JANUS INVESTMENT FUND, 497, 1998-02-20

JANUS INVESTMENT FUND
497, 1998-02-20

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JANUS BALANCED FUND
PROSPECTUS

[JANUS LOGO]
<PAGE>

JANUS BALANCED FUND

100 Fillmore Street
Denver, CO 80206-4928
1-800-525-3713
http://www.Janus.com

FEBRUARY 17, 1998

Janus Balanced Fund (the "Fund") is a no-load, diversified mutual fund that
seeks long-term growth of capital, consistent with preservation of capital and
balanced by current income.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 14.

The Fund is a portfolio of Janus Investment Fund (the "Trust"), which is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Fund that you should consider before investing. Please read it carefully and
keep it for future reference.

Additional information about the Fund is contained in a Statement of Additional
Information ("SAI") filed with the SEC. The SAI dated February 17, 1998, is
incorporated by reference into this Prospectus. For a copy of the SAI, write or
call the Fund at the address or phone number listed above. The SEC maintains a
Web site located at http://www.sec.gov that contains the SAI, material
incorporated by reference, and other information regarding the Fund.

THE FUND'S SHARES ARE NOT BANK DEPOSITS, ARE NOT ENDORSED OR GUARANTEED BY ANY
BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

CONTENTS

<TABLE>
<S> <C>
THE FUND AT A GLANCE
Brief description of the Fund................ 2
EXPENSE INFORMATION
The Fund's annual operating expenses......... 3
Financial Highlights - a summary of financial
data....................................... 4
THE FUND IN DETAIL
Investment Objective and Policies............ 6
General Portfolio Policies................... 8
Additional Risk Factors...................... 10
PERFORMANCE TERMS
An Explanation of Performance Terms.......... 13
SHAREHOLDER'S MANUAL
Minimum Investments.......................... 14
Types of Account Ownership................... 14
How to Open Your Janus Account............... 16
How to Purchase Shares....................... 16
How to Exchange Shares....................... 18
How to Redeem Shares......................... 19
Shareholder Services and Account Policies.... 21
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager..... 24
Personal Investing........................... 24
Management Expenses.......................... 25
Portfolio Transactions....................... 25
Other Service Providers...................... 25
Other Information............................ 26
DISTRIBUTIONS AND TAXES
Distributions................................ 28
Taxes........................................ 29
APPENDIX A
Glossary of Investment Terms................. 30
</TABLE>

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 1
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term capital growth, consistent
with preservation of capital and balanced by current income.

PRIMARY HOLDINGS:
A diversified fund that, under normal circumstances, pursues its investment
objective by investing 40-60% of its assets in securities selected primarily for
their growth potential and 40-60% of its assets in securities selected primarily
for their income potential.

SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for investors who primarily seek growth of capital with a
degree of emphasis on income. The Fund is not designed for investors who desire
a consistent level of income nor is it a short-term trading vehicle and should
not be relied upon for short-term financial needs.

FUND ADVISER:
Janus Capital Corporation ("Janus Capital") serves as the Fund's investment
adviser. Janus Capital has been in the investment advisory business for over 27
years and currently manages approximately $70 billion in assets.

FUND MANAGER:
Blaine P. Rollins

FUND INCEPTION:
September 1992

2 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

EXPENSE INFORMATION

The following tables and example are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Operating Expenses are paid out of
the Fund's assets and include fees for portfolio management, maintenance of
shareholder accounts, shareholder servicing, accounting and other services.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fee* None
Exchange Fee None
</TABLE>

* There is an $8 service fee for redemptions by wire.

ANNUAL OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

<TABLE>
<S> <C>
- ------------------------------------------------------------
Management Fee 0.74%
Other Expenses 0.36%
- ------------------------------------------------------------
Total Operating Expenses 1.10%
- ------------------------------------------------------------
</TABLE>

(1)The Management Fee reflects a reduced fee schedule effective July 1, 1997,
applied to net assets as of October 31, 1997. Other Expenses are based on
expenses before expense offset arrangements for the fiscal year ended October
31, 1997.

EXAMPLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assume you invest $1,000, the Fund
returns 5% annually and its expense
ratio remains as listed above. This
example shows the operating expenses
that you would indirectly bear as an
investor in the Fund. $11 $35 $61 $134
</TABLE>

- --------------------------------------------------------------------------------

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 3
<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992(1)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $15.20 $13.72 $12.17 $12.23 $10.64 $10.00
- -------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.36 0.33 0.61 0.27 0.19 --
3. Net gains or (losses) on securities (both
realized and unrealized) 2.88 2.22 1.52 (0.09) 1.56 0.64
- -------------------------------------------------------------------------------------------------------------
4. Total from investment operations 3.24 2.55 2.13 0.18 1.75 0.64
- -------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.36) (0.26) (0.58) (0.24) (0.16) --
6. Distributions (from capital gains) (1.35) (0.81) -- -- -- --
- -------------------------------------------------------------------------------------------------------------
7. Total distributions (1.71) (1.07) (0.58) (0.24) (0.16) --
- -------------------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $16.73 $15.20 $13.72 $12.17 $12.23 $10.64
- -------------------------------------------------------------------------------------------------------------
9. Total return* 23.38% 19.39% 18.26% 1.51% 16.54% 6.40%
- -------------------------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $360 $207 $125 $94 $73 $2
11. Average net assets for the period (in
millions) $283 $159 $107 $86 $44 $1
12. Ratio of gross expenses to average net
assets** 1.12% 1.23% 1.35% N/A N/A N/A
13. Ratio of net expenses to average net
assets** 1.10% 1.21% 1.32% 1.42% 1.70% 2.50%
14. Ratio of net investment income/(loss) to
average net assets** 2.63% 2.35% 2.52% 2.28% 2.15% (0.12%)
15. Portfolio turnover rate** 139% 151% 185% 167% 131% 130%
16. Average commission rate $.0468 $.0428 N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Fiscal period from September 1, 1992 (inception) to October 31, 1992.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.

4 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

UNDERSTANDING
FINANCIAL HIGHLIGHTS

This section is designed to help you better understand the information
summarized in the Financial Highlights table. The table contains important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.

NET ASSET VALUE ("NAV") is the value of a single share of the Fund. It is
computed by adding the value of all of the Fund's investments and other assets,
subtracting any liabilities and dividing the result by the number of shares
outstanding. The difference between line 1 and line 8 in the Financial
Highlights table represents the change in value of a Fund share over the fiscal
period, but not its total return.

NET INVESTMENT INCOME is the per share amount of dividends and interest income
earned on securities held by the Fund, less Fund expenses. DIVIDENDS (FROM NET
INVESTMENT INCOME) are the per share amount that the Fund paid from net
investment income.

NET GAINS OR (LOSSES) ON SECURITIES is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. DISTRIBUTIONS (FROM CAPITAL GAINS) are the
per share amount that the Fund paid from net realized gains.

TOTAL RETURN is the percentage increase or decrease in the value of an
investment over a stated period of time. Total return includes both changes in
NAV and income. For the purposes of calculating total return, it is assumed that
dividends and distributions are reinvested at the NAV on the day of the
distribution.

RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS is the total of the Fund's
operating expenses before expense offset arrangements divided by its average net
assets for the stated period. The Fund was not required to disclose the ratio of
gross expenses to average net assets prior to 1995. RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS reflects reductions in the Fund's expenses through the use of
brokerage commissions and uninvested cash balances earning interest or balance
credits.

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS is the Fund's total net
investment income divided by its average net assets for the stated period.

PORTFOLIO TURNOVER RATE is a measure of the amount of the Fund's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of the Fund's portfolio securities.

AVERAGE COMMISSION RATE is the total of the Fund's agency commissions paid on
equity securities trades divided by the number of shares purchased and sold.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 5
<PAGE>

THE FUND IN DETAIL

This section takes a closer look at the Fund's investment objective, policies
and the securities in which the Fund invests. Policies that are noted as
"fundamental" cannot be changed without a shareholder vote. All other policies,
including the Fund's investment objective, are not fundamental and may be
changed by the Fund's Trustees without a shareholder vote. You will be notified
of any material changes.

You should carefully consider your own investment goals, time horizon (the
amount of time you plan to hold your shares of the Fund) and risk tolerance
before investing in the Fund. If there is a material change in the Fund's
objective or policies, you should consider whether the Fund remains an
appropriate investment for you. There is no guarantee that the Fund will meet
its investment objective.

You should also carefully review the "Additional Risk Factors" section of this
Prospectus for a more detailed discussion of the risks associated with certain
investment techniques. Appendix A includes more detailed descriptions of
investment terms used throughout this Prospectus.

INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth, consistent
with preservation of capital and balanced by current income. It is a diversified
fund that, under normal circumstances, pursues its objective by investing 40-60%
of its assets in securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for their income
potential. The Fund normally invests at least 25% of its assets in fixed-income
senior securities, which include debt securities and preferred stocks.

TYPES OF INVESTMENTS
The Fund may invest in any combination of common stock, preferred stock,
warrants, convertible securities, debt securities and other fixed-income
securities. The Fund may invest up to 25% of its assets in mortgage- and
asset-backed securities, up to 10% of its assets in zero coupon, pay-in-kind and
step coupon securities, and without limit in indexed/structured securities. The
Fund will invest less than 35% of its assets in high-yield/high-risk securities.
The Fund may also purchase high-grade commercial paper, certificates of deposit,
and repurchase agreements. As further discussed below, such securities may be
selected for their growth potential or income potential. The Fund may also
invest in short-term debt securities, including money market funds managed by
Janus Capital, as a means of receiving a return on idle cash.

When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate investment opportunities with favorable risk/reward
characteristics, the Fund's investments may be hedged to a greater degree and/or
its cash or similar investments may increase. In other words, the Fund does not
always stay fully invested in stocks and bonds. Cash or similar investments are
a residual - they represent the assets that remain after the portfolio manager
has committed available assets to desirable investment opportunities. When the
Fund is hedged or its investments in cash or similar

6 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

investments increase, it may not participate in market advances or declines to
the extent that it would if it remained more fully invested in common stocks or
bonds.

The Fund may invest without limit in foreign equity and debt securities. The
Fund 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. The Fund may use options, futures and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to enhance return.
See "Additional Risk Factors" on page 10. The Fund may purchase securities on a
when-issued, delayed delivery or forward commitment basis.

The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. See "Additional Risk
Factors" on page 10.

THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.

Q: HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENT OF THE
FUND'S PORTFOLIO?

A: The Fund may shift assets between the growth and income components of its
portfolio based on the portfolio manager's analysis of relevant market,
financial and economic conditions. If the portfolio manager believes that
growth securities will provide better returns than the yields then available or
expected on income-producing securities, then the Fund will place a greater
emphasis on the growth component.

Q: WHAT TYPE OF SECURITIES MAKE UP THE GROWTH COMPONENT OF THE FUND?

A: The growth component of the Fund is expected to consist primarily of common
stocks. The portfolio manager will invest in common stocks to the extent
that he believes that the relevant market environment favors profitable
investing in those securities. The portfolio manager generally takes a "bottom
up" approach to building the portfolio. In other words, he seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large. Although themes may emerge in the Fund, securities are
generally selected without regard to any defined industry sector or other
similarly defined selection procedure.

Because income is a part of the investment objective of the Fund, the portfolio
manager may also consider dividend-paying characteristics in selecting equity
securities for the Fund. The Fund may also find opportunities for capital growth
from debt securities because of anticipated changes in interest rates, credit
standing, currency relationships or other factors.

Q: ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 7
<PAGE>

regard to any defined allocation among countries or geographic regions. However,
certain factors such as expected levels of inflation, government policies
influencing business conditions, the outlook for currency relationships, and
prospects for economic growth among countries, regions or geographic areas may
warrant greater consideration in selecting foreign securities. See "Additional
Risk Factors" on page 10.

Q: WHAT TYPES OF SECURITIES MAKE UP THE
INCOME COMPONENT OF THE FUND?

A: The income component of the Fund will consist of securities that the
portfolio manager believes have income potential. Such securities may
include equity securities, convertible securities and all types of debt
securities. Equity securities may be included in the income component of the
Fund if they currently pay dividends or the portfolio manager believes they have
the potential for either increasing their dividends or commencing dividends, if
none are currently paid. You should keep in mind that the Fund is not designed
to produce a consistent level of income.

Q: HOW DOES THE FUND TRY TO REDUCE RISK?

A: Diversification of the Fund's assets reduces the effect of any single
holding on its overall portfolio value. The Fund may also use futures,
options and other derivative instruments to protect the portfolio from
movements in securities prices and interest rates. The Fund may also use a
variety of currency hedging techniques, including forward currency contracts, to
manage exchange rate risk. See "Additional Risk Factors" on page 10.

GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the general policies
listed below. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Fund exceeds a limit as a result of market fluctuations or the
sale of other securities, it will not be required to dispose of any securities.

DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:

- - As a fundamental policy, the Fund may not own more than 10% of the outstanding
voting shares of any issuer.

- - As a fundamental policy, with respect to 75% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.

- - The Fund will invest no more than 25% of its total assets in a single issuer
(other than U.S. government securities).

8 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective,
anticipated changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the
investment decision. Changes are made in the Fund's portfolio whenever its
portfolio manager believes such changes are desirable. Portfolio turnover rates
are generally not a factor in making buy and sell decisions.

To a limited extent, the Fund may purchase securities in anticipation of
relatively short-term price gains. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains.

ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. If illiquid securities exceed 15% of the 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. An illiquid investment is a
security or other position that cannot be disposed of quickly in the normal
course of business. Some securities cannot be sold to the U.S. public because of
their terms or because of SEC regulations. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.

BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:

- - The Fund may borrow money for temporary or emergency purposes in amounts up to
25% of its total assets.

- - The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.

- - As a fundamental policy, the Fund may lend securities or other assets if, as a
result, no more than 25% of its total assets would be lent to other parties.

Under the terms of an exemptive order received from the SEC, the Fund 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 percentage limits.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 9
<PAGE>

ADDITIONAL RISK FACTORS

SPECIAL SITUATIONS
Special situations may include, among others, significant changes in a company's
allocation of its existing capital, a restructuring of assets, a new product or
process, a technological breakthrough, a management change or other
extraordinary corporate event, or differences in market supply of and demand for
the security. Investment in special situations may carry an additional risk of
loss in the event that the anticipated development does not occur or does not
attract the expected attention.

FOREIGN SECURITIES
Investments in foreign securities, including those of foreign governments, may
involve greater risks than investing in comparable domestic securities.
Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

- - CURRENCY RISK. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar. When
the Fund sells a foreign denominated security, its value may be worth less in
U.S. dollars even though the security increases in value in its home country.
U.S. dollar denominated securities of foreign issuers may also be affected by
currency risk.

- - POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to heightened
political and economic risks, particularly in underdeveloped or developing
countries which may have relatively unstable governments and economies based
on only a few industries. In some countries, there is the risk that the
government may take over the assets or operations of a company or that the
government may impose taxes or limits on the removal of the Fund's assets from
that country. The Fund may invest in emerging market countries. Emerging
market countries involve greater risks such as immature economic structures,
national policies restricting investments by foreigners, and different legal
systems.

- - REGULATORY RISK. There may be less government supervision of foreign markets.
Foreign issuers may not be subject to the uniform accounting, auditing and
financial reporting standards and practices applicable to domestic issuers.
There may be less publicly available information about foreign issuers than
domestic issuers.

- - MARKET RISK. Foreign securities markets, particularly those of underdeveloped
or developing countries, may be less liquid and more volatile than domestic
markets. Certain markets may require payment for securities before delivery
and delays may be encountered in settling securities transactions. In some
foreign markets, there may not be protection against failure by other parties
to complete transactions. There may be limited legal recourse against an
issuer in the event of a default on a debt instrument.

- - 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.

10 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

Foreign securities purchased indirectly (e.g., depositary receipts) are subject
to many of the above risks, including currency risk, because their values depend
on the performance of a foreign security denominated in its home currency.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use most derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

- - the risk that interest rates, securities prices and currency markets will not
move in the directions that the portfolio manager anticipates;

- - 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;

- - leverage risk, that is, the risk that adverse price movements in an instrument
can result in a loss substantially greater than the Fund's initial investment
in that instrument (in some cases, the potential loss is unlimited); and

- - particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave the
Fund worse off than if it had not entered into the position.

Although the Fund believes the use of derivative instruments will benefit the
Fund, the Fund's performance could be worse than if the Fund had not used such
instruments if the portfolio manager's judgement proves incorrect.

When the Fund invests in a derivative instrument, it may be required to
segregate cash and other liquid assets or certain portfolio securities with its
custodian to "cover" the Fund's position. Assets segregated or set aside
generally may not be disposed of so long as the Fund maintains the positions
requiring segregation or cover. Segregating assets could diminish the Fund's
return due to the opportunity losses of foregoing other potential investments
with the segregated assets.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 11
<PAGE>

HIGH-YIELD/HIGH-RISK SECURITIES
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies such as Standard & Poor's
Ratings Services ("Standard & Poor's") and Moody's Investors Service, Inc.
("Moody's").

The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e. credit risk) than is
the case for higher quality securities. Conversely, the value of higher quality
securities may be more sensitive to interest rate movements than lower quality
securities. Issuers of high-yield securities may not be as strong financially as
those issuing bonds with higher credit ratings. Investments in such companies
are considered to be more speculative than higher quality investments.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (for instance, an economic downturn or prolonged period of
rising interest rates), political changes or adverse developments specific to
the issuer. The market for lower quality securities is generally less liquid
than the market for higher quality securities. Adverse publicity and investor
perceptions as well as new or proposed laws may also have a greater negative
impact on the market for lower quality securities.

The Fund will invest less than 35% of its assets in high-yield/high-risk
securities. The chart below shows the percentage of the Fund's securities
holdings by rating category (based upon a weighted monthly average) during the
fiscal year ended October 31, 1997. Please refer to the SAI for a description of
bond rating categories.

<TABLE>
<S> <C>
BONDS - STANDARD & POOR'S RATING JANUS BALANCED FUND
- ---------------------------------------------------------------------
AAA 18%
AA 0%
A 4%
BBB 3%
BB 1%
B 6%
CCC 0%
CC 0%
C 0%
Foreign Bond 1%
Preferred Stock 11%
Common Stock 52%
Cash and Options 4%
- ---------------------------------------------------------------------
TOTAL 100%
- ---------------------------------------------------------------------
</TABLE>

SHORT SALES
The Fund may engage in "short sales against the box." This technique involves
selling either a security that the 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. The Fund may enter into a short sale
against the box to hedge against anticipated declines in the market price of
portfolio securities. If the value of the

12 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

securities sold short increases prior to the scheduled delivery date, the Fund
loses the opportunity to participate in the gain.

See Appendix A for risks associated with certain other investments.

PERFORMANCE TERMS

This section will help you understand various terms that are commonly used to
describe the Fund's performance. You may see references to these terms in our
newsletters, advertisements and in media articles. Our newsletters and
advertisements may include comparisons of the Fund's performance to the
performance of other mutual funds, mutual fund averages or recognized stock
market indices. The Fund generally measures performance in terms of total
return.

CUMULATIVE TOTAL RETURN represents the actual rate of return on an investment
for a specified period. The Financial Highlights table shows total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of the Fund). A cumulative total return does not show
interim fluctuations in the value of an investment.

AVERAGE ANNUAL TOTAL RETURN represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Fund's return and are not the
same as actual annual results.

THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT TOTAL RETURN
COMPUTATIONS. FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET
VALUE WILL FLUCTUATE SO THAT YOUR SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 13
<PAGE>

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.

MINIMUM INVESTMENTS*

<TABLE>
<S> <C>
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+
</TABLE>

* The Fund reserves the right to change the amount of these minimums
from time to time or to waive them in whole or in part for certain
types of accounts.
** 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

<TABLE>
<S> <C>
MAILING ADDRESS JANUS XPRESS LINE 1-888-979-7737
Janus For 24-hour access to account and
P.O. Box 173375 fund information, exchanges and
Denver, CO 80217-3375 purchases, automated daily quotes on
fund share prices, yields and total
FOR OVERNIGHT CARRIER returns.
Janus TDD 1-800-525-0056
Suite 101 A telecommunications device for our
3773 Cherry Creek North Drive hearing- and speech-impaired
Denver, CO 80209-3811 shareholders.
JANUS INTERNET ADDRESS JANUS LITERATURE LINE 1-800-525-8983
http://www.Janus.com To request a prospectus, shareholder
reports or marketing materials.
</TABLE>

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.

14 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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.

- - 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 advisor or
legal counsel before selecting a tax-deferred account.

Investors Fiduciary Trust Company serves as custodian for the tax-deferred
accounts offered by the Fund. You will be charged an 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 Fund reserves 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 ("IRAS"): Both types of IRAs
allow most individuals under the age of 70 1/2 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 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 ("SEP"): This plan allows small business
owners (including sole proprietors) to make tax-deductible contributions for
themselves and any eligible employee(s). A SEP requires an IRA (a SEP-IRA) to
be set up for each SEP participant.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 15
<PAGE>

- - 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 Fund is 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.

- - Checks must be drawn on a U.S. bank and made payable to Janus.

- - If a check does not clear your bank, the Fund reserves the right to cancel the
purchase.

- - If the Fund is unable to debit your predesignated bank account on the day of
purchase, it may make additional attempts or cancel the purchase.

16 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - The Fund reserves the right to reject any specific purchase request.

If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Fund (or its agents) has the
authority to redeem shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund.

ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR AN ADDITIONAL
INVESTMENT IS $100. ($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.

BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.

AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help investors achieve
their financial goals as simply and conveniently as possible. You may open a new
account with a $500 initial purchase and $100 automatic subsequent investments.

- - 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.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 17
<PAGE>

- - BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money ($100 minimum)
you would like automatically exchanged from one Janus account to another on
any day of the month. For more information on how to establish this option,
call 1-800-525-3713.

HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your shares into any
other available Janus fund.

IN WRITING
To request an exchange in writing, please follow the instructions for written
requests on page 20.

BY TELEPHONE
All accounts are automatically eligible for the telephone exchange option. To
exchange shares by telephone, call an Investor Service Representative at
1-800-525-3713 during normal business hours or call the Janus 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 a $100
subsequent purchase per month on established accounts. You may establish a new
account with a $500 initial purchase and subsequent $100 systematic exchanges.
If the balance in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the program will be
discontinued.

EXCHANGE POLICIES
- - 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 the 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 Fund reserves the right to reject any exchange request and to modify or
terminate the exchange privilege at any time. For example, the Fund 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.

18 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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 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 20.

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).

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.

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 OR THROUGH THE
AUTOMATIC MONTHLY INVESTMENT PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions,

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 19
<PAGE>

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 16 and must include the following
information:

- - the name of the Fund,

- - the account number,

- - 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.

- - 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.

20 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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 FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.

HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A signature guarantee may not
be provided by a notary public.

If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.

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 the Fund (or its
designated agent). The 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. In order to receive a day's price, your order must be received by
the close of the regular trading session of the NYSE. The Fund's portfolio
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 http://www.Janus.com. You can access
information such as your account balance and the Fund's NAV through the Web
site. In addition, you may request and/or download a prospectus for any Janus
fund.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 21
<PAGE>

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 14 or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued 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 Fund. Processing Organizations may also impose other
charges or restrictions different from those applicable to shareholders who
invest in the Fund directly. A Processing Organization, rather than its
customer, may be the shareholder of record of your shares. The Fund is not
responsible for the failure of any Processing Organization to carry out its
obligations to its customers. Certain Processing Organizations may receive
compensation from Janus Capital or its affiliates and certain Processing
Organizations may receive compensation from the Fund for shareholder
recordkeeping and similar services.

TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification number, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Fund for
any penalty that the IRS may impose.

SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Fund. The Fund will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days 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.

INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Fund.

22 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.

It may be difficult to reach 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.

TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.

ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of the Fund, the account
number(s), the name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address change unless
a signature guarantee is provided.

REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-525-3713.

STATEMENTS AND REPORTS
Investors participating in an automatic investment program will receive
quarterly confirmations of all transactions and dividends. The Fund will send
you an immediate transaction confirmation statement after every non-systematic
transaction.

Financial reports for the Fund, which include a list of the Fund's 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..

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 23
<PAGE>

MANAGEMENT OF THE FUND

TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Fund's investment objective and policies. The
Trustees delegate the day-to-day management of the Fund to the officers of the
Trust and meet at least quarterly to review the Fund's investment policies,
performance, expenses and other business affairs.

INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is the
investment adviser to the Fund and is responsible for the day-to-day management
of its investment portfolio and other business affairs.

Janus Capital began serving as investment adviser to certain series of the Trust
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.

Kansas City Southern Industries, Inc. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, President and Chairman of the Board of Janus Capital, owns approximately
12% of its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.

Janus Capital furnishes continuous advice and recommendations concerning the
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Fund, and may be reimbursed by the
Fund for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Fund and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.

PORTFOLIO MANAGER
BLAINE P. ROLLINS is Executive Vice President and portfolio manager of the Fund,
which he has managed since January 1996, and Janus Equity Income Fund, which he
has managed since inception. He has been an assistant portfolio manager of Janus
Fund since January 1995. Mr. Rollins joined Janus Capital in 1990 and gained
experience as a fixed-income trader and equity research analyst prior to
assuming management responsibility for the Fund. He holds a Bachelor of Science
in Finance from the University of Colorado and is a Chartered Financial Analyst.

PERSONAL INVESTING
Janus Capital does not permit portfolio managers to purchase and sell securities
for their own accounts, except under the limited exceptions contained in Janus
Capital's policy governing personal investing. Janus Capital's policy requires
investment and other personnel to conduct their personal investment activities
in a manner that Janus Capital

24 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

believes is not detrimental to the Fund or Janus Capital's other advisory
clients. See the SAI for more detailed information.

MANAGEMENT EXPENSES
The Fund pays Janus Capital a management fee which is calculated daily and paid
monthly. The advisory agreement with the Fund spells out the management fee and
other expenses that the Fund must pay. The Fund's management fee schedule
(expressed as an annual rate) is set out in the chart below.

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS OF FUND ANNUAL RATE PERCENTAGE (%)
- --------------------------------------------------------------------------------
<S> <C>
First $300 Million 0.75
Next $200 Million 0.70
Over $500 Million 0.65
- --------------------------------------------------------------------------------
</TABLE>

The management fee schedule above was effective July 1, 1997. The actual
management fee paid by the Fund for the fiscal year ended October 31, 1997, was
0.76% of the value of the Fund's average daily net assets. As asset size
increases, the annual rate of the management fee declines in accordance with the
above schedule. The Fund incurs expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and auditing fees,
printing and mailing costs of sending reports and other information to existing
shareholders, and independent Trustees' fees and expenses.

PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund i) to the Fund or ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers to execute transactions.
The Fund's Trustees have authorized Janus Capital to place portfolio
transactions on an agency basis with a broker-dealer affiliated with Janus
Capital. When transactions for the Fund are effected with that broker-dealer,
the commissions payable by the Fund are credited against certain Fund operating
expenses serving to reduce those expenses. The SAI further explains the
selection of broker-dealers.

OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 25
<PAGE>

TRANSFER AGENT
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

DISTRIBUTOR
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206-4928

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.

OTHER INFORMATION
ORGANIZATION
The Trust is a "mutual fund" that was organized as a Massachusetts business
trust on February 11, 1986. A mutual fund is an investment vehicle that pools
money from numerous investors and invests the money to achieve a specified
objective. As of the date of this Prospectus, the Trust offers 19 separate
series, three of which currently offer three classes of shares. The Trust
currently offers the other 18 series by separate prospectuses.

SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of other portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.

SIZE OF THE FUND
The Fund has no present plans to limit its size. However, the Fund may
discontinue sales of its shares if management believes that continued sales may
adversely affect the Fund's ability to achieve its investment objective. If
sales of the Fund are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.

MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's investment objective by
investing all of the Fund's assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. Unless otherwise required by law,
this policy may be implemented by the Trustees without shareholder approval.

26 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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 Fund with service at
current levels.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 27
<PAGE>

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS

TO AVOID TAXATION, THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET
INCOME AND ANY NET GAINS REALIZED ON ITS INVESTMENTS ANNUALLY. THE 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 ARE DECLARED
AND PAID QUARTERLY, WHILE CAPITAL GAINS DISTRIBUTIONS ARE DECLARED AND PAID IN
DECEMBER.

HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the Fund's daily NAV. The
share price of the Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, the
Fund declared a dividend in the amount of $0.25 per share. If the Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations. 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 the Fund just before the distribution, you will pay
the full price for the shares and receive a portion of the purchase price back
as a taxable distribution. This is referred to as "buying a dividend." In the
above example, if you bought shares on December 30, you would have paid $10.00
per share. On December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your account is set
up as a tax-deferred account, dividends paid to you would be included in your
gross income for tax purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.

DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by writing the Fund at one of the addresses on page 16 or calling
1-800-525-3713. The Fund offers the following options:

1. REINVESTMENT OPTION. You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned automatically if
no other choice is made.

2. CASH OPTION. You may receive your income dividends and capital gains
distributions in cash.

28 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

3. REINVEST AND CASH OPTION. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.

4. REDIRECT OPTION. You may direct your dividends or capital gains to purchase
shares of another Janus fund.

The Fund reserves the right to reinvest into your account undeliverable and
uncashed dividend and distribution checks that remain outstanding for six months
in shares of the Fund at the NAV next computed after the check is cancelled.
Subsequent distributions may also be reinvested.

TAXES
As with any investment, you should consider the tax consequences of investing in
the Fund. The following discussion does not apply to tax-deferred accounts, nor
is it a complete analysis of the federal tax implications of investing in the
Fund. You may wish to consult your own tax adviser. Additionally, state or local
taxes may apply to your investment, depending upon the laws of your state of
residence.

TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of the Fund. In certain states, a portion of the dividends and
distributions (depending on the source of the Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year. Account tax information will also be sent to the IRS.

TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. The Fund
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 an election is not made, any foreign taxes paid or accrued
will represent an expense to the Fund which will reduce its investment income.

The Fund does not expect to pay any federal income or excise taxes because it
intends to meet certain requirements of the Internal Revenue Code. It is
important that the Fund meet these requirements so that any earnings on your
investment will not be taxed twice.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 29
<PAGE>

APPENDIX A

GLOSSARY OF INVESTMENT TERMS
This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Fund may invest. The Fund may
invest in these instruments to the extent permitted by its investment objective
and policies. The Fund is not limited by this discussion and may invest in any
other types of instruments not precluded by the policies discussed elsewhere in
this Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.

I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value 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 Fund may purchase commercial paper issued under
Section 4(2) of the Securities Act of 1933.

COMMON STOCK represents a share of ownership in a company, and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.

CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.

DEPOSITARY RECEIPTS are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).

FIXED-INCOME SECURITIES are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.

HIGH-YIELD/HIGH-RISK SECURITIES are securities that are rated below investment
grade by the primary rating agencies (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."

30 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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
Fund must pay if these investments are profitable, the Fund may make various
elections permitted by the tax laws. These elections could require that the Fund
recognize taxable income, which in turn must be distributed, before the
securities are sold and before cash is received to pay the distributions.

PAY-IN-KIND BONDS are debt securities that 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.

PREFERRED STOCK is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.

REPURCHASE AGREEMENTS involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, the Fund will bear the risk of market value fluctuations until the
security can be sold and may encounter delays and incur costs in liquidating the
security.

REVERSE REPURCHASE AGREEMENTS involve the sale of a security by the Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used primarily to provide cash to satisfy unusually heavy
redemption requests, or for other temporary or emergency purposes.

RULE 144A SECURITIES are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

STANDBY COMMITMENTS are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.

STEP COUPON BONDS are debt securities that trade at a discount from their face
value and pay coupon interest. The discount from the face 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.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 31
<PAGE>

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.

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.

VARIABLE AND FLOATING RATE SECURITIES have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.

WARRANTS are securities, typically issued with preferred stocks or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.

WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally involve the
purchase of a security with payment and delivery at some time in the
future - i.e., beyond normal settlement. The Fund does not earn interest on such
securities until settlement and bears the risk of market value fluctuations in
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.

ZERO COUPON BONDS are debt securities that do not pay regular interest at
regular intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. The market value of these securities generally
fluctuates more in response to changes in interest rates than interest-paying
securities of comparable maturity.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

FORWARD CONTRACTS are contracts to purchase or sell a specified amount of 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 Fund 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

32 JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

securities. It may also enter into forward contracts to purchase or sell
securities or other financial indices.

FUTURES CONTRACTS are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Fund may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Fund may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.

INDEXED/STRUCTURED SECURITIES are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.

INTEREST RATE SWAPS involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

OPTIONS are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Fund may purchase and write put and call options on securities,
securities indices and foreign currencies.

JANUS BALANCED FUND PROSPECTUS FEBRUARY 17, 1998 33

<PAGE>
[JANUS LOGO]

P.O. Box 173375 o Denver, CO 80217-3375 o 1-800-525-3713
Janus Distributors, Inc. Member NASD. (2/98)

<PAGE>
JANUS ENTERPRISE FUND
PROSPECTUS

[JANUS LOGO]
<PAGE>

JANUS ENTERPRISE FUND

100 Fillmore Street
Denver, CO 80206-4928
1-800-525-3713
http://www.Janus.com

FEBRUARY 17, 1998

Janus Enterprise Fund (the "Fund") is a no-load, nondiversified mutual fund that
seeks long-term growth of capital. The Fund intends to invest primarily in
common stocks, with an emphasis on securities issued by medium-sized companies.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 14.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

CONTENTS

<TABLE>
<S> <C>
THE FUND AT A GLANCE
Brief description of the Fund................ 2
EXPENSE INFORMATION
The Fund's annual operating expenses......... 3
Financial Highlights - a summary of financial
data....................................... 4
THE FUND IN DETAIL
Investment Objective and Policies............ 6
General Portfolio Policies................... 8
Additional Risk Factors...................... 10
PERFORMANCE TERMS
An Explanation of Performance Terms.......... 13
SHAREHOLDER'S MANUAL
Minimum Investments.......................... 14
Types of Account Ownership................... 14
How to Open Your Janus Account............... 16
How to Purchase Shares....................... 16
How to Exchange Shares....................... 18
How to Redeem Shares......................... 19
Shareholder Services and Account Policies.... 21
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager..... 24
Personal Investing........................... 24
Management Expenses.......................... 25
Portfolio Transactions....................... 25
Other Service Providers...................... 25
Other Information............................ 26
DISTRIBUTIONS AND TAXES
Distributions................................ 27
Taxes........................................ 28
APPENDIX A
Glossary of Investment Terms................. 29
</TABLE>

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 1
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term growth of capital.

PRIMARY HOLDINGS:
A nondiversified fund that pursues its investment objective by investing
primarily in common stocks, with an emphasis on securities issued by
medium-sized companies.

SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital and who
can tolerate the greater risks associated with investments in common stocks. The
Fund is not designed as a short-term trading vehicle and should not be relied
upon for short-term financial needs.

FUND MANAGER:
James P. Goff

FUND INCEPTION:
September 1992

2 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

EXPENSE INFORMATION

SHAREHOLDER TRANSACTION EXPENSES

* There is an $8 service fee for redemptions by wire.

ANNUAL OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

<TABLE>
<S> <C>
- ------------------------------------------------------------
Management Fee 0.72%
Other Expenses 0.35%
- ------------------------------------------------------------
Total Operating Expenses 1.07%
- ------------------------------------------------------------
</TABLE>

(1)The Management Fee reflects a revised fee schedule effective July 1, 1997,
applied to net assets as of October 31, 1997. Other Expenses are based on
expenses before expense offset arrangements for the fiscal year ended October
31, 1997.

EXAMPLE

- --------------------------------------------------------------------------------

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 3
<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992(1)
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $31.19 $27.14 $24.43 $21.87 $17.09 $15.00
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (loss) -- -- 0.52 (0.06) 0.04 --
3. Net gains or (losses) on securities
(both realized and unrealized) 0.95 5.85 3.09 3.18 4.76 2.09
- ------------------------------------------------------------------------------------------------------------
4. Total from investment operations 0.95 5.85 3.61 3.12 4.80 2.09
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- -- (0.52) (0.02) (0.02) --
6. Distributions (from capital gains) (1.28) (1.80) (0.38) (0.54) -- --
- ------------------------------------------------------------------------------------------------------------
7. Total distributions (1.28) (1.80) (0.90) (0.56) (0.02) --
- ------------------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $30.86 $31.19 $27.14 $24.43 $21.87 $17.09
- ------------------------------------------------------------------------------------------------------------
9. Total return* 3.31% 22.43% 15.46% 14.56% 28.09% 13.93%
- ------------------------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $552 $732 $459 $370 $239 $8
11. Average net assets for the period (in
millions) $614 $596 $408 $270 $188 $2
12. Ratio of gross expenses to average net
assets** 1.07% 1.14% 1.26% N/A N/A N/A
13. Ratio of net expenses to average net
assets** 1.04% 1.12% 1.23% 1.25% 1.36% 2.50%
14. Ratio of net investment income/(loss) to
average net assets** (0.61%) (0.78%) 0.02% (0.32%) 0.14% (0.81%)
15. Portfolio turnover rate** 111% 93% 194% 193% 201% 53%
16. Average commission rate $.0360 $.0333 N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------
</TABLE>

4 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

UNDERSTANDING THE
FINANCIAL HIGHLIGHTS

NET GAINS (OR LOSSES) ON SECURITIES is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is realized when securities increase or
decrease in value but are not sold. DISTRIBUTIONS (FROM CAPITAL GAINS) are the
per share amount that the Fund paid from net realized gains.

RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS is the total of the Fund's
operating expenses before expense offset arrangements divided by its average net
assets for the stated period. The Fund was not required to disclose the ratio of
gross expenses to average net assets prior to 1995. RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS reflects reductions in expenses through the use of brokerage
commissions and uninvested cash balances earning interest or balance credits.

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS is the Fund's net
investment income divided by its average net assets for the stated period.

AVERAGE COMMISSION RATE is the total of the Fund's agency commissions paid on
equity securities trades divided by the number of shares purchased and sold.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 5
<PAGE>

THE FUND IN DETAIL

INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital. It is a
nondiversified fund that pursues its objective by normally investing at least
50% of its equity assets in securities issued by medium-sized companies.
Medium-sized companies are those whose market capitalizations fall within the
range of companies in the S&P MidCap 400 Index (the "MidCap Index"). Companies
whose capitalization falls outside this range after the Fund's initial purchase
continue to be considered medium-sized companies for the purpose of this policy.
As of December 31, 1997, the MidCap Index included companies with
capitalizations between approximately $213 million and $13.7 billion. The range
of the MidCap Index is expected to change on a regular basis. Subject to the
above policy, the Fund may also invest in smaller or larger issuers.

TYPES OF INVESTMENTS
The Fund invests primarily in common stocks selected for their growth potential.
The Fund may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities when its
portfolio manager perceives an opportunity for capital growth from such
securities or to receive a return on idle cash. The Fund may invest up to 25% of
its assets in mortgage- and asset-backed securities, up to 10% of its assets in
zero coupon, pay-in-kind and step-coupon securities, and without limit in
indexed/structured securities. The Fund will invest less than 35% of its assets
in high-yield/high-risk securities. The Fund may also purchase high-grade
commercial paper, certificates of deposit, and repurchase agreements. Such
securities may offer growth potential because of anticipated changes in interest
rates, credit standing, currency relationships or other factors. The Fund may
also invest in short-term debt securities, including money market funds managed
by Janus Capital, as a means of receiving a return on idle cash.

When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate

6 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

investment opportunities with favorable risk/return characteristics, the Fund's
investments may be hedged to a greater degree and/or its cash or similar
investments may increase. In other words, the Fund does not always stay fully
invested in stocks and bonds. Cash or similar investments are a residual - they
represent the assets that remain after the portfolio manager has committed
available assets to desirable investment opportunities. When the Fund is hedged
or its investments in cash or similar investments increase, it may not
participate in market advances or declines to the extent that it would if it
remained more fully invested in common stocks.

THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.

Q: HOW ARE COMMON STOCKS SELECTED?

A: The Fund may invest substantially all of its assets in common stocks to the
extent its portfolio manager believes that the relevant market environment
favors profitable investing in those securities. The portfolio manager
generally takes a "bottom up" approach to building the portfolio. In other
words, the manager seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. Although themes may
emerge in the Fund, securities are generally selected without regard to any
defined industry sector or other similarly defined selection procedure.
Realization of income is not a significant investment consideration. Any income
realized on the Fund's investments will be incidental to its objective.

Q: ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

A: Generally, yes. The portfolio manager seeks companies that meet his
selection criteria regardless of country of organization or place of
principal business activity. Foreign securities are generally selected on a
stock-by-stock basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected levels of
inflation, government policies influencing business conditions, the outlook for
currency relationships, and prospects for economic growth among countries,
regions or geographic areas may warrant greater consideration in selecting
foreign securities. See "Additional Risk Factors" on page 10.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 7
<PAGE>

Q: WHAT IS THE MAIN RISK OF INVESTING
IN A GROWTH FUND?

A: Since the Fund usually invests heavily in common stocks, the fundamental
risk is that the value of the stocks the Fund holds might decrease. Stock
values may fluctuate in response to the activities of an individual company
or in response to general market and/or economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Smaller or newer issuers are
more likely to realize more substantial growth as well as suffer more
significant losses than larger or more established issuers. Investments in such
companies can be both more volatile and more speculative. See "Additional Risk
Factors.".

Q: WHAT IS MEANT BY
"MARKET CAPITALIZATION"?

A: Market capitalization is the most commonly used measure of the size and
value of a company. It is computed by multiplying the current market price
of a share of the company's stock by the total number of its shares
outstanding. As noted previously, under normal market circumstances, the Fund
will emphasize issuers with market capitalizations in the range of the MidCap
Index.

Q: HOW DOES A DIVERSIFIED FUND DIFFER
FROM A NONDIVERSIFIED FUND?

A: A "nondiversified" fund has the ability to take larger positions in a
smaller number of issuers than a diversified fund. Because the appreciation
or depreciation of a single stock may have a greater impact on the share
price of a nondiversified fund, its share price can be expected to fluctuate
more than a comparable diversified fund.

Q: HOW DOES THE FUND
TRY TO REDUCE RISK?

A: The Fund may use futures, options and other derivative instruments to
protect the portfolio from movements in securities prices and interest
rates. The Fund may also use a variety of currency hedging techniques,
including forward currency contracts, to manage exchange rate risk. See
"Additional Risk Factors" on page 10.

GENERAL PORTFOLIO POLICIES
In investing its assets, the Fund will follow the general policies listed below.
The percentage limitations included in these policies and elsewhere in this
Prospectus apply only at the time of purchase of the security. For example, if
the Fund exceeds a limit as a result of market fluctuations or the sale of other
securities, it will not be required to dispose of any securities.

DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Fund qualifies as a
nondiversified fund under the 1940 Act and is subject to the following
diversification requirements:

- - As a fundamental policy, the Fund may not own more than 10% of the outstanding
voting shares of any issuer.

8 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - As a fundamental policy, with respect to 50% of its total assets, the Fund
will not purchase a security of any issuer (other than cash items and U.S.
government securities, as defined in the 1940 Act) if such purchase would
cause the Fund's holdings of that issuer to amount to more than 5% of the
Fund's total assets.

- - The Fund will invest no more than 25% of its total assets in a single issuer
(other than U.S. government securities).

- - The Fund reserves the right to become a diversified company by limiting the
investments in which more than 5% of its total assets are invested.

INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.

ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. 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. An illiquid investment is a
security or other position that cannot be disposed of quickly in the normal
course of business. Some securities cannot be sold to the U.S. public because of
their terms or because of SEC regulations. Janus Capital will follow guidelines
established by the Trustees of the Trust ("Trustees") in making liquidity
determinations for Rule 144A securities and other securities, including
privately placed commercial paper.

BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:

- - The Fund may borrow money for temporary or emergency purposes in amounts up to
25% of its total assets.

- - The Fund may mortgage or pledge securities as security for borrowings in
amounts up to 15% of its net assets.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 9
<PAGE>

- - As a fundamental policy, the Fund may lend securities or other assets if, as a
result, no more than 25% of its total assets would be lent to other parties.

ADDITIONAL RISK FACTORS
INVESTMENTS IN SMALLER COMPANIES
Smaller or newer companies may suffer more significant losses as well as realize
more substantial growth than larger or more established issuers. The Fund may
invest in companies that have relatively small revenues, have a small share of
the market for their products or services, or have limited geographic or product
markets. Smaller or newer companies may lack depth of management, they may be
unable to generate internally funds necessary for growth or potential
development or to generate such funds through external financing on favorable
terms, or they may be developing or marketing new products or services for which
markets are not yet established and may never become established. In addition,
such companies may be insignificant factors in their industries and may become
subject to intense competition from larger companies. Securities of small
companies held by the Fund may have more limited trading markets than the
markets for securities of larger or more established issuers, and may be subject
to wider price fluctuations. Investments in such companies tend to be more
volatile and somewhat more speculative.

- - POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to heightened
political and economic risks, particularly in underdeveloped or developing
countries

10 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

which may have relatively unstable governments and economies based on only a
few industries. In some countries, there is the risk that the government may
take over the assets or operations of a company or that the government may
impose taxes or limits on the removal of the Fund's assets from that country.
The Fund may invest in emerging market countries. Emerging market countries
involve greater risks such as immature economic structures, national policies
restricting investments by foreigners, and different legal systems.

- - TRANSACTION COSTS. Transaction costs of buying and selling foreign securities,
including brokerage, tax and custody costs, are generally higher than those
involved in domestic transactions.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The Fund may enter into futures contracts on securities, financial indices and
foreign currencies and options on such contracts ("futures contracts") and may
invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively "derivative instruments"). The Fund intends to use derivative
instruments primarily to hedge the value of its portfolio against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Fund may also use derivative instruments for
non-hedging purposes such as seeking to increase the Fund's income or otherwise
seeking to enhance return. Please refer to Appendix A to this Prospectus and the
SAI for a more detailed discussion of these instruments.

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

- - the risk that interest rates, securities prices and currency markets will not
move in the direction that the portfolio manager anticipates;

- - 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;

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 11
<PAGE>

- - inability to close out certain hedged positions to avoid adverse tax
consequences;

The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.

Please refer to the SAI for a description of bond rating categories.

12 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

anticipated declines in the market price of portfolio securities. If the value
of the securities sold short increases prior to the scheduled delivery date, the
Fund loses the opportunity to participate in the gain.

See Appendix A for risks associated with certain other investments.

PERFORMANCE TERMS

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 13
<PAGE>

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.

MINIMUM INVESTMENTS*

<TABLE>
<S> <C>
To open a new account.............................. $2,500
To open a new retirement or UGMA/UTMA account...... $ 500
To open a new account with an Automatic Investment
Program.......................................... $ 500**
To add to any type of an account................... $ 100+
</TABLE>

* The Fund reserves the right to change the amount of these minimums from
time to time or to waive them in whole or in part for certain types of
accounts.
** 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.

QUICK ADDRESS AND TELEPHONE REFERENCE

14 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one person.
Joint accounts have two or more owners.

- - 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
if used for a nonqualifying purpose. You should consult your tax advisor or
legal counsel before selecting a tax-deferred account.

Investors Fiduciary Trust Company serves as custodian for the tax-deferred
accounts offered by the Fund. 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 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 Fund reserves the right to change the amount of this
fee or 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 ACCOUNT ("IRAS"): Both types of IRAs
allow most individuals under the age of 70 1/2 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 broker for more complete
information regarding the Education IRA.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 15
<PAGE>

- - 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. Make your
check payable to Janus. The Fund is only available 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

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.

- - Checks must be drawn on a U.S. bank and made payable to Janus.

- - If a check does not clear your bank, the Fund reserves the right to cancel the
purchase.

16 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - If the Fund is unable to debit your predesignated bank account on the day of
purchase, it may make additional attempts or cancel the purchase.

- - The Fund reserves the right to reject any specific purchase request.

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 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.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 17
<PAGE>

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 20.

- - Exchanges between existing accounts must meet the $100 subsequent investment
requirement.

- - Exchanges between accounts will be accepted only if the registrations are
identical.

18 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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.

IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 20.

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).

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.

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.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 19
<PAGE>

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 16 and must include the following
information:

- - the name of the Fund,

- - the account number,

- - 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.

- - 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.

20 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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.

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.

SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS XPRESS LINE(TM)
Janus Xpress Line, our electronic telephone service line, 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

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 21
<PAGE>

statements. Janus Xpress Line is accessed by calling 1-888-979-7737. Calls are
limited to five minutes.

22 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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.

INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Fund.

TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.

STATEMENTS AND REPORTS
Investors participating in an automatic investment program will receive
quarterly confirmations of all transactions. In addition, the Fund will send you
an immediate transaction confirmation statement after every non-systematic
transaction. The Fund distributes dividend information annually.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 23
<PAGE>

MANAGEMENT OF THE FUND

PORTFOLIO MANAGER
JAMES P. GOFF is Executive Vice President and portfolio manager of the Fund,
which he has managed since its inception. Mr. Goff joined Janus Capital in 1988
and managed or co-managed Janus Venture Fund from December 1993 to February
1997. He holds a Bachelor of Arts in Economics from Yale University and is a
Chartered Financial Analyst.

24 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS OF FUND ANNUAL RATE PERCENTAGE (%)
<S> <C>
----------------------------------------------------------------------
First $300 Million.............. 0.75
Next $200 Million............... 0.70
Over $500 Million............... 0.65
----------------------------------------------------------------------
</TABLE>

The management fee schedule above was effective July 1, 1997. The actual
management fee paid by the Fund for the fiscal year ended October 31, 1997, was
0.72% of the value of the Fund's average daily net assets. The Fund incurs
expenses not assumed by Janus Capital, including transfer agent and subcustodian
fees and expenses, legal and auditing fees, printing and mailing costs of
sending reports and other information to existing shareholders, and independent
Trustees' fees and expenses.

OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

TRANSFER AGENT
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 25
<PAGE>

DISTRIBUTOR
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206-4928

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.

SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of the other portfolios of the Trust. As
a shareholder, you are entitled to one vote for each share that you own.

26 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS

TO AVOID TAXATION, THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET
INCOME AND ANY NET GAINS REALIZED ON ITS INVESTMENTS ANNUALLY. THE 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 DECLARED AND PAID IN DECEMBER.

1. REINVESTMENT OPTION. You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned automatically if
no other choice is made.

2. CASH OPTION. You may receive your income dividends and capital gains
distributions in cash.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 27
<PAGE>

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.

28 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

APPENDIX A

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.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 29
<PAGE>

RULE 144A SECURITIES are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

STANDBY COMMITMENTS are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.

30 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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 Fund 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.

JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998 31
<PAGE>

INTEREST RATE SWAPS involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

32 JANUS ENTERPRISE FUND PROSPECTUS FEBRUARY 17, 1998

<PAGE>
[JANUS LOGO]

P.O. Box 173375 o Denver, CO 80217-3375 o 1-800-525-3713
Janus Distributors, Inc. Member NASD. (2/98)

<PAGE>
JANUS FLEXIBLE INCOME FUND
PROSPECTUS

[JANUS LOGO]

<PAGE>

JANUS FLEXIBLE INCOME FUND

100 Fillmore Street
Denver, CO 80206-4928
1-800-525-3713
http://www.Janus.com

FEBRUARY 17, 1998

Janus Flexible Income Fund (the "Fund") is a no-load, diversified mutual fund
that seeks to obtain maximum total return, consistent with preservation of
capital, by investing primarily in income-producing securities.

THE FUND MAY HAVE SUBSTANTIAL HOLDINGS OF HIGH-YIELD CORPORATE DEBT SECURITIES,
COMMONLY KNOWN AS "JUNK BONDS." SEE "ADDITIONAL RISK FACTORS" ON PAGE 12 FOR THE
RISKS ASSOCIATED WITH INVESTING IN THESE SECURITIES.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 16.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

CONTENTS

<TABLE>
<S> <C>
THE FUND AT A GLANCE
Brief description of the Fund................ 2

EXPENSE INFORMATION
The Fund's annual operating expenses......... 3
Financial Highlights - a summary of financial
data....................................... 4

THE FUND IN DETAIL
Investment Objective and Policies............ 7
General Portfolio Policies................... 10
Additional Risk Factors...................... 12

PERFORMANCE TERMS
An Explanation of Performance Terms.......... 15

SHAREHOLDER'S MANUAL
Minimum Investments.......................... 16
Types of Account Ownership................... 17
How to Open Your Janus Account............... 18
How to Purchase Shares....................... 18
How to Exchange Shares....................... 20
How to Redeem Shares......................... 21
Shareholder Services and Account Policies.... 24

MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager..... 27
Personal Investing........................... 28
Management Expenses and Expense Limits....... 28
Portfolio Transactions....................... 28
Other Service Providers...................... 28
Other Information............................ 29

DISTRIBUTIONS AND TAXES
Distributions................................ 31
Taxes........................................ 32

APPENDIX A
Glossary of Investment Terms................. 33

APPENDIX B
Explanation of Rating Categories............. 38
</TABLE>

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 1
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVE:
The investment objective of the Fund is to obtain maximum total return,
consistent with preservation of capital.

PRIMARY HOLDINGS:
A diversified fund that pursues its objective primarily through investments in
income-producing securities.

SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who primarily seek current income
and are willing to accept credit and other risks associated with investments in
high-yield/ high-risk securities.

FUND MANAGER:
Ronald V. Speaker

FUND INCEPTION:
July 1987

2 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

EXPENSE INFORMATION

The tables and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. Shareholder Transaction Expenses are fees charged directly
to your individual account when you buy, sell or exchange shares. The table
below shows that you pay no such fees. Annual Operating Expenses are paid out of
the Fund's assets and include fees for portfolio management, maintenance of
shareholder accounts, shareholder servicing, accounting and other services.

SHAREHOLDER TRANSACTION EXPENSES

* There is an $8 service fee for redemptions by wire.

ANNUAL OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

<TABLE>
<S> <C>
- ------------------------------------------------------------
Management Fee 0.60%
Other Expenses 0.27%
- ------------------------------------------------------------
Total Operating Expenses 0.87%
- ------------------------------------------------------------
</TABLE>

(1)Annual Operating Expenses are based on expenses before expense offset
arrangements for the fiscal year ended October 31, 1997.

EXAMPLE

- --------------------------------------------------------------------------------

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 3
<PAGE>

FINANCIAL HIGHLIGHTS

Unless otherwise noted, the information below is for fiscal periods ending on
October 31st of each year. The accounting firm of Price Waterhouse LLP has
audited the Fund's financial statements beginning with the year ended October
31, 1990. Their report is included in the Fund's Annual Report, which is
incorporated by reference into the SAI.

<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 1992(1)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $9.65 $9.55 $8.96 $10.03 $9.26 $9.09
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.69 0.73 0.72 0.74 0.77 0.68
3. Net gains or (losses) on securities
(both realized and unrealized) 0.37 0.10 0.59 (0.86) 0.79 0.15
- ----------------------------------------------------------------------------------------------------------
4. Total from investment operations 1.06 0.83 1.31 (0.12) 1.56 0.83
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.69) (0.73) (0.72) (0.72) (0.77) (0.66)
6. Distributions (from capital gains) (0.02) -- -- (0.23) (0.02) --
- ----------------------------------------------------------------------------------------------------------
7. Total distributions (0.71) (0.73) (0.72) (0.95) (0.79) (0.66)
- ----------------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $10.00 $9.65 $9.55 $8.96 $10.03 $9.26
- ----------------------------------------------------------------------------------------------------------
9. Total return* 11.48% 9.01% 15.35% (1.26%) 17.48% 9.43%
- ----------------------------------------------------------------------------------------------------------
10. Net assets, end of period (in
millions) $727 $604 $580 $377 $473 $205
11. Average net assets for the period (in
millions) $656 $604 $450 $429 $338 $144
12. Ratio of gross expenses to average
net assets** 0.87% 0.88% 0.96% N/A N/A N/A
13. Ratio of net expenses to average net
assets** 0.86% 0.87% 0.96% 0.93% 1.00%(2) 1.00%(2)
14. Ratio of net investment income to
average net assets** 7.10% 7.60% 7.91% 7.75% 7.96% 8.98%
15. Portfolio turnover rate** 207% 214% 250% 137% 201% 210%
- ----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Fiscal period from January 1, 1992 to October 31, 1992.
(2) The ratio of net expenses to average net assets was 1.01% in 1993 and 1.21%
in 1992 before waiver of certain Fund expenses.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.

4 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

<TABLE>
<CAPTION>
(CONTINUED) 1991(1) 1990(1) 1989(1) 1988(1)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $8.01 $9.35 $9.99 $9.92
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.68 0.95 0.97 0.92
3. Net gains or (losses) on securities (both
realized and unrealized) 1.29 (1.38) (0.56) 0.09
- -----------------------------------------------------------------------------------------------
4. Total from investment operations 1.97 (0.43) 0.41 1.01
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.72) (0.91) (0.97) (0.92)
6. Distributions (from capital gains) (0.17) -- (0.08) (0.02)
- -----------------------------------------------------------------------------------------------
7. Total distributions (0.89) (0.91) (1.05) (0.94)
- -----------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $9.09 $8.01 $9.35 $9.99
- -----------------------------------------------------------------------------------------------
9. Total return* 25.98% (4.62%) 4.12% 10.70%
- -----------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $72 $14 $18 $10
11. Average net assets for the period (in millions) $33 $15 $15 $7
12. Ratio of gross expenses to average net assets** N/A N/A N/A N/A
13. Ratio of net expenses to average net assets** 1.00%(2) 1.00%(2) 1.00%(2) 1.00%(2)
14. Ratio of net investment income to average net
assets** 9.38% 11.24% 10.00% 9.32%
15. Portfolio turnover rate** 88% 96% 75% 76%
- -----------------------------------------------------------------------------------------------
</TABLE>

(1) Fiscal year ended on December 31st of each year.
(2) The ratio of net expenses to average net assets was 1.74% in 1991 before
waivers of certain Fund expenses. The ratio was 2% in prior years.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 5
<PAGE>

UNDERSTANDING
FINANCIAL HIGHLIGHTS

This section is designed to help you better understand the information
summarized in the Financial Highlights tables. The tables contain important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Fund's Annual
Report contains additional information about the Fund's performance, including a
comparison to an appropriate securities index. For a copy of the Annual Report,
call 1-800-525-8983.

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS is the Fund's total net
investment income divided by its average net assets for the stated period.

6 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

THE FUND IN DETAIL

This section takes a closer look at the Fund's investment objective, policies
and the securities in which it invests. Policies that are noted as "fundamental"
cannot be changed without a shareholder vote. All other policies, including the
Fund's investment objective, are not fundamental and may be changed by the
Fund's Trustees without a shareholder vote. You will be notified of any material
changes.

You should also carefully review the "Additional Risk Factors" section of this
Prospectus for a more detailed discussion of the risks associated with certain
investment techniques. Appendix A includes a more detailed description of
investment terms used throughout this Prospectus.

INVESTMENT OBJECTIVE
The investment objective of the Fund is to obtain maximum total return,
consistent with preservation of capital. The Fund pursues its objective
primarily through investments in income-producing securities. Total return is
expected to result from a combination of current income and capital
appreciation, although income will normally be the dominant component of total
return. As a fundamental policy, the Fund will invest at least 80% of its assets
in income-producing securities.

TYPES OF INVESTMENTS
The Fund may invest in a wide variety of income-producing securities including
corporate bonds and notes, government securities, indexed/structured securities,
preferred stock, income-producing common stock, debt securities that are
convertible or exchangeable into equity securities, and debt securities that
carry with them the right to acquire equity securities as evidenced by warrants
attached to or acquired with the securities. The Fund may invest to a lesser
degree in common stocks, other equity securities or debt securities that are not
currently paying dividends or interest. The Fund may purchase securities of any
maturity and quality and the average maturity and quality of its portfolio may
vary substantially.

The Fund may invest without limit in foreign securities, including those of
corporate and government issuers. The Fund may invest without limit in
high-yield/high-risk securities and may have substantial holdings of such
securities. The Fund may invest without limit in mortgage- and asset-backed
securities and in zero coupon, pay-in-kind and step coupon securities. The risks
of foreign securities and high-yield securities are described under "Additional
Risk Factors" on page 12.

The Fund may purchase defaulted debt securities, if in the opinion of Janus
Capital, it appears likely that the issuer may resume interest payments or other
advantageous

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 7
<PAGE>

developments appear likely in the near term. Defaulted debt securities may be
illiquid and subject to the Fund's limit on illiquid investments.

The Fund may also purchase securities on a when-issued, delayed delivery or
forward commitment basis. In addition, the Fund may use futures, options, and
other derivatives for hedging purposes or for non-hedging purposes such as
seeking to enhance return. See "Additional Risk Factors" on page 12.

When the Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate investment opportunities with favorable risk/reward
characteristics, the Fund's investments may be hedged to a greater degree and/or
its cash or similar investments may increase. In other words, the Fund does not
always stay fully invested in stocks and bonds. Cash and similar investments are
a residual - they represent the assets that remain after the portfolio manager
has committed available assets to desirable investment opportunities.

Securities that the Fund may invest in as means of receiving a return on idle
cash include high-grade commercial paper, certificates of deposit, repurchase
agreements or other short-term debt obligations, including money market funds
managed by Janus Capital. When the Fund is hedged or its investments in cash or
similar investments increase, it may not participate in stock or bond market
advances or declines to the same extent that it would if the Fund was not hedged
or remained more fully invested in stocks or bonds.

THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.

Q: WHAT IS MEANT BY
"CREDIT QUALITY"?

A: Credit quality measures the likelihood that the issuer will meet its
obligations on a bond. One of the fundamental risks associated with all
fixed-income funds is credit risk, which is the risk that an issuer will be
unable to make principal and interest payments when due. U.S. government
securities are generally considered to be the safest type of investment in terms
of credit risk. Municipal obligations generally rank between U.S. government
securities and corporate debt securities in terms of credit safety. Corporate
debt securities, particularly those rated below investment grade, present the
highest credit risk.

Q: HOW IS CREDIT
QUALITY MEASURED?

A: Ratings published by nationally recognized statistical rating agencies such
as Standard & Poor's Ratings Services ("Standard & Poor's") and Moody's
Investors Service, Inc. ("Moody's") are widely accepted measures of credit
risk. The lower a bond issue is rated by an agency, the more credit risk it is
considered to represent. Lower rated bonds generally pay higher yields to
compensate investors for the associated risk. Please refer to Appendix B for a
description of rating categories.

8 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

Q: WHAT IS A HIGH-YIELD/
HIGH-RISK SECURITY?

A: A high-yield security (also called a "junk" bond) is rated below investment
grade by major rating agencies (i.e., BB or lower by Standard & Poor's or
Ba or lower by Moody's) or an unrated bond of similar quality. It presents
greater risk of default (the failure to make timely interest and principal
payments) than higher quality bonds.

Q: WHAT RISKS DO HIGH-YIELD/
HIGH-RISK SECURITIES PRESENT?

A: High-yield securities are often considered to be speculative and involve
greater risk of default or price changes due to changes in economic and
industry conditions and the issuer's creditworthiness. Their market prices
tend to fluctuate more than higher quality securities as a result of changes in
these factors.

The default rate of lower quality debt securities is likely to be higher when
issuers have difficulty meeting projected goals or obtaining additional
financing. This could occur during economic recessions or periods of high
interest rates. In addition, there may be a smaller market for lower quality
securities than for higher quality securities, making lower quality securities
more difficult to sell promptly at an acceptable price.

The junk bond market can experience sudden and sharp price swings. Because the
Fund may invest a significant portion of its portfolio in high-yield/high-risk
securities, investors in the Fund should be willing to tolerate a corresponding
increase in the risk of significant and sudden changes in NAV.

Q: HOW DO INTEREST RATES AFFECT
THE VALUE OF MY INVESTMENT?

A: A fundamental risk associated with any fund that invests in fixed-income
securities (e.g., a bond fund) is the risk that the value of the securities
it holds will rise or fall as interest rates change. Generally, a
fixed-income security will increase in value when interest rates fall and
decrease in value when interest rates rise. Longer-term securities are generally
more sensitive to interest rate changes than shorter-term securities, but they
generally offer higher yields to compensate investors for the associated risks.
A bond fund's average-weighted effective maturity and its duration are measures
of how the fund may react to interest rate changes. Prices of high-yield
securities are generally less directly responsive to interest rate changes than
investment grade issues and may not always follow this pattern.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 9
<PAGE>

Q: WHAT IS MEANT BY THE FUND'S
"AVERAGE-WEIGHTED EFFECTIVE MATURITY"?

A: The stated maturity of a bond is the date when the issuer must repay the
bond's entire principal value to an investor, such as the Fund. Some types
of bonds, such as mortgage-backed securities and securities with call
provisions, may also have an "effective maturity" that is shorter than the
stated date. With respect to GNMA securities and other mortgage-backed
securities, effective maturity is likely to be substantially less than the
stated maturities of the mortgages in the underlying pools. With respect to
obligations with call provisions, effective maturity is typically the next call
date on which the obligation reasonably may be expected to be called. Securities
without prepayment or call provisions generally have an effective maturity equal
to their stated maturity. Dollar-weighted effective maturity is calculated by
averaging the effective maturity of bonds held by the Fund with each effective
maturity "weighted" according to the percentage of net assets that it
represents.

Q: WHAT IS MEANT BY
THE FUND'S "DURATION"?

A: A bond's duration indicates the time it will take an investor to recoup his
or her investment. Unlike average maturity, duration reflects both
principal and interest payments. Generally, the higher the coupon rate on a
bond, the lower its duration will be. The duration of a bond fund is calculated
by averaging the duration of bonds held by a fund with each duration "weighted"
according to the percentage of net assets that it represents. Because duration
accounts for interest payments, the Fund's duration is usually shorter than its
average maturity.

Q: HOW DOES THE FUND
MANAGE INTEREST RATE RISK?

A: The Fund may vary the average-weighted maturity of its portfolio to reflect
its portfolio manager's analysis of interest rate trends and other factors.
The Fund's average-weighted maturity will tend to be shorter when its
portfolio manager expects interest rates to rise and longer when its portfolio
manager expects interest rates to fall. The Fund may also use futures, options
and other derivatives to manage interest rate risk. See "Additional Risk
Factors" on page 12.

- - As a fundamental policy, the Fund may not own more than 10% of the outstanding
voting shares of any issuer.

10 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - The Fund will invest no more than 25% of its total assets in a single issuer
(other than U.S. government securities).

INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the initial investment
decision. Changes are made in the Fund's portfolio whenever its portfolio
manager believes such changes are desirable. Portfolio turnover rates are
generally not a factor in making buy and sell decisions.

BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:

- - The Fund may borrow money for temporary or emergency purposes in amounts up to
25% of its total assets.

- - The Fund may mortgage or pledge securities as collateral for borrowings in
amounts up to 15% of its net assets.

- - As a fundamental policy, the Fund may lend securities or other assets if, as a
result, no more than 25% of its total assets would be lent to other parties.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 11
<PAGE>

ADDITIONAL RISK FACTORS
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
and Moody's). Please refer to Appendix B for a description of rating categories.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (for instance, an economic downturn or prolonged period of
rising interest rates), political changes or adverse developments specific to
the issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing, particularly if the
issuer is highly leveraged. In the event of a default, the Fund would experience
a reduction of its income and could expect a decline in the market value of the
defaulted securities.

The market for lower quality securities is generally less liquid than the market
for higher quality securities. Adverse publicity and investor perceptions as
well as new or proposed laws may also have a greater negative impact on the
market for lower quality securities. Unrated debt, while not necessarily of
lower quality than rated securities, may not have as broad a market as rated
securities. Sovereign debt of foreign governments is generally rated by country.
Because these ratings do not take into account individual factors relevant to
each issue and may not be updated regularly, Janus Capital may treat such
securities as unrated debt.

The market prices of high-yield securities structured as zero coupon or
pay-in-kind securities are generally affected to a greater extent by interest
rate changes and tend to be more volatile than securities which pay interest
periodically. In addition, zero coupon, pay-in-kind and delayed interest bonds
often do not pay interest until maturity. However, the Fund must recognize a
computed amount of interest income and pay dividends to shareholders even though
it has received no cash. In some instances, the Fund may have to sell securities
to have sufficient cash to pay dividends.

FOREIGN SECURITIES
Investments in foreign securities, including those of foreign governments, may
involve greater risks than investing in comparable domestic securities.
Securities of some foreign

12 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

companies and governments may be traded in the United States, but most foreign
securities are traded primarily in foreign markets. The risks of foreign
investing include:

- - CURRENCY RISK. The Fund may buy the local currency when it buys a foreign
currency denominated security and sell the local currency when it sells the
security. As long as the Fund holds a foreign denominated security, its value
will be affected by the value of the local currency relative to the U.S.
dollar. When the Fund sells a foreign denominated security, its value may be
worth less in U.S. dollars even though the security increases in value in its
home country. U.S. dollar denominated securities of foreign issuers may also
be affected by currency risk.

- - 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.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 13
<PAGE>

otherwise seeking to enhance return. Please refer to Appendix A to this
Prospectus and the SAI for a more detailed discussion of these instruments.

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

- - the risk that interest rates, securities prices and currency markets will not
move in the directions that the portfolio manager anticipates;

- - 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;

SPECIAL SITUATIONS
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with

14 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

respect to that issuer. Developments creating a special situation might include,
among others, a new product or process, a technological breakthrough, a
management change or other extraordinary corporate event, or differences in
market supply of and demand for the security. Investment in special situations
may carry an additional risk of loss in the event that the anticipated
development does not occur or does not attract the expected attention.

See Appendix A for risks associated with certain other investments.

PERFORMANCE TERMS

YIELD shows the rate of income the Fund earns on its investments as a percentage
of the Fund's share price. It is calculated by dividing the Fund's net
investment income for a 30-day period by the average number of shares entitled
to receive dividends and dividing the result by the Fund's NAV per share at the
end of such period. Yield does not include changes in NAV.

Yields are calculated according to standardized SEC formulas and may not equal
the income on your account. Yield is usually quoted on an annualized basis.
Annualized yield represents the amount you would earn if you remained in the
Fund for a year and the Fund continued to have the same yield for the entire
year.

Effective yield is similar to yield in that it is calculated over the same time
frame, but instead the net investment income is compounded and then annualized.
Due to the compounding effect, the effective yield will normally be higher than
the yield.

CUMULATIVE TOTAL RETURN represents the actual rate of return on an investment
for a specified period. The Financial Highlights table on pages 4-5 shows total
return for a single fiscal period. Cumulative total return is generally quoted
for more than one year (e.g., the life of the Fund). A cumulative total return
does not show interim fluctuations in the value of an investment.

THE FUND IMPOSES NO SALES OR OTHER CHARGES THAT WOULD AFFECT YIELD COMPUTATIONS.
FUND PERFORMANCE FIGURES ARE BASED UPON HISTORICAL RESULTS AND ARE NOT INTENDED
TO INDICATE FUTURE PERFORMANCE. INVESTMENT RETURNS AND NET ASSET VALUE WILL
FLUCTUATE SO THAT YOUR SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 15
<PAGE>

SHAREHOLDER'S MANUAL

MINIMUM INVESTMENTS*

<TABLE>
<S> <C>
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+
</TABLE>

QUICK ADDRESS AND TELEPHONE REFERENCE

FOR OVERNIGHT CARRIER TDD 1-800-525-0056
Janus A telecommunications device for our
Suite 101 hearing- and speech-impaired
3773 Cherry Creek North Drive shareholders.
Denver, CO 80209-3811

JANUS INTERNET ADDRESS JANUS LITERATURE LINE 1-800-525-8983
http://www.Janus.com To request a prospectus, shareholder
reports or marketing materials.

</TABLE>

16 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one person.
Joint accounts have two or more owners.

- - 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 advisor or
legal counsel before selecting a tax-deferred account.

Investors Fiduciary Trust Company serves as custodian for the tax-deferred
accounts offered by the Fund. 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 Fund reserves 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 ("IRAS"): 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.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 17
<PAGE>

- - 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.

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.

- - Checks must be drawn on a U.S. bank and made payable to Janus.

18 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - If a check does not clear your bank, the Fund reserves the right to cancel the
purchase.

- - If the Fund is unable to debit your predesignated bank account on the day of
purchase, it may make additional attempts or cancel the purchase.

- - The Fund reserves the right to reject any specific purchase request.

BY WIRE
Purchases may also be made by wiring money from your bank account to your Janus
account. Call 1-800-525-3713 to receive wiring instructions.

AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help you achieve your
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

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 19
<PAGE>

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.

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 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.

EXCHANGE POLICIES
- - Except for Systematic Exchanges, new accounts 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.

20 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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.

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 simply calling 1-800-525-3713
by the close of the regular trading session of the 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.)

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.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 21
<PAGE>

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.

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 18 and must include the following
information:

- - the name of the Fund,

- - the account number,

- - 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.

- - 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.

22 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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.

If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 23
<PAGE>

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 your account balance, Fund
performance or dividends. You can also make exchanges, purchases, redemptions
and electronic transfers in existing accounts, request literature about the
Fund, or order duplicate statements. Janus Xpress Line is accessed by calling
1-888-979-7737. Calls are limited to five minutes.

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 16 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 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.

TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification, the IRS requires the Fund to withhold 31% of any
dividends paid and redemption or exchange

24 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

proceeds. In addition to the 31% backup withholding, you may be subject to a $50
fee to reimburse the Fund for any penalty that the IRS may impose.

INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Fund.

TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.

STATEMENTS AND REPORTS
Investors participating in an automatic investment program will receive
quarterly confirmations of all transactions and dividends. In addition, the Fund
will send you an immediate transaction confirmation statement after every
non-systematic transaction.

Financial reports for the Fund, which include a list of the Fund's portfolio
holdings, will be mailed semiannually to all shareholders. You will receive an
updated prospectus

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 25
<PAGE>

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.

26 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

MANAGEMENT OF THE FUND

PORTFOLIO MANAGER
RONALD V. SPEAKER is Executive Vice President and portfolio manager of the Fund,
which he has managed or co-managed since December 1991. Mr. Speaker joined Janus
Capital in 1986 and previously managed Janus High-Yield Fund from its inception
to February 1998, and Janus Short-Term Bond Fund and Janus Federal Tax-Exempt
Fund from their inceptions through December 1995. He holds a Bachelor of Arts in
Finance from the University of Colorado and is a Chartered Financial Analyst.

In January 1997, Mr. Speaker settled an SEC administrative action involving two
personal trades made by him in January of 1993. Without admitting or denying the
allegations, Mr. Speaker agreed to civil money penalty, disgorgement, and
interest payments totaling $37,199 and to a 90-day suspension which ended on
April 25, 1997.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 27
<PAGE>

MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Fund pays Janus Capital a management fee equal, on an annual basis, to 0.65%
of the first $300 million in assets and 0.55% of all assets in excess of $300
million. The fee is calculated daily and paid monthly. The advisory agreement
with the Fund spells out the management fee and other expenses that the Fund
must pay. Janus Capital will waive certain fees and expenses to the extent that
the Fund's total expenses exceed 1.00%. Janus Capital may modify or terminate
this waiver at any time upon at least 90 days' notice to the Trustees. You will
be notified of any changes in these limits.

The actual management fee paid by the Fund for the fiscal year ended October 31,
1997, was 0.60% of the value of the Fund's average daily net assets. The Fund
incurs expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses.

PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of the Fund are executed by
broker-dealers selected by Janus Capital. Broker-dealers are selected on the
basis of their ability to obtain best price and execution for the Fund's
transactions and recognizing brokerage, research and other services provided to
the Fund and to Janus Capital. Janus Capital may also consider payments made by
brokers effecting transactions for the Fund (i) to the Fund or (ii) to other
persons on behalf of the Fund for services provided to the Fund for which it
would be obligated to pay. Janus Capital may also consider sales of shares of
the Fund as a factor in the selection of broker-dealers to execute transactions.
The Fund's Trustees have authorized Janus Capital to place portfolio
transactions on an agency basis with a broker-dealer affiliated with Janus
Capital. When transactions for the Fund are effected with that broker-dealer,
the commissions payable by the Fund are credited against certain Fund operating
expenses serving to reduce those expenses. The SAI further explains the
selection of broker-dealers.

OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

28 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

TRANSFER AGENT
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

DISTRIBUTOR
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206-4928

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 29
<PAGE>

30 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS
TO AVOID TAXATION, THE INTERNAL REVENUE CODE REQUIRES THE FUND TO DISTRIBUTE NET
INCOME AND ANY NET CAPITAL GAINS REALIZED ON ITS INVESTMENTS ANNUALLY. THE
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 are declared daily, Saturdays, Sundays and holidays included, and are
generally paid as of the last business day of each month. If a month begins on a
Saturday, Sunday or holiday, dividends for those days are paid at the end of the
preceding month. You will begin accruing income dividends the day after a
purchase is effective. If shares are redeemed, you will receive all dividends
accrued through the day of the redemption. Capital gains, if any, are declared
and paid in December.

HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions, other than daily income dividends, are paid to shareholders as of
the record date of the distribution of the Fund, regardless of how long the
shares have been held. Undistributed income and realized gains awaiting
distribution are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent market
fluctuations. As an example, assume that on December 31, the Fund declared a
dividend in the amount of $0.25 per share. If the Fund's share price was $10.00
on December 30, the Fund's share price on December 31 would be $9.75, barring
market fluctuations. Shareholders should be aware that distributions from a
taxable mutual fund are not value-enhancing and may create income tax
obligations.

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

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 31
<PAGE>

writing the Fund at one of the addresses on page 18 or calling 1-800-525-3713.
The Fund offers the following options:

1. REINVESTMENT OPTION. You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned automatically if
no other choice is made.

2. CASH OPTION. You may receive your income dividends and capital gains
distributions in cash.

3. REINVEST AND CASH OPTION. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.

4. REDIRECT OPTION. You may direct your dividends or capital gains to purchase
shares of another Janus fund.

TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund on foreign
securities may be subject to tax withholding or other foreign taxes. The Fund
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 an election is made, any foreign taxes paid or accrued will
represent an expense to the Fund which will reduce its investment income.

32 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

APPENDIX A

CERTIFICATES OF PARTICIPATION ("COPS") are certificates representing an interest
in a pool of securities. Holders are entitled to a proportionate interest in the
underlying securities. Municipal lease obligations are often sold in the form of
COPs. See "Municipal lease obligations" below.

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.

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

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 33
<PAGE>

by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."

INDUSTRIAL DEVELOPMENT BONDS are revenue bonds that are issued by a public
authority but which may be backed only by the credit and security of a private
issuer and may involve greater credit risk. See "Municipal securities" below.

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.

MUNICIPAL LEASE OBLIGATIONS are revenue bonds backed by leases or installment
purchase contracts for property or equipment. Lease obligations may not be
backed by the issuing municipality's credit and may involve risks not normally
associated with general obligation bonds and other revenue bonds. For example,
their interest may become taxable if the lease is assigned and the holders may
incur losses if the issuer does not appropriate funds for the lease payments on
an annual basis, which may result in termination of the lease and possible
default.

MUNICIPAL SECURITIES are bonds or notes issued by a U.S. state or political
subdivision. A municipal security may be a general obligation backed by the full
faith and credit (i.e., the borrowing and taxing power) of a municipality or a
revenue obligation paid out of the revenues of a designated project, facility or
revenue source.

REPURCHASE AGREEMENTS involve the purchase of a security by the Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the

34 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

security from the Fund at a specified date or upon demand. This technique offers
a method of earning income on idle cash. These securities involve the risk that
the seller will fail to repurchase the security, as agreed. In that case, the
Fund will bear the risk of market value fluctuations until the security can be
sold and may encounter delays and incur costs in liquidating the security.

RULE 144A SECURITIES are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

STANDBY COMMITMENTS are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.

TENDER OPTION BONDS are generally long-term securities that have been coupled
with an option to tender the securities to a bank, broker-dealer or other
financial institution at periodic intervals and receive the face value of the
bond. This type of security is commonly used as a means of enhancing the
liquidity of municipal securities.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 35
<PAGE>

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 Fund may enter into forward currency contracts to hedge
against declines on 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.

INTEREST RATE SWAPS involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

36 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

INVERSE FLOATERS are debt instruments whose interest rate bears an inverse
relationship to the interest rate on another instrument or index. For example,
upon reset the interest rate payable on a security may go down when the
underlying index has risen. Certain inverse floaters may have an interest rate
reset mechanism that multiplies the effects of change in the underlying index.
Such mechanism may increase the volatility of the security's market value.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 37
<PAGE>

APPENDIX B

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>

38 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<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 the
portfolio managers determine that such securities are the equivalent of
investment grade securities. Securities that have received ratings from more
than one agency are considered investment grade if at least one agency has rated
the security investment grade.

JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998 39
<PAGE>

SECURITIES HOLDINGS BY RATING CATEGORY
During the fiscal period ended October 31, 1997, the percentage of securities
holdings for the Fund by rating category based upon a weighted monthly average
was:

<TABLE>
<S> <C>
BONDS - S&P RATING THE FUND
- -------------------------------------------------------------------
AAA 15%
AA 1%
A 11%
BBB 21%
BB 15%
B 22%
CCC 3%
CC 0%
C 0%
Preferred Stock 2%
Cash and Options 10%
- -------------------------------------------------------------------
TOTAL 100%
- -------------------------------------------------------------------
</TABLE>

40 JANUS FLEXIBLE INCOME FUND PROSPECTUS FEBRUARY 17, 1998

<PAGE>
[JANUS LOGO]

P.O. Box 173375 o Denver, CO 80217-3375 o 1-800-525-3713
Janus Distributors, Inc. Member NASD. (2/98)

<PAGE>
JANUS GROWTH AND INCOME FUND
PROSPECTUS

[JANUS LOGO]

<PAGE>

JANUS GROWTH AND INCOME FUND

100 Fillmore Street
Denver, CO 80206-4928
1-800-525-3713
http://www.Janus.com

FEBRUARY 17, 1998

Janus Growth and Income Fund (the "Fund") is a no-load, diversified mutual fund
that seeks long-term growth of capital with a limited emphasis on income.
Although the Fund normally invests at least 25% of its assets in securities that
the portfolio manager believes have income potential, it emphasizes equity
securities selected for their growth potential.

For complete information on how to purchase, exchange and sell shares, please
see the Shareholder's Manual beginning on page 14.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE OR
OTHER JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN
SUCH STATE OR OTHER JURISDICTION.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

CONTENTS

<TABLE>
<S> <C>
THE FUND AT A GLANCE
Brief description of the Fund................ 2
EXPENSE INFORMATION
The Fund's annual operating expenses......... 3
Financial Highlights - a summary of financial
data....................................... 4
THE FUND IN DETAIL
Investment Objective and Policies............ 6
General Portfolio Policies................... 8
Additional Risk Factors...................... 9
PERFORMANCE TERMS
An Explanation of Performance Terms.......... 13
SHAREHOLDER'S MANUAL
Minimum Investments.......................... 14
Types of Account Ownership................... 14
How to Open Your Janus Account............... 16
How to Purchase Shares....................... 16
How to Exchange Shares....................... 18
How to Redeem Shares......................... 19
Shareholder Services and Account Policies.... 21
MANAGEMENT OF THE FUND
Investment Adviser and Portfolio Manager..... 24
Personal Investing........................... 24
Management Expenses.......................... 25
Portfolio Transactions....................... 25
Other Service Providers...................... 25
Other Information............................ 26
DISTRIBUTIONS AND TAXES
Distributions................................ 28
Taxes........................................ 29
APPENDIX A
Glossary of Investment Terms................. 30
</TABLE>

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 1
<PAGE>

THE FUND AT A GLANCE

INVESTMENT OBJECTIVE:
The investment objective of the Fund is long-term capital growth and
current income.

PRIMARY HOLDINGS:
A diversified fund that emphasizes equity securities selected for their growth
potential, although the Fund will normally invest at least 25% of its assets in
securities that the portfolio manager believes have income potential.

SHAREHOLDER'S INVESTMENT HORIZON:
The Fund is designed for long-term investors who seek growth of capital with a
limited emphasis on income. The Fund is not designed for investors who desire a
consistent level of income nor is it a short-term trading vehicle and should not
be relied upon for short-term financial needs.

FUND MANAGER:
David J. Corkins

FUND INCEPTION:
May 1991

2 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

EXPENSE INFORMATION

SHAREHOLDER TRANSACTION EXPENSES

* There is an $8 service fee for redemptions by wire.

ANNUAL OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)

<TABLE>
<S> <C>
- ------------------------------------------------------------
Management Fee 0.67%
Other Expenses 0.30%
- ------------------------------------------------------------
Total Operating Expenses 0.97%
- ------------------------------------------------------------
</TABLE>

EXAMPLE

- --------------------------------------------------------------------------------

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 3
<PAGE>

FINANCIAL HIGHLIGHTS

The information below is for fiscal periods ending on October 31st of each year
and has been audited by the accounting firm of Price Waterhouse LLP. Their
report is included in the Fund's Annual Report, which is incorporated by
reference into the SAI.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF
PERIOD $20.05 $18.13 $14.69 $15.24 $12.95
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.01 0.16 0.11 0.19 0.14
3. Net gains or (losses) on securities
(both realized and unrealized) 6.98 4.01 3.43 (0.31) 2.29
- --------------------------------------------------------------------------------------------
4. Total from investment operations 6.99 4.17 3.54 (0.12) 2.43
- --------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.11) (0.08) (0.10) (0.10) (0.14)
6. Distributions (from capital gains) (1.86) (2.17) -- (0.33) --
- --------------------------------------------------------------------------------------------
7. Total distributions (1.97) (2.25) (0.10) (0.43) (0.14)
- --------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $25.07 $20.05 $18.13 $14.69 $15.24
- --------------------------------------------------------------------------------------------
9. Total return* 37.78% 25.56% 24.20% (0.76%) 18.81%
- --------------------------------------------------------------------------------------------
10. Net assets, end of period (in
millions) $1,889 $1,033 $583 $490 $519
11. Average net assets for the period
(in millions) $1,416 $773 $498 $500 $404
12. Ratio of gross expenses to average
net assets** 0.98% 1.05% 1.19% N/A N/A
13. Ratio of net expenses to average
net assets** 0.96% 1.03% 1.17% 1.22% 1.28%
14. Ratio of net investment income to
average net assets** 0.30% 0.70% 1.11% 1.26% 1.13%
15. Portfolio turnover rate** 127% 153% 195% 123% 138%
16. Average commission rate $.0588 $.0520 N/A N/A N/A
- --------------------------------------------------------------------------------------------

<CAPTION>
1992 1991(1)
<S> <C> <C>
- -----------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF
PERIOD $12.13 $10.00
- -----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.17 0.02
3. Net gains or (losses) on securities
(both realized and unrealized) 0.80 2.13
- -----------------------------------------------------------
4. Total from investment operations 0.97 2.15
- -----------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.15) (0.02)
6. Distributions (from capital gains) -- --
- -----------------------------------------------------------
7. Total distributions (0.15) (0.02)
- -----------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $12.95 $12.13
- -----------------------------------------------------------
9. Total return* 7.98% 21.50%
- -----------------------------------------------------------
10. Net assets, end of period (in
millions) $244 $56
11. Average net assets for the period
(in millions) $157 $21
12. Ratio of gross expenses to average
net assets** N/A N/A
13. Ratio of net expenses to average
net assets** 1.52% 2.33%
14. Ratio of net investment income to
average net assets** 1.61% 0.76%
15. Portfolio turnover rate** 120% 14%
16. Average commission rate N/A N/A
- -----------------------------------------------------------
</TABLE>

(1) Fiscal period from May 15, 1991 (inception) to October 31, 1991.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.

4 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

UNDERSTANDING THE
FINANCIAL HIGHLIGHTS

NET GAINS (OR LOSSES) ON SECURITIES is the per share increase or decrease in
value of the securities the Fund holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. DISTRIBUTIONS (FROM CAPITAL GAINS) are the
per share amount that the Fund paid from net realized gains.

RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS is the total of the Fund's
operating expenses before expense offset arrangements divided by its average net
assets for the stated period. The Fund was not required to disclose the ratio of
gross expenses to average net assets prior to 1995. RATIO OF NET EXPENSES TO
AVERAGE NET ASSETS does not reflect reductions in expenses through the use of
brokerage commissions and uninvested cash balances earning interest or balance
credits.

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS is the Fund's total net
investment income divided by its average net assets for the stated period.

AVERAGE COMMISSION RATE is the total of the Fund's agency commissions paid on
equity securities trades divided by the number of shares purchased and sold.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 5
<PAGE>

THE FUND IN DETAIL

INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital growth and current
income. It is a diversified fund that, under normal circumstances, pursues its
objective by investing up to 75% of its assets in equity securities selected
primarily for their growth potential and at least 25% of its assets in
securities that the portfolio manager believes have income potential. The Fund
normally emphasizes the growth component. However, in unusual circumstances, the
Fund may reduce the growth component of its portfolio to 25% of its assets.

TYPES OF INVESTMENTS
The Fund may invest in any combination of common stock, preferred stock,
warrants, convertible securities, debt securities, and other fixed-income
securities. However, it is expected that the Fund will emphasize investments in
common stocks. The Fund may invest up to 25% of its assets in mortgage- and
asset-backed securities, up to 10% of its assets in zero coupon, pay-in-kind and
step coupon securities, and without limit in indexed/structured securities. The
Fund will invest less than 35% of its assets in high-yield/high-risk securities.
The Fund may also purchase high-grade commercial paper, certificates of deposit,
and repurchase agreements. As further discussed below, such securities may be
selected for their growth potential or income potential. The Fund may also
invest in short-term debt securities, including money market funds managed by
Janus Capital, as a means of receiving a return on idle cash.

6 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

opportunities. When the Fund's cash position increases, it may not participate
in market advances or declines to the extent that it would if it remained more
fully invested in common stocks or bonds.

The Fund may invest without limit in foreign equity and debt securities. The
Fund 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. The Fund may use options, futures and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to enhance return.
See "Additional Risk Factors" on page 9. The Fund may purchase securities on a
when-issued, delayed delivery or forward commitment basis.

THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE FUND.

Q: HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENT OF THE
FUND'S PORTFOLIO?

A: The Fund may shift assets between the growth and income components of its
portfolio based on the portfolio manager's analysis of relevant market,
financial and economic conditions. If the portfolio manager believes that
growth securities will provide better returns than the yields then available or
expected on income-producing securities, the Fund will place a greater emphasis
on the growth component.

Q: WHAT TYPE OF SECURITIES MAKE UP THE GROWTH COMPONENT OF THE FUND?

A: The Fund places a stronger emphasis on the growth component and normally
invests up to 75% of its assets in such securities. The growth component of the
Fund is expected to consist primarily of common stocks. The portfolio manager
will invest in common stocks to the extent he believes that the relevant market
environment favors profitable investing in those securities. The portfolio
manager generally takes a "bottom up" approach to building the portfolio. In
other words, he seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. Although themes
may emerge in the Fund, securities are generally selected without regard to any
defined industry sector or other similarly defined selection procedure.

Q: WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF THE FUND?

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 7
<PAGE>

portfolio manager believes they have the potential for either increasing their
dividends or commencing dividends, if none are currently paid. You should keep
in mind that the Fund is not designed to produce a consistent level of income.

Q: ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

A: Generally, yes. The portfolio manager seeks companies that meet his
selection criteria, regardless of country of organization or place of principal
business activity. Foreign securities are generally selected on a
company-by-company basis without regard to any defined allocation among
countries or geographic regions. However, certain factors such as expected
levels of inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth among
countries, regions or geographic areas may warrant greater consideration in
selecting foreign securities. See "Additional Risk Factors" on page 9.

Q: HOW DOES THE FUND TRY TO REDUCE RISK?

A: Diversification of the Fund's assets reduces the effect of any single
holding on its overall portfolio value. The Fund may use futures, options and
other derivative instruments to protect the portfolio from movements in
securities prices and interest rates. The Fund may also use a variety of
currency hedging techniques, including forward currency contracts, to manage
exchange rate risk. See "Additional Risk Factors" on page 9.

- - As a fundamental policy, the Fund may not own more than 10% of the outstanding
voting shares of any issuer.

- - The Fund will invest no more than 25% of its total assets in a single issuer
(other than U.S. government securities).

INDUSTRY CONCENTRATION
As a fundamental policy, the Fund will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

8 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective, changes
in interest rates or the credit standing of an issuer, or by reason of economic
or other developments not foreseen at the time of the investment decision.
Changes are made in the Fund's portfolio whenever its portfolio manager believes
such changes are desirable. Portfolio turnover rates are generally not a factor
in making buy and sell decisions.

BORROWING AND LENDING
The Fund may borrow money and lend securities or other assets, as follows:

- - The Fund may borrow money for temporary or emergency purposes in amounts up to
25% of its total assets.

- - The Fund may mortgage or pledge securities as collateral for borrowings in
amounts up to 15% of its net assets.

- - As a fundamental policy, the Fund may lend securities or other assets if, as a
result, no more than 25% of its total assets would be lent to other parties.

ADDITIONAL RISK FACTORS

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 9
<PAGE>

respect to that issuer. Developments creating a special situation might include,
among others, significant changes in a company's allocation of its existing
capital, a restructuring of assets, a new product or process, a technological
breakthrough, a management change or other extraordinary corporate event, or
differences in market supply of and demand for the security. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention.

- - 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.

10 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

The use of derivative instruments exposes the Fund to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

- - the risk that interest rates, securities prices and currency markets will not
move in the directions that the portfolio manager anticipates;

- - 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;

When the Fund invests in a derivative instrument, it may be required to
segregate cash and other high-grade liquid assets or certain portfolio
securities with its custodian to "cover" the Fund's position. Assets segregated
or set aside generally may not be disposed of so long as the Fund maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Fund's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 11
<PAGE>

Please refer to the SAI for a description of bond rating categories.

See Appendix A for risks associated with certain other investments.

12 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

PERFORMANCE TERMS

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 13
<PAGE>

SHAREHOLDER'S MANUAL

MINIMUM INVESTMENTS*

* 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.

QUICK ADDRESS AND TELEPHONE REFERENCE

- - INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one person.
Joint accounts have two or more owners.

14 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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
if used for a nonqualifying purpose. You should consult your tax advisor or
legal counsel before selecting a tax-deferred account.

Investors Fiduciary Trust Company serves as custodian for the tax-deferred
accounts offered by the Fund. 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 Fund reserves the right to change the
amount of this fee or 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.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 15
<PAGE>

- - 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 Fund is only available to U.S. citizens or
residents and your application will be returned to you if you don't 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

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.

- - Checks must be drawn on a U.S. bank and made payable to Janus.

- - If a check does not clear your bank, the Fund reserves the right to cancel the
purchase.

16 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - If the Fund is unable to debit your predesignated bank account on the day of
purchase, it may make additional attempts or cancel the purchase.

- - The Fund reserves the right to reject any specific purchase request.

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.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 17
<PAGE>

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 20.

- - Exchanges between existing accounts must meet the $100 subsequent investment
requirement.

- - You may make four exchanges out of the 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.

- - Exchanges between accounts will be accepted only if the registrations
are identical.

18 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

- - 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.

IN WRITING
To request a redemption in writing, please follow the instructions for written
requests noted on page 20.

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).

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.

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.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 19
<PAGE>

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 16 and must include the following
information:

- - the name of the Fund,

- - the account number,

- - 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.

- - 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.

- - 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.

20 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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.

If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 21
<PAGE>

statements. Janus Xpress Line is accessed by calling 1-888-979-7737. Calls are
limited to five minutes.

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 14 or to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if your account
balance does not reach the required minimum initial investment or falls below
such minimum and you have discontinued monthly investments. This policy does not
apply to accounts that fall below the minimums solely as a result of market
value fluctuations. It is expected that accounts will be valued 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.

22 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

INVOLUNTARY REDEMPTION
The Fund reserves the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Fund.

TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily suspend telephone
transactions and other shareholder services.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 23
<PAGE>

MANAGEMENT OF THE FUND

PORTFOLIO MANAGER
DAVID J. CORKINS is Executive Vice President and portfolio manager of the Fund,
which he has managed since August 1997. He previously served as an assistant
portfolio manager of Janus Mercury Fund. He joined Janus in 1995 as a research
analyst specializing in domestic financial services companies and a variety of
foreign industries. Prior to joining Janus he was the Chief Financial Officer of
Chase U.S. Consumer Services, Inc., a Chase Manhattan mortgage business. He
holds a Bachelor of Arts in English and Russian from Dartmouth and received his
Master of Business Administration from Columbia University in 1993.

24 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

personnel to conduct their personal investment activities in a manner that Janus
Capital believes is not detrimental to the Fund or Janus Capital's other
advisory clients. See the SAI for more detailed information.

The management fee schedule above was effective July 1, 1997. The actual
management fee paid by the Fund for the fiscal year ended October 31, 1997, was
0.68% of the value of the Fund's average daily net assets. The Fund incurs
expenses not assumed by Janus Capital, including transfer agent and custodian
fees and expenses, legal and auditing fees, printing and mailing costs of
sending reports and other information to existing shareholders, and independent
Trustees' fees and expenses.

OTHER SERVICE PROVIDERS
The following parties provide the Fund with administrative and other services.

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 25
<PAGE>

TRANSFER AGENT
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

DISTRIBUTOR
Janus Distributors, Inc.
100 Fillmore Street
Denver, Colorado 80206-4928

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.

SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called specifically for the Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by the Fund only
if a matter affects or requires the vote of just the Fund or the Fund's interest
in the matter differs from the interest of the other portfolios of the Trust. As
a shareholder, you are entitled to one vote for each share that you own.

26 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 27
<PAGE>

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS

1. REINVESTMENT OPTION. You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned automatically if
no other choice is made.

2. CASH OPTION. You may receive your income dividends and capital gains
distributions in cash.

3. REINVEST AND CASH OPTION. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.

28 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

4. REDIRECT OPTION. You may direct your dividends or capital gains to purchase
shares of another Janus fund.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 29
<PAGE>

APPENDIX A

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.

30 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

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
Fund must pay if these investments are profitable, the Fund may make various
electives permitted by the tax laws. These elections could require that the Fund
recognize taxable income, which in turn must be distributed, before the
securities are sold and before cash is received to pay the distributions.

RULE 144A SECURITIES are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

STANDBY COMMITMENTS are obligations purchased by the Fund from a dealer that
give the Fund the option to sell a security to the dealer at a specified price.

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 31
<PAGE>

32 JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998
<PAGE>

INTEREST RATE SWAPS involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

JANUS GROWTH AND INCOME FUND PROSPECTUS FEBRUARY 17, 1998 33

<PAGE>
[JANUS LOGO]

P.O. Box 173375 o Denver, CO 80217-3375 o 1-800-525-3713
Janus Distributors, Inc. Member NASD. (2/98)