fund assets.
OPTIONS ON FOREIGN CURRENCIES. The Funds may buy and write options on foreign
currencies in a manner similar to that in which futures or forward contracts on
foreign currencies will be utilized. For example, a decline in the U.S. dollar
value of a foreign currency in which portfolio securities are denominated will
reduce the U.S. dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against such diminutions
in the value of portfolio securities, a Fund may buy put options on the foreign
currency. If the value of the currency declines, such Fund will have
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the right to sell such currency for a fixed amount in U.S. dollars, thereby
offsetting, in whole or in part, the adverse effect on its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Fund may buy call options on the foreign currency.
The purchase of such options could offset, at least partially, the effects of
the adverse movements in exchange rates. As in the case of other types of
options, however, the benefit to a Fund from purchases of foreign currency
options will be reduced by the amount of the premium and related transaction
costs. In addition, if currency exchange rates do not move in the direction or
to the extent projected, a Fund could sustain losses on transactions in foreign
currency options that would require such Fund to forego a portion or all of the
benefits of advantageous changes in those rates.
The Funds may also write options on foreign currencies. For example, to hedge
against a potential decline in the U.S. dollar value of foreign currency
denominated securities due to adverse fluctuations in exchange rates, a Fund
could, instead of purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most likely not be
exercised and the decline in value of portfolio securities will be offset by the
amount of the premium received.
Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, a Fund could
write a put option on the relevant currency which, if rates move in the manner
projected, should expire unexercised and allow that Fund to hedge the increased
cost up to the amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium. If exchange rates do not move in the
expected direction, the option may be exercised and a Fund would be required to
buy or sell the underlying currency at a loss which may not be offset by the
amount of the premium. Through the writing of options on foreign currencies, a
Fund also may lose all or a portion of the benefits which might otherwise have
been obtained from favorable movements in exchange rates.
The Funds may write covered call options on foreign currencies. A call option
written on a foreign currency by a Fund is "covered" if that Fund owns the
foreign currency underlying the call or has an absolute and immediate right to
acquire that foreign currency without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other foreign currencies held in its portfolio. A
call option is also covered if a Fund has a call on the same foreign currency in
the same principal amount as the call written if the exercise price of the call
held (i) is equal to or less than the exercise price of the call written or (ii)
is greater than the exercise price of the call written, if the difference is
maintained by such Fund in cash or other liquid assets in a segregated account
with the Funds' custodian.
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The Funds also may write call options on foreign currencies for cross-hedging
purposes. A call option on a foreign currency is for cross-hedging purposes if
it is designed to provide a hedge against a decline due to an adverse change in
the exchange rate in the U.S. dollar value of a security which a Fund owns or
has the right to acquire and which is denominated in the currency underlying the
option. Call options on foreign currencies which are entered into for cross-
hedging purposes are not covered. However, in such circumstances, a Fund will
collateralize the option by segregating cash or other liquid assets in an amount
not less than the value of the underlying foreign currency in U.S. dollars
marked-to-market daily.
OPTIONS ON SECURITIES. In an effort to increase current income and to reduce
fluctuations in net asset value, the Funds may write covered put and call
options and buy put and call options on securities that are traded on United
States and foreign securities exchanges and over-the-counter. The Funds may
write and buy options on the same types of securities that the Funds may
purchase directly.
A put option written by a Fund is "covered" if that Fund (i) segregates cash not
available for investment or other liquid assets with a value equal to the
exercise price of the put with the Funds' custodian or (ii) holds a put on the
same security and in the same principal amount as the put written and the
exercise price of the put held is equal to or greater than the exercise price of
the put written. The premium paid by the buyer of an option will reflect, among
other things, the relationship of the exercise price to the market price and the
volatility of the underlying security, the remaining term of the option, supply
and demand and interest rates.
A call option written by a Fund is "covered" if that Fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or for additional cash
consideration held in a segregated account by the Funds' custodian) upon
conversion or exchange of other securities held in its portfolio. A call option
is also deemed to be covered if a Fund holds a call on the same security and in
the same principal amount as the call written and the exercise price of the call
held (i) is equal to or less than the exercise price of the call written or (ii)
is greater than the exercise price of the call written if the difference is
maintained by that Fund in cash and other liquid assets in a segregated account
with its custodian.
The Funds also may write call options that are not covered for cross-hedging
purposes. A Fund collateralizes its obligation under a written call option for
cross-hedging purposes by segregating cash or other liquid assets in an amount
not less than the market value of the underlying security, marked-to-market
daily. A Fund would write a call option for cross-hedging purposes, instead of
writing a covered call option, when the premium to be received from the cross-
hedge transaction would exceed that which would be received from writing a
covered call option and its portfolio manager believes that writing the option
would achieve the desired hedge.
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The writer of an option may have no control over when the underlying securities
must be sold, in the case of a call option, or bought, in the case of a put
option, since with regard to certain options, the writer may be assigned an
exercise notice at any time prior to the termination of the obligation. Whether
or not an option expires unexercised, the writer retains the amount of the
premium. This amount, of course, may, in the case of a covered call option, be
offset by a decline in the market value of the underlying security during the
option period. If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option is exercised, the
writer must fulfill the obligation to buy the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.
The writer of an option that wishes to terminate its obligation may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same series as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
bought. There is no guarantee that either a closing purchase or a closing sale
transaction can be effected.
In the case of a written call option, effecting a closing transaction will
permit a Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both. In the case of a
written put option, such transaction will permit a Fund to write another put
option to the extent that the exercise price is secured by other liquid assets.
Effecting a closing transaction also will permit a Fund to use the cash or
proceeds from the concurrent sale of any securities subject to the option for
other investments. If a Fund desires to sell a particular security from its
portfolio on which it has written a call option, such Fund will effect a closing
transaction prior to or concurrent with the sale of the security.
A Fund will realize a profit from a closing transaction if the price of the
purchase transaction is less than the premium received from writing the option
or the price received from a sale transaction is more than the premium paid to
buy the option. A Fund will realize a loss from a closing transaction if the
price of the purchase transaction is more than the premium received from writing
the option or the price received from a sale transaction is less than the
premium paid to buy the option. Because increases in the market of a call option
generally will reflect increases in the market price of the underlying security,
any loss resulting from the repurchase of a call option is likely to be offset
in whole or in part by appreciation of the underlying security owned by a Fund.
An option position may be closed out only where a secondary market for an option
of the same series exists. If a secondary market does not exist, the Fund may
not be able to effect closing transactions in particular options and the Fund
would have to exercise the options in order to realize any profit. If a Fund is
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unable to effect a closing purchase transaction in a secondary market, it will
not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise. The absence of a liquid
secondary market may be due to the following: (i) insufficient trading interest
in certain options, (ii) restrictions imposed by a national securities exchange
("Exchange") on which the option is traded on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances that interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current trading
volume, or (vi) one or more Exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been issued by the
OCC as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.
A Fund may write options in connection with buy-and-write transactions. In other
words, a Fund may buy a security and then write a call option against that
security. The exercise price of such call will depend upon the expected price
movement of the underlying security. The exercise price of a call option may be
below ("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money")
the current value of the underlying security at the time the option is written.
Buy-and-write transactions using in-the-money call options may be used when it
is expected that the price of the underlying security will remain flat or
decline moderately during the option period. Buy-and-write transactions using
at-the-money call options may be used when it is expected that the price of the
underlying security will remain fixed or advance moderately during the option
period. Buy-and-write transactions using out-of-the-money call options may be
used when it is expected that the premiums received from writing the call option
plus the appreciation in the market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, a Fund's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the difference between that
Fund's purchase price of the security and the exercise price. If the options are
not exercised and the price of the underlying security declines, the amount of
such decline will be offset by the amount of premium received.
The writing of covered put options is similar in terms of risk and return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and a Fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, a Fund may elect to close the position or take
delivery of the security at the exercise price and that Fund's return will be
the premium
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received from the put options minus the amount by which the market price of the
security is below the exercise price.
A Fund may buy put options to hedge against a decline in the value of its
portfolio. By using put options in this way, a Fund will reduce any profit it
might otherwise have realized in the underlying security by the amount of the
premium paid for the put option and by transaction costs.
A Fund may buy call options to hedge against an increase in the price of
securities that it may buy in the future. The premium paid for the call option
plus any transaction costs will reduce the benefit, if any, realized by such
Fund upon exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to that Fund.
EURODOLLAR INSTRUMENTS. A Fund may make investments in Eurodollar instruments.
Eurodollar instruments are U.S. dollar-denominated futures contracts or options
thereon which are linked to the London Interbank Offered Rate ("LIBOR"),
although foreign currency-denominated instruments are available from time to
time. Eurodollar futures contracts enable purchasers to obtain a fixed rate for
the lending of funds and sellers to obtain a fixed rate for borrowings. A Fund
might use Eurodollar futures contracts and options thereon to hedge against
changes in LIBOR, to which many interest rate swaps and fixed-income instruments
are linked.
SWAPS AND SWAP-RELATED PRODUCTS. A Fund may enter into interest rate swaps, caps
and floors on either an asset-based or liability-based basis, depending upon
whether it is hedging its assets or its liabilities, and will usually enter into
interest rate swaps on a net basis (i.e., the two payment streams are netted
out, with a Fund receiving or paying, as the case may be, only the net amount of
the two payments). The net amount of the excess, if any, of a Fund's obligations
over its entitlement with respect to each interest rate swap will be calculated
on a daily basis and an amount of cash or other liquid assets having an
aggregate net asset value at least equal to the accrued excess will be
maintained in a segregated account by the Funds' custodian. If a Fund enters
into an interest rate swap on other than a net basis, it would maintain a
segregated account in the full amount accrued on a daily basis of its
obligations with respect to the swap. A Fund will not enter into any interest
rate swap, cap or floor transaction unless the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in one of the three
highest rating categories of at least one NRSRO at the time of entering into
such transaction. Janus Capital will monitor the creditworthiness of all
counterparties on an ongoing basis. If there is a default by the other party to
such a transaction, a Fund will have contractual remedies pursuant to the
agreements related to the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. Janus Capital has determined that, as
a result, the swap market has become relatively liquid. Caps and floors are more
recent innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps. To the extent a
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Fund sells (i.e., writes) caps and floors, it will segregate cash or other
liquid assets having an aggregate net asset value at least equal to the full
amount, accrued on a daily basis, of its obligations with respect to any caps or
floors.
There is no limit on the amount of interest rate swap transactions that may be
entered into by a Fund. These transactions may in some instances involve the
delivery of securities or other underlying assets by a Fund or its counterparty
to collateralize obligations under the swap. Under the documentation currently
used in those markets, the risk of loss with respect to interest rate swaps is
limited to the net amount of the payments that a Fund is contractually obligated
to make. If the other party to an interest rate swap that is not collateralized
defaults, a Fund would risk the loss of the net amount of the payments that it
contractually is entitled to receive. A Fund may buy and sell (i.e., write) caps
and floors without limitation, subject to the segregation requirement described
above.
ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS AND FOREIGN
INSTRUMENTS. Unlike transactions entered into by the Funds in futures contracts,
options on foreign currencies and forward contracts are not traded on contract
markets regulated by the CFTC or (with the exception of certain foreign currency
options) by the SEC. To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign currency
options are also traded on certain Exchanges, such as the Philadelphia Stock
Exchange and the Chicago Board Options Exchange, subject to SEC regulation.
Similarly, options on currencies may be traded over-the-counter. In an
over-the-counter trading environment, many of the protections afforded to
Exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Although the buyer of an option
cannot lose more than the amount of the premium plus related transaction costs,
this entire amount could be lost. Moreover, an option writer and a buyer or
seller of futures or forward contracts could lose amounts substantially in
excess of any premium received or initial margin or collateral posted due to the
potential additional margin and collateral requirements associated with such
positions.
Options on foreign currencies traded on Exchanges are within the jurisdiction of
the SEC, as are other securities traded on Exchanges. As a result, many of the
protections provided to traders on organized Exchanges will be available with
respect to such transactions. In particular, all foreign currency option
positions entered into on an Exchange are cleared and guaranteed by the OCC,
thereby reducing the risk of counterparty default. Further, a liquid secondary
market in options traded on an Exchange may be more readily available than in
the over-the-counter market, potentially permitting a Fund to liquidate open
positions at a profit prior to exercise or expiration, or to limit losses in the
event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options, however, is
subject to the risks of the availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
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options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign currencies
involve certain risks not presented by the over-the-counter market. For example,
exercise and settlement of such options must be made exclusively through the
OCC, which has established banking relationships in applicable foreign countries
for this purpose. As a result, the OCC may, if it determines that foreign
governmental restrictions or taxes would prevent the orderly settlement of
foreign currency option exercises, or would result in undue burdens on the OCC
or its clearing member, impose special procedures on exercise and settlement,
such as technical changes in the mechanics of delivery of currency, the fixing
of dollar settlement prices or prohibitions on exercise.
In addition, options on U.S. government securities, futures contracts, options
on futures contracts, forward contracts and options on foreign currencies may be
traded on foreign exchanges and over-the-counter in foreign countries. Such
transactions are subject to the risk of governmental actions affecting trading
in or the prices of foreign currencies or securities. The value of such
positions also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in the United
States of data on which to make trading decisions, (iii) delays in a Fund's
ability to act upon economic events occurring in foreign markets during
non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the
United States, and (v) low trading volume.
INVESTMENT ADVISER
As stated in the Prospectus, each Fund has an Investment Advisory Agreement with
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928. Each Advisory
Agreement provides that Janus Capital will furnish continuous advice and
recommendations concerning the Funds' investments, provide office space for the
Funds, and pay the salaries, fees and expenses of all Fund officers and of those
Trustees who are affiliated with Janus Capital. Janus Capital also may make
payments to selected broker-dealer firms or institutions which perform
recordkeeping or other services with respect to shareholder accounts. The
minimum aggregate size required for eligibility for such payments, and the
factors in selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital. Janus Capital is
also authorized to perform the management and administrative services necessary
for the operation of the Funds.
The Funds pay custodian and transfer agent fees and expenses, brokerage
commissions and dealer spreads and other expenses in connection with the
execution of portfolio transactions, legal and accounting expenses, interest and
taxes, registration fees, expenses of shareholders' meetings and reports to
shareholders, fees and expenses of Trustees who are not affiliated with Janus
Capital, costs of preparing, printing and mailing the Funds' Prospectuses and
SAI to current shareholders, and other costs of complying with applicable laws
regulating the sale of Fund shares. Pursuant to the Advisory Agreements, Janus
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Capital furnishes certain other services, including net asset value
determination and fund accounting, recordkeeping, and blue sky registration and
monitoring services, for which the Funds may reimburse Janus Capital for its
costs.
The Funds have each agreed to compensate Janus Capital for its services by the
monthly payment of a fee at the annual rate of 0.75% of the first $300 million
of the average daily net assets of each Fund, 0.70% of the next $200 million of
the average daily net assets of each Fund and 0.65% on the average daily net
assets of each Fund in excess of $500 million.
The Advisory Agreement for each of the Funds is dated September 14, 1998. Each
Advisory Agreement will continue in effect until July 1, 2000, and thereafter
from year to year so long as such continuance is approved annually by a majority
of the Funds' Trustees who are not parties to the Advisory Agreements or
interested persons of any such party, and by either a majority of the
outstanding voting shares or the Trustees of the Funds. Each Advisory Agreement
(i) may be terminated without the payment of any penalty by a Fund or Janus
Capital on 60 days' written notice; (ii) terminates automatically in the event
of its assignment; and (iii) generally, may not be amended without the approval
by vote of a majority of the Trustees of the affected Fund, including the
Trustees who are not interested persons of that Fund or Janus Capital and, to
the extent required by the 1940 Act, the vote of a majority of the outstanding
voting securities of that Fund.
Janus Capital also performs investment advisory services for other mutual funds,
and for individual, charitable, corporate and retirement accounts. Investment
decisions for each account managed by Janus Capital, including the Funds, are
made independently from those for any other account that is or may in the future
become managed by Janus Capital or its affiliates. If, however, a number of
accounts managed by Janus Capital are contemporaneously engaged in the purchase
or sale of the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by an account or the size of the position obtained or liquidated for an
account. Pursuant to an exemptive order granted by the SEC, the Funds and other
funds advised by Janus Capital may also transfer daily uninvested cash balances
into one or more joint trading accounts. Assets in the joint trading accounts
are invested in money market instruments and the proceeds are allocated to the
participating funds on a pro rata basis.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 82% 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.
KCSI has announced its intention to spin-off, in a tax-free transaction, all of
its financial services subsidiaries to a newly created holding company. The
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transaction is subject to receipt of a favorable tax ruling from the Internal
Revenue Service. In addition, Janus Capital has requested an opinion of KCSI's
counsel confirming that the transaction will not effect a change in control of
the Funds' investment adviser.
Each account managed by Janus Capital has its own investment objective and
policies and is managed accordingly by a particular portfolio manager or team of
portfolio managers. As a result, from time to time two or more different managed
accounts may pursue divergent investment strategies with respect to investments
or categories of investments.
Janus Capital does not permit the Funds' portfolio managers to purchase and sell
securities for their own accounts except under the limited exceptions contained
in Janus Capital's policy regarding personal investing by directors/ Trustees,
officers and employees of Janus Capital and the Trust. The policy requires
investment personnel and officers of Janus Capital, inside directors/ Trustees
of Janus Capital and the Funds and other designated persons deemed to have
access to current trading information to pre-clear all transactions in
securities not otherwise exempt under the policy. Requests for trading authority
will be denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the policy or would be deemed to
adversely affect any transaction then known to be under consideration for or to
have been effected on behalf of any client account, including the Funds.
In addition to the pre-clearance requirement described above, the policy
subjects investment personnel, officers and directors/Trustees of Janus Capital
and the Trust to various trading restrictions and reporting obligations. All
reportable transactions are reviewed for compliance with Janus Capital's policy.
Those persons also may be required under certain circumstances to forfeit their
profits made from personal trading.
The provisions of the policy are administered by and subject to exceptions
authorized by Janus Capital.
CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS
State Street Bank and Trust Company, P.O. Box 0351, Boston, Massachusetts
02117-0351 is the custodian of the domestic securities and cash of the Funds.
State Street and the foreign subcustodians selected by it and approved by the
Trustees, have custody of the assets of the Funds held outside the U.S. and cash
incidental thereto. The custodian and subcustodians hold the Funds' assets in
safekeeping and collect and remit the income thereon, subject to the
instructions of each Fund.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado 80217-3375, a
wholly-owned subsidiary of Janus Capital, is the Funds' transfer agent. In
addition, Janus Service provides certain other administrative, recordkeeping and
shareholder relations services to the Funds. For transfer agency and other
services, Janus Service receives a fee calculated at an annual rate of 0.16% of
average net assets of each Fund and, in addition, $4 per open shareholder
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account in each Fund. In addition, the Funds pay DST Systems, Inc. ("DST"), a
subsidiary of KCSI, license fees at the rate of $3.06 per shareholder account
for the use of DST's shareholder accounting system. The Funds also pay DST $1.10
per closed shareholder account. The Funds pay DST for the use of its portfolio
and fund accounting system a monthly base fee of $250 to $1,250 per month based
on the number of Janus funds using the system and an asset charge of $1 per
million dollars of net assets (not to exceed $500 per month). In addition, the
Funds pay DST postage and forms costs of a DST affiliate incurred in mailing
Fund shareholder transaction confirmations.
The Trustees have authorized the Funds to use another affiliate of DST as
introducing broker for certain Fund portfolio transactions as a means to reduce
Fund expenses through credits against the charges of DST and its affiliates with
regard to commissions earned by such affiliate. See "Portfolio Transactions and
Brokerage."
Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado 80206-4928, a
wholly-owned subsidiary of Janus Capital, is a distributor of the Funds. Janus
Distributors is registered as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities Dealers, Inc.
Janus Distributors acts as the agent of the Funds in connection with the sale of
their shares in all states in which the shares are registered and in which Janus
Distributors is qualified as a broker-dealer. Under the Distribution Agreement,
Janus Distributors continuously offers the Funds' shares and accepts orders at
net asset value. No sales charges are paid by investors. Promotional expenses in
connection with offers and sales of shares are paid by Janus Capital.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of portfolio business for the Funds and
negotiation of its commission rates are made by Janus Capital whose policy is to
obtain the "best execution" (prompt and reliable execution at the most favorable
security price) of all portfolio transactions. The Funds may trade foreign
securities in foreign countries because the best available market for these
securities is often on foreign exchanges. In transactions on foreign stock
exchanges, brokers' commissions are frequently fixed and are often higher than
in the United States, where commissions are negotiated.
In selecting brokers and dealers and in negotiating commissions, Janus Capital
considers a number of factors, including but not limited to: Janus Capital's
knowledge of currently available negotiated commission rates or prices of
securities currently available and other current transaction costs; the nature
of the security being traded; the size and type of the transaction; the nature
and character of the markets for the security to be purchased or sold; the
desired timing of the trade; the activity existing and expected in the market
for the particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker or dealer;
the existence of actual or apparent operational problems of any broker or
dealer; rebates of commissions by a broker to a Fund or to a third party service
provider to the
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Fund to pay Fund expenses; and research products or services provided. In
recognition of the value of the foregoing factors, Janus Capital may place
portfolio transactions with a broker or dealer with whom it has negotiated a
commission that is in excess of the commission another broker or dealer would
have charged for effecting that transaction if Janus Capital determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research provided by such broker or dealer viewed in terms of
either that particular transaction or of the overall responsibilities of Janus
Capital. Research may include furnishing advice, either directly or through
publications or writings, as to the value of securities, the advisability of
purchasing or selling specific securities and the availability of securities or
purchasers or sellers of securities; furnishing seminars, information, analyses
and reports concerning issuers, industries, securities, trading markets and
methods, legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research analysts,
corporate management personnel, industry experts, economists and government
officials; comparative performance evaluation and technical measurement services
and quotation services, and products and other services (such as third party
publications, reports and analyses, and computer and electronic access,
equipment, software, information and accessories that deliver, process or
otherwise utilize information, including the research described above) that
assist Janus Capital in carrying out its responsibilities. Research received
from brokers or dealers is supplemental to Janus Capital's own research efforts.
Most brokers and dealers used by Janus Capital provide research and other
services described above.
Janus Capital may use research products and services in servicing other accounts
in addition to the Funds. If Janus Capital determines that any research product
or service has a mixed use, such that it also serves functions that do not
assist in the investment decision-making process, Janus Capital may allocate the
costs of such service or product accordingly. Only that portion of the product
or service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission dollars. Such
allocation may create a conflict of interest for Janus Capital.
Janus Capital does not enter into agreements with any brokers regarding the
placement of securities transactions because of the research services they
provide. It does, however, have an internal procedure for allocating
transactions in a manner consistent with its execution policy to brokers that it
has identified as providing superior execution and research, research-related
products or services which benefit its advisory clients, including the Funds.
Research products and services incidental to effecting securities transactions
furnished by brokers or dealers may be used in servicing any or all of Janus
Capital's clients and such research may not necessarily be used by Janus Capital
in connection with the accounts which paid commissions to the broker-dealer
providing such research products and services.
Janus Capital may consider sales of Fund shares by a broker-dealer or the
recommendation of a broker-dealer to its customers that they purchase Fund
shares as a factor in the selection of broker-dealers to execute Fund portfolio
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transactions. Janus Capital may also consider payments made by brokers effecting
transactions for a Fund i) to the Fund or ii) to other persons on behalf of the
Fund for services provided to the Fund for which it would be obligated to pay.
In placing portfolio business with such broker-dealers, Janus Capital will seek
the best execution of each transaction.
When the Funds purchase or sell a security in the over-the-counter market, the
transaction takes place directly with a principal market-maker, without the use
of a broker, except in those circumstances where in the opinion of Janus Capital
better prices and executions will be achieved through the use of a broker.
The Funds' Trustees have authorized Janus Capital to place transactions with DST
Securities, Inc. ("DSTS"), a wholly-owned broker-dealer subsidiary of DST. Janus
Capital may do so if it reasonably believes that the quality of the transaction
and the associated commission are fair and reasonable and if, overall, the
associated transaction costs, net of any credits described above under
"Custodian, Transfer Agent and Certain Affiliations," are lower than those that
would otherwise be incurred.
TRUSTEES AND OFFICERS
The following are the names of the Trustees and officers of the Trust, together
with a brief description of their principal occupations during the last five
years.
Thomas H. Bailey, Age 61 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928
Trustee, Chairman and President of Janus Aspen Series. Chairman, Chief
Executive Officer, Director and President of Janus Capital. Director of
Janus Distributors, Inc.
James P. Craig, III, Age 42 - Trustee and Executive Vice President*#
100 Fillmore Street
Denver, CO 80206-4928
Trustee and Executive Vice President of Janus Aspen Series. Chief
Investment Officer, Vice Chairman and Director of Janus Capital. Executive
Vice President and Portfolio Manager of Janus Fund. Executive Vice
President and Co-Manager of Janus Venture Fund.
William D. Stewart, Age 54 - Trustee#
5330 Sterling Drive
Boulder, CO 80302
Trustee of Janus Aspen Series. President of HPS Division of MKS
Instruments, Boulder, CO (manufacturer of vacuum fittings and valves).
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.
30
<PAGE>
Gary O. Loo, Age 58 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
Trustee of Janus Aspen Series. President and Director of High Valley Group,
Inc., Colorado Springs, CO (investments).
Dennis B. Mullen, Age 55 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
Trustee of Janus Aspen Series. Private Investor. Formerly (1997-1998),
Chief Financial Officer-Boston Market Concepts, Boston Chicken, Inc.,
Golden, CO (restaurant chain); (1993-1997), President and Chief Executive
Officer of BC Northwest, L.P., a franchise of Boston Chicken, Inc.,
Bellevue, WA (restaurant chain).
Martin H. Waldinger, Age 60 - Trustee
4940 Sandshore Court
San Diego, CA 92130
Trustee of Janus Aspen Series. Private Consultant. Formerly (1993-1996),
Director of Run Technologies, Inc., a software development firm, San
Carlos, CA. Formerly (1989-1993), President and Chief Executive Officer of
Bridgecliff Management Services, Campbell, CA (a condominium association
management company).
James T. Rothe, Age 54 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
Trustee of Janus Aspen Series. Professor of Business, University of
Colorado, Colorado Springs, CO. Principal, Phillips-Smith Retail Group,
Colorado Springs, CO (a venture capital firm). Formerly (1986-1994), Dean
of the College of Business, University of Colorado, Colorado Springs, CO.
Thomas R. Malley, Age 29 - Executive Vice President*
100 Fillmore Street
Denver, CO 80206-4928
Portfolio manager of Janus Global Life Sciences Fund. Formerly, research
analyst at Janus Capital (1991-1998).
C. Mike Lu, Age 29 - Executive Vice President*
100 Fillmore Street
Denver, CO 80206-4928
Portfolio Manager of Janus Global Technology Fund. Formerly, research
analyst at Janus Capital (1991-1998).
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.
31
<PAGE>
Thomas A. Early, Age 43 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
Vice President and General Counsel of Janus Aspen Series. Vice President,
General Counsel and Secretary of Janus Capital. Vice President and General
Counsel of Janus Service Corporation, Janus Distributors, Inc. and Janus
Capital International, Ltd. Formerly (1997-1998), Executive Vice President
and General Counsel of Prudential Investments Fund Management LLC, Newark,
NJ. Formerly (1994-1997), Vice President and General Counsel of Prudential
Retirement Services, Newark, NJ. Formerly (1988-1994), Associate General
Counsel and Chief Financial Services Counsel, Frank Russell Company,
Tacoma, WA.
Steven R. Goodbarn, Age 41 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928
Vice President and Chief Financial Officer of Janus Aspen Series. Vice
President of Finance, Treasurer and Chief Financial Officer of Janus
Capital, Janus Service Corporation, and Janus Distributors, Inc. Director
of Janus Service Corporation and Janus Distributors, Inc. Director,
Treasurer and Vice President of Finance of Janus Capital International Ltd.
Formerly (May 1992-January 1996), Treasurer of Janus Investment Fund and
Janus Aspen Series.
Glenn P. O'Flaherty, Age 40 - Treasurer and Chief Accounting Officer*
100 Fillmore Street
Denver, CO 80206-4928
Treasurer and Chief Accounting Officer of Janus Aspen Series. Vice
President of Janus Capital. Formerly (1991-1997) Director of Fund
Accounting, Janus Capital.
Kelley Abbott Howes, Age 33 - Assistant Vice President and Secretary*
100 Fillmore Street
Denver, CO 80206-4928
Assistant Vice President and Secretary of Janus Aspen Series. Director and
President of Janus Distributors, Inc. Assistant Vice President and
Associate Counsel of Janus Capital. Formerly (1990-1994), with The Boston
Company Advisors, Inc., Boston, MA (mutual fund administration services).
- --------------------------------------------------------------------------------
*Interested person of the Trust and Janus Capital.
The Trustees are responsible for major decisions relating to each Fund's
objective, policies and techniques. The Trustees also supervise the operation of
the Funds by their officers and review the investment decisions of the officers,
although they do not actively participate on a regular basis in making such
decisions.
The Trust's Executive Committee shall have and may exercise all the powers and
authority of the Trustees except for matters requiring action by all Trustees
32
<PAGE>
pursuant to the Trust's Bylaws or Agreement and Declaration of Trust,
Massachusetts law or the 1940 Act.
The following table shows the aggregate compensation earned by and paid to each
Trustee by the Funds described in this SAI and all funds advised and sponsored
by Janus Capital (collectively, the "Janus Funds") for the periods indicated.
None of the Trustees receive any pension or retirement benefits from the Funds
or the Janus Funds.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
from the Funds for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position October 31, 1998** December 31, 1997***
<S> <C> <C>
- -----------------------------------------------------------------------------
Thomas H. Bailey,
Chairman and Trustee* $0 $0
James P. Craig, Trustee* $0 $0
John W. Shepardson,
Trustee+ $0 $14,500
William D. Stewart,
Trustee $0 $70,667
Gary O. Loo, Trustee $0 $60,667
Dennis B. Mullen, Trustee $0 $67,167
Martin H. Waldinger,
Trustee $0 $67,667
James T. Rothe, Trustee++ $0 $64,833
- -----------------------------------------------------------------------------
</TABLE>
* An interested person of the Funds and of Janus Capital. Compensated by Janus
Capital and not the Funds.
** The Funds had not commenced operations as of October 31, 1998.
*** As of December 31, 1997, Janus Funds consisted of two registered investment
companies comprised of a total of 31 funds.
+ Mr. Shepardson retired as a Trustee on March 31, 1997.
++ Mr. Rothe began serving as a Trustee on January 1, 1997.
PURCHASE OF SHARES
Shares of the Funds are sold at the net asset value per share as determined at
the close of the regular trading session of the New York Stock Exchange (the
"NYSE") next occurring after a purchase order is received and accepted by a
Fund. The Shareholder's Manual Section of the Prospectus contains detailed
information about the purchase of shares.
NET ASSET VALUE DETERMINATION
As stated in the Prospectus, the net asset value ("NAV") of Fund shares is
determined once each day on which the NYSE is open, at the close of its regular
trading session (normally 4:00 p.m., New York time, Monday through Friday). As
stated in the Prospectus, the NAV of Fund shares is not determined on days the
NYSE is closed (generally, New Year's Day, Martin Luther King Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas). The per share NAV of each Fund is determined by dividing the total
value of a Fund's securities and other assets, less liabilities, by the total
number of shares outstanding. In determining NAV, securities listed on an
Exchange, the NASDAQ National Market and foreign markets are valued at the
closing prices on such markets, or if such price is lacking for the trading
period immediately preceding the time of determination,
33
<PAGE>
such securities are valued at their current bid price. Other securities that are
traded on the over-the-counter market are valued at their closing bid prices.
Foreign securities and currencies are converted to U.S. dollars using the
exchange rate in effect at the close of the NYSE. Each Fund will determine the
market value of individual securities held by it, by using prices provided by
one or more professional pricing services which may provide market prices to
other funds, or, as needed, by obtaining market quotations from independent
broker-dealers. Short-term securities maturing within 60 days are valued on an
amortized cost basis. Securities for which quotations are not readily available,
and other assets, are valued at fair values determined in good faith under
procedures established by and under the supervision of the Trustees.
Trading in securities on European and Far Eastern securities exchanges and over-
the-counter markets is normally completed well before the close of business on
each business day in New York (i.e., a day on which the NYSE is open). In
addition, European or Far Eastern securities trading generally or in a
particular country or countries may not take place on all business days in New
York. Furthermore, trading takes place in Japanese markets on certain Saturdays
and in various foreign markets on days which are not business days in New York
and on which a Fund's NAV is not calculated. A Fund calculates its NAV per
share, and therefore effects sales, redemptions and repurchases of its shares,
as of the close of the NYSE once on each day on which the NYSE is open. Such
calculation may not take place contemporaneously with the determination of the
prices of the foreign portfolio securities used in such calculation.
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
If investors do not elect in writing or by phone to receive their dividends and
distributions in cash, all income dividends and capital gains distributions, if
any, on a Fund's shares are reinvested automatically in additional shares of
that Fund at the NAV determined on the payment date. Checks for cash dividends
and distributions and confirmations of reinvestments are usually mailed to
shareholders within ten days after the record date. Any election of the manner
in which a shareholder wishes to receive dividends and distributions (which may
be made on the New Account Application form or by phone) will apply to dividends
and distributions the record dates of which fall on or after the date that a
Fund receives such notice. Changes to distribution options must be received at
least three days prior to the record date to be effective for such date.
Investors receiving cash distributions and dividends may elect in writing or by
phone to change back to automatic reinvestment at any time.
REDEMPTION OF SHARES
Procedures for redemption of shares are set forth in the Shareholder's Manual
section of the Prospectus. Shares normally will be redeemed for cash, although
each Fund retains the right to redeem its shares in kind under unusual
circumstances, in order to protect the interests of remaining shareholders, by
delivery of securities selected from its assets at its discretion. However, the
Funds are governed by Rule 18f-1 under the 1940 Act, which requires each
34
<PAGE>
Fund to redeem shares solely in cash up to the lesser of $250,000 or 1% of the
NAV of that Fund during any 90-day period for any one shareholder. Should
redemptions by any shareholder exceed such limitation, a Fund will have the
option of redeeming the excess in cash or in kind. If shares are redeemed in
kind, the redeeming shareholder might incur brokerage costs in converting the
assets to cash. The method of valuing securities used to make redemptions in
kind will be the same as the method of valuing portfolio securities described
under "Purchase of Shares -- Net Asset Value Determination" and such valuation
will be made as of the same time the redemption price is determined.
The right to require the Funds to redeem its shares may be suspended, or the
date of payment may be postponed, whenever (1) trading on the NYSE is
restricted, as determined by the SEC, or the NYSE is closed except for holidays
and weekends, (2) the SEC permits such suspension and so orders, or (3) an
emergency exists as determined by the SEC so that disposal of securities or
determination of NAV is not reasonably practicable.
SHAREHOLDER ACCOUNTS
Detailed information about the general procedures for shareholder accounts and
specific types of accounts is set forth in the Prospectus. Applications for
specific types of accounts may be obtained by calling the Funds at
1-800-525-3713 or writing to the Funds at P.O. Box 173375, Denver, Colorado
80217-3375.
TELEPHONE TRANSACTIONS
As stated in the Prospectus, shareholders may initiate a number of transactions
by telephone. The Funds, their transfer agent and their distributor disclaim
responsibility for the authenticity of instructions received by telephone. Such
entities will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include, among
others, requiring personal identification prior to acting upon telephone
instructions, providing written confirmation of the transactions and tape
recording telephone conversations.
SYSTEMATIC REDEMPTIONS
As stated in the Shareholder's Manual section of the Prospectus, if you have a
regular account or are eligible for distributions from a retirement plan, you
may establish a systematic redemption option. The payments will be made from the
proceeds of periodic redemptions of shares in the account at the NAV. Depending
on the size or frequency of the disbursements requested, and the fluctuation in
value of a Fund's portfolio, redemptions for the purpose of making such
disbursements may reduce or even exhaust the shareholder's account. Either an
investor or a Fund, by written notice to the other, may terminate the investor's
systematic redemption option without penalty at any time.
35
<PAGE>
Information about requirements to establish a systematic redemption option may
be obtained by writing or calling the Funds at the address or phone number shown
above.
TAX DEFERRED ACCOUNTS
The Funds offer several different types of tax-deferred accounts that an
investor may establish to invest in Fund shares, depending on rules prescribed
by the Code. Regular and Roth Individual Retirement Accounts may be used by most
individuals who have taxable compensation. Simplified Employee Pensions and
Defined Contribution Plans (Profit Sharing or Money Purchase Pension Plans) may
be used by most employers, including corporations, partnerships and sole
proprietors, for the benefit of business owners and their employees. Education
IRAs allow individuals, subject to certain income limitations, to contribute up
to $500 annually on behalf of any child under the age of 18. In addition, the
Funds offer a Section 403(b)(7) Plan for employees of educational organizations
and other qualifying tax-exempt organizations. Investors should consult their
tax adviser or legal counsel before selecting a tax-deferred account.
Contributions under Regular and Roth IRAs, Education IRAs, SEPs, Defined
Contribution Plans and Section 403(b)(7) Plans are subject to specific
contribution limitations. Generally, such contributions may be invested at the
direction of the participant. The investment is then held by Investors Fiduciary
Trust Company as custodian. Each participant's account is charged an annual fee
of $12. There is a maximum annual fee of $24 per taxpayer identification number.
The Funds reserve the right to change the amount of this fee or to waive it in
whole or in part for certain types of accounts.
Distributions from tax-deferred accounts may be subject to ordinary income tax
and may be subject to an additional 10% tax if withdrawn prior to age 59 1/2 or
used for a nonqualifying purpose. Additionally, shareholders generally must
start withdrawing retirement plan assets no later than April 1 of the year after
they reach age 70 1/2. Several exceptions to these general rules may apply and
several methods exist to determine the amount and timing of the minimum annual
distribution (if any). Shareholders should consult with their tax advisor or
legal counsel prior to receiving any distribution from any tax-deferred account,
in order to determine the income tax impact of any such distribution.
To receive additional information about Regular and Roth IRAs, SEPs, Defined
Contribution Plans and Section 403(b)(7) Plans along with the necessary
materials to establish an account, please call the Funds at 1-800-525-3713 or
write to the Funds at P.O. Box 173375, Denver, Colorado 80217-3375. No
contribution to a Regular or Roth IRA, SEP, Defined Contribution Plan or Section
403(b)(7) Plan can be made until the appropriate forms to establish any such
plan have been completed.
36
<PAGE>
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS
AND TAX STATUS
It is a policy of the Funds to make distributions of substantially all of their
investment income and any net realized capital gains. Any capital gains realized
during each fiscal year ended October 31, as defined by the Code, are normally
declared and payable to shareholders in December. The Funds declare and make
annual distributions of income (if any). The Funds intend to qualify as
regulated investment companies by satisfying certain requirements prescribed by
Subchapter M of the Code. Accordingly, a Fund will invest no more than 25% of
its total assets in a single issuer (other than U.S. government securities).
The Funds may purchase securities of certain foreign corporations considered to
be passive foreign investment companies by the IRS. In order to avoid taxes and
interest that must be paid by the Funds if these instruments are profitable, the
Funds may make various elections permitted by the tax laws. However, these
elections could require that the Funds recognize taxable income, which in turn
must be distributed.
Some foreign securities purchased by the Funds may be subject to foreign taxes
which could reduce the yield on such securities. The amount of such foreign
taxes is expected to be insignificant. The Funds may from year to year make the
election permitted under section 853 of the Code to pass through such taxes to
shareholders, who will each decide whether to deduct such taxes or claim a
foreign tax credit. If such election is not made, foreign taxes paid or accrued
will represent an expense to each Fund which will reduce its investment company
taxable income.
MISCELLANEOUS INFORMATION
Each Fund is a series of the Trust, a Massachusetts business trust that was
created on February 11, 1986. The Trust is an open-end management investment
company registered under the 1940 Act. As of the date of this SAI, the Trust
offers 21 separate series three of which currently offer three classes of
shares. The Funds became series of the Trust on December 1, 1998.
Janus Capital reserves the right to the name "Janus." In the event that Janus
Capital does not continue to provide investment advice to the Funds, the Funds
must cease to use the name "Janus" as soon as reasonably practicable.
Under Massachusetts law, shareholders of the Funds could, under certain
circumstances, be held liable for the obligations of their Fund. However, the
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Funds and requires that notice of this disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Funds or the
Trustees. The Declaration of Trust also provides for indemnification from the
assets of the Funds for all losses and expenses of any Fund shareholder held
liable for the obligations of their Fund. Thus, the risk of a shareholder
incurring a financial loss on account of its liability as a shareholder of one
of the Funds is limited to
37
<PAGE>
circumstances in which their Fund would be unable to meet its obligations. The
possibility that these circumstances would occur is remote. The Trustees intend
to conduct the operations of the Funds to avoid, to the extent possible,
liability of shareholders for liabilities of their Fund.
SHARES OF THE TRUST
The Trust is authorized to issue an unlimited number of shares of beneficial
interest with a par value of one cent per share for each series of the Trust.
Shares of each Fund are fully paid and nonassessable when issued. All shares of
a Fund participate equally in dividends and other distributions by such Fund,
and in residual assets of that Fund in the event of liquidation. Shares of each
Fund have no preemptive, conversion or subscription rights. Shares of each Fund
may be transferred by endorsement or stock power as is customary, but a Fund is
not bound to recognize any transfer until it is recorded on its books.
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called for a specific Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by each Fund only
if a matter affects or requires the vote of only that Fund or that 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.
VOTING RIGHTS
The present Trustees were elected at a meeting of shareholders held on July 10,
1992, with the exception of Mr. Craig and Mr. Rothe who were appointed by the
Trustees as of June 30, 1995 and January 1, 1997, respectively. Under the
Declaration of Trust, each Trustee will continue in office until the termination
of the Trust or his earlier death, retirement, resignation, bankruptcy,
incapacity or removal. Vacancies will be filled by a majority of the remaining
Trustees, subject to the 1940 Act. Therefore, no annual or regular meetings of
shareholders normally will be held, unless otherwise required by the Declaration
of Trust or the 1940 Act. Subject to the foregoing, shareholders have the power
to vote to elect or remove Trustees, to terminate or reorganize their Fund, to
amend the Declaration of Trust, to bring certain derivative actions and on any
other matters on which a shareholder vote is required by the 1940 Act, the
Declaration of Trust, the Trust's Bylaws or the Trustees.
As mentioned above in "Shareholder Meetings," each share of each series of the
Trust has one vote (and fractional votes for fractional shares). Shares of all
series of the Trust have noncumulative voting rights, which means that the
holders of more than 50% of the shares of all series of the Trust voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so and,
in such event, the holders of the remaining shares will not be able to elect any
Trustees.
38
<PAGE>
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve a Fund's objective by investing all
of that Fund's assets in another investment company having the same investment
objective and substantially the same investment policies and restrictions as
those applicable to that Fund. Unless otherwise required by law, this policy may
be implemented by the Trustees without shareholder approval.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado
80202, independent accountants for the Funds, audit the Funds' annual financial
statements and prepare their tax returns.
REGISTRATION STATEMENT
The Trust has filed with the SEC, Washington, D.C., a Registration Statement
under the Securities Act of 1933, as amended, with respect to the securities to
which this SAI relates. If further information is desired with respect to the
Funds or such securities, reference is made to the Registration Statement and
the exhibits filed as a part thereof.
PERFORMANCE INFORMATION
Quotations of average annual total return for a Fund will be expressed in terms
of the average annual compounded rate of return of a hypothetical investment in
such Fund over periods of 1, 5, and 10 years (up to the life of the Fund). These
are the annual total rates of return that would equate the initial amount
invested to the ending redeemable value. These rates of return are calculated
pursuant to the following formula: P(1 + T)n = ERV (where P = a hypothetical
initial payment of $1,000, T = the average annual total return, n = the number
of years and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period). All total return figures reflect the
deduction of a proportional share of Fund expenses on an annual basis, and
assume that all dividends and distributions are reinvested when paid.
39
<PAGE>
From time to time in advertisements or sales material, the Funds may discuss
their performance ratings or other information as published by recognized mutual
fund statistical rating services, including, but not limited to, Lipper
Analytical Services, Inc. ("Lipper"), Ibbotson Associates, Micropal or
Morningstar, Inc. ("Morningstar") or by publications of general interest such as
Forbes, Money, The Wall Street Journal, Mutual Funds Magazine, Kiplinger's, or
Smart Money. The Funds may also compare their performance to that of other
selected mutual funds (for example, peer groups created by Lipper or
Morningstar), mutual fund averages or recognized stock market indicators,
including, but not limited to, the Standard & Poor's 500 Composite Stock Price
Index, the Dow Jones Industrial Average, and the NASDAQ composite. In addition,
the Funds may compare their total return to the percentage change in the
Consumer Price Index. Such performance ratings or comparisons may be made with
funds that may have different investment restrictions, objectives, policies or
techniques than the Funds and such other funds or market indicators may be
comprised of securities that differ significantly from the Funds' investments.
40
<PAGE>
APPENDIX A
EXPLANATION OF RATING CATEGORIES
The following is a description of credit ratings issued by two of the major
credit ratings agencies. Credit ratings evaluate only the safety of principal
and interest payments, not the market value risk of lower quality securities.
Credit rating agencies may fail to change credit ratings to reflect subsequent
events on a timely basis. Although Janus Capital considers security ratings when
making investment decisions, it also performs its own investment analysis and
does not rely solely on the ratings assigned by credit agencies.
STANDARD & POOR'S RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
- -------------------------------------------------------------------
INVESTMENT GRADE
AAA Highest rating; extremely strong capacity to
pay principal and interest.
AA High quality; very strong capacity to pay
principal and interest.
A Strong capacity to pay principal and interest;
somewhat more susceptible to the adverse
effects of changing circumstances and economic
conditions.
BBB Adequate capacity to pay principal and
interest; normally exhibit adequate protection
parameters, but adverse economic conditions or
changing circumstances more likely to lead to
a weakened capacity to pay principal and
interest than for higher rated bonds.
NON-INVESTMENT GRADE
BB, B, Predominantly speculative with respect to the
CCC, CC, C issuer's capacity to meet required interest
and principal payments. BB -- lowest degree of
speculation; C -- the highest degree of
speculation. Quality and protective
characteristics outweighed by large
uncertainties or major risk exposure to
adverse conditions.
D In default.
- -------------------------------------------------------------------
</TABLE>
41
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
- -------------------------------------------------------------------
INVESTMENT GRADE
Aaa Highest quality, smallest degree of investment
risk.
Aa High quality; together with Aaa bonds, they
compose the high-grade bond group.
A Upper-medium grade obligations; many favorable
investment attributes.
Baa Medium-grade obligations; neither highly
protected nor poorly secured. Interest and
principal appear adequate for the present but
certain protective elements may be lacking or
may be unreliable over any great length of
time.
NON-INVESTMENT GRADE
Ba More uncertain, with speculative elements.
Protection of interest and principal payments
not well safeguarded during good and bad
times.
B Lack characteristics of desirable investment;
potentially low assurance of timely interest
and principal payments or maintenance of other
contract terms over time.
Caa Poor standing, may be in default; elements of
danger with respect to principal or interest
payments.
Ca Speculative in a high degree; could be in
default or have other marked shortcomings.
C Lowest-rated; extremely poor prospects of ever
attaining investment standing.
- -------------------------------------------------------------------
</TABLE>
Unrated securities will be treated as noninvestment grade securities unless a
portfolio manager determines that such securities are the equivalent of
investment grade securities. Securities that have received different ratings
from more than one agency are considered investment grade if at least one agency
has rated the security investment grade.
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JANUS INVESTMENT FUND
PART C - OTHER INFORMATION
ITEM 23. Exhibits
Exhibit 1 (a) Agreement and Declaration of Trust dated February
11, 1986, is incorporated herein by reference to
Exhibit 1(a) to Post-Effective Amendment No. 79.
(b) Certificate of Designation for Janus Growth and
Income Fund is incorporated herein by reference to
Exhibit 1(b) to Post-Effective Amendment No. 79.
(c) Certificate of Designation for Janus Worldwide
Fund is incorporated herein by reference to
Exhibit 1(c) to Post-Effective Amendment No. 79.
(d) Certificate of Designation for Janus Twenty Fund
is incorporated herein by reference to Exhibit
1(d) to Post-Effective Amendment No. 80.
(e) Certificate of Designation for Janus Flexible
Income Fund is incorporated herein by reference to
Exhibit 1(e) to Post-Effective Amendment No. 80.
(f) Certificate of Designation for Janus Intermediate
Government Securities Fund filed as Exhibit 1(f)
to Post-Effective Amendment No. 46 has been
withdrawn.
(g) Certificate of Designation for Janus Venture Fund
is incorporated herein by reference to Exhibit
1(g) to Post-Effective Amendment No. 80.
(h) Certificate of Designation for Janus Enterprise
Fund is incorporated herein by reference to
Exhibit 1(h) to Post-Effective Amendment No. 80.
(i) Certificate of Designation for Janus Balanced Fund
is incorporated herein by reference to Exhibit
1(i) to Post-Effective Amendment No. 80.
(j) Certificate of Designation for Janus Short-Term
Bond Fund is incorporated herein by reference to
Exhibit 1(j) to Post-Effective Amendment No. 80.
C-1
<PAGE>
(k) Certificate of Designation for Janus Federal
Tax-Exempt Fund is incorporated herein by
reference to Exhibit 1(k) to Post-Effective
Amendment No. 81.
(l) Certificate of Designation for Janus Mercury Fund
is incorporated herein by reference to Exhibit
1(l) to Post-Effective Amendment No. 81.
(m) Certificate of Designation for Janus Overseas Fund
is incorporated herein by reference to Exhibit
1(m) to Post-Effective Amendment No. 81.
(n) Form of Amendment to the Registrant's Agreement
and Declaration of Trust is incorporated herein by
reference to Exhibit 1(n) to Post-Effective
Amendment No. 81.
(o) Form of Certificate of Designation for Janus Money
Market Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market Fund is
incorporated herein by reference to Exhibit 1(o)
to Post-Effective Amendment No. 81.
(p) Form of Certificate of Designation for Janus
High-Yield Fund and Janus Olympus Fund is
incorporated herein by reference to Exhibit 1(p)
to Post-Effective Amendment No. 68.
(q) Certificate of Designation for Janus Equity Income
Fund is incorporated herein by reference to
Exhibit 1(q) to Post-Effective Amendment No. 72.
(r) Form of Certificate of Establishment and
Designation for Janus Special Situations Fund is
incorporated herein by reference to Exhibit 1(r)
to Post-Effective Amendment No. 75.
(s) Form of Amendment to Registrant's Agreement and
Declaration of Trust is incorporated herein by
reference to Exhibit 1(s) to Post-Effective
Amendment No. 75.
(t) Certificate of Establishment and Designation for
Janus Global Life Sciences Fund filed as Exhibit
1(t) to Post-Effective Amendment No. 82 has been
withdrawn.
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(u) Certificate of Establishment and Designation for
Janus Global Life Sciences Fund is filed herein as
Exhibit 1(u).
(v) Form of Certificate of Establishment and
Designation for Janus Global Technology Fund is
filed herein as Exhibit 1(v).
Exhibit 2 (a) Restated Bylaws are incorporated herein by
reference to Exhibit 2(a) to Post-Effective
Amendment No. 71.
(b) First Amendment to the Bylaws is incorporated
herein by reference to Exhibit 2(b) to
Post-Effective Amendment No. 71.
Exhibit 3 (a) Specimen Stock Certificate for Janus Fund(1) is
incorporated herein by reference to Exhibit 4(b)
to Post-Effective Amendment No. 79.
(b) Specimen Stock Certificate for Janus Growth and
Income Fund is incorporated herein by reference to
Exhibit 4(b) to Post-Effective Amendment No. 79.
(c) Specimen Stock Certificate for Janus Worldwide
Fund is incorporated herein by reference to
Exhibit 4(c) to Post-Effective Amendment No. 79.
(d) Specimen Stock Certificate for Janus Twenty
Fund(1) is incorporated herein by reference to
Exhibit 4(d) to Post-Effective Amendment No. 80.
(e) Specimen Stock Certificate for Janus Flexible
Income Fund(1) is incorporated herein by reference
to Exhibit 4(e) to Post-Effective Amendment No.
80.
(f) Specimen Stock Certificate for Janus Intermediate
Government Securities Fund(1) filed as Exhibit
4(f) to Post-Effective Amendment No. 46 has been
withdrawn.
(g) Specimen Stock Certificate for Janus Venture
Fund(1) is incorporated herein by reference to
Exhibit 4(g) to Post-Effective Amendment No. 80.
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(1) Outstanding certificates representing shares of predecessor entity to this
series of the Trust are deemed to represent shares of this series.
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<PAGE>
(h) Specimen Stock Certificate for Janus Enterprise
Fund is incorporated herein by reference to
Exhibit 4(h) to Post-Effective Amendment No. 80.
(i) Specimen Stock Certificate for Janus Balanced Fund
is incorporated herein by reference to Exhibit
4(i) to Post-Effective Amendment No. 80.
(j) Specimen Stock Certificate for Janus Short-Term
Bond Fund is incorporated herein by reference to
Exhibit 4(j) to Post-Effective Amendment No. 80.
(k) Specimen Stock Certificate for Janus Federal
Tax-Exempt Fund is incorporated herein by
reference to Exhibit 4(k) to Post-Effective
Amendment No. 81.
(l) Specimen Stock Certificate for Janus Mercury Fund
is incorporated herein by reference to Exhibit
4(l) to Post-Effective Amendment No. 81.
(m) Specimen Stock Certificate for Janus Overseas Fund
is incorporated herein by reference to Exhibit
4(m) to Post-Effective Amendment No. 81.
(n) Revised Specimen Stock Certificates for Janus
High-Yield Fund and Janus Olympus Fund are
incorporated herein by reference to Exhibit 4(n)
to Post-Effective Amendment No. 79.
(o) Revised Specimen Stock Certificate for Janus
Equity Income Fund is incorporated herein by
reference to Exhibit 4(o) to Post-Effective
Amendment No. 79.
(p) Revised Specimen Stock Certificate for Janus
Special Situations Fund is incorporated herein by
reference to Exhibit 4(p) to Post-Effective
Amendment No. 79.
(q) Specimen Stock Certificate for Janus Global Life
Sciences Fund filed as Exhibit 4(q) to
Post-Effective Amendment No. 82 has been
withdrawn.
(r) Form of Specimen Stock Certificate for Janus
Global Life Sciences Fund is filed herein as
Exhibit 3(r).
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<PAGE>
(s) Form of Specimen Stock Certificate for Janus
Global Technology Fund is filed herein as Exhibit
3(s).
Exhibit 4 (a) Investment Advisory Agreement for Janus Fund dated
July 1, 1997, is incorporated herein by reference
as Exhibit 5(a) to Post-Effective Amendment No.
83.
(b) Investment Advisory Agreements for Janus Growth
and Income Fund and Janus Worldwide Fund dated
July 1, 1997, are incorporated herein by reference
as Exhibit 5(b) to Post-Effective Amendment No.
83.
(c) Investment Advisory Agreements for Janus Twenty
Fund and Janus Venture Fund dated July 1, 1997,
are incorporated herein by reference as Exhibit
5(c) to Post-Effective Amendment No. 83.
(d) Investment Advisory Agreement for Janus Flexible
Income Fund dated July 1, 1997, is incorporated
herein by reference as Exhibit 5(d) to
Post-Effective Amendment No. 83.
(e) Investment Advisory Agreements for Janus
Enterprise Fund, Janus Balanced Fund, and Janus
Short-Term Bond Fund dated July 1, 1997, are
incorporated herein by reference as Exhibit 5(e)
to Post-Effective Amendment No. 83.
(f) Investment Advisory Agreements for Janus Federal
Tax-Exempt Fund and Janus Mercury Fund dated July
1, 1997, are incorporated herein by reference as
Exhibit 5(f) to Post-Effective Amendment No. 83.
(g) Investment Advisory Agreement for Janus Overseas
Fund dated July 1, 1997, is incorporated herein by
reference as Exhibit 5(g) to Post-Effective
Amendment No. 83.
(h) Investment Advisory Agreements for Janus Money
Market Fund, Janus Government Money Market Fund,
and Janus Tax-Exempt Money Market Fund dated July
1, 1997, are incorporated herein by reference as
Exhibit 5(h) to Post-Effective Amendment No. 83.
(i) Investment Advisory Agreement for Janus High-Yield
Fund dated July 1, 1997, is incorporated herein by
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<PAGE>
reference as Exhibit 5(i) to Post-Effective
Amendment No. 83.
(j) Investment Advisory Agreement for Janus Olympus
Fund dated July 1, 1997, is incorporated herein by
reference as Exhibit 5(j) to Post-Effective
Amendment No. 83.
(k) Investment Advisory Agreement for Janus Equity
Income Fund dated July 1, 1997, is incorporated
herein by reference as Exhibit 5(k) to
Post-Effective Amendment No. 83.
(l) Investment Advisory Agreement for Janus Special
Situations Fund dated July 1, 1997, is
incorporated herein by reference as Exhibit 5(l)
to Post-Effective Amendment No. 83.
(m) Investment Advisory Agreement for Janus Global
Life Sciences Fund filed as Exhibit 5(m) to
Post-Effective Amendment No. 82 has been
withdrawn.
(n) Form of Investment Advisory Agreement for Janus
Global Life Sciences Fund is filed herein as
Exhibit 4(n).
(o) Form of Investment Advisory Agreement for Janus
Global Technology Fund is filed herein as Exhibit
4(o).
Exhibit 5 Distribution Agreement between Janus Investment
Fund and Janus Distributors, Inc., dated July 1,
1997, is incorporated herein by reference as
Exhibit 6 to Post-Effective Amendment No. 83.
Exhibit 6 Not Applicable.
Exhibit 7 (a) Custodian Contract between Janus Investment Fund
and State Street Bank and Trust Company is
incorporated herein by reference to Exhibit 8(a)
to Post-Effective Amendment No. 79.
(b) Amendment dated April 25, 1990, of State Street
Custodian Contract is incorporated herein by
reference to Exhibit 8(b) to Post-Effective
Amendment No. 79.
(c) Letter Agreement dated February 1, 1991, regarding
State Street Custodian Contract is incorporated
herein by
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<PAGE>
reference to Exhibit 8(c) to Post-Effective
Amendment No. 79.
(d) Custodian Contract between Janus Investment Fund
and Investors Fiduciary Trust Company filed as
Exhibit 8(d) to Post-Effective Amendment No. 79
has been withdrawn.
(e) Letter Agreement dated October 9, 1992, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(e) to
Post-Effective Amendment No. 81.
(f) Letter Agreement dated April 28, 1993, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(f) to
Post-Effective Amendment No. 81.
(g) Letter Agreement dated April 4, 1994, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(g) to
Post-Effective Amendment No. 81.
(h) Form of Custody Agreement between Janus Investment
Fund, on behalf of Janus Money Market Fund, Janus
Government Money Market Fund and Janus Tax-Exempt
Money Market Fund, and United Missouri Bank, N.A.
is incorporated herein by reference to Exhibit
8(h) to Post-Effective Amendment No. 81.
(i) Letter Agreement dated December 12, 1995,
regarding State Street Custodian Contract is
incorporated herein by reference to Exhibit 8(i)
to Post-Effective Amendment No. 72.
(j) Amendment dated October 11, 1995, of State Street
Custodian Contract is incorporated herein by
reference to Exhibit 8(j) to Post-Effective
Amendment No. 71.
(k) Form of Amendment dated September 10, 1996, of
State Street Custodian Contract is incorporated
herein by reference to Exhibit 8(k) to
Post-Effective Amendment No. 75.
(l) Letter Agreement dated September 10, 1996,
regarding State Street Custodian Contract is
incorporated herein by
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<PAGE>
reference to Exhibit 8(l) to Post-Effective
Amendment No. 75.
(m) Form of Subcustodian Contract between United
Missouri Bank, N.A., and State Street Bank and
Trust Company is incorporated herein by reference
to Exhibit 8(m) to Post-Effective Amendment No.
75.
(n) Form of Letter Agreement dated September 9, 1997,
regarding State Street Custodian Contract is
incorporated herein by reference to Exhibit 8(n)
to Post-Effective Amendment No. 82.
(o) Form of Letter Agreement dated September 14, 1998,
regarding State Street Custodian Contract is filed
herein as Exhibit 7(o).
Exhibit 8 (a) Transfer Agency Agreement with Investors Fiduciary
Trust Company filed as Exhibit 9(a) to
Post-Effective Amendment No. 79 has been
withdrawn.
(b) Subagency Agreement between Janus Service
Corporation and Investors Fiduciary Trust Company
filed as Exhibit 9(b) to Post-Effective Amendment
No. 79 has been withdrawn.
(c) Form of Administration Agreement with Janus
Capital Corporation for Janus Money Market Fund,
Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund is incorporated
herein by reference to Exhibit 9(c) to
Post-Effective Amendment No. 81.
(d) Transfer Agency Agreement dated December 9, 1994,
with Janus Service Corporation for Janus Money
Market Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market Fund filed as
Exhibit 9(d) to Post-Effective Amendment No. 64
has been withdrawn.
(e) Transfer Agency Agreement dated September 27,
1995, with Janus Service Corporation for Janus
Money Market Fund, Janus Government Money Market
Fund, Janus Tax-Exempt Money Market Fund, Janus
High-Yield Fund and Janus Olympus Fund is
incorporated herein by reference to Exhibit 9(e)
to Post-Effective Amendment No. 70.
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<PAGE>
(f) Letter Agreement dated December 21, 1995,
regarding Janus Service Corporation Transfer
Agency Agreement is incorporated herein by
reference to Exhibit 9(f) to Post-Effective
Amendment No. 72.
(g) Letter Agreement dated May 21, 1996, regarding
Janus Service Corporation Transfer Agency
Agreement is incorporated by reference to Exhibit
9(g) to Post-Effective Amendment No. 73.
(h) Form of Amended Administration Agreement with
Janus Capital Corporation for Janus Money Market
Fund, Janus Government Money Market Fund, and
Janus Tax-Exempt Money Market Fund is incorporated
by reference to Exhibit 9(h) to Post-Effective
Amendment No. 77.
(i) Letter Agreement dated September 10, 1996,
regarding Janus Service Corporation Transfer
Agency Agreement is incorporated herein by
reference to Exhibit 9(i) to Post-Effective
Amendment No. 76.
(j) Letter Agreement dated September 9, 1997,
regarding Janus Service Corporation Transfer
Agency Agreement is incorporated herein by
reference to Exhibit 9(j) to Post-Effective
Amendment No. 82.
(k) Form of Letter Agreement dated September 14, 1998,
regarding Janus Service Corporation Transfer
Agency Agreement is filed herein as Exhibit 8(k).
Exhibit 9 (a) Opinion and Consent of Messrs. Davis, Graham &
Stubbs with respect to shares of Janus Fund is
incorporated herein by reference to Exhibit 10 (a)
to Post-Effective Amendment No. 79.
(b) Opinion and Consent of Fund Counsel with respect
to shares of Janus Growth and Income Fund and
Janus Worldwide Fund is incorporated herein by
reference to Exhibit 10(b) to Post-Effective
Amendment No. 79.
(c) Opinion and Consent of Fund Counsel with respect
to shares of Janus Enterprise Fund, Janus Balanced
Fund and Janus Short-Term Bond Fund is
incorporated herein by reference to Exhibit 10(c)
to Post-Effective Amendment No. 80.
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<PAGE>
(d) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Twenty
Fund is incorporated herein by reference to
Exhibit 10(d) to Post-Effective Amendment No. 81.
(e) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Venture
Fund is incorporated herein by reference to
Exhibit 10(e) to Post-Effective Amendment No. 81.
(f) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Flexible
Income Fund is incorporated herein by reference to
Exhibit 10(f) to Post-Effective Amendment No. 81.
(g) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus
Intermediate Government Securities Fund filed as
Exhibit 10(g) to Post-Effective Amendment No. 46
has been withdrawn.
(h) Opinion and Consent of Fund Counsel with respect
to shares of Janus Federal Tax-Exempt Fund and
Janus Mercury Fund is incorporated herein by
reference to Exhibit 10(h) to Post-Effective
Amendment No. 81.
(i) Opinion and Consent of Fund Counsel with respect
to shares of Janus Overseas Fund is incorporated
herein by reference to Exhibit 10(i) to
Post-Effective Amendment No. 81.
(j) Opinion and Consent of Fund Counsel with respect
to shares of Janus Money Market Fund, Janus
Government Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein by
reference to Exhibit 10(j) to Post-Effective
Amendment No. 81.
(k) Opinion and Consent of Fund Counsel with respect
to Institutional Shares of Janus Money Market
Fund, Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund is incorporated
herein by reference to Exhibit 10(k) to
Post-Effective Amendment No. 81.
(l) Opinion and Consent of Fund Counsel with respect
to shares of Janus High-Yield Fund and Janus
Olympus Fund
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<PAGE>
is incorporated herein by reference to Exhibit
10(l) to Post-Effective Amendment No. 68.
(m) Opinion and Consent of Fund Counsel with respect
to shares of Janus Equity Income Fund is
incorporated herein by reference to Exhibit 10(m)
to Post-Effective Amendment No. 72.
(n) Opinion and Consent of Fund Counsel with respect
to shares of Janus Special Situations Fund is
incorporated herein by reference to Exhibit 10(n)
to Post-Effective Amendment No. 75.
(o) Opinion and Consent of Fund Counsel with respect
to shares of Janus Money Market Fund, Janus
Government Money Market Fund, and Janus Tax-Exempt
Money Market Fund is incorporated herein by
reference to Exhibit 10(o) to Post-Effective
Amendment No. 76.
(p) Opinion and Consent of Fund Counsel with respect
to shares of Janus Global Life Sciences Fund filed
as Exhibit 10(p) to Post-Effective Amendment No.
82 has been withdrawn.
(q) Opinion and Consent of Fund Counsel with respect
to shares of Janus Global Life Sciences Fund and
Janus Global Technology Fund is filed herein as
Exhibit 9(q).
Exhibit 10 Consent of Price Waterhouse LLP is filed herein as
Exhibit 10.
Exhibit 11 Not Applicable.
Exhibit 12 Not Applicable.
Exhibit 13 Not Applicable.
Exhibit 14 Financial Data Schedules for the following Funds
(or classes of shares thereof) will be filed by
amendment:
Janus Global Life Sciences Fund
Janus Global Technology Fund
Exhibit 15(a) Form of plan entered into by Janus Money Market
Fund, Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund pursuant to Rule
18f-3 setting
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<PAGE>
forth the separate arrangement and expense
allocation of each class of such Funds filed as
Exhibit 18 to Post-Effective Amendment No. 66 has
been withdrawn.
(b) Restated form of Rule 18f-3 Plan entered into by
Janus Money Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money Market Fund
is incorporated herein by reference to Exhibit
18(b) to Post-Effective Amendment No. 69.
(c) Amended and Restated form of Rule 18f-3 Plan
entered into by Janus Money Market Fund, Janus
Government Money Market Fund, and Janus Tax-Exempt
Money Market Fund is incorporated herein by
reference to Exhibit 18(c) to Post-Effective
Amendment No. 78.
ITEM 24. Persons Controlled by or Under Common Control with Fund
None
ITEM 25. Indemnification
Article VIII of Janus Investment Fund's Agreement and Declaration of Trust
provides for indemnification of certain persons acting on behalf of the Funds.
In general, Trustees and officers will be indemnified against liability and
against all expenses of litigation incurred by them in connection with any
claim, action, suit or proceeding (or settlement of the same) in which they
become involved by virtue of their Fund office, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
or not opposed to the best interests of the Funds. A determination that a person
covered by the indemnification provisions is entitled to indemnification may be
made by the court or other body before which the proceeding is brought, or by
either a vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust nor parties to the proceeding or by an independent legal
counsel in a written opinion. The Funds also may advance money for these
expenses, provided that the Trustee or officer undertakes to repay the Funds if
his conduct is later determined to preclude indemnification, and that either he
provide security for the undertaking, the Trust be insured against losses
resulting from lawful advances or a majority of a quorum of disinterested
Trustees, or independent counsel in a written opinion, determines that he
ultimately will be found to be entitled to indemnification. The Trust also
maintains a liability insurance policy covering its Trustees and officers.
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<PAGE>
ITEM 26. Business and Other Connections of Investment Adviser
The only business of Janus Capital Corporation is to serve as the
investment adviser of the Fund and as investment adviser or subadviser to
several other mutual funds and private and retirement accounts. Business
backgrounds of the principal executive officers and directors of the adviser
that also hold positions with the Registrant are included under "Officers and
Trustees" in the currently effective Statements of Additional Information of the
Registrant. The remaining principal executive officers of the investment adviser
and their positions with the adviser and affiliated entities are: Mark B.
Whiston, Vice President and Chief Marketing Officer of Janus Capital
Corporation, Director and President of Janus Capital International Ltd.;
Marjorie G. Hurd, Vice President and Chief Operations Officer of Janus Capital
Corporation, Director and President of Janus Service Corporation; and Stephen L.
Stieneker, Assistant General Counsel, Chief Compliance Officer and Vice
President of Compliance of Janus Capital Corporation. Mr. Michael E. Herman, a
director of Janus Capital Corporation, is Chairman of the Finance Committee
(1990 to present) of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas City,
Missouri 64112. Mr. Michael N. Stolper, a director of Janus Capital Corporation,
is President of Stolper & Company, Inc., 600 West Broadway, Suite 1010, San
Diego, California 92101, an investment performance consultant. Mr. Thomas A.
McDonnell, a director of Janus Capital Corporation, is President, Chief
Executive Officer and a Director of DST Systems, Inc., 333 West 11th Street, 5th
Floor, Kansas City, Missouri 64105, provider of data processing and
recordkeeping services for various mutual funds, and is Executive Vice President
and a director of Kansas City Southern Industries, Inc., 114 W. 11th Street,
Kansas City, Missouri 64105, a publicly traded holding company whose primary
subsidiaries are engaged in transportation, information processing and financial
services. Mr. Landon H. Rowland, a director of Janus Capital Corporation, is
President and Chief Executive Officer of Kansas City Southern Industries, Inc.
ITEM 27. Principal Underwriters
(a) Janus Distributors, Inc. ("Janus Distributors") serves as a
principal underwriter for the Fund and the Retirement Shares of
Janus Aspen Series only.
(b) The principal business address, positions with Janus Distributors
and positions with Registrant of Thomas E. Early, Kelley Abbott
Howes, and Steven R. Goodbarn, officers and directors of Janus
Distributors, are described under "Officers and Trustees" in the
Statement of Additional Information included in this Registration
Statement. The remaining principal executive officer of Janus
Distributors is Jennifer A. Davis, Secretary. Ms. Davis does not
hold any positions with the Registrant. Ms. Davis's principal
business address is 100 Fillmore Street, Denver, Colorado
80206-4928.
(c) Not applicable.
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<PAGE>
ITEM 28. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado
80206-4928, and by State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts 02101, and United Missouri Bank, P.O. Box 419226, Kansas City,
Missouri 64141-6226.
ITEM 29. Management Services
The Fund has no management-related service contract which is not discussed
in Part A or Part B of this form.
ITEM 30. Undertakings
Not applicable.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Denver, and State of Colorado, on the 10th day
of September, 1998.
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Janus Investment Fund is organized under an Agreement and Declaration of
Trust dated February 11, 1986, a copy of which is on file with the Secretary of
State of The Commonwealth of Massachusetts. The obligations of the Registrant
hereunder are not binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Registrant personally, but bind only the
trust property of the Registrant, as provided in the Agreement and Declaration
of Trust of the Registrant. The execution of this Amendment to the Registration
Statement has been authorized by the Trustees of the Registrant and this
Amendment to the Registration Statement has been signed by an authorized officer
of the Registrant, acting as such, and neither such authorization by such
Trustees nor such execution by such officer shall be deemed to have been made by
any of them personally, but shall bind only the trust property of the Registrant
as provided in its Declaration of Trust.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Thomas H. Bailey President September 10, 1998
Thomas H. Bailey (Principal Executive
Officer) and Trustee
/s/ Steven R. Goodbarn Vice President and September 10, 1998
Steven R. Goodbarn Chief Financial Officer
(Principal Financial
Officer)
<PAGE>
/s/ Glenn P. O'Flaherty Treasurer and Chief September 10, 1998
Glenn P. O'Flaherty Accounting Officer
(Principal Accounting
Officer)
/s/ James P. Craig, III Trustee September 10, 1998
James P. Craig, III
Gary O. Loo* Trustee September 10, 1998
Gary O. Loo
Dennis B. Mullen* Trustee September 10, 1998
Dennis B. Mullen
James T. Rothe* Trustee September 10, 1998
James T. Rothe
William D. Stewart* Trustee September 10, 1998
William D. Stewart
Martin H. Waldinger* Trustee September 10, 1998
Martin H. Waldinger
/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact
<PAGE>
INDEX OF EXHIBITS
Exhibit 1(u) Certificate of Establishment and Designation for
Janus Global Life Sciences Fund
Exhibit 1(v) Form of Certificate of Establishment and
Designation for Janus Global Technology Fund
Exhibit 3(r) Form of Specimen Stock Certificate for Janus
Global Life Sciences Fund
Exhibit 3(s) Form of Specimen Stock Certificate for Janus
Global Technology Fund
Exhibit 4(n) Form of Investment Advisory Agreement for Janus
Global Life Sciences Fund
Exhibit 4(o) Form of Investment Advisory Agreement for Janus
Global Technology Fund
Exhibit 7(o) Form of Letter Agreement regarding State Street
Contract
Exhibit 8(k) Form of Letter Agreement regarding Janus Service
Corporation Transfer Agent Agreement
Exhibit 9(q) Opinion and Consent of Fund Counsel
Exhibit 10 Consent of Price Waterhouse
Exhibit 1(u)
JANUS INVESTMENT FUND
Certificate of Establishment and
Designation of Janus Global Life Sciences Fund
The undersigned, being the Secretary of Janus Investment Fund, a
Massachusetts business trust with transferable shares (the "Trust"), being duly
authorized by vote of a Majority of the Trustees of the Trust acting pursuant to
Section 6.1(b) and Section 9.3 of the Trust's Agreement and Declaration of Trust
dated February 11, 1986, as now in effect (the "Declaration"), does hereby
establish and designate the Janus Global Life Sciences Fund (in addition to the
Funds now existing) into which the assets of the Trust shall be divided (the
"Life Sciences Fund"), having the relative rights and preferences as follows:
1. The beneficial interest in the Life Sciences Fund shall be represented
by a separate series of shares of beneficial interest, par value one cent ($.01)
per share (the "Shares"), which series shall bear the name of the Life Sciences
Fund to which it relates and shall represent the beneficial interest only in
such Life Sciences Fund. An unlimited number of Shares of such series may be
issued.
2. The Life Sciences Fund shall be authorized to invest in cash,
securities, instruments and other property as from time to time described in the
Trust's then effective registration statement under the Securities Act of 1933
and the Investment Company Act of 1940, as amended.
3. The Shares of the Life Sciences Fund shall have the additional relative
rights and preferences, shall be subject to the liabilities, shall have the
other characteristics, and shall be subject to other powers of the Trustees, all
as set forth in paragraphs (a) through (l) of Section 6.2 of the Declaration.
Without limitation of the foregoing sentence, each Share of such series shall be
redeemable, shall be entitled to one vote, or a ratable fraction of one vote in
respect of a fractional share, as to matters on which Shares of such series
shall be entitled to vote, and shall represent a share of the beneficial
interest in the assets of the Life Sciences Fund, all as provided in the
Declaration.
4. Subject to the provisions and limitations of Section 9.3 of the
Declaration and applicable law, this Certificate of Designation may be amended
by an instrument in writing signed by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the Trustees),
provided that, if any amendment adversely affects the rights of the Shareholders
of the Life Sciences Fund, such amendment may be adopted by an instrument in
writing signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees) when authorized to do so by
the vote in accordance with Section 7.1 of the Declaration of the holders of a
majority of all the Shares of the Life Sciences Fund outstanding and entitled to
vote.
<PAGE>
5. All capitalized terms which are not defined herein shall have the same
meanings as are assigned to those terms in the Declaration filed with the
Secretary of State of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, I have hereunto set my hand as of the day and year set
forth opposite my signature below.
Dated: September 9, 1997 /s/ Kelley Abbott Howes
Kelley Abbott Howes, Secretary
<PAGE>
ACKNOWLEDGMENT
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
BEFORE ME, the undersigned authority, on this day personally appeared
Kelley Abbott Howes, Secretary of Janus Investment Fund, a Massachusetts
business trust, who, after being first duly sworn, stated that she executed the
foregoing document for the consideration therein expressed and in the capacity
therein stated.
SUBSCRIBED AND SWORN TO this 9th day of September, 1997.
My Commission Expires: /s/ Darlene A. Trujillo
5/19/98 Notary Public
Exhibit 1(v)
JANUS INVESTMENT FUND
Certificate of Establishment and
Designation of Janus Global Technology Fund
The undersigned, being the Secretary of Janus Investment Fund, a
Massachusetts business trust with transferable shares (the "Trust"), being duly
authorized by vote of a Majority of the Trustees of the Trust acting pursuant to
Section 6.1(b) and Section 9.3 of the Trust's Agreement and Declaration of Trust
dated February 11, 1986, as now in effect (the "Declaration"), does hereby
establish and designate the Janus Global Technology Fund (in addition to the
Funds now existing) into which the assets of the Trust shall be divided (the
"Technology Fund"), having the relative rights and preferences as follows:
1. The beneficial interest in the Technology Fund shall be represented by a
separate series of shares of beneficial interest, par value one cent ($.01) per
share (the "Shares"), which series shall bear the name of the Technology Fund to
which it relates and shall represent the beneficial interest only in such
Technology Fund. An unlimited number of Shares of such series may be issued.
2. The Technology Fund shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then effective registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940, as amended.
3. The Shares of the Technology Fund shall have the additional relative
rights and preferences, shall be subject to the liabilities, shall have the
other characteristics, and shall be subject to other powers of the Trustees, all
as set forth in paragraphs (a) through (l) of Section 6.2 of the Declaration.
Without limitation of the foregoing sentence, each Share of such series shall be
redeemable, shall be entitled to one vote, or a ratable fraction of one vote in
respect of a fractional share, as to matters on which Shares of such series
shall be entitled to vote, and shall represent a share of the beneficial
interest in the assets of the Technology Fund, all as provided in the
Declaration.
4. Subject to the provisions and limitations of Section 9.3 of the
Declaration and applicable law, this Certificate of Designation may be amended
by an instrument in writing signed by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the Trustees),
provided that, if any amendment adversely affects the rights of the Shareholders
of the Technology Fund, such amendment may be adopted by an instrument in
writing signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees) when authorized to do so by
the vote in accordance with Section 7.1 of the Declaration of the holders of a
majority of all the Shares of the Technology Fund outstanding and entitled to
vote.
<PAGE>
5. All capitalized terms which are not defined herein shall have the same
meanings as are assigned to those terms in the Declaration filed with the
Secretary of State of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, I have hereunto set my hand as of the day and year set
forth opposite my signature below.
Dated: September 14, 1998 ________________________________________
Kelley Abbott Howes, Secretary
<PAGE>
ACKNOWLEDGMENT
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
BEFORE ME, the undersigned authority, on this day personally appeared
Kelley Abbott Howes, Secretary of Janus Investment Fund, a Massachusetts
business trust, who, after being first duly sworn, stated that she executed the
foregoing document for the consideration therein expressed and in the capacity
therein stated.
SUBSCRIBED AND SWORN TO this 14th day of September, 1998.
My Commission Expires: ________________________________________
__________________________ Notary Public
Exhibit 3(r)
[LOGO]
JANUS INVESTMENT FUND
(A Massachusetts Business Trust)
JANUS GLOBAL LIFE SCIENCES FUND
SHARES OF BENEFICIAL INTEREST
ACCOUNT NO.
THIS CERTIFIES that CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS
Is the owner of ________________ shares of beneficial interest in the Janus
Global Life Sciences Fund series of Janus Investment Fund (the "Fund"), fully
paid and nonassessable, the said shares being issued and held subject to the
provisions of the Agreement and Declaration of Trust of the Fund, and all
amendments thereto, copies of which are on file with the Secretary of The
Commonwealth of Massachusetts. The said owner by accepting this certificate
agrees to and is bound by all of the said provisions. The shares represented
hereby are transferable in writing by the owner thereof in person or by attorney
upon surrender of this certificate to the Fund properly endorsed for transfer
(see the reverse side hereof). This certificate is executed on behalf of the
Trustees of the Fund as Trustees and not individually and the obligations hereof
are not binding upon any of the Trustees, officers or shareholders individually
but are binding only upon the assets and property of the Janus Global Life
Sciences Fund series of Janus Investment Fund. This certificate is not valid
unless countersigned by the Transfer Agent.
Witness the facsimile seal of the Fund and the facsimile signatures of its duly
authorized officers.
Dated:
/s/ Kelley Abbott Howes /s/ Thomas H. Bailey
SECRETARY PRESIDENT
[SEAL]
COUNTERSIGNED
BY JANUS SERVICE CORPORATION
(DENVER COLORADO) TRANSFER AGENT
AUTHORIZED SIGNATURE
<PAGE>
NOTICE. THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATIONS, ENLARGEMENT, OR ANY CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION IN
ACCORDANCE WITH FUND POLICIES.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT. _____ Custodian _____
(Cust) (Minor)
Under Uniform Gifts to Minors Act
________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________
________________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE) ___________________________________________________________________
Shares of beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
______________________________________________________________________________
_________________________________________________________________ Attorney to
transfer the said shares on the books of the within-named Fund with full power
of substitution in the premises.
Dated, ______________________ ___________________________________
Owner
___________________________________
Signature of Co-Owner, if any
IMPORTANT { BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
________________________________
Exhibit 3(s)
[LOGO]
JANUS INVESTMENT FUND
(A Massachusetts Business Trust)
JANUS GLOBAL TECHNOLOGY FUND
SHARES OF BENEFICIAL INTEREST
ACCOUNT NO.
THIS CERTIFIES that CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS
Is the owner of ________________ shares of beneficial interest in the Janus
Global Technology Fund series of Janus Investment Fund (the "Fund"), fully paid
and nonassessable, the said shares being issued and held subject to the
provisions of the Agreement and Declaration of Trust of the Fund, and all
amendments thereto, copies of which are on file with the Secretary of The
Commonwealth of Massachusetts. The said owner by accepting this certificate
agrees to and is bound by all of the said provisions. The shares represented
hereby are transferable in writing by the owner thereof in person or by attorney
upon surrender of this certificate to the Fund properly endorsed for transfer
(see the reverse side hereof). This certificate is executed on behalf of the
Trustees of the Fund as Trustees and not individually and the obligations hereof
are not binding upon any of the Trustees, officers or shareholders individually
but are binding only upon the assets and property of the Janus Global Technology
Fund series of Janus Investment Fund. This certificate is not valid unless
countersigned by the Transfer Agent.
Witness the facsimile seal of the Fund and the facsimile signatures of its duly
authorized officers.
Dated:
/s/ Kelley Abbott Howes /s/ Thomas H. Bailey
SECRETARY PRESIDENT
[SEAL]
COUNTERSIGNED
BY JANUS SERVICE CORPORATION
(DENVER COLORADO) TRANSFER AGENT
AUTHORIZED SIGNATURE
<PAGE>
NOTICE. THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATIONS, ENLARGEMENT, OR ANY CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION IN
ACCORDANCE WITH FUND POLICIES.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT. _____ Custodian _____
(Cust) (Minor)
Under Uniform Gifts to Minors Act
________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________
________________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE) ___________________________________________________________________
Shares of beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
______________________________________________________________________________
_________________________________________________________________ Attorney to
transfer the said shares on the books of the within-named Fund with full power
of substitution in the premises.
Dated, ______________________ ___________________________________
Owner
___________________________________
Signature of Co-Owner, if any
IMPORTANT { BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
________________________________
Exhibit 4(n)
JANUS INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT
JANUS GLOBAL LIFE SCIENCES FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 14th day
of September, 1998, between JANUS INVESTMENT FUND, a Massachusetts business
trust (the "Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation
("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Global Life Sciences Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Investment Advisory Services. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust's declaration of trust, bylaws, and registration statements
under the 1940 Act and the 1933 Act, and to the provisions of the Internal
Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company. In addition, JCC shall cause its officers to
attend meetings and furnish oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate officers of the Trust
fully informed as to the condition of the investment portfolio of the Fund, the
investment recommendations of JCC, and the investment considerations which have
given rise to those recommendations. JCC shall supervise the purchase and sale
of securities as directed by the appropriate officers of the Trust.
2. Other Services. JCC is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates) the management (not to
<PAGE>
include advisory) and administrative services necessary for the operation of the
Fund. JCC is specifically authorized, on behalf of the Trust, to conduct
relations with custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed by JCC to be necessary or desirable. JCC shall generally monitor and
report to Fund officers the Fund's compliance with investment policies and
restrictions as set forth in the currently effective prospectus and statement of
additional information relating to the shares of the Fund under the Securities
Act of 1933, as amended. JCC shall make reports to the Trustees of its
performance of services hereunder upon request therefor and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as it shall determine to be desirable. JCC is also authorized,
subject to review by the Trustees, to furnish such other services as JCC shall
from time to time determine to be necessary or useful to perform the services
contemplated by this Agreement.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets
and liabilities from time to time;
(b) to furnish JCC with a certified copy of any financial statement
or report prepared for it by certified or independent public
accountants and with copies of any financial statements or
reports made to its shareholders or to any governmental body or
securities exchange;
(c) to furnish JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. Compensation. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.75% of the first $300,000,000 of the daily closing net
asset value of the Fund, plus 1/365 of 0.70% of the next $200,000,000 of the
daily closing net asset value of the Fund, plus 1/365 of 0.65% of the daily
closing net asset value of the Fund in excess of $500,000,000. The fee shall be
paid monthly.
5. Expenses Borne by JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise,
<PAGE>
JCC shall incur and pay the following expenses relating to the Fund's operations
without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the Fund, other
than expenses incurred in complying with federal and state laws
and the law of any foreign country or territory or other
jurisdiction applicable to the issue, offer or sale of shares of
the Fund including without limitation registration fees and
costs, the costs of preparing the Fund's registration statement
and amendments thereto, and the costs and expenses of preparing,
printing, and mailing prospectuses (and statements of additional
information) to persons other than shareholders of the Fund.
6. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; compensation of the Fund's custodian,
transfer agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and all other expenses in connection
with execution of portfolio transactions (including any appropriate commissions
paid to JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the purchaser
thereof; expenses of local representation in Massachusetts; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
all expenses incurred in complying with all federal and state laws and the laws
of any foreign country applicable to the issue, offer, or sale of shares of the
Fund, including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and systems for compliance with blue sky laws, and
all costs involved in preparing, printing and mailing prospectuses and
statements of additional information of the Fund; and all fees, dues and other
expenses incurred by the Trust in connection with the membership of the Trust in
any trade association or other investment company organization. To the extent
that JCC shall perform any of the above described administrative and clerical
functions, including transfer agency, registry, dividend disbursing,
recordkeeping, bookkeeping, accounting and blue sky monitoring and registration
functions, and the preparation of reports and returns, the Trust shall pay to
JCC compensation for, or reimburse JCC for its expenses incurred in connection
with, such services
<PAGE>
as JCC and the Trust shall agree from time to time, any other provision of this
Agreement notwithstanding.
7. Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCC at its principal place of business. This Agreement may be terminated by
JCC at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust's
Declaration of Trust, the Trust shall cease to use the name "Janus" in
connection with the Fund as soon as reasonably practicable following any
termination of this Agreement if JCC does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until July 1, 2000,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of JCC and, if
required by applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
<PAGE>
13. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable for any of
the foregoing liabilities. The Trust's Declaration of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the
respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCC. JCC shall not be liable for any error
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 14,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. Activities of JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
16. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons" when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
By:__________________________________________
Steven R. Goodbarn, Vice President
JANUS INVESTMENT FUND
By:__________________________________________
Thomas H. Bailey, President
Exhibit 4(o)
JANUS INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT
JANUS GLOBAL TECHNOLOGY FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 14th day
of September, 1998, between JANUS INVESTMENT FUND, a Massachusetts business
trust (the "Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation
("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Global Technology Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC should
assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Investment Advisory Services. JCC shall furnish continuous advice and
recommendations to the Fund as to the acquisition, holding, or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust's declaration of trust, bylaws, and registration statements
under the 1940 Act and the 1933 Act, and to the provisions of the Internal
Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company. In addition, JCC shall cause its officers to
attend meetings and furnish oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate officers of the Trust
fully informed as to the condition of the investment portfolio of the Fund, the
investment recommendations of JCC, and the investment considerations which have
given rise to those recommendations. JCC shall supervise the purchase and sale
of securities as directed by the appropriate officers of the Trust.
2. Other Services. JCC is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates) the management (not to
<PAGE>
include advisory) and administrative services necessary for the operation of the
Fund. JCC is specifically authorized, on behalf of the Trust, to conduct
relations with custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed by JCC to be necessary or desirable. JCC shall generally monitor and
report to Fund officers the Fund's compliance with investment policies and
restrictions as set forth in the currently effective prospectus and statement of
additional information relating to the shares of the Fund under the Securities
Act of 1933, as amended. JCC shall make reports to the Trustees of its
performance of services hereunder upon request therefor and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as it shall determine to be desirable. JCC is also authorized,
subject to review by the Trustees, to furnish such other services as JCC shall
from time to time determine to be necessary or useful to perform the services
contemplated by this Agreement.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC continuously and fully informed as to the composition
of its investment portfolio and the nature of all of its assets
and liabilities from time to time;
(b) to furnish JCC with a certified copy of any financial statement
or report prepared for it by certified or independent public
accountants and with copies of any financial statements or
reports made to its shareholders or to any governmental body or
securities exchange;
(c) to furnish JCC with any further materials or information which
JCC may reasonably request to enable it to perform its function
under this Agreement; and
(d) to compensate JCC for its services and reimburse JCC for its
expenses incurred hereunder in accordance with the provisions
hereof.
4. Compensation. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.75% of the first $300,000,000 of the daily closing net
asset value of the Fund, plus 1/365 of 0.70% of the next $200,000,000 of the
daily closing net asset value of the Fund, plus 1/365 of 0.65% of the daily
closing net asset value of the Fund in excess of $500,000,000. The fee shall be
paid monthly.
5. Expenses Borne by JCC. In addition to the expenses which JCC may incur
in the performance of its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to incur and pay under other
agreements with the Trust or otherwise,
<PAGE>
JCC shall incur and pay the following expenses relating to the Fund's operations
without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
interested persons of JCC;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the Fund, other than
expenses incurred in complying with federal and state laws and the law
of any foreign country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund including without
limitation registration fees and costs, the costs of preparing the
Fund's registration statement and amendments thereto, and the costs
and expenses of preparing, printing, and mailing prospectuses (and
statements of additional information) to persons other than
shareholders of the Fund.
6. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; compensation of the Fund's custodian,
transfer agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and all other expenses in connection
with execution of portfolio transactions (including any appropriate commissions
paid to JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the purchaser
thereof; expenses of local representation in Massachusetts; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
all expenses incurred in complying with all federal and state laws and the laws
of any foreign country applicable to the issue, offer, or sale of shares of the
Fund, including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and systems for compliance with blue sky laws, and
all costs involved in preparing, printing and mailing prospectuses and
statements of additional information of the Fund; and all fees, dues and other
expenses incurred by the Trust in connection with the membership of the Trust in
any trade association or other investment company organization. To the extent
that JCC shall perform any of the above described administrative and clerical
functions, including transfer agency, registry, dividend disbursing,
recordkeeping, bookkeeping, accounting and blue sky monitoring and registration
functions, and the preparation of reports and returns, the Trust shall pay to
JCC compensation for, or reimburse JCC for its expenses incurred in connection
with, such services
<PAGE>
as JCC and the Trust shall agree from time to time, any other provision of this
Agreement notwithstanding.
7. Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCC at its principal place of business. This Agreement may be terminated by
JCC at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust's
Declaration of Trust, the Trust shall cease to use the name "Janus" in
connection with the Fund as soon as reasonably practicable following any
termination of this Agreement if JCC does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate automatically in the event of
any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until July 1, 2000,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons of JCC and, if
required by applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
<PAGE>
13. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable for any of
the foregoing liabilities. The Trust's Declaration of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the
respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCC. JCC shall not be liable for any error
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 14,
"JCC" shall include any affiliate of JCC performing services for the Trust
contemplated hereunder and directors, officers and employees of JCC and such
affiliates.
15. Activities of JCC. The services of JCC to the Trust hereunder are not
to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
16. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons" when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
JANUS CAPITAL CORPORATION
By:__________________________________________
Steven R. Goodbarn, Vice President
JANUS INVESTMENT FUND
By:__________________________________________
Thomas H. Bailey, President
Exhibit 7(o)
JANUS
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
PH: 303-333-3863
http://www.JanusFunds.com
LETTER AGREEMENT
September 14, 1998
Mr. Donald DeMarco
Vice President
State Street Bank and Trust Company
One Heritage Drive
Mutual Fund Services, P2N
North Quincy, Massachusetts 02171
Dear Mr. DeMarco:
Please be advised that Janus Investment Fund (the "Trust") has established Janus
Global Technology Fund as a new series of the Trust. Pursuant to Section 16 of
the Custodian Contract dated July 31, 1986, as amended, between the Trust and
State Street Bank and Trust Company ("State Street"), the Trust requests
confirmation that State Street will act as custodian for the new series under
the terms of the contract.
Please indicate your acceptance of the foregoing by executing two copies of this
Letter Agreement, returning one copy to the Trust and retaining one copy for
your records.
JANUS INVESTMENT FUND
By:_______________________________
Kelley Abbott Howes
Assistant Vice President
STATE STREET BANK AND TRUST COMPANY
By:________________________________
Agreed to this 14th day of September, 1998
cc: Glenn O'Flaherty
Sue Vreeland
Exhibit 8(k)
JANUS
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
PH: 303-333-3863
http://www.JanusFunds.com
September 14, 1998
Ms. Marjorie G. Hurd
Janus Service Corporation
100 Fillmore Street
Denver, Colorado 80206
Dear Ms. Hurd:
Attached are revised Appendix A and Appendix B to the Transfer Agency Agreement
dated as of September 27, 1995 (the "Agreement"), between Janus Investment Fund
(the "Trust") and Janus Service Corporation ("JSC"). The revised Appendices will
be effective as of September 14, 1998. The purpose of the revisions is to add
Janus Global Technology Fund as an additional portfolio of the Trust. Pursuant
to Section 9 of the Agreement, the Fund hereby requests that JSC acknowledge its
acceptance of the terms contained in each of the revised Appendices.
Please indicate your acceptance of the foregoing by executing two copies of this
letter, returning one copy to the Trust and retaining one copy for your records.
JANUS INVESTMENT FUND
By:__________________________________
Kelley Abbott Howes
Assistant Vice President
JANUS SERVICE CORPORATION
By:___________________________________
Marjorie G. Hurd
President
Agreed to this 14th day of September, 1998
cc: Sue Vreeland
Exhibit 9(q)
JANUS FUNDS
100 FILLMORE STREET
DENVER, COLORADO 80206-4928
PH: 303-333-3863
http://www.JanusFunds.com
September 9, 1998
Janus Investment Fund
100 Fillmore Street
Denver, Colorado 80206-4928
Re: Public Offering of Janus Global Life Sciences Fund and
Janus Global Technology Fund
Gentlemen:
I have acted as counsel for Janus Investment Fund, a Massachusetts business
trust (the "Trust"), in connection with the filing with the Securities and
Exchange Commission of a post-effective amendment to the Trust's registration
statement with respect to the proposed sale of shares of beneficial interest,
$0.01 par value, of Janus Global Life Sciences Fund and Janus Global Technology
Fund (the "Shares").
I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as
amended, the proceedings of its trustees relating to the authorization, issuance
and proposed sale of the Shares, and such other records and documents as I have
deemed relevant. Based upon such examination, it is my opinion that upon the
issuance and sale of the Shares in the manner contemplated by the aforesaid
post-effective amendment to the Trust's registration statement, such Shares will
be legally issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
above-referenced registration statement. This opinion is for the exclusive use
of the Trust in connection with the filing of such post-effective amendment to
the Trust's registration statement with the Securities and Exchange Commission
(and certain state securities commissions) and is not to be used, circulated,
quoted, relied upon or otherwise referred to by any other person or for any
other purpose. This opinion is given as of the date hereof and I render no
opinion and disclaim any obligation to revise or supplement this opinion based
upon any change in applicable law or any factual matter that occurs or comes to
my attention after the date hereof.
Very truly yours,
/s/ Thomas A. Early
Thomas A. Early
Vice President and General Counsel
/djw
Exhibit 10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Independent
Accountants" in the Statement of Additional Information constituting part of
this Post-Effective Amendment No. 85 to the Registration Statement on Form N-1A
of Janus Investment Fund.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
September 9, 1998
