<PAGE>
JANUS INVESTMENT FUND
JANUS EQUITY FUNDS
100 Fillmore Street
Denver, CO 80206-4928
(800) 525-3713
http://www.Janus.com
FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL 17, 1998
This Prospectus describes ten mutual funds that emphasize growth of capital or a
combination of growth and income (the "Funds"). Janus Capital Corporation
("Janus Capital") serves as investment adviser to each Fund. Janus Capital has
been in the investment advisory business for over 27 years and currently manages
approximately $80 billion in assets.
Each Fund is a series of Janus Investment Fund (the "Trust"). The Trust is
registered with the Securities and Exchange Commission ("SEC") as an open-end
management investment company. This Prospectus contains information about the
Funds that you should consider before investing. Please read it carefully and
keep it for future reference.
Additional information about the Funds 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 Funds 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 Funds.
THE FUNDS' 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 EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998
<PAGE>
CONTENTS
<TABLE>
<S> <C>
FUNDS AT A GLANCE
Brief description of each Fund............... 2
EXPENSE INFORMATION
Each Fund's annual operating expenses........ 6
Financial Highlights - a summary of financial
data....................................... 7
THE FUNDS IN DETAIL
Investment Objectives and Policies........... 15
General Portfolio Policies................... 22
Additional Risk Factors...................... 24
SHAREHOLDER'S MANUAL
Minimum Investments.......................... 28
Types of Account Ownership................... 28
How to Open Your Janus Account............... 30
How to Purchase Shares....................... 30
How to Exchange Shares....................... 32
How to Redeem Shares......................... 33
Shareholder Services and Account Policies.... 35
MANAGEMENT OF THE FUNDS
Investment Adviser and Investment
Personnel................................. 38
Personal Investing........................... 40
Management Expenses.......................... 40
Portfolio Transactions....................... 41
Other Service Providers...................... 41
Other Information............................ 41
DISTRIBUTIONS AND TAXES
Distributions................................ 43
Taxes........................................ 44
PERFORMANCE TERMS
An Explanation of Performance Terms.......... 45
APPENDIX A
Glossary of Investment Terms................. 46
</TABLE>
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 1
<PAGE>
FUNDS AT A GLANCE
This section is designed to provide you with a brief overview of the Funds and
their investment emphasis. A more detailed discussion of the Funds' investment
objectives and policies begins on page 15.
All Janus funds are no-load investments. This means you may purchase and sell
shares in any of our mutual funds without incurring any sales charges. If you
enroll in our low minimum initial investment program, you can open your account
for as little as $500 and a $100 subsequent purchase per month. Otherwise, the
minimum initial investment is $2,500 ($500 minimum for Individual Retirement
Accounts). For complete information on how to purchase, exchange and sell
shares, please see the Shareholder's Manual beginning on page 28.
GROWTH FUNDS
THE JANUS GROWTH FUNDS ARE DESIGNED FOR LONG-TERM INVESTORS WHO SEEK GROWTH OF
CAPITAL AND WHO CAN TOLERATE THE GREATER RISKS ASSOCIATED WITH COMMON STOCK
INVESTMENTS.
DOMESTIC GROWTH FUNDS
JANUS FUND
Fund Focus: A diversified fund that seeks long-term growth of capital by
investing primarily in common stocks, with an emphasis on companies with larger
market capitalizations.
Fund Inception: February 1970
Fund Manager: James P. Craig, III
Assistant Fund Managers: David C. Decker
Blaine P. Rollins
JANUS ENTERPRISE FUND
Fund Focus: A nondiversified fund that seeks long-term growth of capital by
investing primarily in common stocks, with an emphasis on securities issued by
medium-sized companies.
Fund Inception: September 1992
Fund Manager: James P. Goff
JANUS MERCURY FUND
Fund Focus: A diversified fund that seeks long-term growth of capital by
investing primarily in common stocks of companies of any size.
Fund Inception: May 1993
Fund Manager: Warren B. Lammert
2 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
JANUS OLYMPUS FUND
Fund Focus: A nondiversified fund that seeks long-term growth of capital by
investing primarily in common stocks of issuers of any size.
Fund Inception: December 1995
Fund Manager: Claire Young
JANUS SPECIAL SITUATIONS FUND
Fund Focus: A nondiversified fund that seeks capital appreciation by investing
primarily in common stocks that its portfolio manager believes have been
overlooked or undervalued by other investors.
Fund Inception: December 1996
Fund Manager: David C. Decker
JANUS TWENTY FUND
Fund Focus: A nondiversified fund that seeks long-term growth of capital by
normally concentrating its investments in a core position of 20-30 common
stocks.
Fund Inception: April 1985
Fund Manager: Scott W. Schoelzel
GLOBAL GROWTH FUND
JANUS WORLDWIDE FUND
Fund Focus: A diversified fund that seeks long-term growth of capital by
investing primarily in common stocks of foreign and domestic issuers.
Fund Inception: May 1991
Fund Manager: Helen Young Hayes
Assistant Fund Manager: Laurence J. Chang
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 3
<PAGE>
COMBINATION FUNDS
THE JANUS COMBINATION FUNDS ARE DESIGNED FOR INVESTORS WHO PRIMARILY SEEK GROWTH
OF CAPITAL WITH VARYING DEGREE OF EMPHASIS ON INCOME. THESE FUNDS ARE NOT
DESIGNED FOR INVESTORS WHO DESIRE A CONSISTENT LEVEL OF INCOME.
JANUS BALANCED FUND
Fund Focus: A diversified fund that seeks long-term growth of capital, balanced
by current income. The Fund normally invests 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.
Fund Inception: September 1992
Fund Manager: Blaine P. Rollins
JANUS EQUITY INCOME FUND
Fund Focus: A diversified fund that seeks current income and long-term growth of
capital by investing primarily in income-producing equity securities.
Fund Inception: June 1996
Fund Manager: Blaine P. Rollins
JANUS GROWTH AND INCOME FUND
Fund Focus: A diversified 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.
Fund Inception: May 1991
Fund Manager: David J. Corkins
4 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 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 Funds. Shareholder Transaction Expenses are fees charged
directly to your individual account when you buy, sell or exchange shares. The
table below shows that you pay no such fees. Annual Fund Operating Expenses are
paid out of each Fund's assets and include fees for portfolio management,
maintenance of shareholder accounts, shareholder servicing, accounting and other
services. Expenses may vary among the Funds for a number of reasons, including
Fund size, differences in management fees, average shareholder account size, the
frequency of dividend payments, and the extent of foreign investments which
entail greater transaction costs.
SHAREHOLDER TRANSACTION EXPENSES
(applicable to each Fund)
<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.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 5
<PAGE>
ANNUAL OPERATING EXPENSES(1)
(expressed as a percentage of average net assets)
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL FUND
FEE EXPENSES OPERATING EXPENSES
- - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Janus Fund 0.65% 0.22% 0.87%
Janus Enterprise Fund 0.72% 0.35% 1.07%
Janus Mercury Fund 0.67% 0.31% 0.98%
Janus Olympus Fund 0.71% 0.33% 1.04%
Janus Special Situations Fund 0.74% 0.43%(2) 1.17%
Janus Twenty Fund 0.66% 0.27% 0.93%
Janus Worldwide Fund 0.65% 0.31% 0.96%
Janus Balanced Fund 0.74% 0.36% 1.10%
Janus Equity Income Fund 0.75% 0.62% 1.37%
Janus Growth and Income Fund 0.67% 0.30% 0.97%
</TABLE>
- - --------------------------------------------------------------------------------
(1) Management Fees reflect a reduced fee schedule effective July 1, 1997. The
management fee for each Fund reflects the new rate applied to net assets as
of October 31, 1997. Other expenses are based on expenses before expense
offset arrangements for the fiscal year or period ended October 31, 1997.
(2) Based on expenses incurred during the initial fiscal period.
EXAMPLE
Assume you invest $1,000, the Funds return 5% annually and each Fund's expense
ratio remains as listed above. The example below shows the operating expenses
that you would indirectly bear as an investor in the Funds.
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Janus Fund $ 9 $28 $48 $107
Janus Enterprise Fund $11 $34 $59 $131
Janus Mercury Fund $10 $31 $54 $120
Janus Olympus Fund $11 $33 $57 $127
Janus Special Situations Fund $12 $37 $64 $142
Janus Twenty Fund $ 9 $30 $51 $114
Janus Worldwide Fund $10 $31 $53 $118
Janus Balanced Fund $11 $35 $61 $134
Janus Equity Income Fund $14 $43 $75 $165
Janus Growth and Income Fund $10 $31 $54 $119
</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.
6 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<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 Funds' financial statements beginning with the year ended October
31, 1990. Their report is included in the Funds' Annual Reports, which are
incorporated by reference into the SAI. A DETAILED EXPLANATION OF THE FINANCIAL
HIGHLIGHTS CAN BE FOUND ON PAGE 14.
<TABLE>
<CAPTION>
JANUS FUND
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $26.65 $23.37 $19.62 $20.81 $18.86
- - ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.15 0.31 0.16 0.17 0.26
3. Net gains or (losses) on securities (both
realized and unrealized) 5.69 4.23 3.99 (0.03) 2.88
- - ----------------------------------------------------------------------------------------------
4. Total from investment operations 5.84 4.54 4.15 0.14 3.14
- - ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.21) (0.13) (0.01) (0.39) (0.29)
6. Distributions (from capital gains) (2.92) (1.13) (0.39) (0.94) (0.90)
- - ----------------------------------------------------------------------------------------------
7. Total distributions (3.13) (1.26) (0.40) (1.33) (1.19)
- - ----------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $29.36 $26.65 $23.37 $19.62 $20.81
- - ----------------------------------------------------------------------------------------------
9. Total return 24.18% 20.31% 21.62% 0.75% 17.41%
- - ----------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $19,029 $15,313 $11,963 $9,647 $9,098
11. Average net assets for the period (in
millions) $17,515 $13,753 $10,560 $9,339 $7,336
12. Ratio of gross expenses to average net
assets 0.87% 0.86% 0.87% N/A N/A
13. Ratio of net expenses to average net assets 0.86% 0.85% 0.86% 0.91% 0.92%
14. Ratio of net investment income to average
net assets 0.85% 0.91% 1.25% 1.12% 1.55%
15. Portfolio turnover rate 132% 104% 118% 139% 127%
16. Average commission rate $.0500 $.0558 N/A N/A N/A
- - ----------------------------------------------------------------------------------------------
</TABLE>
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 7
<PAGE>
<TABLE>
<CAPTION>
JANUS FUND
(CONTINUED) 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $18.27 $13.25 $16.36 $12.11 $12.39
- - -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.23 0.25 0.25 0.22 0.60
3. Net gains or (losses) on securities (both
realized and unrealized) 1.46 5.09 (0.67) 4.59 1.05
- - -------------------------------------------------------------------------------------------
4. Total from investment operations 1.69 5.34 (0.42) 4.81 1.65
- - -------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.19) (0.31) (0.19) (0.56) (0.32)
6. Distributions (from capital gains) (0.91) (0.01) (2.50) -- (1.61)
- - -------------------------------------------------------------------------------------------
7. Total distributions (1.10) (0.32) (2.69) (0.56) (1.93)
- - -------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $18.86 $18.27 $13.25 $16.36 $12.11
- - -------------------------------------------------------------------------------------------
9. Total return 9.35% 40.95% (3.68%) 41.67% 15.83%
- - -------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $4,989 $2,598 $1,049 $673 $391
11. Average net assets for the period (in
millions) $3,871 $1,785 $930 $487 $382
12. Ratio of gross expenses to average net
assets N/A N/A N/A N/A N/A
13. Ratio of net expenses to average net assets 0.97% 0.98% 1.02% 0.92% 0.98%
14. Ratio of net investment income to average
net assets 1.54% 1.77% 2.11% 1.68% 4.99%
15. Portfolio turnover rate 153% 132% 307% 205% 175%
16. Average commission rate N/A N/A N/A N/A N/A
- - -------------------------------------------------------------------------------------------
</TABLE>
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS ENTERPRISE FUND
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>
(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.
8 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
<TABLE>
<CAPTION>
JANUS MERCURY FUND
1997 1996 1995 1994 1993(1)
<S> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $18.20 $17.38 $14.12 $11.70 $10.00
- - ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (0.01) 0.14 0.16 0.02 (0.01)
3. Net gains or (losses) on securities
(both realized and unrealized) 2.82 2.74 3.37 2.40 1.71
- - ----------------------------------------------------------------------------------------------
4. Total from investment operations 2.81 2.88 3.53 2.42 1.70
- - ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.08) -- (0.16) -- --
6. Distributions (from capital gains) (2.28) (2.06) (0.11) -- --
- - ----------------------------------------------------------------------------------------------
7. Total distributions (2.36) (2.06) (0.27) -- --
- - ----------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $18.65 $18.20 $17.38 $14.12 $11.70
- - ----------------------------------------------------------------------------------------------
9. Total return* 17.07% 18.18% 25.53% 20.68% 17.00%
- - ----------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $1,971 $2,002 $1,521 $596 $113
11. Average net assets for the period (in
millions) $2,046 $1,839 $1,116 $258 $67
12. Ratio of gross expenses to average net
assets** 0.98% 1.02% 1.14% N/A N/A
13. Ratio of net expenses to average net
assets** 0.96% 1.00% 1.12% 1.33% 1.75%
14. Ratio of net investment income/(loss) to
average net assets** 0.21% 0.45% 0.50% 0.25% (0.40%)
15. Portfolio turnover rate** 157% 177% 201% 283% 151%
16. Average commission rate $.0441 $.0383 N/A N/A N/A
- - ----------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from May 3, 1993 (inception) to October 31, 1993.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS OLYMPUS FUND
1997 1996(1)
<S> <C> <C>
- - ------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $14.86 $12.00
- - ------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (loss) 0.04 0.13
3. Net gains or (losses) on securities (both realized and
unrealized) 3.64 2.73
- - ------------------------------------------------------------------------------------
4. Total from investment operations 3.68 2.86
- - ------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.13) --
6. Distributions (from capital gains) -- --
- - ------------------------------------------------------------------------------------
7. Total distributions (0.13) --
- - ------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $18.41 $14.86
- - ------------------------------------------------------------------------------------
9. Total return* 24.98% 23.83%
- - ------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $616 $432
11. Average net assets for the period (in millions) $517 $276
12. Ratio of gross expenses to average net assets** 1.06% 1.17%
13. Ratio of net expenses to average net assets** 1.03% 1.15%
14. Ratio of net investment income/(loss) to average net
assets** 0.26% 1.64%
15. Portfolio turnover rate** 244% 303%
16. Average commission rate $.0496 $.0336
- - ------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from December 29, 1995 (inception) to October 31, 1996.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 9
<PAGE>
<TABLE>
<CAPTION>
JANUS SPECIAL SITUATIONS FUND
1997(1)
<S> <C>
- - ----------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- - ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income --
3. Net gains or (losses) on securities (both realized
and unrealized) 4.08
- - ----------------------------------------------------------------------------------------
4. Total from investment operations 4.08
- - ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) --
6. Distributions (from capital gains) --
- - ----------------------------------------------------------------------------------------
7. Total distributions --
- - ----------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $14.08
- - ----------------------------------------------------------------------------------------
9. Total return* 40.80%
- - ----------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $334
11. Average net assets for the period (in millions) $168
12. Ratio of gross expenses to average net assets** 1.20%
13. Ratio of net expenses to average net assets** 1.18%
14. Ratio of net investment income to average net
assets** (0.08%)
15. Portfolio turnover rate** 146%
16. Average commission rate $.0417
- - ----------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from December 31, 1996 (inception) to October 31, 1997.
* Total return is not annualized.
** Annualized.
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS TWENTY FUND
1997 1996 1995 1994 1993 1992(1)
<S> <C> <C> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $31.90 $30.12 $24.24 $25.85 $22.75 $22.17
- - -------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (0.09) 0.37 0.01 0.16 0.17 0.09
3. Net gains or (losses) on securities
(both realized and unrealized) 8.85 6.68 5.94 (1.07) 3.31 0.49
- - -------------------------------------------------------------------------------------------------
4. Total from investment operations 8.76 7.05 5.95 (0.91) 3.48 0.58
- - -------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.18) -- (0.07) (0.25) (0.18) --
6. Distributions (from capital gains) (5.32) (5.27) -- (0.45) (0.20) --
- - -------------------------------------------------------------------------------------------------
7. Total distributions (5.50) (5.27) (0.07) (0.70) (0.38) --
- - -------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $35.16 $31.90 $30.12 $24.24 $25.85 $22.75
- - -------------------------------------------------------------------------------------------------
9. Total return* 31.65% 27.59% 24.67% (3.52%) 15.39% 2.62%
- - -------------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $5,871 $3,937 $2,996 $2,743 $3,749 $2,434
11. Average net assets for the period (in
millions) $4,990 $3,386 $2,716 $3,051 $3,546 $2,221
12. Ratio of gross expenses to average net
assets** 0.93% 0.93% 1.00% N/A N/A N/A
13. Ratio of net expenses to average net
assets** 0.91% 0.92% 0.99% 1.02% 1.05% 1.12%
14. Ratio of net investment income to
average net assets** 0.33% 0.67% 0.62% 0.57% 0.87% 1.27%
15. Portfolio turnover rate** 123% 137% 147% 102% 99% 79%
16. Average commission rate $.0567 $.0571 N/A N/A N/A N/A
- - -------------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from June 1, 1992 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.
10 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
<TABLE>
<CAPTION>
JANUS TWENTY FUND
(CONTINUED) 1992(1) 1991(1) 1990(1) 1989(1) 1988(1)
<S> <C> <C> <C> <C> <C>
- - --------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $18.88 $16.01 $13.05 $9.66 $13.69
- - --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.11 0.16 0.05 0.46 0.42
3. Net gains or (losses) on securities (both
realized and unrealized) 3.62 2.90 3.35 3.73 (2.86)
- - --------------------------------------------------------------------------------------------------
4. Total from investment operations 3.73 3.06 3.40 4.19 (2.44)
- - --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.02) (0.19) (0.02) (0.80) (0.41)
6. Distributions (from capital gains) (0.42) -- (0.42) -- (1.18)
- - --------------------------------------------------------------------------------------------------
7. Total distributions (0.44) (0.19) (0.44) (0.80) (1.59)
- - --------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $22.17 $18.88 $16.01 $13.05 $9.66
- - --------------------------------------------------------------------------------------------------
9. Total return* 19.60% 19.43% 26.36% 45.89% (17.13%)
- - --------------------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $2,081 $556 $175 $20 $13
11. Average net assets for the period (in
millions) $1,188 $294 $64 $10 $16
12. Ratio of gross expenses to average net
assets** N/A N/A N/A N/A N/A
13. Ratio of net expenses to average net assets** 1.01% 1.07% 1.32% 1.88% 1.70%
14. Ratio of net investment income to average net
assets** 1.08% 1.30% 1.28% 0.68% 3.35%
15. Portfolio turnover rate** 83% 163% 228% 220% 317%
16. Average commission rate N/A N/A N/A N/A N/A
- - --------------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal year ended on May 31st of each year.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JANUS WORLDWIDE FUND
1997 1996 1995 1994 1993 1992 1991(1)
<S> <C> <C> <C> <C> <C> <C> <C>
- - ----------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF
PERIOD $34.60 $27.65 $27.00 $24.16 $18.95 $17.45 $15.00
- - ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
2. Net investment income (0.08) 0.49 0.81 0.15 0.14 0.16 --
3. Net gains or (losses) on
securities (both realized and
unrealized) 7.73 7.79 1.39 3.34 5.29 1.39 2.45
- - ----------------------------------------------------------------------------------------------------
4. Total from investment operations 7.65 8.28 2.20 3.49 5.43 1.55 2.45
- - ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.15) (0.26) (0.54) (0.27) (0.22) -- --
6. Distributions (from capital
gains) (2.05) (1.07) (1.01) (0.38) -- (0.05) --
- - ----------------------------------------------------------------------------------------------------
7. Total distributions (2.20) (1.33) (1.55) (0.65) (0.22) (0.05) --
- - ----------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $40.05 $34.60 $27.65 $27.00 $24.16 $18.95 $17.45
- - ----------------------------------------------------------------------------------------------------
9. Total return* 23.34% 31.00% 8.89% 14.76% 28.79% 9.20% 16.00%
- - ----------------------------------------------------------------------------------------------------
10. Net assets, end of period (in
millions) $10,358 $4,467 $1,804 $1,587 $755 $161 $18
11. Average net assets for the
period (in millions) $7,784 $2,953 $1,622 $1,244 $379 $80 $7
12. Ratio of gross expenses to
average net assets** 0.97% 1.02% 1.24% N/A N/A N/A N/A
13. Ratio of net expenses to average
net assets** 0.95% 1.01% 1.23% 1.12% 1.32% 1.73% 2.50%
14. Ratio of net investment income
to average net assets** 0.65% 0.73% 0.99% 0.42% 0.92% 1.74% 0.02%
15. Portfolio turnover rate** 79% 80% 142% 158% 124% 147% 40%
16. Average commission rate $.0561 $.0311 N/A N/A N/A 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.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 11
<PAGE>
<TABLE>
<CAPTION>
JANUS BALANCED FUND
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 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.
<TABLE>
<CAPTION>
JANUS EQUITY INCOME FUND
1997 1996(1)
<S> <C> <C>
- - ---------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF PERIOD $11.29 $10.00
- - ---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.09 0.07
3. Net gains or (losses) on securities (both realized and
unrealized) 3.11 1.25
- - ---------------------------------------------------------------------------------------
4. Total from investment operations 3.20 1.32
- - ---------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.12) (0.03)
6. Distributions (from capital gains) (0.39) --
- - ---------------------------------------------------------------------------------------
7. Total distributions (0.51) (0.03)
- - ---------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $13.98 $11.29
- - ---------------------------------------------------------------------------------------
9. Total return* 29.46% 13.20%
- - ---------------------------------------------------------------------------------------
10. Net assets, end of period (in millions) $74 $30
11. Average net assets for the period (in millions) $46 $21
12. Ratio of gross expenses to average net assets** 1.48% 1.79%
13. Ratio of net expenses to average net assets** 1.45% 1.71%
14. Ratio of net investment income to average net assets** 0.62% 3.09%
15. Portfolio turnover rate** 180% 325%
16. Average commission rate $.0437 $.0350
- - ---------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from June 28, 1996 (inception) to October 31, 1996.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
12 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
<TABLE>
<CAPTION>
JANUS GROWTH AND INCOME FUND
1997 1996 1995 1994 1993 1992 1991(1)
<S> <C> <C> <C> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
1. NET ASSET VALUE, BEGINNING OF
PERIOD $20.05 $18.13 $14.69 $15.24 $12.95 $12.13 $10.00
- - -------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.01 0.16 0.11 0.19 0.14 0.17 0.02
3. Net gains or (losses) on securities
(both realized and unrealized) 6.98 4.01 3.43 (0.31) 2.29 0.80 2.13
- - -------------------------------------------------------------------------------------------------------
4. Total from investment operations 6.99 4.17 3.54 (0.12) 2.43 0.97 2.15
- - -------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.11) (0.08) (0.10) (0.10) (0.14) (0.15) (0.02)
6. Distributions (from capital gains) (1.86) (2.17) -- (0.33) -- -- --
- - -------------------------------------------------------------------------------------------------------
7. Total distributions (1.97) (2.25) (0.10) (0.43) (0.14) (0.15) (0.02)
- - -------------------------------------------------------------------------------------------------------
8. NET ASSET VALUE, END OF PERIOD $25.07 $20.05 $18.13 $14.69 $15.24 $12.95 $12.13
- - -------------------------------------------------------------------------------------------------------
9. Total return* 37.78% 25.56% 24.20% (0.76%) 18.81% 7.98% 21.50%
- - -------------------------------------------------------------------------------------------------------
10. Net assets, end of period (in
millions) $1,889 $1,033 $583 $490 $519 $244 $56
11. Average net assets for the period
(in millions) $1,416 $773 $498 $500 $404 $157 $21
12. Ratio of gross expenses to average
net assets** 0.98% 1.05% 1.19% N/A N/A N/A N/A
13. Ratio of net expenses to average
net assets** 0.96% 1.03% 1.17% 1.22% 1.28% 1.52% 2.33%
14. Ratio of net investment income to
average net assets** 0.30% 0.70% 1.11% 1.26% 1.13% 1.61% 0.76%
15. Portfolio turnover rate** 127% 153% 195% 123% 138% 120% 14%
16. Average commission rate $.0588 $.0520 N/A N/A N/A 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.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 13
<PAGE>
UNDERSTANDING THE
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 Funds' Annual
Reports contain additional information about each Fund's performance, including
a comparison to an appropriate securities index. For a copy of your Fund's
Annual Report, call 1-800-525-8983.
NET ASSET VALUE ("NAV") is the value of a single share of a Fund. It is computed
by adding the value of all of a 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 tables
represents the change in value of a share of a Fund 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 a Fund, less Fund expenses. DIVIDENDS (FROM NET
INVESTMENT INCOME) are the per share amount that a Fund paid from net investment
income.
NET GAINS OR (LOSSES) ON SECURITIES is the per share increase or decrease in
value of the securities a 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 a 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 a Fund's operating
expenses before expense offset arrangements divided by its average net assets
for the stated period. The Funds were 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 a 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 a Fund's net investment
income divided by its average net assets for the stated period.
PORTFOLIO TURNOVER RATE is a measure of the amount of a 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 a Fund's portfolio securities.
AVERAGE COMMISSION RATE is the total of a Fund's agency commissions paid on
equity securities trades divided by the number of shares purchased and sold.
14 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
THE FUNDS IN DETAIL
This section takes a closer look at the Funds' investment objectives, policies
and the securities in which they invest. Policies that are noted as
"fundamental" cannot be changed without a shareholder vote. All other policies,
including each Fund's investment objective, are not fundamental and may be
changed by the Funds' 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 a Fund) and risk tolerance before
investing in a Fund. If there is a material change in a Fund's objective or
policies, you should consider whether that Fund remains an appropriate
investment for you. There is no guarantee that any 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.
- - --------------------------------------------------------------------------------
GROWTH FUNDS
<TABLE>
<S> <C>
Investment Objective:............................... Growth of Capital
Primary Holdings:................................... Common Stocks
Shareholder's Investment Horizon:................... Long-Term
</TABLE>
- - --------------------------------------------------------------------------------
DOMESTIC GROWTH FUNDS
JANUS FUND
The investment objective of this Fund is long-term growth of capital in a manner
consistent with the preservation of capital. It is a diversified fund that
pursues its objective by investing primarily in common stocks of issuers of any
size. Janus Fund was first offered to the public in 1970 and has the largest
asset base of the Funds. This Fund generally invests in larger, more established
issuers.
JANUS ENTERPRISE FUND
The investment objective of this 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.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 15
<PAGE>
JANUS MERCURY FUND
The investment objective of this Fund is long-term growth of capital. It is a
diversified fund that pursues its objective by investing primarily in common
stocks of issuers of any size, which may include larger well-established issuers
and/or smaller emerging growth companies.
JANUS OLYMPUS FUND
The investment objective of this Fund is long-term growth of capital. It is a
nondiversified fund that pursues its objective by investing primarily in common
stocks of issuers of any size, which may include larger well-established issuers
and/or smaller emerging growth companies.
JANUS SPECIAL SITUATIONS FUND
The investment objective of this Fund is capital appreciation. It is a
nondiversified fund that pursues its objective by investing primarily in common
stocks of domestic and foreign issuers. The Fund seeks investments in issuers
that its portfolio manager believes have been overlooked or undervalued by other
investors in connection with a significant change or development affecting the
issuer's business ("special situations"). The Fund places particular emphasis on
issuers that have, or that the portfolio manager believes will have, higher free
cash flows. Although the Fund emphasizes these types of companies, it may invest
in other companies that the portfolio manager believes have the potential for
significant capital appreciation.
JANUS TWENTY FUND
The investment objective of this Fund is long-term growth of capital. It is a
nondiversified fund that pursues its objective by normally concentrating its
investments in a core position of 20-30 common stocks.
GLOBAL GROWTH FUND
JANUS WORLDWIDE FUND
The investment objective of this Fund is long-term growth of capital in a manner
consistent with the preservation of capital. It is a diversified fund that
pursues its objective primarily through investments in common stocks of foreign
and domestic issuers. The Fund has the flexibility to invest on a worldwide
basis in companies and other organizations of any size, regardless of country of
organization or place of principal business activity. Janus Worldwide Fund
normally invests in issuers from at least five different countries, including
the United States. The Fund may at times invest in fewer than five countries or
even a single country.
GROWTH FUNDS - TYPES OF INVESTMENTS
The Growth Funds invest primarily in common stocks of foreign and domestic
companies. However, the percentage of each Fund's assets invested in common
stocks will vary and each Fund may at times hold substantial positions in cash
equivalents or interest bearing securities. See "General Portfolio Policies" on
page 22. Each 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
16 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
opportunity for capital growth from such securities or to receive a return on
idle cash. The Funds may purchase securities on a when-issued, delayed delivery
or forward commitment basis. The Funds may invest up to 25% of their assets in
mortgage- and asset-backed securities, up to 10% of their assets in zero coupon,
pay-in-kind and step coupon securities, and without limit in indexed/structured
securities. No Fund will invest 35% or more of its assets in
high-yield/high-risk securities. Each of the Growth Funds 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 pages 24-27
for a discussion of the risks associated with derivatives.
Although Janus Worldwide Fund is committed to foreign investing, all of the
Growth Funds may invest without limit in foreign equity and debt securities. The
Funds may invest directly in foreign securities denominated in a foreign
currency and not publicly traded in the United States. Other ways of investing
in foreign securities include depositary receipts or shares, and passive foreign
investment companies. See "Additional Risk Factors" on pages 24-27 for a
discussion of the risks associated with foreign investing.
Although Janus Special Situations Fund emphasizes investments in "special
situations," each of the Growth Funds may invest in such issuers from time to
time. A special situation arises when, in the opinion of a Fund's portfolio
manager, the securities of a particular issuer will be recognized and appreciate
in value due to a specific development with respect to that issuer. Investments
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. Special situations are discussed in more detail in the questions
below.
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE JANUS GROWTH FUNDS.
Q: HOW ARE COMMON STOCKS SELECTED?
A: Each of the Growth Funds invests substantially all of its assets in common
stocks to the extent its portfolio manager believes that the relevant
market environment favors profitable investing in those securities.
Portfolio managers generally take a "bottom up" approach to building their
portfolios. In other words, they seek to identify individual companies with
earnings growth potential that may not be recognized by the market at large.
Although themes may emerge in any 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 for the Growth Funds. Any income realized on the Growth Funds'
investments will be incidental to their objectives.
Q: ARE THE SAME CRITERIA USED
TO SELECT FOREIGN SECURITIES?
A: Generally, yes. Portfolio managers seek companies that meet their 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
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 17
<PAGE>
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
pages 24-27.
Q: WHAT IS A "SPECIAL SITUATION"?
A: A special situation arises when a portfolio manager believes that the
securities of an issuer will be recognized and appreciate in value due to a
specific development with respect to that issuer. Special situations may
include significant changes in a company's allocation of its existing capital, a
restructuring of assets, or a redirection of free cash flows. For example,
issuers undergoing significant capital changes may include companies involved in
spin-offs, sales of divisions, mergers or acquisitions, companies emerging from
bankruptcy, or companies initiating large changes in their debt to equity ratio.
Companies that are redirecting cash flows may be reducing debt, repurchasing
shares or paying dividends. Special situations may also result from (i)
significant changes in industry structure through regulatory developments or
shifts in competition; (ii) a new or improved product, service, operation or
technological advance; (iii) changes in senior management; or (iv) significant
changes in cost structure. As noted above, Janus Special Situations Fund
emphasizes this type of investment.
Q: WHAT IS THE MAIN RISK OF INVESTING
IN A GROWTH FUND?
A: Since the Growth Funds usually invest heavily in common stocks, the
fundamental risk is that the value of the stocks a 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" on pages 24-27.
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, market capitalization is an important
investment criteria for Janus Enterprise Fund. Although the other Growth Funds
offered by this Prospectus do not emphasize companies of any particular size,
Funds with a larger asset base (e.g., Janus Fund) are more likely to invest in
larger, more established issuers.
Q: HOW DOES A DIVERSIFIED FUND
DIFFER FROM A NONDIVERSIFIED FUND?
A: Diversification is a means of reducing risk by investing a fund's assets in
a broad range of stocks or other securities. A "nondiversified" fund has
the ability to take
18 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
larger positions in a smaller number of issuers. Because the appreciation or
depreciation of a single stock may have a greater impact on the share price of a
nondiversified fund, it can be expected to fluctuate more than a comparable
diversified fund. Janus Enterprise Fund, Janus Olympus Fund, Janus Special
Situations Fund, and Janus Twenty Fund are nondiversified funds. See "General
Portfolio Policies" on page 22.
Q: HOW DO THE GROWTH FUNDS
TRY TO REDUCE RISK?
A: Diversification of a Fund's assets reduces the effect of any single holding
on its overall portfolio value. A Fund may also use futures, options and
other derivative instruments to protect its portfolio from movements in
securities prices and interest rates. The Funds may use a variety of currency
hedging techniques, including forward currency contracts, to manage exchange
rate risk. See "Additional Risk Factors" on pages 24-27. In addition, to the
extent that a Fund holds a larger cash position, it might not participate in
market declines to the same extent as if the Fund remained more fully invested
in common stocks.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 19
<PAGE>
- - --------------------------------------------------------------------------------
COMBINATION FUNDS
<TABLE>
<S> <C>
Investment Objective:........ Growth of Capital; Some Emphasis on Income
Primary Holdings:............ Common Stocks and Income-Producing Securities
Shareholder's Investment
Horizon:................... Long-Term
</TABLE>
- - --------------------------------------------------------------------------------
JANUS BALANCED FUND
The investment objective of this 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. This Fund normally invests at least 25% of its assets in fixed-income
senior securities, which include debt securities and preferred stocks.
JANUS EQUITY INCOME FUND
The investment objective of this Fund is current income and long-term growth of
capital. It is a diversified fund that pursues its objective by normally
investing at least 65% of its invested assets in income-producing equity
securities. Equity securities include common stocks, preferred stocks, warrants
and securities convertible into common or preferred stocks. Growth potential is
a significant investment consideration and the Fund may hold securities selected
solely for their growth potential.
JANUS GROWTH AND INCOME FUND
The investment objective of this 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
(such as those described under "Cash Position" on page 22), this Fund may reduce
the growth component of its portfolio to 25% of its assets.
COMBINATION FUNDS - TYPES OF INVESTMENTS
All of the Combination Funds may invest in a combination of common stocks,
preferred stocks, convertible securities, debt securities and other fixed-income
securities. The Combination Funds may invest in the types of investments
previously described under "Growth Funds - Types of Investments" on page 16.
Although each of the Combination Funds places some emphasis on the income
objective, investors should keep in mind that the Combination Funds are not
designed to produce a consistent level of income.
20 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
THE FOLLOWING QUESTIONS ARE DESIGNED TO HELP YOU BETTER UNDERSTAND AN INVESTMENT
IN THE JANUS COMBINATION FUNDS.
Q: HOW DO THE COMBINATION FUNDS
DIFFER FROM EACH OTHER?
A: Janus Growth and Income Fund places a greater emphasis on aggressive growth
stocks and may derive a greater portion of its income from dividend-paying
common stocks. Because of these factors, its share price can be expected to
fluctuate more than the other Combination Funds. Janus Equity Income Fund
emphasizes investments in dividend-paying common stocks and other equity
securities characterized by relatively greater price stability, and thus may be
expected to be less volatile than Janus Growth and Income Fund, as discussed in
more detail below. Janus Balanced Fund places a greater emphasis on the income
component of its portfolio and invests to a greater degree in debt securities
and preferred stock. As a result it is the least volatile of the Combination
Funds.
Q: HOW DOES JANUS EQUITY INCOME
FUND TRY TO LIMIT PORTFOLIO VOLATILITY?
A: Janus Equity Income Fund seeks to provide a lower level of volatility than
the stock market at large, as measured by the S&P 500. The lower volatility
sought by this Fund is expected to result primarily from investments in
dividend-paying common stocks and other equity securities characterized by
relatively greater price stability. The greater price stability sought by Janus
Equity Income Fund may be characteristic of companies that generate above
average free cash flows. A company may use free cash flows for a number of
purposes including commencing or increasing dividend payments, repurchasing its
own stock or retiring outstanding debt. The portfolio manager also considers
growth potential in selecting this Fund's securities and may hold securities
selected solely for their growth potential.
Q: HOW ARE EQUITY SECURITIES SELECTED?
A: The growth component of Janus Balanced Fund and Janus Growth and Income
Fund is expected to consist primarily of common stocks and Janus Equity
Income Fund invests substantially all of its assets in common stocks. The
selection criteria for common stocks are described on page 17. Because income is
a part of the investment objective of the Combination Funds, a portfolio manager
may consider dividend-paying characteristics to a greater degree in selecting
equity securities for these Funds. The Combination Funds 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: HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME
COMPONENT OF JANUS BALANCED FUND'S AND JANUS GROWTH AND INCOME FUND'S
PORTFOLIOS?
A: Janus Balanced Fund and Janus Growth and Income Fund shift assets between
the growth and income components of their portfolios based on the portfolio
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 21
<PAGE>
managers' analysis of relevant market, financial and economic conditions. If a
portfolio manager believes that growth securities will provide better returns
than the yields then available or expected on income-producing securities, that
Fund will place a greater emphasis on the growth component.
Q: WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT
OF JANUS BALANCED FUND'S AND JANUS GROWTH AND INCOME FUND'S PORTFOLIOS?
A: The income component of Janus Balanced Fund and Janus Growth and Income
Fund will consist of securities that a 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 a Fund if they currently pay dividends or
a portfolio manager believes they have the potential for either increasing their
dividends or commencing dividends, if none are currently paid.
GENERAL PORTFOLIO POLICIES
Unless otherwise stated, each of the following policies applies to all of the
Funds. The percentage limitations included in these policies and elsewhere in
this Prospectus apply at the time of purchase of the security. For example, if a
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.
CASH POSITION
When a Fund's portfolio manager believes that market conditions are not
favorable for profitable investing or when the portfolio manager is otherwise
unable to locate favorable investment opportunities, a Fund's investments may be
hedged to a greater degree and/or its cash or similar investments may increase.
In other words, the Funds do not always stay fully invested in stocks and bonds.
Cash or similar investments are a residual - they represent the assets that
remain after a portfolio manager has committed available assets to desirable
investment opportunities. Partly because the portfolio managers act
independently of each other, the cash positions of the Funds may vary
significantly. Larger hedged positions and/or larger cash positions may serve as
a means of preserving capital in unfavorable market conditions.
Securities that the Funds may invest in as a means of receiving a return on idle
cash include high-grade commercial paper, certificates of deposit, repurchase
agreements or other short-term debt obligations. The Funds may also invest in
money market funds (including funds managed by Janus Capital). When a 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.
DIVERSIFICATION
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. All of the Funds (except
Janus Enterprise Fund, Janus Olympus Fund, Janus Special Situations Fund and
Janus Twenty Fund) qualify as
22 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
diversified funds under the 1940 Act, and are subject to the following
diversification requirements:
- - - As a fundamental policy, no Fund may own more than 10% of the outstanding
voting shares of any issuer.
- - - As a fundamental policy, with respect to 50% of the total assets of Janus
Enterprise Fund, Janus Olympus Fund, Janus Special Situations Fund and Janus
Twenty Fund and 75% of the total assets of the other Funds, no Fund will
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 a Fund's
holdings of that issuer to amount to more than 5% of that Fund's total assets.
- - - No Fund will invest more than 25% of its total assets in a single issuer
(other than U.S. government securities).
- - - Janus Enterprise Fund, Janus Olympus Fund, Janus Special Situations Fund and
Janus Twenty Fund reserve the right to become diversified funds by limiting
the investments in which more than 5% of their total assets are invested.
INDUSTRY CONCENTRATION
As a fundamental policy, no Fund will invest 25% or more of its total assets in
any particular industry (excluding U.S. government securities).
PORTFOLIO TURNOVER
Each 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 a Fund's portfolio whenever its portfolio manager
believes such changes are desirable. Portfolio turnover rates are generally not
a factor in making buy and sell decisions.
To a limited extent, a Fund may purchase securities in anticipation of
relatively short-term price gains. A Fund may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. 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
Each 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 Funds' Trustees in making liquidity determinations for Rule
144A securities and certain other securities, including privately placed
commercial paper and municipal lease obligations.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 23
<PAGE>
BORROWING AND LENDING
Each Fund may borrow money and lend securities or other assets, as follows:
- - - Each Fund may borrow money for temporary or emergency purposes in amounts up
to 25% of its total assets.
- - - Each Fund may mortgage or pledge securities as collateral for borrowings in
amounts up to 15% of its net assets.
- - - As a fundamental policy, each 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, each of the Funds
may borrow money from or lend money to each other and 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.
ADDITIONAL RISK FACTORS
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 many foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:
- - - CURRENCY RISK. A 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 a Fund holds a foreign security, its value will be
affected by the value of the local currency relative to the U.S. dollar. When
a Fund sells a foreign denominated security, its value may be worth less in
U.S. dollars even 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 a Fund's assets from
that country. The Funds 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
24 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
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.
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.
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. Smaller or
newer companies may lack depth of management, they may be unable to generate
funds necessary for growth or potential development, 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 or more established companies. Securities of smaller or
newer companies may have more limited trading markets than the markets for
securities of larger or more established issuers, and may be subject to wider
price fluctuations. Investments in such companies tend to be more volatile and
somewhat more speculative.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
Each 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 Funds intend to use most derivative
instruments primarily to hedge the value of their portfolios against potential
adverse movements in securities prices, foreign currency markets or interest
rates. To a limited extent, the Funds may also use derivative instruments for
non-hedging purposes such as seeking to increase a 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 Funds 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 a 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;
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 25
<PAGE>
- - - 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 a Fund's initial investment in
that instrument (in some cases, the potential loss is unlimited); and
- - - particularly in the case of privately-negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave a
Fund worse off than if it had not entered into the position.
Although the Funds believe the use of derivative instruments will benefit the
Funds, a Fund's performance could be worse than if the Fund had not used such
instruments if a portfolio manager's judgement proves incorrect.
When a 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.
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.
No Fund will invest 35% or more of its assets in high-yield/high-risk
securities. Janus Balanced Fund's percentage of securities holdings by rating
category (based on a weighted monthly average) during the fiscal year ended
October 31, 1997, is set out in the following chart. During such period, no
other Fund held 5% or more of its assets in bonds rated below investment grade.
Please refer to the SAI for a description of bond rating categories.
26 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
<TABLE>
<S> <C>
BONDS - S&P 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
Each Fund may engage in "short sales against the box." This technique involves
selling either a security that a Fund owns, or a security equivalent in kind and
amount to the security sold short that the Fund has the right to obtain, for
delivery at a specified date in the future. A Fund may enter into a short sale
against the box to hedge against anticipated declines in the market price of
portfolio securities. If the value of the securities sold short increases prior
to the scheduled delivery date, a Fund loses the opportunity to participate in
the gain.
SPECIAL SITUATIONS
Each Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of a Fund's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry 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.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 27
<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 Funds reserve the right to change the amount of these minimums
from time to time or to waive them in whole or in part for certain
types of accounts.
** An Automatic Investment Program requires a $100 minimum automatic
investment per month until the account balance reaches $2,500.
+ The minimum subsequent investment for IRA or UGMA/UTMA accounts is
$50.
HOW TO GET IN TOUCH WITH JANUS
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00 a.m.-8:00
p.m., and Saturday: 10:00 a.m.-4:00 p.m., New York time. The Quick Address and
Telephone Reference below includes other ways to get in touch with Janus.
QUICK ADDRESS AND TELEPHONE REFERENCE
<TABLE>
<S> <C>
MAILING ADDRESS JANUS XPRESS LINE(TM) 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 in the Funds 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.
28 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 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 Funds. You will be charged an annual account maintenance
fee of $12 for each Fund account, up to a maximum of $24 for two or more Fund
accounts registered under the same taxpayer identification number. Each Janus
fund you own under your IRA account number is considered a separate "Fund
account." You may pay the fee by check or have it automatically deducted from
your account (usually in December). The Funds reserve the right to change the
amount of this fee or to waive it in whole or in part for certain types of
accounts.
The following plans require a special application. For an application and more
details about our Retirement Plans, call 1-800-525-3713.
- - - REGULAR AND ROTH INDIVIDUAL RETIREMENT ACCOUNTS ("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.
- - - 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 EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 29
<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 Funds are available only to U.S. citizens or
residents, and your application will be returned if you do not meet these
criteria. Send all items to one of the following addresses:
For Overnight Carrier
- - --------------------
Janus
Suite 101
3773 Cherry Creek North Drive
Denver, CO 80209-3811
For All Other Inquiries
- - ---------------------
Janus
P.O. Box 173375
Denver, CO 80217-3375
INVESTOR SERVICE CENTERS
Janus offers two Investor Service Centers for those individuals who would like
to conduct their investing in person. Our representatives will be happy to
assist you at either of the following locations: Monday-Friday 7:00 a.m. to 6:00
p.m. Mountain time and Saturday 9:00 a.m. to 1:00 p.m. Mountain time.
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the next NAV
calculated after your order is received and accepted. Please note the following:
- - - Cash, credit cards, third party checks and credit card checks will not be
accepted.
- - - All purchases must be made in U.S. dollars.
- - - Checks must be drawn on U.S. banks and made payable to Janus.
- - - If a check does not clear your bank, the Funds reserve the right to cancel the
purchase.
- - - If the Funds are unable to debit your predesignated bank account on the day of
purchase, they may make additional attempts or cancel the purchase.
30 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
- - - The Funds reserve the right to reject any specific purchase request.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Funds (or their agents) have the
authority to redeem shares in your account(s) to cover any 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 business 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 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 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 EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 31
<PAGE>
- - - 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 34.
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 $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 established by exchange must be
opened with $2,500 or the total account value if the value of the account you
are exchanging from is less than $2,500.
- - - Exchanges between existing accounts must meet the $100 subsequent investment
requirement.
- - - You may make four exchanges out of each Fund during a calendar year (exclusive
of Systematic Exchanges). Exchanges in excess of this limit may be subject to
an exchange fee or may result in termination of the exchange privilege.
- - - The Funds reserve the right to reject any exchange request and to modify or
terminate the exchange privilege at any time. For example, the Funds may
reject exchanges from accounts engaged in or known to engage in excessive
trading (including market timing transactions).
- - - Exchanges between accounts will be accepted only if the registrations are
identical.
- - - If the shares you are exchanging are held in certificate form, you must return
the certificate to your Fund prior to making any exchanges.
- - - Be sure that you read the prospectus for the fund into which you are
exchanging.
32 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 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 on page 34.
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 FUNDS MAY DELAY THE PAYMENT OF YOUR
REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions,
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 33
<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 30 and must include the following
information:
- - - the name of the Fund(s)
- - - the account number(s)
- - - the amount of money or number of shares being redeemed
- - - the name(s) on the account
- - - the signature(s) of all registered account owners
- - - 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 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.
- - - 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.
34 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
THE FUNDS RESERVE THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE UNDER OTHER
CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON CERTAIN LEGAL GROUNDS. FOR
MORE INFORMATION PERTAINING TO SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized account transfers. The
following financial institutions may guarantee signatures: banks, savings and
loan associations, trust companies, credit unions, broker-dealers, and member
firms of a national securities exchange. Call your financial institution to see
if they have the ability to guarantee a signature. A signature guarantee may not
be provided by a notary public.
If you live outside the United States, a foreign bank properly authorized to do
business in your country of residence or a U.S. consulate may be able to
authenticate your signature.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the NAV next
calculated after your request is received and approved by a Fund (or its
designated agent). A Fund's NAV is calculated at the close of the regular
trading session of the NYSE (normally 4:00 p.m. New York time) each day that the
NYSE is open. In order to receive a day's price, your order must be received by
the close of the regular trading session of the NYSE. Securities are valued at
market value or, if a market quotation is not readily available, at their fair
value determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60 days are
valued at amortized cost, which approximates market value. See the SAI for more
detailed information.
SHAREHOLDER SERVICES AND ACCOUNT POLICIES
JANUS XPRESS LINE(TM)
Janus Xpress Line, our electronic telephone service, offers you 24-hour access
by TouchTone(TM) telephone to obtain information on account balances, Fund
performance or dividends. You can also make exchanges, purchases, redemptions
and electronic transfers in existing accounts, request literature about any
Janus fund, or order duplicate statements. Janus Xpress Line is accessed by
calling 1-888-979-7737. Calls are limited to five minutes.
JANUS WEB SITE
Janus maintains a Web site located at http://www.Janus.com. You can access
information such as your account balance and the Funds' NAVs through the Web
site. In addition, you may request and/or download a prospectus for any Janus
fund.
ACCOUNT MINIMUMS
Due to the proportionately higher costs of maintaining small accounts, Janus
reserves the right to deduct a $10 minimum balance fee (or the value of the
account if less than $10) from accounts with values below the minimums described
on page 28 or to close such accounts. This policy will apply to accounts
participating in the Automatic
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 35
<PAGE>
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.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other employee benefit plans (a
"Processing Organization"). Processing Organizations may charge you a fee for
this service and may require different minimum initial and subsequent
investments than the Funds. Processing Organizations may also impose other
charges or restrictions different from those applicable to shareholders who
invest in the Funds directly. A Processing Organization, rather than its
customers, may be the shareholder of record of your shares. The Funds are not
responsible for the failure of any Processing Organization to carry out its
obligations to its customers. Certain Processing Organizations may receive
compensation from Janus Capital or its affiliates and certain Processing
Organizations may receive compensation from the Funds for shareholder
recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that you
are not subject to backup withholding for failing to report income to the IRS.
If you are subject to the 31% backup withholding or you did not certify your
taxpayer identification number, the IRS requires the Funds to withhold 31% of
any dividends paid and redemption or exchange proceeds. In addition to the 31%
backup withholding, you may be subject to a $50 fee to reimburse the Funds for
any penalty that the IRS may impose.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate form because
account transactions such as exchanges and redemptions cannot be completed until
the certificate has been returned to the Funds. The Funds will issue share
certificates upon written request only. Share certificates will not be issued
until the shares have been held for at least 15 days and will not be issued for
accounts that do not meet the minimum investment requirements. Share
certificates cannot be issued for retirement accounts. In addition, if the
certificate is lost, there may be a replacement charge.
INVOLUNTARY REDEMPTIONS
The Funds reserve the right to close an account if the shareholder is deemed to
engage in activities which are illegal or otherwise believed to be detrimental
to the Funds.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Funds and their agents will
not be responsible for any losses resulting from unauthorized transactions when
procedures designed to verify the identity of the caller are followed.
36 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
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 Funds or their agents may, in case of emergency, temporarily suspend
telephone transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or send a written
request signed by all account owners. Include the name of your Fund(s), the
account number(s), the name(s) on the account and both the old and new
addresses. Certain options may be suspended for 10 days following an address
change unless a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information, call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors participating in an automatic investment program will receive
quarterly confirmations of all transactions. In addition, the Funds will send
you an immediate transaction confirmation statement after every non-systematic
transaction. The Growth Funds distribute dividend information annually. The
Combination Funds distribute dividend information quarterly.
Financial reports for the Funds, which include a list of the Funds' portfolio
holdings, will be mailed semiannually to all shareholders. You will receive an
updated prospectus annually. To reduce expenses, only one copy of most financial
reports and prospectuses will be mailed to your household, even if more than one
person in the household has a Fund account. Please call 1-800-525-3713 if you
would like to receive additional reports or prospectuses.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 37
<PAGE>
MANAGEMENT OF THE FUNDS
TRUSTEES
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to each Fund's investment objectives and policies. The
Trustees delegate the day-to-day management of the Funds to the officers of the
Trust and meet at least quarterly to review the Funds' investment policies,
performance, expenses and other business affairs.
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is the
investment adviser to each of the Funds and is responsible for the day-to-day
management of the investment portfolios and other business affairs of the Funds.
Janus Capital began serving as investment adviser to Janus Fund at its inception
in 1970 and currently serves as investment adviser to all of the Janus funds, as
well as adviser or subadviser to other mutual funds and individual, corporate,
charitable and retirement accounts.
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 each
Fund's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Funds, and may be reimbursed by the
Funds for its costs in providing those services. In addition, Janus Capital
employees serve as officers of the Trust and Janus Capital provides office space
for the Funds and pays the salaries, fees and expenses of all Fund officers and
those Trustees who are affiliated with Janus Capital.
INVESTMENT PERSONNEL
PORTFOLIO MANAGERS
DAVID J. CORKINS is Executive Vice President and portfolio manager of Janus
Growth and Income 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.
JAMES P. CRAIG, III is Chief Investment Officer of Janus Capital. He is
Executive Vice President and portfolio manager of Janus Fund, which he has
managed since 1986. He is
38 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
also Executive Vice President and a co-manager of Janus Venture Fund, which he
has managed since February 1, 1997. Mr. Craig previously managed Janus Venture
Fund from its inception to December 1993 and Janus Balanced Fund from December
1993 to December 1995. He holds a Bachelor of Arts in Business from the
University of Alabama and a Master of Arts in Finance from the Wharton School of
the University of Pennsylvania.
DAVID C. DECKER is Executive Vice President and portfolio manager of Janus
Special Situations Fund, which he has managed since inception, and an assistant
portfolio manager of Janus Fund. He joined Janus in 1992 as a research analyst
and focused on companies in the automotive and defense industries prior to
managing Janus Special Situations Fund. He obtained his Master of Business
Administration in finance from the Fuqua School of Business at Duke University
and a Bachelor of Arts in Economics and Political Science from Tufts University.
He is a Chartered Financial Analyst.
JAMES P. GOFF is Executive Vice President and portfolio manager of Janus
Enterprise Fund. Mr. Goff joined Janus Capital in 1988 and has managed Janus
Enterprise Fund since its inception. Mr. Goff managed or co-managed Janus
Venture Fund from December 1993 to February 1, 1997. He holds a Bachelor of Arts
in Economics from Yale University and is a Chartered Financial Analyst.
HELEN YOUNG HAYES is Executive Vice President and portfolio manager of Janus
Worldwide Fund. She is also Executive Vice President and co-manager of Janus
Overseas Fund. Ms. Hayes joined Janus Capital in 1987 and has managed or
co-managed Janus Worldwide Fund and Janus Overseas Fund since their inceptions.
She holds a Bachelor of Arts in Economics from Yale University and is a
Chartered Financial Analyst.
WARREN B. LAMMERT is Executive Vice President and portfolio manager of Janus
Mercury Fund. Mr. Lammert joined Janus Capital in 1987 and has managed Janus
Mercury Fund since its inception. He previously managed Janus Balanced Fund from
its inception to December 1993 and co-managed Janus Venture Fund from December
1993 to December 1996. He holds a Bachelor of Arts in Economics from Yale
University and a Master of Science in Economic History from the London School of
Economics. He is a Chartered Financial Analyst.
BLAINE P. ROLLINS is Executive Vice President and portfolio manager of Janus
Balanced Fund, which he has managed since January 1996, and Janus Equity Income
Fund, which he has managed since inception. He is an assistant portfolio manager
of Janus Fund. Mr. Rollins joined Janus Capital in 1990 and gained experience as
a fixed-income trader and equity research analyst prior to managing Janus
Balanced Fund. He holds a Bachelor of Science in Finance from the University of
Colorado and is a Chartered Financial Analyst.
SCOTT W. SCHOELZEL is Executive Vice President and portfolio manager of Janus
Twenty Fund, which he has managed since August 1997. He previously managed Janus
Olympus Fund from its inception to August 1997. Mr. Schoelzel joined Janus
Capital in January 1994. From 1991-1993, Mr. Schoelzel was a portfolio manager
at Founders Asset Management, Denver, Colorado. He holds a Bachelor of Arts in
Business from Colorado College.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 39
<PAGE>
CLAIRE YOUNG is Executive Vice President and portfolio manager of Janus Olympus
Fund which she has managed since August 1997. She previously served as an
assistant portfolio manager of Janus Growth and Income Fund and Janus Twenty
Fund. Ms. Young joined Janus Capital in 1992 as a research analyst. She holds a
Bachelor of Science in Electrical Engineering from Yale University and is a
Chartered Financial Analyst.
ASSISTANT PORTFOLIO MANAGER
LAURENCE J. CHANG is assistant portfolio manager of Janus Worldwide Fund. He is
also Executive Vice President and co-manager of Janus Overseas Fund. He received
an undergraduate degree with honors in religion and philosophy from Dartmouth
College and a Master's Degree in Political Science from Stanford University. Mr.
Chang 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 believes is not detrimental to the Funds or Janus
Capital's other advisory clients. See the SAI for more detailed information.
MANAGEMENT EXPENSES
Each Fund pays Janus Capital a management fee which is calculated daily and paid
monthly. The advisory agreement with each Fund spells out the management fee and
other expenses that the Funds must pay. Each of the Growth Funds and Combination
Funds is subject to the following management fee schedule (expressed as an
annual rate):
<TABLE>
<CAPTION>
AVERAGE DAILY NET ANNUAL RATE
ASSETS OF FUND PERCENTAGE (%)
<S> <C>
- - --------------------------------------------------------------------------------
First $300 Million 0.75
Next $200 Million 0.70
Over $500 Million 0.65
</TABLE>
- - --------------------------------------------------------------------------------
Differences in the actual management fees incurred by the Funds are due
primarily to variances in the asset size of the Funds. As asset size increases,
the annual rate of the management fee declines in accordance with the above
schedule. In addition, each 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. This fee
schedule was effective July 1, 1997.
During the most recent fiscal year, the Funds paid the following management
fees, expressed as a percentage of average net assets: Janus Fund 0.65%; Janus
Enterprise Fund 0.72%; Janus Mercury Fund 0.67%; Janus Olympus Fund 0.73%; Janus
Special Situations Fund 0.77%; Janus Twenty Fund 0.66%; Janus Worldwide Fund
0.66%; Janus Balanced Fund 0.76%; Janus Equity Income Fund 0.86%; and Janus
Growth and Income Fund 0.68%.
40 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
PORTFOLIO TRANSACTIONS
Purchases and sales of securities on behalf of each 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 a 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 a Fund i) to the Fund or ii) to other persons
on behalf of the Fund for services provided to the Fund for which it would be
obligated to pay. Janus Capital may also consider sales of shares of a Janus
fund as a factor in the selection of broker-dealers to execute transactions. The
Funds' Trustees have authorized Janus Capital to place portfolio transactions on
an agency basis with a broker-dealer affiliated with Janus Capital. When
transactions for a 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 Funds 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
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. This Prospectus describes ten
series of the Trust; the other series are offered by separate prospectuses.
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 41
<PAGE>
SHAREHOLDER MEETINGS
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called for a specific Fund or for the Trust as a whole for
purposes such as electing or removing Trustees, terminating or reorganizing the
Trust, changing fundamental policies, or for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by each Fund only
if a matter affects or requires the vote of only that Fund or that Fund's
interest in the matter differs from the interest of other portfolios of the
Trust. As a shareholder, you are entitled to one vote for each share that you
own.
SIZE OF FUNDS
The Funds have no present plans to limit their size. However, any 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 a Fund are discontinued, it is expected that existing shareholders of
that Fund would be permitted to continue to purchase shares and to reinvest any
dividends or capital gains distributions, absent highly unusual circumstances.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve any Fund's investment objective by
investing all of that Fund's assets in another investment company having the
same investment objective and substantially the same investment policies and
restrictions as those applicable to that Fund. Unless otherwise required by law,
this policy may be implemented by the Trustees without shareholder approval.
YEAR 2000
Preparing for Year 2000 is a high priority for Janus Capital, which has
established a dedicated group to address this issue. Janus Capital has entered
into a consulting arrangement with one of the foremost experts in Year 2000
compliance to help Janus Capital successfully achieve Year 2000 compliance.
Janus Capital does not anticipate that the move to Year 2000 will have a
material impact on its ability to continue to provide the Funds with service at
current levels.
42 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
APRIL 17, 1998
<PAGE>
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
TO AVOID TAXATION, THE INTERNAL REVENUE CODE REQUIRES EACH FUND TO DISTRIBUTE
NET INCOME AND ANY NET CAPITAL GAINS REALIZED ON ITS INVESTMENTS ANNUALLY. A
FUND'S INCOME FROM DIVIDENDS AND INTEREST AND ANY NET REALIZED SHORT-TERM
CAPITAL GAINS ARE PAID TO SHAREHOLDERS AS ORDINARY INCOME DIVIDENDS. NET
REALIZED LONG-TERM GAINS ARE PAID TO SHAREHOLDERS AS CAPITAL GAINS
DISTRIBUTIONS.
DISTRIBUTION SCHEDULE
<TABLE>
<CAPTION>
DIVIDENDS CAPITAL GAINS
<S> <C> <C>
Growth Funds Declared and paid in December Declared and paid in December
- - ---------------------------------------------------------------------------------------
Combination Declared and paid in March, June, Declared and paid in December
Funds September and December
</TABLE>
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of a distribution
of a Fund, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in each Fund's daily NAV. The
share price of a Fund drops by the amount of the distribution, net of any
subsequent market fluctuations. As an example, assume that on December 31, Janus
Fund declared a dividend in the amount of $0.25 per share. If Janus Fund's share
price was $10.00 on December 30, the Fund's share price on December 31 would be
$9.75, barring market fluctuations. Shareholders should be aware that
distributions from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of a Fund just before the distribution, you will pay the
full price for the shares and receive a portion of the purchase price back as a
taxable distribution. This is referred to as "buying a dividend." In the above
example, if you bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as a dividend and
your shares would now be worth $9.75 per share. Unless your account is set up as
a tax-deferred account, dividends paid to you would be included in your gross
income for tax purposes even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application how you want to
receive your distributions. You may change your distribution option at any time
by
JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED APRIL
17, 1998 43
<PAGE>
writing the Funds at one of the addresses on page 30 or calling 1-800-525-3713.
The Funds offer the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned automatically if
no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital gains
distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income dividends or
capital gains distributions in cash and reinvest the other in additional
shares.
4. REDIRECT OPTION. You may direct your dividends or capital gains to purchase
shares of another Janus fund.
The Funds reserve the right to reinvest into your account undeliverable and
uncashed dividend and distribution checks that remain outstanding for six months
in shares of the applicable Fund at the NAV next computed after the check is
cancelled. Subsequent distributions may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences of investing in
the Funds. The following discussion does not apply to tax-deferred accounts, nor
is it a complete analysis of the federal tax implications of investing in the
Funds. You may wish to consult your own tax adviser. Additionally, state or
local taxes may apply to your investment, depending upon the laws of your state
of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions of the Funds are subject to federal income tax,
regardless of whether the distribution is made in cash or reinvested in
additional shares of a Fund. In certain states, a portion of the dividends and
distributions (depending on the sources of a Fund's income) may be exempt from
state and local taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on or before
January 31st of each year. Account tax information will also be sent to the IRS.
TAXATION OF THE FUNDS
Dividends, interest, and some capital gains received by the Funds on foreign
securities may be subject to tax withholding or other foreign taxes. The Funds
may from year to year make the election permitted under section 853 of the
Internal Revenue Code to pass through such taxes to shareholders as a foreign
tax credit. If such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Funds which will reduce their investment
income.
The Funds do not expect to pay any federal income or excise taxes because they
intend to meet certain requirements of the Internal Revenue Code. It is
important that the
44 JANUS EQUITY FUNDS COMBINED PROSPECTUS FEBRUARY 17, 1998 AS SUPPLEMENTED
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Funds meet these requirements so that any earnings on your investment will not
be taxed twice.
PERFORMANCE TERMS
This section will help you understand various terms that are commonly used to
describe a 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 Growth and Combination Funds generally measure 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 tables beginning on page 7 show
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 a Fund's return and are not the
same as actual annual results.
THE FUNDS IMPOSE 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.
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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 Funds may invest. The Funds may
invest in these instruments to the extent permitted by their investment
objectives and policies. The Funds are not limited by this discussion and may
invest in any other types of instruments not precluded by the policies discussed
elsewhere in this Prospectus. Please refer to the SAI for a more detailed
discussion of certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value of the bond) at a specified maturity and to make
scheduled interest payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. The Funds may purchase commercial paper issued
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."
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,
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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, a portfolio manager may have to reinvest the proceeds from
the securities at a lower rate. Potential market gains on a security subject to
prepayment risk may be more limited than potential market gains on a comparable
security that is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign corporations which
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. To avoid taxes and interest that the Funds must
pay if these investments are profitable, the Funds may make various elections
permitted by the tax laws. These elections could require that the Funds
recognize taxable income, which in turn must be distributed, before the
securities are sold and before cash is received to pay 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 a Fund and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Fund at a specified date or upon demand. This technique
offers a method of earning income on idle cash. These securities involve the
risk that the seller will fail to repurchase the security, as agreed. In that
case, a Fund will bear the risk of market value fluctuations until the security
can be sold and may encounter delays and incur costs in liquidating the
security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by a Fund to
another party (generally a bank or dealer) in return for cash and an agreement
by the Fund to buy the security back at a specified price and time. This
technique will be used primarily to provide cash to satisfy unusually high
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 a 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.
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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 stock or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally involve the
purchase of a security with payment and delivery at some time in the
future -- i.e., beyond normal settlement. The Funds do not earn interest on such
securities until settlement and bear 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 Funds may enter into forward currency contracts to hedge
against declines in the value of securities denominated in, or whose value is
tied to, a currency other than the U.S. dollar or to reduce the impact of
currency appreciation on purchases of such securities. They may also enter into
forward contracts to purchase or sell securities or other financial indices.
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FUTURES CONTRACTS are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Funds may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Funds may
also buy options on futures contracts. An option on a futures contract gives the
buyer the right, but not the obligation, to buy or sell a futures contract at a
specified price on or before a specified date. Futures contracts and options on
futures are standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e. their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. A Fund bears the market risk of an
investment in the underlying instruments, as well as the credit risk of the
issuer.
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 Funds may purchase and write put and call options on securities,
securities indices and foreign currencies.
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JANUS EQUITY FUNDS
PROSPECTUS
Janus Fund
Janus Enterprise Fund
Janus Mercury Fund
Janus Olympus Fund
Janus Special Situations Fund
Janus Twenty Fund
Janus Worldwide Fund
Janus Balanced Fund
Janus Equity Income Fund
Janus Growth and Income Fund
[JANUS LOGO]
P.O. Box 173375 * Denver, CO 80217-3375 * 1-800-525-3713
Janus Distributors, Inc. Member NASD. (7/98)
