OMB APPROVAL
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre- Effective Amendment No. [ ]
Post-Effective Amendment No. 88 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
Amendment No. 71 [X]
(Check appropriate box or boxes.)
JANUS INVESTMENT FUND
(Exact Name of Registrant as Specified in Charter)
100 Fillmore Street, Denver, Colorado 80206-4928
Address of Principal Executive Offices (Zip Code)
Registrant's Telephone No., including Area Code: 303-333-3863
Thomas A. Early - 100 Fillmore Street, Denver, Colorado 80206-4928
(Name and Address of Agent for Service)
Approximate Date of Proposed Offering: February 29, 2000
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[X] on January 31, 2000 pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
JANUS INVESTMENT FUND
Cross Reference Sheet
Between the Prospectus and Statement of
Additional Information and Form N-1A Item for Janus Strategic Value Fund
(Cross Reference Sheets for other series of Janus Investment Fund are included
in previous post-effective amendments related to those series)
FORM N-1A ITEM CAPTION IN PROSPECTUSES
PART A
1. Front and Back Cover Pages Cover Pages
2. Risk/Return Summary: Risk/Return Summary
Investments, Risks, and
Performance
3. Risk/Return Summary: Fee Risk/Return Summary
Table
4. Investment Objectives, Investment Objective, Principal
Principal Investment Investment Strategies, and Risks
Strategies, and Related Risks
5. Management's Discussion of Not Applicable
Fund Performance
6. Management, Organization, and Management of the Fund
Capital Structure
7. Shareholder Information Shareholder's Manual; Other
Information; Distributions and
Taxes
8. Distribution Arrangements Not Applicable
9. Financial Highlights Not Applicable
Information
<PAGE>
FORM N-1A ITEM CAPTION IN STATEMENTS OF
ADDITIONAL INFORMATION
PART B
10. Cover Page and Table of Cover Page; Table of Contents
Contents
11. Fund History Miscellaneous Information
12. Description of the Fund and Classification, Investment
Its Investments and Risks Policies and Restrictions,
Investment Strategies and Risks;
Appendix A
13. Management of the Fund Investment Adviser; Custodian,
Transfer Agent and Certain
Affiliations; Trustees and
Officers
14. Control Persons and Principal Not Applicable
Holders of Securities
15. Investment Advisory and Other Investment Adviser; Custodian,
Services Transfer Agent, and Certain
Affiliations; Portfolio
Transactions and Brokerage;
Trustees and Officers;
Miscellaneous Information
16. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
17. Capital Stock and Other Purchase of Shares; Redemption of
Securities Shares; Miscellaneous Information
18. Purchase, Redemption, and Purchase of Shares; Redemption of
Pricing of Shares Shares; Miscellaneous Information
19. Taxation of the Fund Tax-Deferred Accounts; Income
Dividends, Capital Gains
Distributions, and Tax Status
20. Underwriters Custodian, Transfer Agent, and
Certain Affiliations
21. Calculation of Performance Performance Information
Data
22. Financial Statements Not Applicable
<PAGE>
[JANUS LOGO]
Janus Strategic Value Fund
PROSPECTUS
JANUARY 31, 2000
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
[JANUS LOGO]
<PAGE>
Table of contents
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus Strategic Value Fund................... 2
Fees and expenses............................ 4
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 5
General portfolio policies................... 7
Risks........................................ 10
SHAREHOLDER'S MANUAL
Minimum investments.......................... 15
Types of account ownership................... 15
How to open your Janus account............... 17
How to purchase shares....................... 18
How to exchange shares....................... 20
How to redeem shares......................... 22
Shareholder services and account policies.... 26
MANAGEMENT OF THE FUND
Investment adviser........................... 31
Portfolio manager............................ 32
OTHER INFORMATION............... ............... 33
DISTRIBUTIONS AND TAXES
Distributions................................ 34
Taxes........................................ 35
GLOSSARY
Glossary of investment terms................. 37
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
JANUS STRATEGIC VALUE FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS STRATEGIC VALUE FUND?
The Fund seeks long-term growth of capital.
The Fund's Trustees may change this objective without a
shareholder vote and the Fund will notify you of any changes that
are material. If there is a material change in the Fund's
objective or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee
that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS STRATEGIC VALUE FUND?
The Fund invests primarily in common stocks with the potential
for long-term growth of capital using a "value" approach. The
"value" approach the portfolio manager uses emphasizes
investments in companies he believes are undervalued relative to
their intrinsic worth.
The portfolio manager measures value as a function of
price/earnings (P/E) ratios and price/free cash flow. A P/E ratio
is the relationship between the price of a stock and its earnings
per share. This figure is determined by dividing a stock's market
price by the company's earnings per share amount. Price/free cash
flow is the relationship between the price of a stock and its
available cash from operations minus capital expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving
their returns on invested capital. These companies may also
include special situations companies that are experiencing
management changes and/or are temporarily out of favor.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks for companies with earnings
growth potential one at a time. If the portfolio manager is
unable to find investments with earnings growth potential, a
significant portion of the Fund's assets may be in cash or
similar investments.
2 Janus Strategic Value Fund
<PAGE>
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS STRATEGIC VALUE FUND?
The biggest risk of investing in this Fund is that its returns
may vary and you could lose money. If you are considering
investing in the Fund, remember that it is designed for long-term
investors who can accept the risks of investing in a portfolio
with significant common stock holdings. Common stocks tend to be
more volatile than other investment choices.
The value of the Fund's portfolio may decrease if the value of an
individual company in the portfolio decreases or if the portfolio
manager's belief about a company's intrinsic worth is incorrect.
The value of the Fund's portfolio could also decrease if the
stock market goes down. If the value of the Fund's portfolio
decreases, the Fund's net asset value (NAV) will also decrease
which means if you sell your shares in the Fund you would get
back less money.
An investment in the Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Risk return summary 3
<PAGE>
FEES AND EXPENSES
SHAREHOLDER FEES, such as sales loads, redemption fees or
exchange fees, are charged directly to an investor's account. All
Janus funds are no-load investments, so you will not pay any
shareholder fees when you buy or sell shares of the Fund.
ANNUAL FUND OPERATING EXPENSES are paid out of the Fund's assets
and include fees for portfolio management, maintenance of
shareholder accounts, shareholder servicing, accounting and other
services. You do not pay these fees directly but, as the example
below shows, these costs are borne indirectly by all
shareholders.
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
<TABLE>
<CAPTION>
Janus Strategic Value Fund
<S> <C>
Management Fee 0.75%
Other Expenses(1) 0.50%
Total Annual Fund Operating Expenses 1.25%
</TABLE>
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(1) "Other Expenses" are based on the estimated expenses that the Fund expects
to incur in its initial fiscal year.
- --------------------------------------------------------------------------------
EXAMPLE:
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods
indicated then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and
that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 Year 3 Years
-----------------
<S> <C> <C>
Janus Strategic Value Fund $127 $397
</TABLE>
4 Janus Strategic Value Fund
<PAGE>
Investment objective, principal
investment
strategies and risks
This section takes a closer look at the investment objective of
the Fund, its principal investment strategies and certain risks
of investing in the Fund. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.
Please carefully review the "Risks" section of this Prospectus on
pages 10-12 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Strategic Value Fund seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks
with the potential for long-term growth of capital using a
"value" approach. The "value" approach the portfolio manager uses
emphasizes investments in companies he believes are undervalued
relative to their intrinsic worth.
The portfolio manager measures value as a function of
price/earnings (P/E) ratios and price/free cash flow. A P/E ratio
is the relationship between the price of a stock and its earnings
per share. This figure is determined by dividing a stock's market
price by the company's earnings per share amount. Price/free cash
flow is the relationship between the price of a stock and its
available cash from operations minus capital expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving
their returns on invested capital. These companies may also
include special situations companies that are experiencing
management changes and/or are temporarily out of favor.
Investment objective, principal investment strategies and risks 5
<PAGE>
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common
stocks if its portfolio manager believes that common stocks will
appreciate in value. The portfolio manager generally takes a
"bottom up" approach to selecting companies. In other words, he
seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. He
makes this assessment by looking at companies one at a time,
regardless of size, country of organization, place of principal
business activity, or other similar selection criteria.
Realization of income is not a significant consideration when
choosing investments for the Fund. Income realized on the Fund's
investments will be incidental to its objective.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies that meet
his selection criteria regardless of where a company is located.
Foreign securities are generally selected on a stock-by-stock
basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected
levels of inflation, government policies influencing business
conditions, the outlook for currency relationships, and prospects
for economic growth among countries, regions or geographic areas
may warrant greater consideration in selecting foreign
securities. There are no limitations on the countries in which
the Fund may invest and the Fund may at times have significant
foreign exposure.
3. HOW DOES THE PORTFOLIO MANAGER DETERMINE THAT A COMPANY MAY BE UNDERVALUED?
A company may be undervalued when, in the opinion of the Fund's
portfolio manager, the company is selling for a price that is
below its intrinsic worth. A company may be undervalued due to
market or economic conditions, temporary earnings declines,
6 Janus Strategic Value Fund
<PAGE>
unfavorable developments affecting the company or other factors.
Such factors may provide buying opportunities at attractive
prices compared to historical or market price-earnings ratios,
price/free cash flow, book value, or return on equity. The
portfolio manager believes that buying these securities at a
price that is below its intrinsic worth may generate greater
returns for the Fund than those obtained by paying premium prices
for companies currently in favor in the market.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the
general policies listed below. The percentage limitations
included in these policies and elsewhere in this Prospectus apply
only at the time of purchase of the security. So, for example, if
the Fund exceeds a limit as a result of market fluctuations or
the sale of securities, it will not be required to dispose of any
securities.
CASH POSITION
When the Fund's portfolio manager believes that market conditions
are unfavorable for profitable investing, or when he is otherwise
unable to locate attractive investment opportunities, the Fund's
cash or similar investments may increase. In other words, the
Fund does not always stay fully invested in stocks. Cash or
similar investments generally are a residual - they represent the
assets that remain after the portfolio manager has committed
available assets to desirable investment opportunities. However,
the portfolio manager may also temporarily increase the Fund's
cash position to protect its assets or maintain liquidity. When
the Fund's investments in cash or similar investments increase,
it may not participate in market advances or declines to the same
extent that it would if the Fund remained more fully invested in
stocks.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred
stocks, but it may also invest to a lesser degree in other types
of
Investment objective, principal investment strategies and risks 7
<PAGE>
securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
- options, futures, forwards, swaps and other types of
derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return
- securities purchased on a when-issued, delayed delivery or
forward commitment basis
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other
position that cannot be disposed of quickly in the normal course
of business. For example, some securities are not registered
under the U.S. securities laws and cannot be sold to the U.S.
public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Fund's Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Fund may invest without limit in foreign equity and debt
securities. The Fund may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
SPECIAL SITUATIONS
The Fund may invest in special situations. A special situation
arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and
appreciate in value due to a specific development with respect to
that issuer.
8 Janus Strategic Value Fund
<PAGE>
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. The
Fund's performance could suffer if the anticipated development in
a "special situation" investment does not occur or does not
attract the expected attention.
PORTFOLIO TURNOVER
The Fund generally intends to purchase securities for long-term
investment although, to a limited extent, the Fund may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason
of economic or other developments not foreseen at the time of the
investment decision. The Fund may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or
securities prices. Changes are made in the Fund's portfolio
whenever its portfolio manager believes such changes are
desirable. Portfolio turnover rates are generally not a factor in
making buy and sell decisions.
Increased portfolio turnover may result in higher costs for
brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Higher costs
associated with increased portfolio turnover may offset gains in
the Fund's performance.
Investment objective, principal investment strategies and risks 9
<PAGE>
RISKS
Because the Fund may invest substantially all of its assets in
common stocks, the main risk is the risk that the value of the
stocks it holds might decrease in response to the activities of
an individual company or in response to general market and/or
economic conditions. If this occurs, the Fund's share price may
also decrease. The Fund's performance may also be affected by
risks specific to certain types of investments, such as foreign
securities, derivative investments, non-investment grade debt
securities or companies with relatively small market
capitalizations.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?
If the portfolio manager's perception of a company's worth is not
realized in the time frame he expects, the overall performance of
the Fund may suffer. In addition, if the market value of a
company declines the Fund's performance could suffer. In general,
the portfolio manager believes these risks are mitigated by
investing in companies that are undervalued in the market in
relation to earnings, dividends and/or assets.
2. THE FUND MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Many attractive investment opportunities may be smaller, start-up
companies offering emerging products or services. Smaller or
newer companies may suffer more significant losses as well as
realize more substantial growth than larger or more established
issuers because they may lack depth of management, be unable to
generate funds necessary for growth or potential development, or
be developing or marketing new products or services for which
markets are not yet established and may never become established.
In addition, such companies may be insignificant factors in their
industries and may become subject to intense competition from
larger or more established companies. Securities
10 Janus Strategic Value Fund
<PAGE>
of smaller or newer companies may have more limited trading
markets than the markets for securities of larger or more
established issuers, and may be subject to wide price
fluctuations. Investments in such companies tend to be more
volatile and somewhat more speculative.
3. I'VE HEARD A LOT ABOUT HOW THE CHANGE TO THE YEAR 2000 COULD AFFECT COMPUTER
SYSTEMS. DOES THIS CREATE ANY SPECIAL RISKS?
The portfolio manager carefully researches each potential
investment before making an investment decision and, among other
things, considers Year 2000 readiness when selecting portfolio
holdings. However, there is no guarantee that the information the
portfolio manager receives regarding a company's Year 2000
readiness is completely accurate. If a company has not
satisfactorily addressed Year 2000 issues, the Fund's performance
could suffer.
4. HOW COULD THE FUND'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?
The Fund may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign
markets. Investments in foreign securities, including those of
foreign governments, may involve greater risks than investing in
domestic securities because the Fund's performance may depend on
issues other than the performance of a particular company. These
issues include:
- currency risk
- political and economic risk
- regulatory risk
- market risk
- transaction costs
These risks are described in the SAI.
Investment objective, principal investment strategies and risks 11
<PAGE>
5. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?
High-yield/high-risk bonds (or "junk" bonds) are securities rated
below investment grade by the primary rating agencies such as
Standard & Poor's and Moody's. The value of lower quality
securities generally is more dependent on credit risk, or the
ability of the issuer to meet interest and principal payments,
than investment grade debt securities. Issuers of high-yield
bonds may not be as strong financially as those issuing bonds
with higher credit ratings and are more vulnerable to real or
perceived economic changes, political changes or adverse
developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
6. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options, swaps and other derivative
instruments to "hedge" or protect its portfolio from adverse
movements in securities prices and interest rates. The Fund may
also use a variety of currency hedging techniques, including
forward currency contracts, to manage exchange rate risk. The
Fund believes the use of these instruments will benefit the Fund.
However, the Fund's performance could be worse than if the Fund
had not used such instruments if the portfolio manager's
judgement proves incorrect. Risks associated with the use of
derivative instruments are described in the SAI.
12 Janus Strategic Value Fund
<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.
[JANUS LOGO]
<PAGE>
HOW TO GET IN TOUCH WITH JANUS
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
QUICK ADDRESS AND TELEPHONE REFERENCE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
MAILING ADDRESS JANUS XPRESSLINE(TM)
Janus 1-888-979-7737
P.O. Box 173375 For 24-hour access to account
Denver, CO 80217-3375 and fund information,
exchanges, purchases and
FOR OVERNIGHT CARRIER redemptions, automated daily
Janus quotes on fund share prices,
Suite 101 yields and total returns.
3773 Cherry Creek North Drive
Denver, CO 80209-3811 TDD
1-800-525-0056
INVESTOR SERVICE REPRESENTATIVES A telecommunications device
If you have any questions while reading for our hearing- and
this Prospectus, please call one of our speech-impaired shareholders.
Investor Service Representatives at
1-800-525-3713 Monday-Friday: 8:00 JANUS LITERATURE LINE
a.m.-8:00 p.m., and Saturday: 10:00 1-800-525-8983
a.m.-4:00 p.m., New York time. To request a prospectus,
shareholder reports or
JANUS INTERNET ADDRESS marketing materials 24 hours a
janus.com day.
</TABLE>
14 Janus Strategic Value Fund
<PAGE>
MINIMUM INVESTMENTS*
- ---------------------------------------------
<TABLE>
<S> <C>
To open a new regular account $2,500
To open a new retirement,
education or UGMA/UTMA account $ 500
To open a new regular account with
an Automatic Investment Program $ 500**
To add to any type of an account $ 100+
</TABLE>
* The Fund reserves the right to change the amount of these minimums from time
to time or to waive them in whole or in part for certain types of accounts.
** An Automatic Investment Program requires a $100 minimum automatic investment
per month until the account balance reaches $2,500.
+ The minimum subsequent investment for IRA UGMA/UTMA accounts is $50.
TYPES OF ACCOUNT OWNERSHIP
If you are investing in the Fund 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 or visit our Web site
at janus.com to download an application.
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.
Shareholder's manual 15
<PAGE>
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
described below and the Education IRA. Distributions from these
plans are generally subject to income tax and may be subject to
an additional tax if withdrawn prior to age 59 1/2 or used for a
nonqualifying purpose. Investors should consult their tax adviser
or legal counsel before selecting a tax-deferred account.
Investors Fiduciary Trust Company serves as custodian for the
tax-deferred accounts offered by the Fund. You will be charged an
annual account maintenance fee of $12 for each taxpayer
identification number no matter how many tax-deferred accounts
you have with Janus. You may pay the fee by check or have it
automatically deducted from your account (usually in December).
The custodian reserves the right to change the amount of this fee
or to waive it in whole or in part for certain types of accounts.
The following plans require a special application. For an
application and more details about our Retirement Plans, call
1-800-525-3713.
TRADITIONAL AND ROTH INDIVIDUAL RETIREMENT ACCOUNTS
Both types of IRAs allow most individuals with earned income to
contribute up to the lesser of $2,000 ($4,000 for most married
couples) or 100% of compensation annually. Please refer to the
Janus IRA booklet for more complete information regarding the
different types of IRAs.
16 Janus Strategic Value Fund
<PAGE>
EDUCATION IRA
This plan allows individuals, subject to certain income
limitations, to contribute up to $500 annually on behalf of any
child under the age of 18. Please refer to the Janus IRA booklet
for more complete information regarding the Education IRA.
SIMPLIFIED EMPLOYEE PENSION PLAN
This plan allows small business owners (including sole
proprietors) to make tax-deductible contributions for themselves
and any eligible employee(s). A SEP requires an IRA (a SEP-IRA)
to be set up for each SEP participant.
PROFIT SHARING OR MONEY PURCHASE PENSION PLAN
These plans are open to corporations, partnerships and sole
proprietors to benefit their employees and themselves.
SECTION 403(B)(7) PLAN
Employees of educational organizations or other qualifying, tax-
exempt organizations may be eligible to participate in a Section
403(b)(7) Plan.
HOW TO OPEN YOUR JANUS ACCOUNT
Complete and sign the appropriate application. Please be sure to
provide your Social Security or taxpayer identification number on
the application and make your check payable to Janus. The Fund is
available only to U.S. citizens or residents, and your
application will be returned to you if you do not meet these
criteria. Send all items to one of addresses listed in the "Quick
Address and Telephone Reference" on page 14.
Shareholder's manual 17
<PAGE>
HOW TO PURCHASE SHARES
PAYING FOR SHARES
When you purchase shares, your request will be processed at the
next NAV calculated after your order is received and accepted.
Please note the following:
- Cash, credit cards, third party checks and credit card checks
will not be accepted.
- All purchases must be made in U.S. dollars.
- Checks must be drawn on a U.S. bank and made payable to Janus.
- If a check does not clear your bank, the Fund reserves the
right to cancel the purchase.
- If the Fund is unable to debit your predesignated bank account
on the day of purchase, it may make additional attempts or
cancel the purchase.
- The Fund reserves the right to reject any specific purchase
request.
If your purchase is cancelled you will be responsible for any
losses or fees imposed by your bank and losses that may be
incurred as a result of any decline in the value of the cancelled
purchase. The Fund (or its agents) has the authority to redeem
shares in your account(s) to cover any such losses due to
fluctuations in share price. Any profit on such cancellation will
accrue to the Fund.
ONCE YOU HAVE OPENED YOUR JANUS ACCOUNT, THE MINIMUM AMOUNT FOR
AN ADDITIONAL INVESTMENT IS $100 ($50 FOR IRAS OR UGMA/UTMA
ACCOUNTS). You may add to your account at any time through any of
the following options:
BY MAIL
Complete the remittance slip attached at the bottom of your
confirmation statement. If you are making a purchase into a
retirement account, please indicate whether the purchase is a
18 Janus Strategic Value Fund
<PAGE>
rollover or a current or prior year contribution. Send your check
made payable to Janus 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
XpressLine, 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.
BY INTERNET
You must pre-establish the "Telephone Purchase of Shares Option"
to make a purchase on our Web site at janus.com. If you have
questions, please call 1-800-975-9932 to speak to a Janus
representative.
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help you
achieve your financial goals as simply and conveniently as
Shareholder's manual 19
<PAGE>
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 from your bank account. If your Fund account is
already established, call 1-800-525-3713 to request the
appropriate form.
PAYROLL DEDUCTION
If your employer can initiate an automatic payroll deduction, you
may have all or a portion of your paycheck ($100 minimum)
invested directly into your Fund account. To obtain information
on establishing this option, call 1-800-525-3713.
SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money
($100 minimum) you would like automatically exchanged from one
Janus account to another on any day of the month. For more
information on how to establish this option, call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your
shares into any other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions
for written requests on page 24.
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
20 Janus Strategic Value Fund
<PAGE>
or call the Janus XpressLine, 1-888-979-7737, for access to this
option 24 hours a day.
BY SYSTEMATIC EXCHANGE
As noted above, you may establish a Systematic Exchange for as
little as $100 per month on established accounts. You may
establish a new account with a $500 initial purchase and
subsequent $100 systematic exchanges. If the balance in the
account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the
program will be discontinued.
BY INTERNET
Exchanges may also be made on our Web site at janus.com.
EXCHANGE POLICIES
- Except for Systematic Exchanges, new accounts established by
exchange must be opened with $2,500 or the total account value
if the value of the account you are exchanging from is less
than $2,500.
- Exchanges between existing accounts must meet the $100
subsequent investment requirement.
- You may make four exchanges out of the Fund during a calendar
year (exclusive of Systematic Exchanges). Exchanges in excess
of this limit may be subject to an exchange fee or may result
in termination of the exchange privilege.
- The Fund reserves the right to reject any exchange request and
to modify or terminate the exchange privilege at any time. For
example, the Fund may reject exchanges from accounts engaged in
or known to engage in trading in excess of the limit above
(including market timing transactions).
- Exchanges between accounts will be accepted only if the
registrations are identical.
Shareholder's manual 21
<PAGE>
- Be sure to read the prospectus for the fund into which you are
exchanging.
- An exchange represents the sale of shares from one fund and the
purchase of shares of another fund, which may produce a taxable
gain or loss in a non-tax deferred account.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your
shares. If the shares are held in certificate form, the
certificate must be returned with or before your redemption
request. Your transaction will be processed at the next NAV
calculated after your order is received and accepted. The
redemption may be suspended for 10 days following an address
change unless a signature guarantee is provided.
IN WRITING
To request a redemption in writing, please follow the
instructions for written requests noted on page 26.
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
XpressLine, 1-888-979-7737, for access to this option 24 hours a
day. (There is a daily limit of $100,000 per account for
redemptions payable by check.)
22 Janus Strategic Value Fund
<PAGE>
BY INTERNET
Redemptions may also be made on our Web site at janus.com.
SYSTEMATIC REDEMPTION OPTION
The Systematic Redemption Option allows you to redeem a specific
dollar amount from your Fund 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,
ON OUR WEB SITE, OR THROUGH THE AUTOMATIC MONTHLY INVESTMENT
PROGRAM, THE FUND MAY DELAY THE PAYMENT OF YOUR REDEMPTION
PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF PURCHASE TO ALLOW THE
PURCHASE TO CLEAR. Unless you provide alternate instructions,
your proceeds will be invested in Janus
Shareholder's manual 23
<PAGE>
Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem all or part of your shares in writing, your request
should be sent to one of the addresses listed on page 14 and must
include the following information:
- the name of the Fund
- the account number
- the amount of money or number of shares being redeemed or
exchanged
- the name(s) on the account registration
- 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.
24 Janus Strategic Value Fund
<PAGE>
TRUST
Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days
must also be submitted.
IRA
Written instructions must be signed by the account owner. If you
do not want federal income tax withheld from your redemption, you
must state that you elect not to have such withholding apply. In
addition, your instructions must state whether the distribution
is normal (after age 59 1/2) or premature (before age 59 1/2)
and, if premature, whether any exceptions such as death or
disability apply with regard to the 10% additional tax on early
distributions.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE
IS ALSO REQUIRED if any of the following is applicable:
- You request a redemption by check that exceeds $100,000.
- You would like the check made payable to anyone other than the
shareholder(s) of record.
- You would like the check mailed to an address which has been
changed within 10 days of the redemption request.
- You would like the check mailed to an address other than the
address of record.
THE FUND RESERVES THE RIGHT TO REQUIRE A SIGNATURE GUARANTEE
UNDER OTHER CIRCUMSTANCES OR TO REJECT OR DELAY A REDEMPTION ON
CERTAIN LEGAL GROUNDS. FOR MORE INFORMATION PERTAINING TO
SIGNATURE GUARANTEES, PLEASE CALL 1-800-525-3713.
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The
signature guarantee protects shareholders from unauthorized
account transfers. The following financial institutions may
guaran-
Shareholder's manual 25
<PAGE>
tee 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 cannot 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 accepted
by the Fund (or the Fund's agent or authorized designee). The
Fund's NAV is calculated at the close of the regular trading
session of the NYSE (normally 4:00 p.m. New York time) each day
that the NYSE is open. The NAV of Fund shares is not determined
on days the NYSE is closed (generally, New Year's Day, Martin
Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas). 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 XPRESSLINE(TM)
Janus XpressLine, 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 and redemptions in existing accounts,
request literature about any Janus fund, or order duplicate
26 Janus Strategic Value Fund
<PAGE>
statements. Janus XpressLine is accessed by calling
1-888-979-7737. Calls are limited to five minutes.
JANUS WEB SITE
Janus maintains a Web site located at JANUS.COM. You can
purchase, exchange and redeem shares and access information such
as your account balance and the Fund's NAV through the Web site.
You can also view your quarterly statement on the Web site. In
order to engage in transactions on our Web site, you must
authorize us to transmit account information online and accept
online instructions (see janus.com and follow the procedures
accordingly). You may also need to have bank account information,
wire instructions or other options established on your account.
The Fund and its agents will not be responsible for any losses
resulting from unauthorized transactions on our Web site when
procedures designed for engaging in such transactions are
followed. If you have questions, please call 1-800-975-9932 to
speak to a Janus representative.
ACCOUNT MINIMUMS
Due to the proportionately higher costs of maintaining small
accounts, Janus reserves the right to deduct a $10 minimum
balance fee (or the value of the account if less than $10) from
accounts with values below the minimums described on page 15 or
to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if
your account balance does not reach the required minimum initial
investment or falls below such minimum and you have discontinued
monthly investments. This policy does not apply to accounts that
fall below the minimums solely as a result of market value
fluctuations. It is expected that, 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.
Shareholder's manual 27
<PAGE>
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer,
bank or other financial institution, or an organization that
provides recordkeeping and consulting services to 401(k) plans or
other employee benefit plans (a "Processing Organization").
Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent
investments than the Fund. Processing Organizations may also
impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. A
Processing Organization, rather than its customer, may be the
shareholder of record of your shares. The Fund is not responsible
for the failure of any Processing Organization to carry out its
obligations to its customers. Certain Processing Organizations
may receive compensation from Janus Capital or its affiliates and
certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On your application or other appropriate form, you will be asked
to certify that your Social Security or taxpayer identification
number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you are
subject to the 31% backup withholding or you did not certify your
taxpayer identification number, the IRS requires the Fund to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Fund for any penalty that
the IRS may impose.
INVOLUNTARY REDEMPTIONS
The Fund reserves the right to close an account if the
shareholder is deemed to engage in activities which are illegal
or otherwise believed to be detrimental to the Fund.
28 Janus Strategic Value Fund
<PAGE>
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Fund and its
agents will not be responsible for any losses resulting from
unauthorized transactions when procedures designed to verify the
identity of the caller are followed.
It may be difficult to reach an Investor Service Representative
by telephone during periods of unusual market activity. If you
are unable to reach a representative by telephone, please
consider sending written instructions, stopping by a Service
Center, calling the Janus XpressLine or visiting our Web site.
TEMPORARY SUSPENSION OF SERVICES
The Fund or its agents may, in case of emergency, temporarily
suspend telephone transactions or other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by all account owners. Include the
name of the Fund, the account number(s), the name(s) on the
account and both the old and new addresses. Certain options may
be suspended for 10 days following an address change unless a
signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For more information call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors will receive quarterly confirmations of all
transactions. Quarterly statements for all investors are
available on our Web site. You may elect to discontinue receipt
of paper statements on our Web site. Dividend information will be
distributed annually.
Shareholder's manual 29
<PAGE>
In addition, the Fund will send you an immediate transaction
confirmation statement after every non-systematic transaction.
The Fund produces financial reports, which include a list of the
Fund's portfolio holdings, semiannually and updates its
prospectus annually. To reduce expenses, the Fund may choose to
mail only one report or prospectus 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. The Fund reserves the right to charge a
fee for additional statement and report requests.
30 Janus Strategic Value Fund
<PAGE>
Management of the fund
INVESTMENT ADVISER
Janus Capital Corporation, 100 Fillmore Street, Denver, Colorado
80206-4928, is the investment adviser to the Fund and is
responsible for the day-to-day management of its investment
portfolio and other business affairs.
Janus Capital began serving as investment adviser to Janus Fund
in 1970 and currently serves as investment adviser to all of the
Janus funds, acts as sub-adviser for a number of private-label
mutual funds and provides separate account advisory services for
institutional accounts.
Janus Capital furnishes continuous advice and recommendations
concerning the Fund's investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for
the Fund, and may be reimbursed by the Fund for its costs in
providing those services. In addition, Janus Capital employees
serve as officers of the Trust and Janus Capital provides office
space for the Fund and pays the salaries, fees and expenses of
all Fund officers and those Trustees who are affiliated with
Janus Capital.
The Fund pays Janus Capital a management fee which is calculated
daily and paid monthly. The advisory agreement with the Fund
spells out the management fee and other expenses that the Fund
must pay. The Fund's management fee schedule is set out below.
<TABLE>
<CAPTION>
Average Daily Net Assets of Funds Annual Rate Percentage (%)
- --------------------------------------------------------------------------------
<S> <C>
First $300 Million 0.75
Next $200 Million 0.70
Over $500 Million 0.65
- --------------------------------------------------------------------------------
</TABLE>
The Fund incurs expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and
auditing fees, printing and mailing costs of sending reports and
other information to existing shareholders, and independent
Trustees' fees and expenses.
Management of the fund 31
<PAGE>
PORTFOLIO MANAGER
DAVID C. DECKER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund, which he has managed since inception. He is also
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 Capital in 1992 as a research
analyst and focused on companies in the automotive and
defense industries prior to managing the 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. Mr. Decker received the Chartered Financial
Analyst designation.
32 Janus Strategic Value Fund
<PAGE>
Other information
SIZE OF THE FUND
Although there is no present intention to do so, the Fund may
discontinue sales of its shares if management and the Trustees
believe that continued sales may adversely affect the Fund's
ability to achieve its investment objective. If sales of the Fund
are discontinued, it is expected that existing shareholders of
the Fund would be permitted to continue to purchase shares and to
reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
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 devoted considerable internal resources and has
engaged one of the foremost experts in the field to help achieve
Year 2000 readiness. Janus Capital does not anticipate that Year
2000-related issues will have a material impact on its ability to
continue to provide the Fund with service at current levels;
however, Janus Capital cannot make any assurances that the steps
it has taken to ensure Year 2000 readiness will be successful. In
addition, there can be no assurance that Year 2000 issues will
not affect the companies in which the Fund invests or worldwide
markets and economies.
Other information 33
<PAGE>
Distributions and taxes
DISTRIBUTIONS
To avoid taxation of the Fund, the Internal Revenue Code requires
the Fund to distribute net income and any net capital gains
realized on its investments annually. The Fund's income from
dividends and interest and any net realized short-term gains are
paid to shareholders as ordinary income dividends. Net realized
long-term gains are paid to shareholders as capital gains
distributions. Dividends and capital gains distributions are
normally declared and paid in December.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions are paid to shareholders as of the record date of
the distribution of the Fund, regardless of how long the shares
have been held. Dividends and capital gains awaiting distribution
are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
the Fund declared a dividend in the amount of $0.25 per share. If
the Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as "buying a dividend." In the above example, if you
bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as
a dividend and your shares would now be worth $9.75 per share.
Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for
tax purposes, even though you may not have participated in the
34 Janus Strategic Value Fund
<PAGE>
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 14 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income
dividends or capital gains distributions in cash and reinvest
the other in additional shares.
4. REDIRECT OPTION. You may direct your dividends or capital
gains to purchase shares of another Janus fund.
The Fund reserves the right to reinvest into your account
undeliverable and uncashed dividend and distribution checks that
remain outstanding for six months in shares of the Fund at the
NAV next computed after the check is cancelled. Subsequent
distributions may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax
Distributions and taxes 35
<PAGE>
adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal
income tax, regardless of whether the distribution is made in
cash or reinvested in additional shares of the Fund.
Distributions may be taxable at different rates depending on the
length of time the Fund holds a security. In certain states, a
portion of the dividends and distributions (depending on the
source of the Fund's income) may be exempt from state and local
taxes. Information regarding the tax status of income dividends
and capital gains distributions will be mailed to shareholders on
or before January 31st of each year. Account tax information will
also be sent to the IRS.
TAXATION OF THE FUND
Dividends, interest, and some capital gains received by the Fund
on foreign securities may be subject to tax withholding or other
foreign taxes. The Fund may from year to year make the election
permitted under section 853 of the Internal Revenue Code to pass
through such taxes to shareholders as a foreign tax credit. If
such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Fund.
The Fund does not expect to pay federal income or excise taxes
because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meet these
requirements so that any earnings on your investment will not be
taxed twice.
36 Janus Strategic Value Fund
<PAGE>
Glossary of investment terms
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Fund may
invest. The Fund may invest in these instruments to the extent
permitted by its investment objective and policies. The Fund is
not limited by this discussion and may invest in any other types
of instruments not precluded by the policies discussed elsewhere
in this Prospectus. Please refer to the SAI for a more detailed
discussion of certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required
to pay the holder the amount of the loan (or par value of the
bond) at a specified maturity and to make scheduled interest
payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and
other borrowers to investors seeking to invest idle cash. The
Fund may purchase commercial paper issued in private placements
under Section 4(2) of the Securities Act of 1933.
COMMON STOCKS are equity securities representing shares of
ownership in a company, and usually carry voting rights and earns
dividends. Unlike preferred stock, dividends on common stocks are
not fixed but are declared at the discretion of the issuer's
board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a
fixed dividend or interest payment and are convertible into
common stock at a specified price or conversion ratio.
DEBT SECURITIES are equity securities representing money borrowed
that must be repaid at a later date. Such securities have
specific maturities and usually a specific rate of interest or an
original purchase discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital
gains on the underlying security. Receipts include those issued
by domestic banks (American Depositary Receipts), foreign banks
Glossary of investment terms 37
<PAGE>
(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 BONDS are securities that are rated below
investment grade by the primary rating agencies (e.g., BB or
lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio managers may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or
hold certain amounts of assets for the production of passive
income. Passive income includes dividends, interest, royalties,
rents and annuities. To avoid taxes and interest that the Fund
must pay if these investments are profitable, the Fund may make
various elections permitted by the tax laws. These elections
could require that the Fund recognize taxable income, which in
turn
38 Janus Strategic Value Fund
<PAGE>
must be distributed, before the securities are sold and before
cash is received to pay the distributions.
PREFERRED STOCKS are equity securities that generally pay
dividends at a specified rate and have preference over common
stock in the payment of dividends and liquidation. Preferred
stock generally does not carry voting rights.
REPURCHASE AGREEMENTS involve the purchase of a security by the
Fund and a simultaneous agreement by the seller (generally a bank
or dealer) to repurchase the security from the Fund at a
specified date or upon demand. This technique offers a method of
earning income on idle cash. These securities involve the risk
that the seller will fail to repurchase the security, as agreed.
In that case, the Fund will bear the risk of market value
fluctuations until the security can be sold and may encounter
delays and incur costs in liquidating the security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by
the Fund to another party (generally a bank or dealer) in return
for cash and an agreement by the Fund to buy the security back at
a specified price and time. This technique will be used primarily
to provide cash to satisfy unusually heavy redemption requests,
or for other temporary or emergency purposes.
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.
Glossary of investment terms 39
<PAGE>
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
40 Janus Strategic Value Fund
<PAGE>
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 instrument and may be more volatile
than the underlying instrument. The Fund bears the market risk of
an investment in the underlying instrument, as well as the credit
risk of the issuer.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Fund may purchase and
write put and call options on securities, securities indices and
foreign currencies.
Glossary of investment terms 41
<PAGE>
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<PAGE>
[JANUS LOGO]
1-800-525-3713
P.O. Box 173375
Denver, Colorado 80217-3375
janus.com
You can request other information, including a Statement of
Additional Information, free of charge, by contacting Janus at
1-800-525-3713 or visiting our Web site at janus.com. Other
information is also available from financial intermediaries that
sell shares of the Fund.
The Statement of Additional Information provides detailed
information about the Fund and is incorporated into this Prospectus
by reference. You may review the Fund's Statement of Additional
Information at the Public Reference Room of the SEC or get text only
copies for a fee, by writing to or calling the Public Reference
Room, Washington, D.C. 20549-6009 (1-800-SEC-0330). You may obtain
the Statement of Additional Information for free from the SEC's Web
site at http://www.sec.gov.
Investment Company Act File No. 811-1879
<PAGE>
[JANUS LOGO]
Janus Investment Fund
Janus Strategic Value Fund
100 Fillmore Street
Denver, CO 80206-4928
(800) 525-3713
Statement of Additional Information
January 31, 2000
Janus Strategic Value Fund is a no-load, diversified
mutual fund that seeks long-term growth of capital. It
invests primarily in common stocks with the potential for
long-term growth of capital using a "value" approach. The
"value" approach the portfolio manager uses emphasizes
investments in companies he believes are undervalued
relative to their intrinsic worth.
The portfolio manager measures value as a function of
price/earnings (P/E) ratios and price/free cash flow. A
P/E ratio is the relationship between the price of a
stock and its earnings per share. This figure is
determined by dividing a stock's market price by the
company's earnings per share amount. Price/free cash flow
is the relationship between the price of a stock and its
available cash from operations minus capital
expenditures.
The portfolio manager will typically seek attractively
valued companies that are improving their free cash flow
and improving their returns on invested capital. These
companies may also include special situations companies
that are experiencing management changes and/or are
temporarily out of favor.
The Fund is a separate series of Janus Investment Fund, a
Massachusetts business trust.
This Statement of Additional Information is not a
Prospectus and should be read in conjunction with the
Fund's Prospectus dated January 31, 2000, which is
incorporated by reference into this SAI and may be
obtained from the Trust at the above phone number or
address. This SAI contains additional and more detailed
information about the Fund's operations and activities
than the Prospectus.
<PAGE>
[JANUS LOGO]
<PAGE>
Table of contents
<TABLE>
<S> <C>
Classification, Investment Policies and
Restrictions, and Investment Strategies and
Risks........................................... 2
Investment Adviser.............................. 39
Custodian, Transfer Agent and Certain
Affiliations.................................... 43
Portfolio Transactions and Brokerage............ 45
Trustees and Officers........................... 48
Purchase of Shares.............................. 53
Net Asset Value Determination................ 53
Reinvestment of Dividends and Distributions.. 54
Redemption of Shares............................ 56
Shareholder Accounts............................ 57
Telephone and Web Site Transactions.......... 57
Systematic Redemptions....................... 57
Tax-Deferred Accounts........................... 58
Income Dividends, Capital Gains Distributions
and Tax Status.................................. 60
Miscellaneous Information....................... 61
Shares of the Trust.......................... 61
Shareholder Meetings......................... 62
Voting Rights................................ 62
Master/Feeder Option......................... 63
Independent Accountants...................... 63
Registration Statement....................... 63
Performance Information......................... 64
Appendix A...................................... 65
</TABLE>
1
<PAGE>
Classification, investment policies
and restrictions, and
investment strategies
and risks
CLASSIFICATION
The Fund is a series of the Trust, an open-end, management
investment company. The Investment Company Act of 1940 ("1940
Act") classifies mutual funds as either diversified or
nondiversified, and the Fund is a diversified fund.
INVESTMENT POLICIES AND RESTRICTIONS
The Fund is subject to certain fundamental policies and
restrictions that may not be changed without shareholder
approval. Shareholder approval means approval by the lesser of
(i) more than 50% of the outstanding voting securities of the
Trust (or the Fund if a matter affects just the Fund), or (ii)
67% or more of the voting securities present at a meeting if the
holders of more than 50% of the outstanding voting securities of
the Trust (or the Fund) are present or represented by proxy. As
fundamental policies, the Fund may not:
(1) Own more than 10% of the outstanding voting securities of any
one issuer and, as to seventy-five percent (75%) of the value of
its total assets, purchase the securities of any one issuer
(except cash items and "government securities" as defined under
the 1940 Act), if immediately after and as a result of such
purchase, the value of the holdings of the Fund in the securities
of such issuer exceeds 5% of the value of the Fund's total
assets.
(2) Invest 25% or more of the value of its total assets in any
particular industry (other than U.S. government securities).
(3) Invest directly in real estate or interests in real estate;
however, the Fund may own debt or equity securities issued by
companies engaged in those businesses.
(4) Purchase or sell physical commodities other than foreign
currencies unless acquired as a result of ownership of securities
(but this limitation shall not prevent the Fund from purchasing
or
2
<PAGE>
selling options, futures, swaps and forward contracts or from
investing in securities or other instruments backed by physical
commodities).
(5) Lend any security or make any other loan if, as a result,
more than 25% of its total assets would be lent to other parties
(but this limitation does not apply to purchases of commercial
paper, debt securities or repurchase agreements).
(6) Act as an underwriter of securities issued by others, except
to the extent that the Fund may be deemed an underwriter in
connection with the disposition of portfolio securities of the
Fund.
As a fundamental policy, the Fund may, notwithstanding any other
investment policy or limitation (whether or not fundamental),
invest all of its assets in the securities of a single open-end
management investment company with substantially the same
fundamental investment objective, policies and limitations as the
Fund.
The Trustees have adopted additional investment restrictions for
the Fund. These restrictions are operating policies of the Fund
and may be changed by the Trustees without shareholder approval.
The additional investment restrictions adopted by the Trustees to
date include the following:
(a) The Fund will not (i) enter into any futures contracts and
related options for purposes other than bona fide hedging
transactions within the meaning of Commodity Futures Trading
Commission ("CFTC") regulations if the aggregate initial margin
and premiums required to establish positions in futures contracts
and related options that do not fall within the definition of
bona fide hedging transactions will exceed 5% of the fair market
value of the Fund's net assets, after taking into account
unrealized profits and unrealized losses on any such contracts it
has entered into; and (ii) enter into any futures contracts if
the aggregate amount of the Fund's commitments under outstanding
futures contracts positions would exceed the market value of its
total assets.
3
<PAGE>
(b) The Fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent
in kind and amount to the securities sold short without the
payment of any additional consideration therefor, and provided
that transactions in futures, options, swaps and forward
contracts are not deemed to constitute selling securities short.
(c) The Fund does not currently intend to purchase securities on
margin, except that the Fund may obtain such short-term credits
as are necessary for the clearance of transactions, and provided
that margin payments and other deposits in connection with
transactions in futures, options, swaps and forward contracts
shall not be deemed to constitute purchasing securities on
margin.
(d) The Fund may not mortgage or pledge any securities owned or
held by the Fund in amounts that exceed, in the aggregate, 15% of
the Fund's net asset value, provided that this limitation does
not apply to reverse repurchase agreements, deposits of assets to
margin, guarantee positions in futures, options, swaps or forward
contracts, or the segregation of assets in connection with such
contracts.
(e) The Fund may borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25%
of the value of its total assets (including the amount borrowed)
less liabilities (other than borrowings). If borrowings exceed
25% of the value of the Fund's total assets by reason of a
decline in net assets, the Fund will reduce its borrowings within
three business days to the extent necessary to comply with the
25% limitation. This policy shall not prohibit reverse repurchase
agreements, deposits of assets to margin or guarantee positions
in futures, options, swaps or forward contracts, or the
segregation of assets in connection with such contracts.
(f) The Fund does not currently intend to purchase any security
or enter into a repurchase agreement if, as a result, more than
15% of its net assets would be invested in repurchase agreements
not entitling the holder to payment of principal and interest
4
<PAGE>
within seven days and in securities that are illiquid by virtue
of legal or contractual restrictions on resale or the absence of
a readily available market. The Trustees, or the Fund's
investment adviser acting pursuant to authority delegated by the
Trustees, may determine that a readily available market exists
for securities eligible for resale pursuant to Rule 144A under
the Securities Act of 1933 ("Rule 144A Securities"), or any
successor to such rule, Section 4(2) commercial paper and
municipal lease obligations. Accordingly, such securities may not
be subject to the foregoing limitation.
(g) The Fund may not invest in companies for the purpose of
exercising control of management.
Under the terms of an exemptive order received from the
Securities and Exchange Commission ("SEC") the Fund may borrow
money from or lend money to other funds that permit such
transactions and for which Janus Capital serves as investment
adviser. All such borrowing and lending will be subject to the
above limits. The Fund will borrow money through the program only
when the costs are equal to or lower than the cost of bank loans.
Interfund loans and borrowings normally extend overnight, but can
have maximum duration of seven days. The Fund will lend through
the program only when the returns are higher than those available
from other short-term instruments (such as repurchase
agreements). The Fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any
delay in repayment to a lending Fund could result in a lost
investment opportunity or additional borrowing costs.
For the purposes of the Fund's policies on investing in
particular industries, the Fund will rely primarily on industry
or industry group classifications published by Bloomberg L.P. To
the extent that Bloomberg L.P. industry classifications are so
broad that the primary economic characteristics in a single
industry are materially different, the Fund may further classify
issuers in accordance with industry classifications as published
by the SEC.
5
<PAGE>
INVESTMENT STRATEGIES AND RISKS
Cash Position
As discussed in the Prospectus, when the Fund's portfolio manager
believes that market conditions are unfavorable for profitable
investing, or when he is otherwise unable to locate attractive
investment opportunities, the Fund's investment in cash and
similar investments may increase. Securities that the Fund may
invest in as a means of receiving a return on idle cash include
commercial paper, certificates of deposit, repurchase agreements
or other short-term debt obligations. The Fund may also invest in
money market funds, including funds managed by Janus Capital.
(See "Investment Company Securities" on page 11).
Illiquid Investments
The Fund may invest up to 15% of its net assets in illiquid
investments (i.e., securities that are not readily marketable).
The Trustees have authorized Janus Capital to make liquidity
determinations with respect to certain securities, including Rule
144A Securities, commercial paper and municipal lease obligations
purchased by the Fund. Under the guidelines established by the
Trustees, Janus Capital will consider the following factors: 1)
the frequency of trades and quoted prices for the obligation; 2)
the number of dealers willing to purchase or sell the security
and the number of other potential purchasers; 3) the willingness
of dealers to undertake to make a market in the security; and 4)
the nature of the security and the nature of marketplace trades,
including the time needed to dispose of the security, the method
of soliciting offers and the mechanics of the transfer. In the
case of commercial paper, Janus Capital will also consider
whether the paper is traded flat or in default as to principal
and interest and any ratings of the paper by a Nationally
Recognized Statistical Rating Organization ("NRSRO"). A foreign
security that may be freely traded on or through the facilities
of an offshore exchange or other established offshore securities
6
<PAGE>
market is not deemed to be a restricted security subject to these
procedures.
If illiquid securities exceed 15% of the Fund's net assets after
the time of purchase the Fund will take steps to reduce in an
orderly fashion its holdings of illiquid securities. Because
illiquid securities may not be readily marketable, the portfolio
manager may not be able to dispose of them in a timely manner. As
a result, the Fund may be forced to hold illiquid securities
while their price depreciates. Depreciation in the price of
illiquid securities may cause the net asset value of the Fund to
decline.
Securities Lending
The Fund may lend securities to qualified parties (typically
brokers or other financial institutions) who need to borrow
securities in order to complete certain transactions such as
covering short sales, avoiding failures to deliver securities or
completing arbitrage activities. The Fund may seek to earn
additional income through securities lending. Since there is the
risk of delay in recovering a loaned security or the risk of loss
in collateral rights if the borrower fails financially,
securities lending will only be made to parties that Janus
Capital deems creditworthy and in good standing. In addition,
such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Fund
will not have the right to vote on securities while they are
being lent, but it will call a loan in anticipation of any
important vote. All loans will be continuously secured by
collateral which consists of cash, U.S. government securities,
letters of credit and such other collateral permitted by the
Securities and Exchange Commission and policies approved by the
Trustees. Cash collateral may be invested in money market funds
advised by Janus to the extent consistent with exemptive relief
obtained from the SEC.
Foreign Securities
The Fund may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign
markets.
7
<PAGE>
Investments in foreign securities, including those of foreign
governments, may involve greater risks than investing in domestic
securities, because the Fund's performance may depend on issues
other than the performance of a particular company. These issues
include:
- CURRENCY RISK. As long as the Fund holds a foreign security,
its value will be affected by the value of the local currency
relative to the U.S. dollar. When the Fund sells a foreign
denominated security, its value may be worth less in U.S.
dollars even if the security increases in value in its home
country. U.S. dollar denominated securities of foreign issuers
may also be affected by currency risk.
- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject
to heightened political and economic risks, particularly in
emerging markets which may have relatively unstable
governments, immature economic structures, national policies
restricting investments by foreigners, different legal systems,
and economies based on only a few industries. In some
countries, there is the risk that the government may take over
the assets or operations of a company or that the government
may impose taxes or limits on the removal of a Fund's assets
from that country.
- REGULATORY RISK. There may be less government supervision of
foreign markets. As a result, foreign issuers may not be
subject to the uniform accounting, auditing and financial
reporting standards and practices applicable to domestic
issuers and there may be less publicly available information
about foreign issuers.
- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile
than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in
settling securities transactions. In some foreign markets,
there may not be protection against failure by other parties to
complete transactions.
8
<PAGE>
- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.
Short Sales
The Fund may engage in "short sales against the box." This
technique involves selling either a security that the Fund owns,
or a security equivalent in kind and amount to the security sold
short that the Fund has the right to obtain, for delivery at a
specified date in the future. The Fund may enter into a short
sale against the box to hedge against anticipated declines in the
market price of portfolio securities. If the value of the
securities sold short increases prior to the scheduled delivery
date, the Fund loses the opportunity to participate in the gain.
Zero Coupon, Step Coupon and Pay-In-Kind Securities
The Fund may invest up to 10% of its assets in zero coupon, pay-
in-kind and step coupon securities. Zero coupon bonds are issued
and traded at a discount from their face value. They do not
entitle the holder to any periodic payment of interest prior to
maturity. Step coupon bonds trade at a discount from their face
value and pay coupon interest. The coupon rate is low for an
initial period and then increases to a higher coupon rate
thereafter. The discount from the face amount or par value
depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the
perceived credit quality of the issuer. Pay-in-kind bonds
normally give the issuer an option to pay cash at a coupon
payment date or give the holder of the security a similar bond
with the same coupon rate and a face value equal to the amount of
the coupon payment that would have been made.
Current federal income tax law requires holders of zero coupon
and step coupon securities to report the portion of the original
issue discount on such securities that accrues during a given
year as interest income, even though the holders receive no cash
payments of interest during the year. In order to qualify as a
9
<PAGE>
"regulated investment company" under the Internal Revenue Code of
1986 and the regulations thereunder (the "Code"), the Fund must
distribute its investment company taxable income, including the
original issue discount accrued on zero coupon or step coupon
bonds. Because the Fund will not receive cash payments on a
current basis in respect of accrued original issue discount on
zero coupon bonds or step coupon bonds during the period before
interest payments begin, in some years the Fund may have to
distribute cash obtained from other sources in order to satisfy
the distribution requirements under the Code. The Fund might
obtain such cash from selling other portfolio holdings which
might cause the Fund to incur capital gains or losses on the
sale. Additionally, these actions are likely to reduce the assets
to which Fund expenses could be allocated and to reduce the rate
of return for the Fund. In some circumstances, such sales might
be necessary in order to satisfy cash distribution requirements
even though investment considerations might otherwise make it
undesirable for the Fund to sell the securities at the time.
Generally, the market prices of zero coupon, step coupon and
pay-in-kind securities are more volatile than the prices of
securities that pay interest periodically and in cash and are
likely to respond to changes in interest rates to a greater
degree than other types of debt securities having similar
maturities and credit quality.
Pass-Through Securities
The Fund may invest in various types of pass-through securities,
such as mortgage-backed securities, asset-backed securities and
participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that have
been repackaged by an intermediary, such as a bank or
broker-dealer. The purchaser of a pass-through security receives
an undivided interest in the underlying pool of securities. The
issuers of the underlying securities make interest and principal
payments to the intermediary which are passed through to
purchasers, such as the Fund. The most common type of
pass-through securities are
10
<PAGE>
mortgage-backed securities. Government National Mortgage
Association ("GNMA") Certificates are mortgage-backed securities
that evidence an undivided interest in a pool of mortgage loans.
GNMA Certificates differ from bonds in that principal is paid
back monthly by the borrowers over the term of the loan rather
than returned in a lump sum at maturity. The Fund will generally
purchase "modified pass-through" GNMA Certificates, which entitle
the holder to receive a share of all interest and principal
payments paid and owned on the mortgage pool, net of fees paid to
the "issuer" and GNMA, regardless of whether or not the mortgagor
actually makes the payment. GNMA Certificates are backed as to
the timely payment of principal and interest by the full faith
and credit of the U.S. government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two
types of mortgage pass-through securities: mortgage participation
certificates ("PCs") and guaranteed mortgage certificates
("GMCs"). PCs resemble GNMA Certificates in that each PC
represents a pro rata share of all interest and principal
payments made and owned on the underlying pool. FHLMC guarantees
timely payments of interest on PCs and the full return of
principal. GMCs also represent a pro rata interest in a pool of
mortgages. However, these instruments pay interest semiannually
and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment
of principal and interest but it is not guaranteed by the full
faith and credit of the U.S. government.
The Federal National Mortgage Association ("FNMA") issues
guaranteed mortgage pass-through certificates ("FNMA
Certificates"). FNMA Certificates resemble GNMA Certificates in
that each FNMA Certificate represents a pro rata share of all
interest and principal payments made and owned on the underlying
pool. This type of security is guaranteed by FNMA as to timely
payment of principal and interest but it is not guaranteed by the
full faith and credit of the U.S. government.
11
<PAGE>
Except for GMCs, each of the mortgage-backed securities described
above is characterized by monthly payments to the holder,
reflecting the monthly payments made by the borrowers who
received the underlying mortgage loans. The payments to the
security holders (such as the Fund), like the payments on the
underlying loans, represent both principal and interest. Although
the underlying mortgage loans are for specified periods of time,
such as 20 or 30 years, the borrowers can, and typically do, pay
them off sooner. Thus, the security holders frequently receive
prepayments of principal in addition to the principal that is
part of the regular monthly payments. The Fund's portfolio
manager will consider estimated prepayment rates in calculating
the average weighted maturity of the Fund. A borrower is more
likely to prepay a mortgage that bears a relatively high rate of
interest. This means that in times of declining interest rates,
higher yielding mortgage-backed securities held by the Fund might
be converted to cash and the Fund will be forced to accept lower
interest rates when that cash is used to purchase additional
securities in the mortgage-backed securities sector or in other
investment sectors. Additionally, prepayments during such periods
will limit the Fund's ability to participate in as large a market
gain as may be experienced with a comparable security not subject
to prepayment.
Asset-backed securities represent interests in pools of consumer
loans and are backed by paper or accounts receivables originated
by banks, credit card companies or other providers of credit.
Generally, the originating bank or credit provider is neither the
obligor nor the guarantor of the security, and interest and
principal payments ultimately depend upon payment of the
underlying loans by individuals. Tax-exempt asset-backed
securities include units of beneficial interests in pools of
purchase contracts, financing leases, and sales agreements that
may be created when a municipality enters into an installment
purchase contract or lease with a vendor. Such securities may be
secured by the assets purchased or leased by the municipality;
however, if the municipality stops making payments, there
generally will be no
12
<PAGE>
recourse against the vendor. These obligations are likely to
involve unscheduled prepayments of principal.
Investment Company Securities
From time to time, the Fund may invest in securities of other
investment companies, subject to the provisions of Section
12(d)(1) of the 1940 Act. The Fund may invest in securities of
money market funds managed by Janus Capital in excess of the
limitations of Section 12(d)(1) under the terms of an SEC
exemptive order obtained by Janus Capital and the Janus funds.
Depositary Receipts
The Fund may invest in sponsored and unsponsored American
Depositary Receipts ("ADRs"), which are receipts issued by an
American bank or trust company evidencing ownership of underlying
securities issued by a foreign issuer. ADRs, in registered form,
are designed for use in U.S. securities markets. Unsponsored ADRs
may be created without the participation of the foreign issuer.
Holders of these ADRs generally bear all the costs of the ADR
facility, whereas foreign issuers typically bear certain costs in
a sponsored ADR. The bank or trust company depositary of an
unsponsored ADR may be under no obligation to distribute
shareholder communications received from the foreign issuer or to
pass through voting rights. The Fund may also invest in European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs")
and in other similar instruments representing securities of
foreign companies. EDRs and GDRs are securities that are
typically issued by foreign banks or foreign trust companies,
although U.S. banks or U.S. trust companies may issue them. EDRs
and GDRs represent ownership of underlying securities issued by a
foreign or U.S. securities market. EDRs and GDRs are similar to
the arrangements of ADRs. EDRs, in bearer form, are designed for
use in European securities markets.
Depositary Receipts are generally subject to the same sort of
risks as direct investments in a foreign country, such as,
currency risk, political and economic risk, and market risk,
because their values
13
<PAGE>
depend on the performance of a foreign security denominated in
its home currency. The risks of foreign investing are addressed
in some detail in the Fund's prospectus.
Municipal Obligations
The Fund may invest in municipal obligations issued by states,
territories and possessions of the United States and the District
of Columbia. The value of municipal obligations can be affected
by changes in their actual or perceived credit quality. The
credit quality of municipal obligations can be affected by, among
other things the financial condition of the issuer or guarantor,
the issuer's future borrowing plans and sources of revenue, the
economic feasibility of the revenue bond project or general
borrowing purpose, political or economic developments in the
region where the security is issued, and the liquidity of the
security. Because municipal securities are generally traded over-
the-counter, the liquidity of a particular issue often depends on
the willingness of dealers to make a market in the security. The
liquidity of some municipal obligations may be enhanced by demand
features, which would enable the Fund to demand payment on short
notice from the issuer or a financial intermediary.
Other Income-Producing Securities
Other types of income producing securities that the Fund may
purchase include, but are not limited to, the following types of
securities:
VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities
have variable or floating rates of interest and, under certain
limited circumstances, may have varying principal amounts. These
securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some
interest rate index or market interest rate. The floating rate
tends to decrease the security's price sensitivity to changes in
interest rates. These types of securities have variable or
floating rates of interest and, under certain limited
circumstances, may have
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varying principal amounts. Variable and floating rate 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 "underlying index"). See also
"Inverse Floaters."
In order to most effectively use these investments, the portfolio
manager must correctly assess probable movements in interest
rates. This involves different skills than those used to select
most portfolio securities. If the portfolio manager incorrectly
forecasts such movements, the Fund could be adversely affected by
the use of variable or floating rate obligations.
STANDBY COMMITMENTS. These instruments, which are similar to a
put, give the Fund the option to obligate a broker, dealer or
bank to repurchase a security held by the Fund at a specified
price.
TENDER OPTION BONDS. Tender option bonds are generally long-term
securities that are coupled with the option to tender the
securities to a bank, broker-dealer or other financial
institution at periodic intervals and receive the face value of
the bond. This type of security is commonly used as a means of
enhancing the security's liquidity.
INVERSE FLOATERS. Inverse floaters are debt instruments whose
interest bears an inverse relationship to the interest rate on
another security. The Fund will not invest more than 5% of its
assets in inverse floaters. Similar to variable and floating rate
obligations, effective use of inverse floaters requires skills
different from those needed to select most portfolio securities.
If movements in interest rates are incorrectly anticipated, the
Fund could lose money or its NAV could decline by the use of
inverse floaters.
STRIP BONDS. Strip bonds are debt securities that are stripped of
their interest (usually by a financial intermediary) after the
securities are issued. The market value of these securities
generally fluctuates more in response to changes in interest
rates than interest-paying securities of comparable maturity.
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The Fund will purchase standby commitments, tender option bonds
and instruments with demand features primarily for the purpose of
increasing the liquidity of its portfolio.
High-Yield/High-Risk Bonds
The Fund intends to invest less than 35% of its net assets in
securities that are rated below investment grade (e.g.,
securities rated BB or lower by Standard & Poor's Ratings
Services or Ba or lower by Moody's Investors Service, Inc.).
Lower rated securities involve a higher degree of credit risk,
which is the risk that the issuer will not make interest or
principal payments when due. In the event of an unanticipated
default, the Fund would experience a reduction in its income, and
could expect a decline in the market value of the securities so
affected.
The Fund may also invest in unrated debt securities of foreign
and domestic issuers. Unrated debt, while not necessarily of
lower quality than rated securities, may not have as broad a
market. Sovereign debt of foreign governments is generally rated
by country. Because these ratings do not take into account
individual factors relevant to each issue and may not be updated
regularly, Janus Capital may treat such securities as unrated
debt. Because of the size and perceived demand of the issue,
among other factors, certain municipalities may not incur the
costs of obtaining a rating. The Fund's portfolio manager will
analyze the creditworthiness of the issuer, as well as any
financial institution or other party responsible for payments on
the security, in determining whether to purchase unrated
municipal bonds. Unrated debt securities will be included in the
35% limit unless the portfolio manager deems such securities to
be the equivalent of investment grade securities.
Subject to the above limits, the Fund may purchase defaulted
securities only when its portfolio manager believes, based upon
their analysis of the financial condition, results of operations
and economic outlook of an issuer, that there is potential for
resumption of income payments and that the securities offer an
unusual opportunity for capital appreciation. Notwithstanding the
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<PAGE>
portfolio manager's belief about the resumption of income,
however, the purchase of any security on which payment of
interest or dividends is suspended involves a high degree of
risk. Such risk includes, among other things, the following:
Financial and Market Risks. Investments in securities that are in
default involve a high degree of financial and market risks that
can result in substantial or, at times, even total losses.
Issuers of defaulted securities may have substantial capital
needs and may become involved in bankruptcy or reorganization
proceedings. Among the problems involved in investments in such
issuers is the fact that it may be difficult to obtain
information about the condition of such issuers. The market
prices of such securities also are subject to abrupt and erratic
movements and above average price volatility, and the spread
between the bid and asked prices of such securities may be
greater than normally expected.
Disposition of Portfolio Securities. Although the Fund generally
will purchase securities for which its portfolio manager expects
an active market to be maintained, defaulted securities may be
less actively traded than other securities and it may be
difficult to dispose of substantial holdings of such securities
at prevailing market prices. The Fund will limit holdings of any
such securities to amounts that the portfolio manager believes
could be readily sold, and holdings of such securities would, in
any event, be limited so as not to limit the Fund's ability to
readily dispose of securities to meet redemptions.
Other. Defaulted securities require active monitoring and may, at
times, require participation in bankruptcy or receivership
proceedings on behalf of the Fund.
Repurchase and Reverse Repurchase Agreements
In a repurchase agreement, the Fund purchases a security and
simultaneously commits to resell that security to the seller at
an agreed upon price on an agreed upon date within a number of
days (usually not more than seven) from the date of purchase. The
resale price consists of the purchase price plus an agreed upon
17
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incremental amount that is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon
price, which obligation is in effect secured by the value (at
least equal to the amount of the agreed upon resale price and
marked-to-market daily) of the underlying security or
"collateral." A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed,
which may cause the Fund to suffer a loss if the market value of
such securities declines before they can be liquidated on the
open market. In the event of bankruptcy or insolvency of the
seller, the Fund may encounter delays and incur costs in
liquidating the underlying security. Repurchase agreements that
mature in more than seven days are subject to the 15% limit on
illiquid investments. While it is possible to eliminate all risks
from these transactions, it is the policy of the Fund to limit
repurchase agreements to those parties whose creditworthiness has
been reviewed and found satisfactory by Janus Capital.
The Fund may use reverse repurchase agreements to obtain cash to
satisfy unusually heavy redemption requests or for other
temporary or emergency purposes without the necessity of selling
portfolio securities or to earn additional income on portfolio
securities, such as Treasury bills or notes. In a reverse
repurchase agreement, the Fund sells a portfolio security to
another party, such as a bank or broker-dealer, in return for
cash and agrees to repurchase the instrument at a particular
price and time. While a reverse repurchase agreement is
outstanding, the Fund will maintain cash and appropriate liquid
assets in a segregated custodial account to cover its obligation
under the agreement. The Fund will enter into reverse repurchase
agreements only with parties that Janus Capital deems
creditworthy. Using reverse repurchase agreements to earn
additional income involves the risk that the interest earned on
the invested proceeds is less than the expense of the reverse
repurchase agreement transaction. This technique may also have a
leveraging effect on the Fund's
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portfolio, although the Fund's intent to segregate assets in the
amount of the reverse repurchase agreement minimizes this effect.
Futures, Options and Other Derivative Instruments
FUTURES CONTRACTS. The Fund may enter into contracts for the
purchase or sale for future delivery of fixed-income securities,
foreign currencies or contracts based on financial indices,
including indices of U.S. government securities, foreign
government securities, equity or fixed-income securities. U.S.
futures contracts are traded on exchanges which have been
designated "contract markets" by the CFTC and must be executed
through a futures commission merchant ("FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their
clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange.
The buyer or seller of a futures contract is not required to
deliver or pay for the underlying instrument unless the contract
is held until the delivery date. However, both the buyer and
seller are required to deposit "initial margin" for the benefit
of the FCM when the contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as
set by the exchange on which the contract is traded, and may be
maintained in cash or certain other liquid assets by the Fund's
custodian for the benefit of the FCM. Initial margin payments are
similar to good faith deposits or performance bonds. Unlike
margin extended by a securities broker, initial margin payments
do not constitute purchasing securities on margin for purposes of
the Fund's investment limitations. If the value of either party's
position declines, that party will be required to make additional
"variation margin" payments for the benefit of the FCM to settle
the change in value on a daily basis. The party that has a gain
may be entitled to receive all or a portion of this amount. In
the event of the bankruptcy of the FCM that holds margin on
behalf of the Fund, the Fund may be entitled to a return of
margin owed to the Fund only in proportion to the amount received
by the FCM's other customers. Janus Capital will attempt to
minimize the risk
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by careful monitoring of the creditworthiness of the FCMs with
which the Fund does business and by depositing margin payments in
a segregated account with the Fund's custodian.
The Fund intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool
operator" adopted by the CFTC and the National Futures
Association, which regulate trading in the futures markets. The
Fund will use futures contracts and related options primarily for
bona fide hedging purposes within the meaning of CFTC
regulations. To the extent that the Fund holds positions in
futures contracts and related options that do not fall within the
definition of bona fide hedging transactions, the aggregate
initial margin and premiums required to establish such positions
will not exceed 5% of the fair market value of the Fund's net
assets, after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into.
Although the Fund will segregate cash and liquid assets in an
amount sufficient to cover its open futures obligations, the
segregated assets would be available to the Fund immediately upon
closing out the futures position, while settlement of securities
transactions could take several days. However, because the Fund's
cash that may otherwise be invested would be held uninvested or
invested in other liquid assets so long as the futures position
remains open, the Fund's return could be diminished due to the
opportunity losses of foregoing other potential investments.
The Fund's primary purpose in entering into futures contracts is
to protect the Fund from fluctuations in the value of securities
or interest rates without actually buying or selling the
underlying debt or equity security. For example, if the Fund
anticipates an increase in the price of stocks, and it intends to
purchase stocks at a later time, the Fund could enter into a
futures contract to purchase a stock index as a temporary
substitute for stock purchases. If an increase in the market
occurs that influences the stock index as anticipated, the value
of the futures contracts will increase, thereby serving as a
hedge against the Fund not
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<PAGE>
participating in a market advance. This technique is sometimes
known as an anticipatory hedge. To the extent the Fund enters
into futures contracts for this purpose, the segregated assets
maintained to cover the Fund's obligations with respect to the
futures contracts will consist of other liquid assets from its
portfolio in an amount equal to the difference between the
contract price and the aggregate value of the initial and
variation margin payments made by the Fund with respect to the
futures contracts. Conversely, if the Fund holds stocks and seeks
to protect itself from a decrease in stock prices, the Fund might
sell stock index futures contracts, thereby hoping to offset the
potential decline in the value of its portfolio securities by a
corresponding increase in the value of the futures contract
position. The Fund could protect against a decline in stock
prices by selling portfolio securities and investing in money
market instruments, but the use of futures contracts enables it
to maintain a defensive position without having to sell portfolio
securities.
If the Fund owns bonds and the portfolio manager expects interest
rates to increase, the Fund may take a short position in interest
rate futures contracts. Taking such a position would have much
the same effect as the Fund selling bonds in its portfolio. If
interest rates increase as anticipated, the value of the bonds
would decline, but the value of the Fund's interest rate futures
contract will increase, thereby keeping the net asset value of
the Fund from declining as much as it may have otherwise. If, on
the other hand, the portfolio manager expects interest rates to
decline, the Fund may take a long position in interest rate
futures contracts in anticipation of later closing out the
futures position and purchasing bonds. Although the Fund can
accomplish similar results by buying securities with long
maturities and selling securities with short maturities, given
the greater liquidity of the futures market than the cash market,
it may be possible to accomplish the same result more easily and
more quickly by using futures contracts as an investment tool to
reduce risk.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the nature of those markets, are
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<PAGE>
subject to distortions. First, all participants in the futures
market are subject to initial margin and variation margin
requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal price
relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering
into offsetting transactions rather than making or taking
delivery of the instrument underlying a futures contract. To the
extent participants decide to make or take delivery, liquidity in
the futures market could be reduced and prices in the futures
market distorted. Third, from the point of view of speculators,
the margin deposit requirements in the futures market are less
onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures
market may cause temporary price distortions. Due to the
possibility of the foregoing distortions, a correct forecast of
general price trends by the portfolio manager still may not
result in a successful use of futures.
Futures contracts entail risks. Although the Fund believes that
use of such contracts will benefit the Fund, the Fund's overall
performance could be worse than if the Fund had not entered into
futures contracts if the portfolio manager's investment judgement
proves incorrect. For example, if the Fund has hedged against the
effects of a possible decrease in prices of securities held in
its portfolio and prices increase instead, the Fund will lose
part or all of the benefit of the increased value of these
securities because of offsetting losses in its futures positions.
In addition, if the Fund has insufficient cash, it may have to
sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at
increased prices which reflect the rising market and may occur at
a time when the sales are disadvantageous to the Fund.
The prices of futures contracts depend primarily on the value of
their underlying instruments. Because there are a limited number
of types of futures contracts, it is possible that the
standardized
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<PAGE>
futures contracts available to the Fund will not match exactly
the Fund's current or potential investments. The Fund may buy and
sell futures contracts based on underlying instruments with
different characteristics from the securities in which it
typically invests - for example, by hedging investments in
portfolio securities with a futures contract based on a broad
index of securities - which involves a risk that the futures
position will not correlate precisely with the performance of the
Fund's investments.
Futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments
closely correlate with the Fund's investments. Futures prices are
affected by factors such as current and anticipated short-term
interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the
contract. Those factors may affect securities prices differently
from futures prices. Imperfect correlations between the Fund's
investments and its futures positions also may result from
differing levels of demand in the futures markets and the
securities markets, from structural differences in how futures
and securities are traded, and from imposition of daily price
fluctuation limits for futures contracts. The Fund may buy or
sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or is considering purchasing in
order to attempt to compensate for differences in historical
volatility between the futures contract and the securities,
although this may not be successful in all cases. If price
changes in the Fund's futures positions are poorly correlated
with its other investments, its futures positions may fail to
produce desired gains or result in losses that are not offset by
the gains in the Fund's other investments.
Because futures contracts are generally settled within a day from
the date they are closed out, compared with a settlement period
of three days for some types of securities, the futures markets
can provide superior liquidity to the securities markets.
Nevertheless, there is no assurance that a liquid secondary
market will exist for any particular futures contract at any
particular time. In addition, futures exchanges may establish
daily price fluctuation limits for
23
<PAGE>
futures contracts and may halt trading if a contract's price
moves upward or downward more than the limit in a given day. On
volatile trading days when the price fluctuation limit is
reached, it may be impossible for the Fund to enter into new
positions or close out existing positions. If the secondary
market for a futures contract is not liquid because of price
fluctuation limits or otherwise, the Fund may not be able to
promptly liquidate unfavorable futures positions and potentially
could be required to continue to hold a futures position until
the delivery date, regardless of changes in its value. As a
result, the Fund's access to other assets held to cover its
futures positions also could be impaired.
OPTIONS ON FUTURES CONTRACTS. The Fund may buy and write put and
call options on futures contracts. An option on a future gives
the Fund the right (but not the obligation) to buy or sell a
futures contract at a specified price on or before a specified
date. The purchase of a call option on a futures contract is
similar in some respects to the purchase of a call option on an
individual security. Depending on the pricing of the option
compared to either the price of the futures contract upon which
it is based or the price of the underlying instrument, ownership
of the option may or may not be less risky than ownership of the
futures contract or the underlying instrument. As with the
purchase of futures contracts, when the Fund is not fully
invested it may buy a call option on a futures contract to hedge
against a market advance.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the security or foreign
currency which is deliverable under, or of the index comprising,
the futures contract. If the future's price at the expiration of
the option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's
portfolio holdings. The writing of a put option on a futures
contract constitutes a partial hedge against increasing prices of
the security or foreign currency which is deliverable under, or
of the index comprising, the futures contract. If the futures'
price at expiration
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<PAGE>
of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities
which the Fund is considering buying. If a call or put option the
Fund has written is exercised, the Fund will incur a loss which
will be reduced by the amount of the premium it received.
Depending on the degree of correlation between the change in the
value of its portfolio securities and changes in the value of the
futures positions, the Fund's losses from existing options on
futures may to some extent be reduced or increased by changes in
the value of portfolio securities.
The purchase of a put option on a futures contract is similar in
some respects to the purchase of protective put options on
portfolio securities. For example, the Fund may buy a put option
on a futures contract to hedge its portfolio against the risk of
falling prices or rising interest rates.
The amount of risk the Fund assumes when it buys an option on a
futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that
changes in the value of the underlying futures contract will not
be fully reflected in the value of the options bought.
FORWARD CONTRACTS. A forward contract is an agreement between two
parties in which one party is obligated to deliver a stated
amount of a stated asset at a specified time in the future and
the other party is obligated to pay a specified amount for the
assets at the time of delivery. The Fund may enter into forward
contracts to purchase and sell government securities, equity or
income securities, foreign currencies or other financial
instruments. Forward contracts generally are traded in an
interbank market conducted directly between traders (usually
large commercial banks) and their customers. Unlike futures
contracts, which are standardized contracts, forward contracts
can be specifically drawn to meet the needs of the parties that
enter into them. The parties to a forward contract may agree to
offset or terminate the contract
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<PAGE>
before its maturity, or may hold the contract to maturity and
complete the contemplated exchange.
The following discussion summarizes the Fund's principal uses of
forward foreign currency exchange contracts ("forward currency
contracts"). The Fund may enter into forward currency contracts
with stated contract values of up to the value of the Fund's
assets. A forward currency contract is an obligation to buy or
sell an amount of a specified currency for an agreed price (which
may be in U.S. dollars or a foreign currency). The Fund will
exchange foreign currencies for U.S. dollars and for other
foreign currencies in the normal course of business and may buy
and sell currencies through forward currency contracts in order
to fix a price for securities it has agreed to buy or sell
("transaction hedge"). The Fund also may hedge some or all of its
investments denominated in a foreign currency or exposed to
foreign currency fluctuations against a decline in the value of
that currency relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency (or
a proxy currency whose performance is expected to replicate or
exceed the performance of that currency relative to the U.S.
dollar) approximating the value of some or all of its portfolio
securities denominated in that currency ("position hedge") or by
participating in options or futures contracts with respect to the
currency. The Fund also may enter into a forward currency
contract with respect to a currency where the Fund is considering
the purchase or sale of investments denominated in that currency
but has not yet selected the specific investments ("anticipatory
hedge"). In any of these circumstances the Fund may,
alternatively, enter into a forward currency contract to purchase
or sell one foreign currency for a second currency that is
expected to perform more favorably relative to the U.S. dollar if
the portfolio manager believes there is a reasonable degree of
correlation between movements in the two currencies
("cross-hedge").
These types of hedging minimize the effect of currency
appreciation as well as depreciation, but do not eliminate
fluctuations in the underlying U.S. dollar equivalent value of
the proceeds of or
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rates of return on the Fund's foreign currency denominated
portfolio securities. The matching of the increase in value of a
forward contract and the decline in the U.S. dollar equivalent
value of the foreign currency denominated asset that is the
subject of the hedge generally will not be precise. Shifting the
Fund's currency exposure from one foreign currency to another
removes the Fund's opportunity to profit from increases in the
value of the original currency and involves a risk of increased
losses to the Fund if its portfolio manager's projection of
future exchange rates is inaccurate. Proxy hedges and
cross-hedges may result in losses if the currency used to hedge
does not perform similarly to the currency in which hedged
securities are denominated. Unforeseen changes in currency prices
may result in poorer overall performance for the Fund than if it
had not entered into such contracts.
The Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or whose
value its tied to, the currency underlying the forward contract
or the currency being hedged. To the extent that the Fund is not
able to cover its forward currency positions with underlying
portfolio securities, the Fund's custodian will segregate cash or
other liquid assets having a value equal to the aggregate amount
of the Fund's commitments under forward contracts entered into
with respect to position hedges, cross-hedges and anticipatory
hedges. If the value of the securities used to cover a position
or the value of segregated assets declines, the Fund will find
alternative cover or segregate additional cash or liquid assets
on a daily basis so that the value of the covered and segregated
assets will be equal to the amount of the Fund's commitments with
respect to such contracts. As an alternative to segregating
assets, the Fund may buy call options permitting the Fund to buy
the amount of foreign currency being hedged by a forward sale
contract or the Fund may buy put options permitting it to sell
the amount of foreign currency subject to a forward buy contract.
While forward contracts are not currently regulated by the CFTC,
the CFTC may in the future assert authority to regulate forward
contacts. In such event, the Fund's ability to utilize forward
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<PAGE>
contracts may be restricted. In addition, the Fund may not always
be able to enter into forward contracts at attractive prices and
may be limited in its ability to use these contracts to hedge
Fund assets.
OPTIONS ON FOREIGN CURRENCIES. The Fund may buy and write options
on foreign currencies in a manner similar to that in which
futures or forward contracts on foreign currencies will be
utilized. For example, a decline in the U.S. dollar value of a
foreign currency in which portfolio securities are denominated
will reduce the U.S. dollar value of such securities, even if
their value in the foreign currency remains constant. In order to
protect against such diminutions in the value of portfolio
securities, the Fund may buy put options on the foreign currency.
If the value of the currency declines, the Fund will have the
right to sell such currency for a fixed amount in U.S. dollars,
thereby offsetting, in whole or in part, the adverse effect on
its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in
which securities to be acquired are denominated is projected,
thereby increasing the cost of such securities, the Fund may buy
call options on the foreign currency. The purchase of such
options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Fund from purchases
of foreign currency options will be reduced by the amount of the
premium and related transaction costs. In addition, if currency
exchange rates do not move in the direction or to the extent
projected, the Fund could sustain losses on transactions in
foreign currency options that would require the Fund to forego a
portion or all of the benefits of advantageous changes in those
rates.
The Fund may also write options on foreign currencies. For
example, to hedge against a potential decline in the U.S. dollar
value of foreign currency denominated securities due to adverse
fluctuations in exchange rates, the Fund could, instead of
purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most
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<PAGE>
likely not be exercised and the decline in value of portfolio
securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against a
potential increase in the U.S. dollar cost of securities to be
acquired, the Fund could write a put option on the relevant
currency which, if rates move in the manner projected, should
expire unexercised and allow the Fund to hedge the increased cost
up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium.
If exchange rates do not move in the expected direction, the
option may be exercised and the Fund would be required to buy or
sell the underlying currency at a loss which may not be offset by
the amount of the premium. Through the writing of options on
foreign currencies, the Fund also may lose all or a portion of
the benefits which might otherwise have been obtained from
favorable movements in exchange rates.
The Fund may write covered call options on foreign currencies. A
call option written on a foreign currency by the Fund is
"covered" if the Fund owns the foreign currency underlying the
call or has an absolute and immediate right to acquire that
foreign currency without additional cash consideration (or for
additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other foreign
currencies held in its portfolio. A call option is also covered
if the Fund has a call on the same foreign currency in the same
principal amount as the call written if the exercise price of the
call held (i) is equal to or less than the exercise price of the
call written or (ii) is greater than the exercise price of the
call written, if the difference is maintained by the Fund in cash
or other liquid assets in a segregated account with the Fund's
custodian.
The Fund also may write call options on foreign currencies for
cross-hedging purposes. A call option on a foreign currency is
for cross-hedging purposes if it is designed to provide a hedge
against a decline due to an adverse change in the exchange rate
in the
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U.S. dollar value of a security which the Fund owns or has the
right to acquire and which is denominated in the currency
underlying the option. Call options on foreign currencies which
are entered into for cross-hedging purposes are not covered.
However, in such circumstances, the Fund will collateralize the
option by segregating cash or other liquid assets in an amount
not less than the value of the underlying foreign currency in
U.S. dollars marked-to-market daily.
OPTIONS ON SECURITIES. In an effort to increase current income
and to reduce fluctuations in net asset value, the Fund may write
covered put and call options and buy put and call options on
securities that are traded on United States and foreign
securities exchanges and over-the-counter. The Fund may write and
buy options on the same types of securities that the Fund may
purchase directly.
A put option written by the Fund is "covered" if the Fund (i)
segregates cash not available for investment or other liquid
assets with a value equal to the exercise price of the put with
the Fund's custodian or (ii) holds a put on the same security and
in the same principal amount as the put written and the exercise
price of the put held is equal to or greater than the exercise
price of the put written. The premium paid by the buyer of an
option will reflect, among other things, the relationship of the
exercise price to the market price and the volatility of the
underlying security, the remaining term of the option, supply and
demand and interest rates.
A call option written by the Fund is "covered" if the Fund owns
the underlying security covered by the call or has an absolute
and immediate right to acquire that security without additional
cash consideration (or for additional cash consideration held in
a segregated account by the Fund's custodian) upon conversion or
exchange of other securities held in its portfolio. A call option
is also deemed to be covered if the Fund holds a call on the same
security and in the same principal amount as the call written and
the exercise price of the call held (i) is equal to or less than
the
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exercise price of the call written or (ii) is greater than the
exercise price of the call written if the difference is
maintained by the Fund in cash and other liquid assets in a
segregated account with its custodian.
The Fund also may write call options that are not covered for
cross-hedging purposes. The Fund collateralizes its obligation
under a written call option for cross-hedging purposes by
segregating cash or other liquid assets in an amount not less
than the market value of the underlying security,
marked-to-market daily. The Fund would write a call option for
cross-hedging purposes, instead of writing a covered call option,
when the premium to be received from the cross-hedge transaction
would exceed that which would be received from writing a covered
call option and its portfolio manager believes that writing the
option would achieve the desired hedge.
The writer of an option may have no control over when the
underlying securities must be sold, in the case of a call option,
or bought, in the case of a put option, since with regard to
certain options, the writer may be assigned an exercise notice at
any time prior to the termination of the obligation. Whether or
not an option expires unexercised, the writer retains the amount
of the premium. This amount, of course, may, in the case of a
covered call option, be offset by a decline in the market value
of the underlying security during the option period. If a call
option is exercised, the writer experiences a profit or loss from
the sale of the underlying security. If a put option is
exercised, the writer must fulfill the obligation to buy the
underlying security at the exercise price, which will usually
exceed the then market value of the underlying security.
The writer of an option that wishes to terminate its obligation
may effect a "closing purchase transaction." This is accomplished
by buying an option of the same series as the option previously
written. The effect of the purchase is that the writer's position
will be canceled by the clearing corporation. However, a writer
may not effect a closing purchase transaction after being
notified of the
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exercise of an option. Likewise, an investor who is the holder of
an option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the
same series as the option previously bought. There is no
guarantee that either a closing purchase or a closing sale
transaction can be effected.
In the case of a written call option, effecting a closing
transaction will permit the Fund to write another call option on
the underlying security with either a different exercise price or
expiration date or both. In the case of a written put option,
such transaction will permit the Fund to write another put option
to the extent that the exercise price is secured by other liquid
assets. Effecting a closing transaction also will permit the Fund
to use the cash or proceeds from the concurrent sale of any
securities subject to the option for other investments. If the
Fund desires to sell a particular security from its portfolio on
which it has written a call option, the Fund will effect a
closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the
price of the purchase transaction is less than the premium
received from writing the option or the price received from a
sale transaction is more than the premium paid to buy the option.
The Fund will realize a loss from a closing transaction if the
price of the purchase transaction is more than the premium
received from writing the option or the price received from a
sale transaction is less than the premium paid to buy the option.
Because increases in the market of a call option generally will
reflect increases in the market price of the underlying security,
any loss resulting from the repurchase of a call option is likely
to be offset in whole or in part by appreciation of the
underlying security owned by the Fund.
An option position may be closed out only where a secondary
market for an option of the same series exists. If a secondary
market does not exist, the Fund may not be able to effect closing
transactions in particular options and the Fund would have to
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<PAGE>
exercise the options in order to realize any profit. If the Fund
is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon
exercise. The absence of a liquid secondary market may be due to
the following: (i) insufficient trading interest in certain
options, (ii) restrictions imposed by a national securities
exchange ("Exchange") on which the option is traded on opening or
closing transactions or both, (iii) trading halts, suspensions or
other restrictions imposed with respect to particular classes or
series of options or underlying securities, (iv) unusual or
unforeseen circumstances that interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options
Clearing Corporation ("OCC") may not at all times be adequate to
handle current trading volume, or (vi) one or more Exchanges
could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a
particular class or series of options), in which event the
secondary market on that Exchange (or in that class or series of
options) would cease to exist, although outstanding options on
that Exchange that had been issued by the OCC as a result of
trades on that Exchange would continue to be exercisable in
accordance with their terms.
The Fund may write options in connection with buy-and-write
transactions. In other words, the Fund may buy a security and
then write a call option against that security. The exercise
price of such call will depend upon the expected price movement
of the underlying security. The exercise price of a call option
may be below ("in-the-money"), equal to ("at-the-money") or above
("out-of-the-money") the current value of the underlying security
at the time the option is written. Buy-and-write transactions
using in-the-money call options may be used when it is expected
that the price of the underlying security will remain flat or
decline moderately during the option period. Buy-and-write
transactions using at-the-money call options may be used when it
is expected that the price of the underlying security will remain
fixed or advance moderately during the option period.
Buy-and-write
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<PAGE>
transactions using out-of-the-money call options may be used when
it is expected that the premiums received from writing the call
option plus the appreciation in the market price of the
underlying security up to the exercise price will be greater than
the appreciation in the price of the underlying security alone.
If the call options are exercised in such transactions, the
Fund's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the
difference between the Fund's purchase price of the security and
the exercise price. If the options are not exercised and the
price of the underlying security declines, the amount of such
decline will be offset by the amount of premium received.
The writing of covered put options is similar in terms of risk
and return characteristics to buy-and-write transactions. If the
market price of the underlying security rises or otherwise is
above the exercise price, the put option will expire worthless
and the Fund's gain will be limited to the premium received. If
the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the
position or take delivery of the security at the exercise price
and the Fund's return will be the premium received from the put
options minus the amount by which the market price of the
security is below the exercise price.
The Fund may buy put options to hedge against a decline in the
value of its portfolio. By using put options in this way, the
Fund will reduce any profit it might otherwise have realized in
the underlying security by the amount of the premium paid for the
put option and by transaction costs.
The Fund may buy call options to hedge against an increase in the
price of securities that it may buy in the future. The premium
paid for the call option plus any transaction costs will reduce
the benefit, if any, realized by the Fund upon exercise of the
option, and, unless the price of the underlying security rises
sufficiently, the option may expire worthless to the Fund.
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<PAGE>
EURODOLLAR INSTRUMENTS. The Fund may make investments in
Eurodollar instruments. Eurodollar instruments are U.S. dollar-
denominated futures contracts or options thereon which are linked
to the London Interbank Offered Rate ("LIBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed
rate for the lending of funds and sellers to obtain a fixed rate
for borrowings. The Fund might use Eurodollar futures contracts
and options thereon to hedge against changes in LIBOR, to which
many interest rate swaps and fixed-income instruments are linked.
SWAPS AND SWAP-RELATED PRODUCTS. The Fund may enter into interest
rate swaps, caps and floors on either an asset-based or
liability-based basis, depending upon whether it is hedging its
assets or its liabilities, and will usually enter into interest
rate swaps on a net basis (i.e., the two payment streams are
netted out, with the Fund receiving or paying, as the case may
be, only the net amount of the two payments). The net amount of
the excess, if any, of the Fund's obligations over its
entitlement with respect to each interest rate swap will be
calculated on a daily basis and an amount of cash or other liquid
assets having an aggregate net asset value at least equal to the
accrued excess will be maintained in a segregated account by the
Fund's custodian. If the Fund enters into an interest rate swap
on other than a net basis, it would maintain a segregated account
in the full amount accrued on a daily basis of its obligations
with respect to the swap. The Fund will not enter into any
interest rate swap, cap or floor transaction unless the unsecured
senior debt or the claims-paying ability of the other party
thereto is rated in one of the three highest rating categories of
at least one NRSRO at the time of entering into such transaction.
Janus Capital will monitor the creditworthiness of all
counterparties on an ongoing basis. If there is a default by the
other party to such a transaction, the Fund will have contractual
remedies pursuant to the agreements related to the transaction.
The swap market has grown substantially in recent years with a
large number of banks and investment banking firms acting both
35
<PAGE>
as principals and as agents utilizing standardized swap
documentation. Janus Capital has determined that, as a result,
the swap market has become relatively liquid. Caps and floors are
more recent innovations for which standardized documentation has
not yet been developed and, accordingly, they are less liquid
than swaps. To the extent the Fund sells (i.e., writes) caps and
floors, it will segregate cash or other liquid assets having an
aggregate net asset value at least equal to the full amount,
accrued on a daily basis, of its obligations with respect to any
caps or floors.
There is no limit on the amount of interest rate swap
transactions that may be entered into by the Fund. These
transactions may in some instances involve the delivery of
securities or other underlying assets by the Fund or its
counterparty to collateralize obligations under the swap. Under
the documentation currently used in those markets, the risk of
loss with respect to interest rate swaps is limited to the net
amount of the payments that the Fund is contractually obligated
to make. If the other party to an interest rate swap that is not
collateralized defaults, the Fund would risk the loss of the net
amount of the payments that it contractually is entitled to
receive. The Fund may buy and sell (i.e., write) caps and floors
without limitation, subject to the segregation requirement
described above.
ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD
CONTRACTS AND FOREIGN INSTRUMENTS. Unlike transactions entered
into by the Fund in futures contracts, options on foreign
currencies and forward contracts are not traded on contract
markets regulated by the CFTC or (with the exception of certain
foreign currency options) by the SEC. To the contrary, such
instruments are traded through financial institutions acting as
market-makers, although foreign currency options are also traded
on certain Exchanges, such as the Philadelphia Stock Exchange and
the Chicago Board Options Exchange, subject to SEC regulation.
Similarly, options on currencies may be traded over the-counter.
In an over-the-counter trading environment, many of the
protections afforded to Exchange participants will not be
available. For example, there are no daily price fluctuation
limits,
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<PAGE>
and adverse market movements could therefore continue to an
unlimited extent over a period of time. Although the buyer of an
option cannot lose more than the amount of the premium plus
related transaction costs, this entire amount could be lost.
Moreover, an option writer and a buyer or seller of futures or
forward contracts could lose amounts substantially in excess of
any premium received or initial margin or collateral posted due
to the potential additional margin and collateral requirements
associated with such positions.
Options on foreign currencies traded on Exchanges are within the
jurisdiction of the SEC, as are other securities traded on
Exchanges. As a result, many of the protections provided to
traders on organized Exchanges will be available with respect to
such transactions. In particular, all foreign currency option
positions entered into on an Exchange are cleared and guaranteed
by the OCC, thereby reducing the risk of counterparty default.
Further, a liquid secondary market in options traded on an
Exchange may be more readily available than in the over-the-
counter market, potentially permitting the Fund to liquidate open
positions at a profit prior to exercise or expiration, or to
limit losses in the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency
options, however, is subject to the risks of the availability of
a liquid secondary market described above, as well as the risks
regarding adverse market movements, margining of options written,
the nature of the foreign currency market, possible intervention
by governmental authorities and the effects of other political
and economic events. In addition, exchange-traded options on
foreign currencies involve certain risks not presented by the
over-the-counter market. For example, exercise and settlement of
such options must be made exclusively through the OCC, which has
established banking relationships in applicable foreign countries
for this purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercises, or would
result in undue burdens on the OCC or its clearing
37
<PAGE>
member, impose special procedures on exercise and settlement,
such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions
on exercise.
In addition, options on U.S. government securities, futures
contracts, options on futures contracts, forward contracts and
options on foreign currencies may be traded on foreign exchanges
and over-the-counter in foreign countries. Such transactions are
subject to the risk of governmental actions affecting trading in
or the prices of foreign currencies or securities. The value of
such positions also could be adversely affected by (i) other
complex foreign political and economic factors, (ii) lesser
availability than in the United States of data on which to make
trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during non-business
hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) low trading
volume.
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<PAGE>
Investment adviser
As stated in the Prospectus, the Fund has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver,
Colorado 80206-4928. The Advisory Agreement provides that Janus
Capital will furnish continuous advice and recommendations
concerning the Fund's investments, provide office space for the
Fund, and pay the salaries, fees and expenses of all Fund
officers and of those Trustees who are affiliated with Janus
Capital. Janus Capital also may make payments to selected
broker-dealer firms or institutions which perform recordkeeping
or other services with respect to shareholder accounts. The
minimum aggregate size required for eligibility for such
payments, and the factors in selecting the broker-dealer firms
and institutions to which they will be made, are determined from
time to time by Janus Capital. Janus Capital is also authorized
to perform the management and administrative services necessary
for the operation of the Fund.
The Fund pays custodian and transfer agent fees and expenses,
brokerage commissions and dealer spreads and other expenses in
connection with the execution of portfolio transactions, legal
and accounting expenses, interest and taxes, registration fees,
expenses of shareholders' meetings and reports to shareholders,
fees and expenses of Trustees who are not affiliated with Janus
Capital, costs of preparing, printing and mailing the Fund's
Prospectus and SAI to current shareholders, and other costs of
complying with applicable laws regulating the sale of Fund
shares. Pursuant to the Advisory Agreement, Janus Capital
furnishes certain other services, including net asset value
determination and Fund accounting, recordkeeping, and blue sky
registration and monitoring services, for which the Fund may
reimburse Janus Capital for its costs.
The Fund has agreed to compensate Janus Capital for its services
by the monthly payment of a fee at the annual rate of 0.75% of
the first $300 million of the Fund's average daily net assets,
0.70% of the next $200 million of the Fund's average daily net
assets, and 0.65% of the average daily net assets of the Fund in
excess of $500 million.
The Advisory Agreement is dated September 14, 1999, and it will
continue in effect until July 1, 2001, and thereafter from year
to
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<PAGE>
year so long as such continuance is approved annually by a
majority of the Fund's Trustees who are not parties to the
Advisory Agreement or interested persons of any such party, and
by either a majority of the outstanding voting shares or the
Trustees of the Fund. The Advisory Agreement i) may be terminated
without the payment of any penalty by the Fund or Janus Capital
on 60 days' written notice; ii) terminates automatically in the
event of its assignment; and iii) generally, may not be amended
without the approval by vote of a majority of the Trustees of the
Fund, including the Trustees who are not interested persons of
the Fund or Janus Capital and, to the extent required by the 1940
Act, the vote of a majority of the outstanding voting securities
of the Fund.
Janus Capital also acts as sub-adviser for a number of
private-label mutual funds and provides separate account advisory
services for institutional accounts. Investment decisions for
each account managed by Janus Capital, including the Fund, are
made independently from those for any other account that is or
may in the future become managed by Janus Capital or its
affiliates. If, however, a number of accounts managed by Janus
Capital are contemporaneously engaged in the purchase or sale of
the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably
to each account. In some cases, this policy might adversely
affect the price paid or received by an account or the size of
the position obtained or liquidated for an account. Pursuant to
an exemptive order granted by the SEC, the Fund and other funds
advised by Janus Capital may also transfer daily uninvested cash
balances into one or more joint trading accounts. Assets in the
joint trading accounts are invested in money market instruments
and the proceeds are allocated to the participating Funds on a
pro rata basis.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately
82% of the outstanding voting stock of Janus Capital, most of
which it acquired in 1984. KCSI is a publicly traded holding
company whose primary subsidiaries are engaged in transportation,
information processing and financial services. Thomas H.
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<PAGE>
Bailey, President and Chairman of the Board of Janus Capital,
owns approximately 12% of its voting stock and, by agreement with
KCSI, selects a majority of Janus Capital's Board.
KCSI has announced its intention to separate its transportation
and financial services businesses. KCSI is currently studying
alternatives for completion of the separation that meet its
business objectives without risking adverse tax consequences.
KCSI expects completion of the separation to be contemplated in
1999.
Each account managed by Janus Capital has its own investment
objective and policies and is managed accordingly by a particular
portfolio manager or team of portfolio managers. As a result,
from time to time two or more different managed accounts may
pursue divergent investment strategies with respect to
investments or categories of investments.
Janus Capital does not permit the Fund's portfolio manager to
purchase and sell securities for his own accounts except under
the limited exceptions contained in Janus Capital's policy
regarding personal investing by directors/Trustees, officers and
employees of Janus Capital and the Trust. The policy requires
investment personnel and officers of Janus Capital, inside
directors/Trustees of Janus Capital and the Fund and other
designated persons deemed to have access to current trading
information to pre-clear all transactions in securities not
otherwise exempt under the policy. Requests for trading authority
will be denied when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the policy or
would be deemed to adversely affect any transaction known to be
under consideration for or to have been effected on behalf of any
client account, including the Fund.
In addition to the pre-clearance requirement described above, the
policy subjects investment personnel, officers and directors/
Trustees of Janus Capital and the Trust to various trading
restrictions and reporting obligations. All reportable
transactions are required to be reviewed for compliance with
Janus Capital's
41
<PAGE>
policy. Those persons also may be required under certain
circumstances to forfeit their profits made from personal
trading.
The provisions of the policy are administered by and subject to
exceptions authorized by Janus Capital.
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Custodian, transfer agent and
certain affiliations
State Street Bank and Trust Company, P.O. Box 0351, Boston,
Massachusetts 02117-0351 is the custodian of the domestic
securities and cash of the Fund. State Street and the foreign
subcustodians selected by it and approved by the Trustees have
custody of the assets of the Fund held outside the U.S. and cash
incidental thereto. The custodian and subcustodians hold the
Fund's assets in safekeeping and collect and remit the income
thereon, subject to the instructions of the Fund.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the
Fund's transfer agent. In addition, Janus Service provides
certain other administrative, recordkeeping and shareholder
relations services to the Fund. For transfer agency and other
services, Janus Service receives a fee calculated at an annual
rate of 0.16% of average net assets of the Fund and, in addition,
$4 per open shareholder account. In addition, the Fund pays DST
Systems, Inc. ("DST"), a subsidiary of KCSI, license fees at the
rate of $3.06 per shareholder account for the use of DST's
shareholder accounting system. The Fund also pays DST $1.10 per
closed shareholder account. The Fund pays DST for the use of its
portfolio and fund accounting system a monthly base fee of $250
to $1,250 based on the number of Janus funds using the system and
an asset charge of $1 per million dollars of net assets (not to
exceed $500 per month). In addition, the Fund pays DST postage
and forms costs of a DST affiliate incurred in mailing Fund
shareholder transaction confirmations.
The Trustees have authorized the Fund to use another affiliate of
DST as introducing broker for certain Fund portfolio transactions
as a means to reduce Fund expenses through credits against the
charges of DST and its affiliates with regard to commissions
earned by such affiliate. See "Portfolio Transactions and
Brokerage."
Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado
80206-4928, a wholly-owned subsidiary of Janus Capital, is a
distributor of the Fund. Janus Distributors is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a
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<PAGE>
member of the National Association of Securities Dealers, Inc.
Janus Distributors acts as the agent of the Fund in connection
with the sale of its shares in all states in which the shares are
registered and in which Janus Distributors is qualified as a
broker-dealer. Under the Distribution Agreement, Janus
Distributors continuously offers the Fund's shares and accepts
orders at net asset value. No sales charges are paid by
investors. Promotional expenses in connection with offers and
sales of shares are paid by Janus Capital.
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<PAGE>
Portfolio transactions and brokerage
Decisions as to the assignment of portfolio business for the Fund
and negotiation of its commission rates are made by Janus
Capital, whose policy is to obtain the "best execution" (prompt
and reliable execution at the most favorable security price) of
all portfolio transactions. The Fund may trade foreign securities
in foreign countries because the best available market for these
securities is often on foreign exchanges. In transactions on
foreign stock exchanges, brokers' commissions are frequently
fixed and are often higher than in the United States, where
commissions are negotiated.
In selecting brokers and dealers and in negotiating commissions,
Janus Capital considers a number of factors, including but not
limited to: Janus Capital's knowledge of currently available
negotiated commission rates or prices of securities currently
available and other current transaction costs; the nature of the
security being traded; the size and type of the transaction; the
nature and character of the markets for the security to be
purchased or sold; the desired timing of the trade; the activity
existing and expected in the market for the particular security;
confidentiality; the quality of the execution, clearance and
settlement services; financial stability of the broker or dealer;
the existence of actual or apparent operational problems of any
broker or dealer; rebates of commissions by a broker to the Fund
or to a third party service provider to the Fund to pay Fund
expenses; and research products or services provided. In
recognition of the value of the foregoing factors, Janus Capital
may place portfolio transactions with a broker or dealer with
whom it has negotiated a commission that is in excess of the
commission another broker or dealer would have charged for
effecting that transaction if Janus Capital determines in good
faith that such amount of commission was reasonable in relation
to the value of the brokerage and research provided by such
broker or dealer viewed in terms of either that particular
transaction or of the overall responsibilities of Janus Capital.
Research may include furnishing advice, either directly or
through publications or writings, as to the value of securities,
the advisability of purchasing or selling specific securities and
the availability of securities or purchasers or sellers
45
<PAGE>
of securities; furnishing seminars, information, analyses and
reports concerning issuers, industries, securities, trading
markets and methods, legislative developments, changes in
accounting practices, economic factors and trends and portfolio
strategy; access to research analysts, corporate management
personnel, industry experts, economists and government officials;
comparative performance evaluation and technical measurement
services and quotation services, and products and other services
(such as third party publications, reports and analyses, and
computer and electronic access, equipment, software, information
and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist
Janus Capital in carrying out its responsibilities. Research
received from brokers or dealers is supplemental to Janus
Capital's own research efforts. Most brokers and dealers used by
Janus Capital provide research and other services described
above.
Janus Capital may use research products and services in servicing
other accounts in addition to the Fund. If Janus Capital
determines that any research product or service has a mixed use,
such that it also serves functions that do not assist in the
investment decision-making process, Janus Capital may allocate
the costs of such service or product accordingly. Only that
portion of the product or service that Janus Capital determines
will assist it in the investment decision-making process may be
paid for in brokerage commission dollars. Such allocation may
create a conflict of interest for Janus Capital.
Janus Capital does not enter into agreements with any brokers
regarding the placement of securities transactions because of the
research services they provide. It does, however, have an
internal procedure for allocating transactions in a manner
consistent with its execution policy to brokers that it has
identified as providing superior execution and research,
research-related products or services which benefit its advisory
clients, including the Fund. Research products and services
incidental to effecting securities transactions furnished by
brokers or dealers may be used in servicing any or all of Janus
Capital's clients and such research
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<PAGE>
may not necessarily be used by Janus Capital in connection with
the accounts which paid commissions to the broker-dealer
providing such research products and services.
Janus Capital may consider sales of Fund shares by a broker-
dealer or the recommendation of a broker-dealer to its customers
that they purchase Fund shares as a factor in the selection of
broker-dealers to execute Fund portfolio transactions. Janus
Capital may also consider payments made by brokers effecting
transactions for the Fund i) to the Fund or ii) to other persons
on behalf of the Fund for services provided to the Fund for which
it would be obligated to pay. In placing portfolio business with
such broker-dealers, Janus Capital will seek the best execution
of each transaction.
When the Fund purchases or sells a security in the over-the-
counter market, the transaction takes place directly with a
principal market-maker, without the use of a broker, except in
those circumstances where in the opinion of Janus Capital better
prices and executions will be achieved through the use of a
broker.
The Fund's Trustees have authorized Janus Capital to place
transactions with DST Securities, Inc. ("DSTS"), a wholly-owned
broker-dealer subsidiary of DST. Janus Capital may do so if it
reasonably believes that the quality of the transaction and the
associated commission are fair and reasonable and if, overall,
the associated transaction costs, net of any credits described
above under "Custodian, Transfer Agent and Certain Affiliations,"
are lower than those that would otherwise be incurred.
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Trustees and officers
The following are the names of the Trustees and officers of the
Trust, together with a brief description of their principal
occupations during the last five years.
Thomas H. Bailey, Age 62 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee, Chairman and President of Janus Aspen Series. Chairman,
Chief Executive Officer, Director and President of Janus Capital.
Director of Janus Distributors, Inc.
James P. Craig, III, Age 43 - Trustee*#
100 Fillmore Street
Denver, CO 80206-4928
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Trustee of Janus Aspen Series. Chief Investment Officer, Director
of Research, Vice Chairman and Director of Janus Capital.
Formerly (June 1986 - December 1999), Executive Vice President
and Portfolio Manager of Janus Fund. Formerly (February 1997 -
December 1999), Executive Vice President and Co-Manager of Janus
Venture Fund. Formerly (December 1993 -December 1995), Executive
Vice President and Portfolio Manager of Janus Balanced Fund.
Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Aspen Series. President and Director of High
Valley Group, Inc., Colorado Springs, CO (investments).
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.
48
<PAGE>
Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
- --------------------------------------------------------------------------------
Trustee of Janus Aspen Series. Private Investor. Formerly
(1997-1998), Chief Financial Officer-Boston Market Concepts,
Boston Chicken, Inc., Golden, CO (restaurant chain); (1993-1997),
President and Chief Executive Officer of BC Northwest, L.P., a
franchise of Boston Chicken, Inc., Bellevue, WA (restaurant
chain).
James T. Rothe, Age 56 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Aspen Series. Professor of Business, University
of Colorado, Colorado Springs, CO. Principal, Phillips-Smith
Retail Group, Colorado Springs, CO (a venture capital firm).
Formerly (1986-1994), Dean of the College of Business, University
of Colorado, Colorado Springs, CO.
William D. Stewart, Age 55 - Trustee#
5330 Sterling Drive
Boulder, CO 80302
- --------------------------------------------------------------------------------
Trustee of Janus Aspen Series. President of HPS Division of MKS
Instruments, Boulder, CO (manufacturer of vacuum fittings and
valves).
Martin H. Waldinger, Age 61 - Trustee
4940 Sandshore Court
San Diego, CA 92130
- --------------------------------------------------------------------------------
Trustee of Janus Aspen Series. Private Consultant. Formerly
(1993-1996), Director of Run Technologies, Inc., a software
development firm, San Carlos, CA.
- --------------------------------------------------------------------------------
#Member of the Trust's Executive Committee.
49
<PAGE>
David C. Decker, Age 33 - Executive Vice President*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Strategic
Value Fund. Executive Vice President and Portfolio Manager of
Janus Special Situations Fund. Assistant Portfolio Manager of
Janus Fund. Vice President of Janus Capital. Formerly, research
analyst at Janus Capital (1992-1996).
Thomas A. Early, Age 45 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and General Counsel of Janus Aspen Series. Vice
President, General Counsel and Secretary of Janus Capital. Vice
President and General Counsel of Janus Service Corporation, Janus
Distributors, Inc. and Janus Capital International, Ltd. Director
of Janus World Funds Plc. Formerly (1997-1998), Executive Vice
President and General Counsel of Prudential Investments Fund
Management LLC, Newark, NJ. Formerly (1994-1997), Vice President
and General Counsel of Prudential Retirement Services, Newark,
NJ. Formerly (1988-1994), Associate General Counsel and Chief
Financial Services Counsel, Frank Russell Company, Tacoma, WA.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
50
<PAGE>
Steven R. Goodbarn, Age 42 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Aspen Series.
Vice President of Finance, Treasurer and Chief Financial Officer
of Janus Capital, Janus Service Corporation and Janus
Distributors, Inc. Director of Janus Service Corporation, Janus
Distributors, Inc. and Janus World Funds Plc. Director, Treasurer
and Vice President of Finance of Janus Capital International Ltd.
Formerly (May 1992-January 1996), Treasurer of Janus Investment
Fund and Janus Aspen Series.
Kelley Abbot Howes, Age 34 - Vice President and Secretary*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Secretary of Janus Aspen Series. Vice
President and Associate Counsel of Janus Capital. Vice President
of Janus Distributors, Inc. Assistant Vice President of Janus
Service Corporation.
Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Aspen Series.
Vice President of Janus Capital. Formerly (1991 to 1997),
Director of Fund Accounting, Janus Capital.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
51
<PAGE>
The Trustees are responsible for major decisions relating to the
Fund's objective, policies and techniques. The Trustees also
supervise the operation of the Fund by its officers and review
the investment decisions of the officers, although they do not
actively participate on a regular basis in making such decisions.
The Trust's Executive Committee shall have and may exercise all
the powers and authority of the Trustees except for matters
requiring action by all Trustees pursuant to the Trust's Bylaws
or Agreement and Declaration of Trust, Massachusetts law or the
1940 Act.
The following table shows the aggregate compensation earned by
and paid to each Trustee by the Fund described in this SAI and
all funds advised and sponsored by Janus Capital (collectively,
the "Janus Funds") for the periods indicated. None of the
Trustees receives any pension or retirement benefits from the
Fund or the Janus Funds.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
from the Fund for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position October 31, 1999** December 31, 1999***
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman and Trustee* $ $
James P. Craig, Trustee* $ $
William D. Stewart, Trustee $ $
Gary O. Loo, Trustee $ $
Dennis B. Mullen, Trustee $ $
Martin H. Waldinger, Trustee $ $
James T. Rothe, Trustee $ $
</TABLE>
*An interested person of the Fund and of Janus Capital. Compensated by Janus
Capital and not the Fund.
**The Fund had not commenced operations as of October 31, 1999.
***As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.
52
<PAGE>
Purchase of shares
Shares of the Fund are sold at the net asset value per share as
determined at the close of the regular trading session of the New
York Stock Exchange (the "NYSE") next occurring after a purchase
order is received and accepted by the Fund. The Shareholder's
Manual Section of the Prospectus contains detailed information
about the purchase of shares.
NET ASSET VALUE DETERMINATION
As stated in the Prospectus, the net asset value ("NAV") of Fund
shares is determined once each day on which the New York Stock
Exchange ("NYSE") is open, at the close of its regular trading
session (normally 4:00 p.m., New York time, Monday through
Friday). As stated in the Prospectus, the NAV of Fund shares is
not determined on days the NYSE is closed (generally, New Year's
Day, Presidents' Day, Martin Luther King Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas). The per share NAV of the Fund is determined by
dividing the total value of the Fund's securities and other
assets, less liabilities, by the total number of shares
outstanding. In determining NAV, securities listed on an
Exchange, the NASDAQ National Market and foreign markets are
valued at the closing prices on such markets, or if such price is
lacking for the trading period immediately preceding the time of
determination, such securities are valued at their current bid
price. Municipal securities held by the Fund are traded primarily
in the over-the-counter market. Valuations of such securities are
furnished by one or more pricing services employed by the Fund
and are based upon a computerized matrix system or appraisals
obtained by a pricing service, in each case in reliance upon
information concerning market transactions and quotations from
recognized municipal securities dealers. Other securities that
are traded on the over-the-counter market are valued at their
closing bid prices. Foreign securities and currencies are
converted to U.S. dollars using the exchange rate in effect at
the close of the NYSE. The Fund will determine the market value
of individual securities held by it, by using prices provided by
one or more professional pricing services which may provide
market prices to other funds, or, as needed, by obtaining market
quotations from independent broker-dealers.
53
<PAGE>
Short-term securities maturing within 60 days are valued on an
amortized cost basis. Securities for which quotations are not
readily available, and other assets, are valued at fair values
determined in good faith under procedures established by and
under the supervision of the Trustees.
Trading in securities on European and Far Eastern securities
exchanges and over-the-counter markets is normally completed well
before the close of business on each business day in New York
(i.e., a day on which the NYSE is open). In addition, European or
Far Eastern securities trading generally or in a particular
country or countries may not take place on all business days in
New York. Furthermore, trading takes place in Japanese markets on
certain Saturdays and in various foreign markets on days which
are not business days in New York and on which the Fund's NAV is
not calculated. The Fund calculates its NAV per share, and
therefore effects sales, redemptions and repurchases of its
shares, as of the close of the NYSE once on each day on which the
NYSE is open. Such calculation may not take place
contemporaneously with the determination of the prices of the
foreign portfolio securities used in such calculation.
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
If investors do not elect in writing or by phone to receive their
dividends and distributions in cash, all income dividends and
capital gains distributions, if any, on the Fund's shares are
reinvested automatically in additional shares of the Fund at the
NAV determined on the payment date. Checks for cash dividends and
distributions and confirmations of reinvestments are usually
mailed to shareholders within ten days after the record date. Any
election of the manner in which a shareholder wishes to receive
dividends and distributions (which may be made on the New Account
Application form or by phone) will apply to dividends and
distributions the record dates of which fall on or after the date
that the Fund receives such notice. Changes to distribution
options must be received at least three days prior to the record
date to be effective for such date. Investors receiving cash
54
<PAGE>
distributions and dividends may elect in writing or by phone to
change back to automatic reinvestment at any time.
55
<PAGE>
Redemption of shares
Procedures for redemption of shares are set forth in the
Shareholder's Manual section of the Prospectus. Shares normally
will be redeemed for cash, although the Fund retains the right to
redeem its shares in kind under unusual circumstances, in order
to protect the interests of remaining shareholders, by delivery
of securities selected from its assets at its discretion.
However, the Fund is governed by Rule 18f-1 under the 1940 Act,
which requires the Fund to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the NAV of the Fund during any 90-day
period for any one shareholder. Should redemptions by any
shareholder exceed such limitation, the Fund will have the option
of redeeming the excess in cash or in kind. If shares are
redeemed in kind, the redeeming shareholder might incur brokerage
costs in converting the assets to cash. The method of valuing
securities used to make redemptions in kind will be the same as
the method of valuing portfolio securities described under
"Purchase of Shares - Net Asset Value Determination" and such
valuation will be made as of the same time the redemption price
is determined.
The right to require the Fund to redeem its shares may be
suspended, or the date of payment may be postponed, whenever (1)
trading on the NYSE is restricted, as determined by the SEC, or
the NYSE is closed except for holidays and weekends, (2) the SEC
permits such suspension and so orders, or (3) an emergency exists
as determined by the SEC so that disposal of securities or
determination of NAV is not reasonably practicable.
56
<PAGE>
Shareholder accounts
Detailed information about the general procedures for shareholder
accounts and specific types of accounts is set forth in the
Prospectus. Applications for specific types of accounts may be
obtained by calling the Fund at 1-800-525-3713 or writing to the
Fund at P.O. Box 173375, Denver, Colorado 80217-3375.
TELEPHONE AND WEB SITE TRANSACTIONS
As stated in the Prospectus, shareholders may initiate a number
of transactions by telephone and via our Web site. The Fund, its
transfer agent and its distributor disclaim responsibility for
the authenticity of instructions received by telephone and the
Web site. Such entities will employ reasonable procedures to
confirm that instructions communicated by telephone and the Web
site are genuine. Such procedures may include, among others,
requiring personal identification prior to acting upon telephone
and Web site instructions, providing written confirmation of
telephone and Web site transactions and tape recording telephone
conversations.
SYSTEMATIC REDEMPTIONS
As stated in the Shareholder's Manual section of the Prospectus,
if you have a regular account or are eligible for distributions
from a retirement plan, you may establish a systematic redemption
option. The payments will be made from the proceeds of periodic
redemptions of shares in the account at the NAV. Depending on the
size or frequency of the disbursements requested, and the
fluctuation in value of the Fund's portfolio, redemptions for the
purpose of making such disbursements may reduce or even exhaust
the shareholder's account. Either an investor or the Fund, by
written notice to the other, may terminate the investor's
systematic redemption option without penalty at any time.
Information about requirements to establish a systematic
redemption option may be obtained by writing or calling the Fund
at the address or phone number shown above.
57
<PAGE>
Tax-deferred accounts
The Fund offers several different types of tax-deferred accounts
that an investor may establish to invest in Fund shares,
depending on rules prescribed by the Code. Traditional and Roth
Individual Retirement Accounts may be used by most individuals
who have taxable compensation. Simplified Employee Pensions and
Defined Contribution Plans (Profit Sharing or Money Purchase
Pension Plans) may be used by most employers, including
corporations, partnerships and sole proprietors, for the benefit
of business owners and their employees. Education IRAs allow
individuals, subject to certain income limitations, to contribute
up to $500 annually on behalf of any child under the age of 18.
In addition, the Fund offers a Section 403(b)(7) Plan for
employees of educational organizations and other qualifying
tax-exempt organizations. Investors should consult their tax
adviser or legal counsel before selecting a tax-deferred account.
Contributions under Traditional and Roth IRAs, Education IRAs,
SEPs, Defined Contribution Plans and Section 403(b)(7) Plans are
subject to specific contribution limitations. Generally, such
contributions may be invested at the direction of the
participant. The investment is then held by Investors Fiduciary
Trust Company as custodian. Each participant's account is charged
an annual fee of $12 per taxpayer identification number no matter
how many tax-deferred accounts the participant has with Janus.
The custodian reserves the right to change the amount of this fee
or to waive it in whole or in part for certain types of accounts.
Distributions from tax-deferred accounts may be subject to
ordinary income tax and may be subject to an additional 10% tax
if withdrawn prior to age 59 1/2 or used for a nonqualifying
purpose. Additionally, shareholders generally must start
withdrawing retirement plan assets no later than April 1 of the
year after they reach age 70 1/2. Several exceptions to these
general rules may apply and several methods exist to determine
the amount and timing of the minimum annual distribution (if
any). Shareholders should consult with their tax adviser or legal
counsel prior to receiving any distribution from any tax-deferred
account, in order to determine the income tax impact of any such
distribution.
58
<PAGE>
To receive additional information about Traditional and Roth
IRAs, SEPs, Defined Contribution Plans and Section 403(b)(7)
Plans along with the necessary materials to establish an account,
please call the Fund at 1-800-525-3713 or write to the Fund at
P.O. Box 173375, Denver, Colorado 80217-3375. No contribution to
a Traditional or Roth IRA, SEP, Defined Contribution Plan or
Section 403(b)(7) Plan can be made until the appropriate forms to
establish any such plan have been completed.
59
<PAGE>
Income dividends, capital gains
distributions and tax status
It is a policy of the Fund to make distributions of substantially
all of its investment income and any net realized capital gains.
Any capital gains realized during each fiscal year of the Fund
ended October 31, as defined by the Code, are normally declared
and payable to shareholders in December. The Fund intends to
qualify as a regulated investment company by satisfying certain
requirements prescribed by Subchapter M of the Code. Accordingly,
the Fund will invest no more than 25% of its total assets in a
single issuer (other than U.S. government securities).
The Fund may purchase securities of certain foreign corporations
considered to be passive foreign investment companies by the IRS.
In order to avoid taxes and interest that must be paid by the
Fund, if these instruments are profitable, the Fund may make
various elections permitted by the tax laws. However, these
elections could require that the Fund recognize taxable income,
which in turn must be distributed.
Some foreign securities purchased by the Fund may be subject to
foreign taxes which could reduce the yield on such securities.
The amount of such foreign taxes is expected to be insignificant.
The Fund may from year to year make the election permitted under
Section 853 of the Code to pass through such taxes to
shareholders, who will each decide whether to deduct such taxes
or claim a foreign tax credit. If such election is not made,
foreign taxes paid or accrued will represent an expense to the
Fund which will reduce its investment company taxable income.
60
<PAGE>
Miscellaneous information
The Fund is a series of the Trust, a Massachusetts business trust
that was created on February 11, 1986. The Trust is an open-end
management investment company registered under the 1940 Act. As
of the date of this SAI, the Trust offers 22 separate series,
three of which currently offer three classes of shares.
Janus Capital reserves the right to the name "Janus." In the
event that Janus Capital does not continue to provide investment
advice to the Fund, the Fund must cease to use the name "Janus"
as soon as reasonably practicable.
Under Massachusetts law, shareholders of the Fund could, under
certain circumstances, be held liable for the obligations of the
Fund. However, the Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that
notice of this disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Fund or the
Trustees. The Declaration of Trust also provides for
indemnification from the assets of the Fund for all losses and
expenses of any Fund shareholder held liable for the obligations
of the Fund. Thus, the risk of a shareholder incurring a
financial loss on account of its liability as a shareholder of
the Fund is limited to circumstances in which the Fund would be
unable to meet its obligations. The possibility that these
circumstances would occur is remote. The Trustees intend to
conduct the operations of the Fund to avoid, to the extent
possible, liability of shareholders for liabilities of the Fund.
SHARES OF THE TRUST
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of one cent per share for
each series of the Trust. Shares of the Fund are fully paid and
nonassessable when issued. All shares of the Fund participate
equally in dividends and other distributions by the Fund, and in
residual assets of the Fund in the event of liquidation. Shares
of the Fund have no preemptive, conversion or subscription
rights. Shares of the Fund may be transferred by endorsement or
stock power as is customary, but the Fund is not bound to
recognize any transfer until it is recorded on its books.
61
<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 the Fund only if a matter affects or requires the vote of only
the Fund or the Fund's interest in the matter differs from the
interest of other portfolios of the Trust. As a shareholder, you
are entitled to one vote for each share that you own.
VOTING RIGHTS
The present Trustees were elected at a meeting of shareholders
held on July 10, 1992, with the exception of Mr. Craig and Mr.
Rothe who were appointed by the Trustees as of June 30, 1995 and
January 1, 1997, respectively. Under the Declaration of Trust,
each Trustee will continue in office until the termination of the
Trust or his earlier death, retirement, resignation, bankruptcy,
incapacity or removal. Vacancies will be filled by a majority of
the remaining Trustees, subject to the 1940 Act. Therefore, no
annual or regular meetings of shareholders normally will be held,
unless otherwise required by the Declaration of Trust or the 1940
Act. Subject to the foregoing, shareholders have the power to
vote to elect or remove Trustees, to terminate or reorganize the
Fund, to amend the Declaration of Trust, to bring certain
derivative actions and on any other matters on which a
shareholder vote is required by the 1940 Act, the Declaration of
Trust, the Trust's Bylaws or the Trustees.
As mentioned above in "Shareholder Meetings," each share of the
Fund and of each other series of the Trust has one vote (and
fractional votes for fractional shares). Shares of all series of
the Trust have noncumulative voting rights, which means that the
holders of more than 50% of the shares of all series of the Trust
voting for the election of Trustees can elect 100% of the
Trustees
62
<PAGE>
if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any Trustees.
MASTER/FEEDER OPTION
The Trust may in the future seek to achieve the Fund's objective
by investing all of the Fund's assets in another investment
company having the same investment objective and substantially
the same investment policies and restrictions as those applicable
to the Fund. Unless otherwise required by law, this policy may be
implemented by the Trustees without shareholder approval.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500,
Denver, Colorado 80202, independent accountants for the Fund,
audit the Fund's annual financial statements and prepare its tax
returns.
REGISTRATION STATEMENT
The Trust has filed with the SEC, Washington, D.C., a
Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities to which this SAI
relates. If further information is desired with respect to the
Fund or such securities, reference is made to the Registration
Statement and the exhibits filed as a part thereof.
63
<PAGE>
Performance information
Quotations of average annual total return for the Fund will be
expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the Fund over periods of
1, 5, and 10 years (up to the life of the Fund). These are the
annual total rates of return that would equate the initial amount
invested to the ending redeemable value. These rates of return
are calculated pursuant to the following formula: P(1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the
average annual total return, n = the number of years and
ERV = the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period). All total return
figures reflect the deduction of a proportional share of Fund
expenses on an annual basis, and assume that all dividends and
distributions are reinvested when paid.
From time to time in advertisements or sales material, the Fund
may discuss its performance ratings or other information as
published by recognized mutual fund statistical rating services,
including, but not limited to, Lipper Analytical Services, Inc.,
("Lipper") Ibbotson Associates, Micropal or Morningstar, Inc.
("Morningstar") or by publications of general interest such as
Forbes, Money, The Wall Street Journal, Mutual Funds Magazine,
Kiplinger's or Smart Money. The Fund may also compare its
performance to that of other selected mutual funds (for example,
peer groups created by Lipper or Morningstar), mutual fund
averages or recognized stock market indicators, including, but
not limited to, the S&P 500 Index, the Dow Jones Industrial
Average, and the NASDAQ composite. In addition, the Fund may
compare its total return to the yield on U.S. Treasury
obligations and to the percentage change in the Consumer Price
Index. Such performance ratings or comparisons may be made with
funds that may have different investment restrictions,
objectives, policies or techniques than the Fund and such other
funds or market indicators may be comprised of securities that
differ significantly from the Fund's investments.
64
<PAGE>
Appendix A
EXPLANATION OF RATING CATEGORIES
The following is a description of credit ratings issued by two of
the major credit ratings agencies. Credit ratings evaluate only
the safety of principal and interest payments, not the market
value risk of lower quality securities. Credit rating agencies
may fail to change credit ratings to reflect subsequent events on
a timely basis. Although Janus Capital considers security ratings
when making investment decisions, it also performs its own
investment analysis and does not rely solely on the ratings
assigned by credit agencies.
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong
capacity to pay principal and
interest.
AA.......................... High quality; very strong capacity
to pay principal and interest.
A........................... Strong capacity to pay principal
and interest; somewhat more
susceptible to the adverse effects
of changing circumstances and
economic conditions.
BBB......................... Adequate capacity to pay principal
and interest; normally exhibit
adequate protection parameters, but
adverse economic conditions or
changing circumstances more likely
to lead to a weakened capacity to
pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with
respect to the issuer's capacity to
meet required interest and
principal payments. BB-lowest
degree of speculation; C-the
highest degree of speculation.
Quality and protective
characteristics outweighed by large
uncertainties or major risk
exposure to adverse conditions.
D........................... In default.
</TABLE>
65
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of
investment risk.
Aa.......................... High quality; together with Aaa
bonds, they compose the high-grade
bond group.
A........................... Upper-medium grade obligations;
many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither
highly protected nor poorly
secured. Interest and principal
appear adequate for the present but
certain protective elements may be
lacking or may be unreliable over
any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative
elements. Protection of interest
and principal payments not well
safeguarded during good and bad
times.
B........................... Lack characteristics of desirable
investment; potentially low
assurance of timely interest and
principal payments or maintenance
of other contract terms over time.
Caa......................... Poor standing, may be in default;
elements of danger with respect to
principal or interest payments.
Ca.......................... Speculative in a high degree; could
be in default or have other marked
shortcomings.
C........................... Lowest-rated; extremely poor
prospects of ever attaining
investment standing.
</TABLE>
66
<PAGE>
Unrated securities will be treated as noninvestment grade
securities unless the portfolio manager determines that such
securities are the equivalent of investment grade securities.
Securities that have received ratings from more than one agency
are considered investment grade if at least one agency has rated
the security investment grade.
67
<PAGE>
[JANUS LOGO]
1-800-525-3713
P.O. Box 173375
Denver, Colorado 80217-3375
janus.com
<PAGE>
JANUS INVESTMENT FUND
PART C - OTHER INFORMATION
ITEM 23. Exhibits
Exhibit 1 (a) Agreement and Declaration of Trust dated
February 11, 1986, is incorporated herein by
reference to Exhibit 1(a) to Post-Effective
Amendment No. 79.
(b) Certificate of Designation for Janus Growth and
Income Fund is incorporated herein by reference to
Exhibit 1(b) to Post-Effective Amendment No. 79.
(c) Certificate of Designation for Janus Worldwide
Fund is incorporated herein by reference to
Exhibit 1(c) to Post-Effective Amendment No. 79.
(d) Certificate of Designation for Janus Twenty Fund
is incorporated herein by reference to Exhibit
1(d) to Post-Effective Amendment No. 80.
(e) Certificate of Designation for Janus Flexible
Income Fund is incorporated herein by reference to
Exhibit 1(e) to Post-Effective Amendment No. 80.
(f) Certificate of Designation for Janus Intermediate
Government Securities Fund filed as Exhibit 1(f)
to Post-Effective Amendment No. 46 has been
withdrawn.
(g) Certificate of Designation for Janus Venture Fund
is incorporated herein by reference to Exhibit
1(g) to Post-Effective Amendment No. 80.
(h) Certificate of Designation for Janus Enterprise
Fund is incorporated herein by reference to
Exhibit 1(h) to Post-Effective Amendment No. 80.
(i) Certificate of Designation for Janus Balanced Fund
is incorporated herein by reference to Exhibit
1(i) to Post-Effective Amendment No. 80.
(j) Certificate of Designation for Janus Short-Term
Bond Fund is incorporated herein by reference to
Exhibit 1(j) to Post-Effective Amendment No. 80.
C-1
<PAGE>
(k) Certificate of Designation for Janus Federal Tax-
Exempt Fund is incorporated herein by reference to
Exhibit 1(k) to Post-Effective Amendment No. 81.
(l) Certificate of Designation for Janus Mercury Fund
is incorporated herein by reference to Exhibit
1(l) to Post-Effective Amendment No. 81.
(m) Certificate of Designation for Janus Overseas Fund
is incorporated herein by reference to Exhibit
1(m) to Post-Effective Amendment No. 81.
(n) Form of Amendment to the Registrant's Agreement
and Declaration of Trust is incorporated herein by
reference to Exhibit 1(n) to Post-Effective
Amendment No. 81.
(o) Form of Certificate of Designation for Janus Money
Market Fund, Janus Government Money Market Fund
and Janus Tax-Exempt Money Market Fund is
incorporated herein by reference to Exhibit 1(o)
to Post-Effective Amendment No. 81.
(p) Form of Certificate of Designation for Janus High-
Yield Fund and Janus Olympus Fund is incorporated
herein by reference to Exhibit 1(p) to Post-
Effective Amendment No. 68.
(q) Certificate of Designation for Janus Equity Income
Fund is incorporated herein by reference to
Exhibit 1(q) to Post-Effective Amendment No. 72.
(r) Form of Certificate of Establishment and
Designation for Janus Special Situations Fund is
incorporated herein by reference to Exhibit 1(r)
to Post-Effective Amendment No. 75.
(s) Form of Amendment to Registrant's Agreement and
Declaration of Trust is incorporated herein by
reference to Exhibit 1(s) to Post-Effective
Amendment No. 75.
(t) Certificate of Establishment and Designation for
Janus Global Life Sciences Fund filed as Exhibit
1(t) to Post-Effective Amendment No. 82 has been
withdrawn.
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(u) Certificate of Establishment and Designation for
Janus Global Life Sciences Fund is incorporated
herein by reference to Exhibit 1(u) to Post-
Effective Amendment No. 85.
(v) Form of Certificate of Establishment and
Designation for Janus Global Technology Fund is
incorporated herein by referenced to Exhibit 1(v)
to Post-Effective Amendment No. 85.
(w) Certificate of Establishment and Designation for
Janus Strategic Value Fund is filed herein as
Exhibit 1(w).
Exhibit 2 (a) Restated Bylaws are incorporated herein by
reference to Exhibit 2(a) to Post-Effective
Amendment No. 71.
(b) First Amendment to the Bylaws is incorporated
herein by reference to Exhibit 2(b) to Post-
Effective Amendment No. 71.
Exhibit 3 (a) Specimen Stock Certificate for Janus Fund1 is
incorporated herein by reference to Exhibit 4(b)
to Post-Effective Amendment No. 79.
(b) Specimen Stock Certificate for Janus Growth and
Income Fund is incorporated herein by reference to
Exhibit 4(b) to Post-Effective Amendment No. 79.
(c) Specimen Stock Certificate for Janus Worldwide
Fund is incorporated herein by reference to
Exhibit 4(c) to Post-Effective Amendment No. 79.
(d) Specimen Stock Certificate for Janus Twenty
Fund(1) is incorporated herein by reference to
Exhibit 4(d) to Post-Effective Amendment No. 80.
(e) Specimen Stock Certificate for Janus Flexible
Income Fund(1) is incorporated herein by reference
to Exhibit 4(e) to Post-Effective Amendment No.
80.
(f) Specimen Stock Certificate for Janus Intermediate
Government Securities Fund(1) filed as Exhibit
4(f) to Post-Effective Amendment No. 46 has been
withdrawn.
(g) Specimen Stock Certificate for Janus Venture
Fund(1) is incorporated herein by reference to
Exhibit 4(g) to Post-
- -------------------
(1) Outstanding certificates representing shares of predecessor entity to this
series of the Trust are deemed to represent shares of this series.
C-3
<PAGE>
Effective Amendment No. 80.
(h) Specimen Stock Certificate for Janus Enterprise
Fund is incorporated herein by reference to
Exhibit 4(h) to Post-Effective Amendment No. 80.
(i) Specimen Stock Certificate for Janus Balanced Fund
is incorporated herein by reference to Exhibit
4(i) to Post-Effective Amendment No. 80.
(j) Specimen Stock Certificate for Janus Short-Term
Bond Fund is incorporated herein by reference to
Exhibit 4(j) to Post-Effective Amendment No. 80.
(k) Specimen Stock Certificate for Janus Federal Tax-
Exempt Fund is incorporated herein by reference to
Exhibit 4(k) to Post-Effective Amendment No. 81.
(l) Specimen Stock Certificate for Janus Mercury Fund
is incorporated herein by reference to Exhibit
4(l) to Post-Effective Amendment No. 81.
(m) Specimen Stock Certificate for Janus Overseas Fund
is incorporated herein by reference to Exhibit
4(m) to Post-Effective Amendment No. 81.
(n) Revised Specimen Stock Certificates for Janus
High-Yield Fund and Janus Olympus Fund are
incorporated herein by reference to Exhibit 4(n)
to Post-Effective Amendment No. 79.
(o) Revised Specimen Stock Certificate for Janus
Equity Income Fund is incorporated herein by
reference to Exhibit 4(o) to Post-Effective
Amendment No. 79.
(p) Revised Specimen Stock Certificate for Janus
Special Situations Fund is incorporated herein by
reference to Exhibit 4(p) to Post-Effective
Amendment No. 79.
(q) Specimen Stock Certificate for Janus Global Life
Sciences Fund filed as Exhibit 4(q) to Post-
Effective Amendment
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<PAGE>
No. 82 has been withdrawn.
(r) Form of Specimen Stock Certificate for Janus
Global Life Sciences Fund is incorporated herein
by reference to Exhibit 3(r) to Post-Effective
Amendment No. 85.
(s) Form of Specimen Stock Certificate for Janus
Global Technology Fund is incorporated herein by
reference to Exhibit 3(s) to Post-Effective
Amendment No. 85.
Exhibit 4 (a) Investment Advisory Agreement for Janus Fund dated
July 1, 1997, is incorporated herein by reference
to Exhibit 5(a) to Post-Effective Amendment No.
83.
(b) Investment Advisory Agreements for Janus Growth
and Income Fund and Janus Worldwide Fund dated
July 1, 1997, are incorporated herein by
reference to Exhibit 5(b) to Post-Effective
Amendment No. 83.
(c) Investment Advisory Agreements for Janus Twenty
Fund and Janus Venture Fund dated July 1, 1997,
are incorporated herein by reference to Exhibit
5(c) to Post-Effective Amendment No. 83.
(d) Investment Advisory Agreement for Janus Flexible
Income Fund dated July 1, 1997, is incorporated
herein by reference to Exhibit 5(d) to Post-
Effective Amendment No. 83.
(e) Investment Advisory Agreements for Janus
Enterprise Fund, Janus Balanced Fund, and Janus
Short-Term Bond Fund dated July 1, 1997, are
incorporated herein by reference to Exhibit 5(e)
to Post-Effective Amendment No. 83.
(f) Investment Advisory Agreements for Janus Federal
Tax-Exempt Fund and Janus Mercury Fund dated
July 1, 1997, are incorporated herein by
reference to Exhibit 5(f) to Post-Effective
Amendment No. 83.
(g) Investment Advisory Agreement for Janus Overseas
Fund dated July 1, 1997, is incorporated herein by
reference to Exhibit 5(g) to Post-Effective
Amendment No. 83.
(h) Investment Advisory Agreements for Janus Money
Market
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<PAGE>
Fund, Janus Government Money Market Fund,
and Janus Tax-Exempt Money Market Fund dated
July 1, 1997, are incorporated herein by reference
to Exhibit 5(h) to Post-Effective Amendment
No. 83.
(i) Investment Advisory Agreement for Janus High-Yield
Fund dated July 1, 1997, is incorporated herein by
reference to Exhibit 5(i) to Post-Effective
Amendment No. 83.
(j) Investment Advisory Agreement for Janus Olympus
Fund dated July 1, 1997, is incorporated herein by
reference to Exhibit 5(j) to Post-Effective
Amendment No. 83.
(k) Investment Advisory Agreement for Janus Equity
Income Fund dated July 1, 1997, is incorporated
herein by reference to Exhibit 5(k) to Post-
Effective Amendment No. 83.
(l) Investment Advisory Agreement for Janus Special
Situations Fund dated July 1, 1997, is incorporated
herein by reference to Exhibit 5(l) to Post-
Effective Amendment No. 83.
(m) Investment Advisory Agreement for Janus Global Life
Sciences Fund filed as Exhibit 5(m) to Post-
Effective Amendment No. 82 has been withdrawn.
(n) Form of Investment Advisory Agreement for Janus
Global Life Sciences Fund is incorporated herein
by reference to Exhibit 4(n) to Post-Effective
Amendment No. 85.
(o) Form of Investment Advisory Agreement for Janus
Global Technology Fund is incorporated herein by
reference to Exhibit 4(o) to Post-Effective
Amendment No. 85.
(p) Investment Advisory Agreement for Janus Strategic
Value Fund is filed herein as Exhibit 4(p).
Exhibit 5 Distribution Agreement between Janus Investment
Fund and Janus Distributors, Inc., dated
July 1, 1997, is incorporated herein by reference
to Exhibit 6 to Post-Effective Amendment No. 83.
Exhibit 6 Not Applicable.
C-6
<PAGE>
Exhibit 7 (a) Custodian Contract between Janus Investment Fund
and State Street Bank and Trust Company is
incorporated herein by reference to Exhibit 8(a) to
Post-Effective Amendment No. 79.
(b) Amendment dated April 25, 1990, of State Street
Custodian Contract is incorporated herein by
reference to Exhibit 8(b) to Post-Effective
Amendment No. 79.
(c) Letter Agreement dated February 1, 1991, regarding
State Street Custodian Contract is incorporated
herein by reference to Exhibit 8(c) to Post-
Effective Amendment No. 79.
(d) Custodian Contract between Janus Investment Fund
and Investors Fiduciary Trust Company filed as
Exhibit 8(d) to Post-Effective Amendment No. 79 has
been withdrawn.
(e) Letter Agreement dated October 9, 1992, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(e) to Post-
Effective Amendment No. 81.
(f) Letter Agreement dated April 28, 1993, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(f) to Post-
Effective Amendment No. 81.
(g) Letter Agreement dated April 4, 1994, regarding
State Street Custodian Agreement is incorporated
herein by reference to Exhibit 8(g) to Post-
Effective Amendment No. 81.
(h) Form of Custody Agreement between Janus Investment
Fund, on behalf of Janus Money Market Fund, Janus
Government Money Market Fund and Janus Tax-Exempt
Money Market Fund, and United Missouri Bank, N.A.
filed as Exhibit 8(h) to Post-Effective Amendment
No. 81 has been withdrawn.
(i) Letter Agreement dated December 12, 1995, regarding
State Street Custodian Contract is incorporated
herein by reference to Exhibit 8(i) to Post-
Effective Amendment No. 72.
C-7
<PAGE>
(j) Amendment dated October 11, 1 995, of State Street
Custodian Contract is incorporated herein by
reference to Exhibit 8(j) to Post-Effective
Amendment No. 71.
(k) Form of Amendment dated September 10, 1996, of
State Street Custodian Contract is incorporated
herein by reference to Exhibit 8(k) to Post-
Effective Amendment No. 75.
(l) Letter Agreement dated September 10, 1996,
regarding State Street Custodian Contract is
incorporated herein by reference to Exhibit 8(l)
to Post-Effective Amendment No. 75.
(m) Form of Subcustodian Contract between United
Missouri Bank, N.A., and State Street Bank and
Trust Company is incorporated herein by reference
to Exhibit 8(m) to Post-Effective Amendment No. 75.
(n) Form of Letter Agreement dated September 9, 1997,
regarding State Street Custodian Contract is
incorporated herein by reference to Exhibit 8(n) to
Post-Effective Amendment No. 82.
(o) Form of Letter Agreement dated September 14, 1998,
regarding State Street Custodian Contract is
incorporated herein by reference to Exhibit 7(o) to
Post-Effective Amendment No. 85.
(p) Letter Agreement dated September 14, 1999,
regarding State Street Custodian Contract is filed
herein as Exhibit 7(p).
(q) Global Custody Services Agreement between Janus
Investment Fund, on behalf of Janus Money Market
Fund, Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund, and Citibank, N.A.
dated March 15, 1999 is filed herein as Exhibit
7(q).
Exhibit 8 (a) Transfer Agency Agreement with Investors Fiduciary
Trust Company filed as Exhibit 9(a) to Post-
Effective Amendment No. 79 has been withdrawn.
(b) Subagency Agreement between Janus Service
Corporation
C-8
<PAGE>
and Investors Fiduciary Trust Company filed as
Exhibit 9(b) to Post-Effective Amendment No. 79 has
been withdrawn.
(c) Form of Administration Agreement with Janus Capital
Corporation for Janus Money Market Fund, Janus
Government Money Market Fund and Janus Tax-Exempt
Money Market Fund is incorporated herein by
reference to Exhibit 9(c) to Post-Effective
Amendment No. 81.
(d) Transfer Agency Agreement dated December 9, 1994,
with Janus Service Corporation for Janus Money
Market Fund, Janus Government Money Market Fund and
Janus Tax-Exempt Money Market Fund filed as Exhibit
9(d) to Post-Effective Amendment No. 64 has been
withdrawn.
(e) Transfer Agency Agreement dated September 27, 1995,
with Janus Service Corporation for Janus Money
Market Fund, Janus Government Money Market Fund,
Janus Tax-Exempt Money Market Fund, Janus High-
Yield Fund and Janus Olympus Fund is incorporated
herein by reference to Exhibit 9(e) to Post-
Effective Amendment No. 70.
(f) Letter Agreement dated December 21, 1995, regarding
Janus Service Corporation Transfer Agency Agreement
is incorporated herein by reference to Exhibit 9(f
to Post-Effective Amendment No. 72.
(g) Letter Agreement dated May 21, 1996, regarding
Janus Service Corporation Transfer Agency Agreement
is incorporated by reference to Exhibit 9(g) to
Post-Effective Amendment No. 73.
(h) Form of Amended Administration Agreement with Janus
Capital Corporation for Janus Money Market Fund,
Janus Government Money Market Fund, and Janus Tax-
Exempt Money Market Fund is incorporated by
reference to Exhibit 9(h) to Post-Effective
Amendment No. 77.
(i) Letter Agreement dated September 10, 1996,
regarding Janus Service Corporation Transfer Agency
Agreement is incorporated herein by reference to
Exhibit 9(i) to Post-Effective Amendment No. 76.
(j) Letter Agreement dated September 9, 1997, regarding
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<PAGE>
Janus Service Corporation Transfer Agency Agreement
is incorporated herein by reference to Exhibit 9(j)
to Post-Effective Amendment No. 82.
(k) Form of Letter Agreement dated September 14, 1998,
regarding Janus Service Corporation Transfer Agency
Agreement is incorporated herein by reference to
Exhibit 8(k) to Post-Effective Amendment No. 85.
(l) Letter agreement dated September 14, 1999,
regarding Janus Service Corporation Transfer Agency
Agreement is filed herein as Exhibit 8(l).
Exhibit 9 (a) Opinion and Consent of Messrs. Davis, Graham &
Stubbs with respect to shares of Janus Fund is
incorporated herein by reference to Exhibit 10 (a)
to Post-Effective Amendment No. 79.
(b) Opinion and Consent of Fund Counsel with respect to
shares of Janus Growth and Income Fund and Janus
Worldwide Fund is incorporated herein by reference
to Exhibit 10(b) to Post-Effective Amendment
No. 79.
(c) Opinion and Consent of Fund Counsel with respect to
shares of Janus Enterprise Fund, Janus Balanced
Fund and Janus Short-Term Bond Fund is incorporated
herein by reference to Exhibit 10(c) to Post-
Effective Amendment No. 80.
(d) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Twenty
Fund is incorporated herein by reference to
Exhibit 10(d) to Post-Effective Amendment No. 81.
(e) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Venture
Fund is incorporated herein by reference to
Exhibit 10(e) to Post-Effective Amendment No. 81.
(f) Opinion and Consent of Messrs. Sullivan and
Worcester with respect to shares of Janus Flexible
Income Fund is incorporated herein by reference to
Exhibit 10(f) to Post-Effective Amendment No. 81.
(g) Opinion and Consent of Messrs. Sullivan and
Worcester
C-10
<PAGE>
with respect to shares of Janus Intermediate
Government Securities Fund filed as Exhibit 10(g)
to Post-Effective Amendment No. 46 has been
withdrawn.
(h) Opinion and Consent of Fund Counsel with respect to
shares of Janus Federal Tax-Exempt Fund and Janus
Mercury Fund is incorporated herein by reference to
Exhibit 10(h) to Post-Effective Amendment No. 81.
(i) Opinion and Consent of Fund Counsel with respect to
shares of Janus Overseas Fund is incorporated
herein by reference to Exhibit 10(i) to Post-
Effective Amendment No. 81.
(j) Opinion and Consent of Fund Counsel with respect to
shares of Janus Money Market Fund, Janus Government
Money Market Fund and Janus Tax-Exempt Money Market
Fund is incorporated herein by reference to Exhibit
10(j) to Post-Effective Amendment No. 81.
(k) Opinion and Consent of Fund Counsel with respect to
Institutional Shares of Janus Money Market Fund,
Janus Government Money Market Fund and Janus Tax-
Exempt Money Market Fund is incorporated herein by
reference to Exhibit 10(k) to Post-Effective
Amendment No. 81.
(l) Opinion and Consent of Fund Counsel with respect to
shares of Janus High-Yield Fund and Janus Olympus
Fund is incorporated herein by reference to Exhibi
10(l) to Post-Effective Amendment No. 68.
(m) Opinion and Consent of Fund Counsel with respect to
shares of Janus Equity Income Fund is incorporated
herein by reference to Exhibit 10(m) to Post-
Effective Amendment No. 72.
(n) Opinion and Consent of Fund Counsel with respect to
shares of Janus Special Situations Fund is
incorporated herein by reference to Exhibit 10(n)
Amendment No. 75.
(o) Opinion and Consent of Fund Counsel with respect to
shares of Janus Money Market Fund, Janus Government
Money Market Fund, and Janus Tax-Exempt Money
Market Fund is incorporated herein by reference to
Exhibit
C-11
<PAGE>
10(o) to Post-Effective Amendment No. 76.
(p) Opinion and Consent of Fund Counsel with respect to
shares of Janus Global Life Sciences Fund fixed as
Exhibit 10(p) to Post-Effective Amendment No. 82
has been withdrawn.
(q) Opinion and Consent of Fund Counsel with respect to
shares of Janus Global Life Sciences Fund and Janus
Global Technology Fund is incorporated herein by
reference to Exhibit 9(q) to Post-Effective
Amendment No. 85.
(r) Opinion and Consent of Fund Counsel with respect to
shares of Janus Strategic Value Fund is filed
herein as Exhibit 9(r).
Exhibit 10 Consent of PricewaterhouseCoopers LLP is filed
herein as Exhibit 10.
Exhibit 11 Not Applicable.
Exhibit 12 Not Applicable.
Exhibit 13 Not Applicable.
Exhibit 14 Not Applicable.
Exhibit 15 (a) Form of plan entered into by Janus Money Market
Fund, Janus Government Money Market Fund and Janus
Tax-Exempt Money Market Fund pursuant to Rule 18f-3
setting forth the separate arrangement and expense
allocation of each class of such Funds filed as
Exhibit 18 to Post-Effective Amendment No. 66 has
been withdrawn.
(b) Restated form of Rule 18f-3 Plan entered into by
Janus Money Market Fund, Janus Government Money
Market Fund and Janus Tax-Exempt Money Market Fund
is incorporated herein by reference to Exhibit
18(b) to Post-Effective Amendment No. 69.
(c) Amended and Restated form of Rule 18f-3 Plan
entered into by Janus Money Market Fund, Janus
Government Money Market Fund, and Janus Tax-Exempt
Money Market Fund is incorporated herein by
reference to Exhibit
C-12
<PAGE>
18(c) to Post-Effective Amendment No. 78.
ITEM 24. Persons Controlled by or Under Common Control with Fund
None
ITEM 25. Indemnification
Article VIII of Janus Investment Fund's Agreement and Declaration of
Trust provides for indemnification of certain persons acting on behalf of the
Funds. In general, Trustees and officers will be indemnified against liability
and against all expenses of litigation incurred by them in connection with any
claim, action, suit or proceeding (or settlement of the same) in which they
become involved by virtue of their Fund office, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
or not opposed to the best interests of the Funds. A determination that a person
covered by the indemnification provisions is entitled to indemnification may be
made by the court or other body before which the proceeding is brought, or by
either a vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust nor parties to the proceeding or by an independent legal
counsel in a written opinion. The Funds also may advance money for these
expenses, provided that the Trustee or officer undertakes to repay the Funds if
his conduct is later determined to preclude indemnification, and that either he
provide security for the undertaking, the Trust be insured against losses
resulting from lawful advances or a majority of a quorum of disinterested
Trustees, or independent counsel in a written opinion, determines that he
ultimately will be found to be entitled to indemnification. The Trust also
maintains a liability insurance policy covering its Trustees and officers.
ITEM 26. Business and Other Connections of Investment Adviser
The only business of Janus Capital Corporation is to serve as the
investment adviser of the Fund and as investment adviser or subadviser to
several other mutual funds and private and retirement accounts. Business
backgrounds of the principal executive officers and directors of the adviser
that also hold positions with the Registrant are included under "Officers and
Trustees" in the currently effective Statements of Additional Information of the
Registrant. The remaining principal executive officers of the investment adviser
and their positions with the adviser and affiliated entities are: Mark B.
Whiston, Vice President and Chief Marketing Officer of Janus Capital
Corporation, Director and President of Janus Capital International Ltd.,
Director of Janus World Funds Plc; Marjorie G. Hurd, Vice President and Chief
Operations Officer of Janus Capital Corporation, Director and President of Janus
Service Corporation; and Stephen L. Stieneker, Assistant General Counsel, Chief
Compliance Officer and Vice President of Compliance of Janus Capital
Corporation. Mr. Michael E. Herman, a director of Janus Capital Corporation, is
Chairman of the Finance Committee (1990 to present) of Ewing Marion Kauffman
Foundation, 4900 Oak, Kansas City, Missouri 64112. Mr. Michael N. Stolper, a
C-13
<PAGE>
director of Janus Capital Corporation, is President of Stolper & Company, Inc.,
600 West Broadway, Suite 1010, San Diego, California 92101, an investment
performance consultant. Mr. Thomas A. McDonnell, a director of Janus Capital
Corporation, is President, Chief Executive Officer and a Director of DST
Systems, Inc., 333 West 11th Street, 5th Floor, Kansas City, Missouri 64105,
provider of data processing and recordkeeping services for various mutual funds,
and is Executive Vice President and a director of Kansas City Southern
Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105, a publicly
traded holding company whose primary subsidiaries are engaged in transportation,
information processing and financial services. Mr. Landon H. Rowland, a director
of Janus Capital Corporation, is President and Chief Executive Officer of Kansa
City Southern Industries, Inc.
ITEM 27. Principal Underwriters
(a) Janus Distributors, Inc. ("Janus Distributors")
serves as a principal underwriter for the Fund and
Janus Aspen Series.
(b) The principal business address, positions with
Janus Distributors and positions with Registrant of
Thomas E. Early, Kelley Abbott Howes, and Steven R.
Goodbarn, officers and directors of Janus
Distributors, are described under "Officers and
Trustees" in the Statements of Additional
Information included in this Registration
Statement. The remaining principal executive
officer of Janus Distributors is Marjorie G. Hurd,
Director and President. Ms. Hurd does not hold any
positions with the Registrant. Ms. Hurd's principal
business address is 100 Fillmore Street, Denver,
Colorado 80206-4928.
(c) Not applicable.
ITEM 28. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Denver, Colorado
80206-4928, and by State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts 02101, and Citibank, N.A., 111 Wall Street, New York, New York
10043.
ITEM 29. Management Services
The Fund has no management-related service contract which is not discussed
in Part A or Part B of this form.
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<PAGE>
ITEM 30. Undertakings
Not applicable.
C-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Denver, and State of Colorado, on the 15th day of
November, 1999.
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Janus Investment Fund is organized under an Agreement and Declaration
of Trust dated February 11, 1986, a copy of which is on file with the Secretary
of State of The Commonwealth of Massachusetts. The obligations of the Registrant
hereunder are not binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Registrant personally, but bind only the
trust property of the Registrant, as provided in the Agreement and Declaration
of Trust of the Registrant. The execution of this Amendment to the Registration
Statement has been authorized by the Trustees of the Registrant and this
Amendment to the Registration Statement has been signed by an authorized officer
of the Registrant, acting as such, and neither such authorization by such
Trustees nor such execution by such officer shall be deemed to have been made by
any of them personally, but shall bind only the trust property of the Registrant
as provided in its Declaration of Trust.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Thomas H. Bailey President November 15, 1999
Thomas H. Bailey (Principal Executive
Officer) and Trustee
/s/ Steven R. Goodbarn Vice President and November 15, 1999
Steven R. Goodbarn Chief Financial Officer
(Principal Financial
Officer)
<PAGE>
/s/ Glenn P. O'Flaherty Treasurer and Chief November 15, 1999
Glenn P. O'Flaherty Accounting Officer
(Principal Accounting
Officer)
/s/ James P. Craig, III Trustee November 15, 1999
James P. Craig, III
Gary O. Loo* Trustee November 15, 1999
Gary O. Loo
Dennis B. Mullen* Trustee November 15, 1999
Dennis B. Mullen
James T. Rothe* Trustee November 15, 1999
James T. Rothe
William D. Stewart* Trustee November 15, 1999
William D. Stewart
Martin H. Waldinger* Trustee November 15, 1999
Martin H. Waldinger
/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact
<PAGE>
INDEX OF EXHIBITS
Exhibit 1(w) Certificate of Establishment and Designation for
Janus Strategic Value Fund
Exhibit 4(p) Investment Advisory Agreement for Janus Strategic
Value Fund
Exhibit 7(p) Letter Agreement regarding State Street Custodian
Contract
Exhibit 7(q) Global Custody Services Agreement
Exhibit 8(l) Letter Agreement regarding Janus Service Corporation
Transfer Agency Agreement
Exhibit 9(r) Opinion and Consent of Fund Counsel with respect to
Janus Strategic Value Fund
Exhibit 10 Consent of PricewaterhouseCoopers LLP
Exhibit 1(w)
JANUS INVESTMENT FUND
Certificate of Establishment and
Designation of Janus Strategic Value Fund
The undersigned, being the Secretary of Janus Investment Fund, a
Massachusetts business trust with transferable shares (the "Trust"), being duly
authorized by vote of a Majority of the Trustees of the Trust acting pursuant to
Section 6.1(b) and Section 9.3 of the Trust's Agreement and Declaration of Trust
dated February 11, 1986, as now in effect (the "Declaration"), does hereby
establish and designate the Janus Strategic Value Fund (in addition to the Funds
now existing) into which the assets of the Trust shall be divided (the
"Strategic Value Fund"), having the relative rights and preferences as follows:
1. The beneficial interest in the Strategic Value Fund shall be
represented by a separate series of shares of beneficial interest, par value one
cent ($.01) per share (the "Shares"), which series shall bear the name of the
Strategic Value Fund to which it relates and shall represent the beneficial
interest only in such Strategic Value Fund. An unlimited number of Shares of
such series may be issued.
2. The Strategic Value Fund shall be authorized to invest in cash,
securities, instruments and other property as from time to time described in the
Trust's then effective registration statement under the Securities Act of 1933
and the Investment Company Act of 1940, as amended.
3. The Shares of the Strategic Value Fund shall have the additional
relative rights and preferences, shall be subject to the liabilities, shall have
the other characteristics, and shall be subject to other powers of the Trustees,
all as set forth in paragraphs (a) through (l) of Section 6.2 of the
Declaration. Without limitation of the foregoing sentence, each Share of such
series shall be redeemable, shall be entitled to one vote, or a ratable fraction
of one vote in respect of a fractional share, as to matters on which Shares of
such series shall be entitled to vote, and shall represent a share of the
beneficial interest in the assets of the Strategic Value Fund, all as provided
in the Declaration.
4. Subject to the provisions and limitations of Section 9.3 of the
Declaration and applicable law, this Certificate of Designation may be amended
by an instrument in writing signed by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the Trustees),
provided that, if any amendment adversely affects the rights of the Shareholders
of the Strategic Value Fund, such amendment may be adopted by an instrument in
writing signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees) when authorized to do so by
the vote in accordance with Section 7.1 of the Declaration of the holders of a
majority of all the Shares of the Strategic Value Fund outstanding and entitled
to vote.
<PAGE>
5. All capitalized terms which are not defined herein shall have the
same meanings as are assigned to those terms in the Declaration filed with the
Secretary of State of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, I have hereunto set my hand as of the day and year
set forth opposite my signature below.
Dated: September 14, 1999 /s/ Stephen L. Stieneker
Stephen L. Stieneker, Secretary
<PAGE>
ACKNOWLEDGMENT
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
BEFORE ME, the undersigned authority, on this day personally appeared
Stephen L. Stieneker, Secretary of Janus Investment Fund, a Massachusetts
business trust, who, after being first duly sworn, stated that she executed the
foregoing document for the consideration therein expressed and in the capacity
therein stated.
SUBSCRIBED AND SWORN TO this 14th day of September, 1999.
My Commission Expires: /s/ Dianne E. Perry
10/13/2001 Notary Public
Exhibit 4(p)
JANUS INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT
JANUS STRATEGIC VALUE FUND
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 14th
day of September, 1999 between JANUS INVESTMENT FUND, a Massachusetts business
trust (the "Trust"), and JANUS CAPITAL CORPORATION, a Colorado corporation
("JCC").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with
its own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Strategic Value Fund (the "Fund"); and
WHEREAS, the Trust and JCC deem it mutually advantageous that JCC
should assist the Trustees and officers of the Trust in the management of the
securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Investment Advisory Services. JCC shall furnish continuous advice
and recommendations to the Fund as to the acquisition, holding, or disposition
of any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time. JCC shall give due consideration to the
investment policies and restrictions and the other statements concerning the
Fund in the Trust's declaration of trust, bylaws, and registration statements
under the 1940 Act and the 1933 Act, and to the provisions of the Internal
Revenue Code, as amended from time to time, applicable to the Fund as a
regulated investment company. In addition, JCC shall cause its officers to
attend meetings and furnish oral or written reports, as the Trust may reasonably
require, in order to keep the Trustees and appropriate officers of the Trust
fully informed as to the condition of the investment portfolio of the Fund, the
investment recommendations of JCC, and the investment considerations which have
given rise to those recommendations. JCC shall supervise the purchase and sale
of securities as directed by the appropriate officers of the Trust.
2. Other Services. JCC is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates) the management (not to
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include advisory) and administrative services necessary for the operation of the
Fund. JCC is specifically authorized, on behalf of the Trust, to conduct
relations with custodians, depositories, transfer and pricing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed by JCC to be necessary or desirabrele. JCC shall generally monitor and
report to Fund officers the Fund's compliance with investment policies and
restrictions as set forth in the currently effective prospectus and statement of
additional information relating to the shares of the Fund under the Securities
Act of 1933, as amended. JCC shall make reports to the Trustees of its
performance of services hereunder upon request therefor and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as it shall determine to be desirable. JCC is also authorized,
subject to review by the Trustees, to furnish such other services as JCC shall
from time to time determine to be necessary or useful to perform the services
contemplated by this Agreement.
3. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCC continuously and fully informed as to the
composition of its investment portfolio and the
nature of all of its assets and liabilities from time
to time;
(b) to furnish JCC with a certified copy of any financial
statement or report prepared for it by certified or
independent public accountants and with copies of any
financial statements or reports made to its
shareholders or to any governmental body or
securities exchange;
(c) to furnish JCC with any further materials or
information which JCC may reasonably request to
enable it to perform its function under this
Agreement; and
(d) to compensate JCC for its services and reimburse JCC
for its expenses incurred hereunder in accordance
with the provisions hereof.
4. Compensation. The Trust shall pay to JCC for its investment advisory
services a fee, calculated and payable for each day that this Agreement is in
effect, of 1/365 of 0.75% of the first $300,000,000 of the daily closing net
asset value of the Fund, plus 1/365 of 0.70% of the next $200,000,000 of the
daily closing net asset value of the Fund, plus 1/365 of 0.65% of the daily
closing net asset value of the Fund in excess of $500,000,000. The fee shall be
paid monthly.
5. Expenses Borne by JCC. In addition to the expenses which JCC may
incur in the performance of its investment advisory functions under this
Agreement, and the expenses which it may expressly undertake to incur and pay
under other agreements with the Trust or otherwise,
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JCC shall incur and pay the following expenses relating to the Fund's operations
without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of
the Trust's officers and its Trustees, except for
such Trustees who are not interested persons of JCC;
(b) Rental of offices of the Trust; and
(c) All expenses of promoting the sale of shares of the
Fund, other than expenses incurred in complying with
federal and state laws and the law of any foreign
country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund
including without limitation registration fees and
costs, the costs of preparing the Fund's registration
statement and amendments thereto, and the costs and
expenses of preparing, printing, and mailing
prospectuses (and statements of additional
information) to persons other than shareholders of
the Fund.
6. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCC pursuant to Sections 2 and 5
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not interested persons of JCC; compensation of the Fund's custodian,
transfer agent, registrar and dividend disbursing agent; legal, accounting,
audit and printing expenses; administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and all other expenses in connection
with execution of portfolio transactions (including any appropriate commissions
paid to JCC or its affiliates for effecting exchange listed, over-the-counter or
other securities transactions); interest; all federal, state and local taxes
(including stamp, excise, income and franchise taxes); costs of stock
certificates and expenses of delivering such certificates to the purchaser
thereof; expenses of local representation in Massachusetts; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
all expenses incurred in complying with all federal and state laws and the laws
of any foreign country applicable to the issue, offer, or sale of shares of the
Fund, including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and systems for compliance with blue sky laws, and
all costs involved in preparing, printing and mailing prospectuses and
statements of additional information of the Fund; and all fees, dues and other
expenses incurred by the Trust in connection with the membership of the Trust in
any trade association or other investment company organization. To the extent
that JCC shall perform any of the above described administrative and clerical
functions, including transfer agency, registry, dividend disbursing,
recordkeeping, bookkeeping, accounting and blue sky monitoring and registration
functions, and the preparation of reports and returns, the Trust shall pay to
JCC compensation for, or reimburse JCC for its expenses incurred in connection
with, such services
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as JCC and the Trust shall agree from time to time, any other provision of this
Agreement notwithstanding.
7. Treatment of Investment Advice. The Trust shall treat the investment
advice and recommendations of JCC as being advisory only, and shall retain full
control over its own investment policies. However, the Trustees may delegate to
the appropriate officers of the Trust, or to a committee of the Trustees, the
power to authorize purchases, sales or other actions affecting the portfolio of
the Fund in the interim between meetings of the Trustees.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCC at its principal place of business. This Agreement may be terminated by
JCC at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust's
Declaration of Trust, the Trust shall cease to use the name "Janus" in
connection with the Fund as soon as reasonably practicable following any
termination of this Agreement if JCC does not continue to provide investment
advice to the Fund after such termination.
9. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until July 1, 2001,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to July 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons of JCC and,
if required by applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund.
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
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13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing liabilities. The Trust's Declaration of Trust, as
amended from time to time, is on file in the Office of the Secretary of State of
the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCC. JCC shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 14, "JCC" shall include any affiliate of JCC performing services for the
Trust contemplated hereunder and directors, officers and employees of JCC and
such affiliates.
15. Activities of JCC. The services of JCC to the Trust hereunder are
not to be deemed to be exclusive, and JCC and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCC as directors,
officers and shareholders of JCC, that directors, officers, employees and
shareholders of JCC are or may become similarly interested in the Trust, and
that JCC may become interested in the Trust as a shareholder or otherwise.
16. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when used
herein, shall have the respective meanings specified in the 1940 Act, as now in
effect or hereafter amended, and the rules and regulations thereunder, subject
to such orders, exemptions and interpretations as may be issued by the
Securities and Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of the date and year
first above written.
JANUS CAPITAL CORPORATION
By: /s/ Steven R. Goodbarn
Steven R. Goodbarn, Vice President
JANUS INVESTMENT FUND
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Exhibit 7(p)
LETTER AGREEMENT
September 14, 1999
Mr. Donald DeMarco
Vice President
State Street Bank and Trust Company
One Heritage Drive
Mutual Fund Services, P2N
North Quincy, Massachusetts 02171
Dear Mr. DeMarco:
Please be advised that Janus Investment Fund (the "Trust") has established Janus
Strategic Value Fund as a new series of the Trust. Pursuant to Section 16 of the
Custodian Contract dated July 31, 1986, as amended, between the Trust and State
Street Bank and Trust Company ("State Street"), the Trust requests confirmation
that State Street will act as custodian for the new series under the terms of
the contract.
Please indicate your acceptance of the foregoing by executing two copies of this
Letter Agreement, returning one copy to the Trust and retaining one copy for
your records.
JANUS INVESTMENT FUND
By: /s/ Stephen L. Stieneker
Stephen L. Stieneker
Assistant Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Donald DeMarco
Agreed to this 14th day of September, 1999
cc: Glenn O'Flaherty
Suzanne Olczak
Exhibit 7(q)
[GRAPHIC OMITTED][GRAPHIC OMITTED]
GLOBAL CUSTODIAL SERVICES
AGREEMENT
JANUS INVESTMENT FUND
ON BEHALF OF
Janus Money Market Fund,
Janus Government Money Market Fund
&
Janus Tax-Exempt Money Market Fund
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TABLE OF CONTENTS
1. DEFINITIONS...............................................................3
2. APPOINTMENT OF CUSTODIAN..................................................5
3. PROPERTY ACCEPTED.........................................................5
4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS..............................6
5. INSTRUCTIONS..............................................................7
6. PERFORMANCE BY THE CUSTODIAN..............................................7
7. REGISTRATION AND OTHER ACTION.............................................9
8. CUSTODY CASH ACCOUNT PAYMENTS.............................................9
9. ASSURED INCOME PAYMENT SERVICE...........................................10
10. WITHDRAWAL AND DELIVERY..................................................10
11. ACCESS AND RECORDS AND REPORTS...........................................11
12. USE OF AGENTS............................................................11
13. CITIGROUP ORGANIZATION INVOLVEMENT.......................................12
14. SCOPE OF RESPONSIBILITY..................................................13
15. LITIGATION; INDEMNITY....................................................14
16. LIEN AND SET-OFF.........................................................15
17. FEES AND EXPENSES........................................................16
18. TAX STATUS/WITHHOLDING TAXES.............................................16
19. TERMINATION..............................................................16
20. ASSIGNMENT...............................................................17
21. SEPARATE LIABILITY.......................................................17
22. DISCLOSURE...............................................................17
23. NOTICES..................................................................18
24. GOVERNING LAW AND JURISDICTION...........................................18
25. MISCELLANEOUS............................................................19
Schedule I - approved subcustodians
Schedule II - Fee schedule
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THIS GLOBAL CUSTODIAL SERVICES AGREEMENT is made on the 15th day of March,
1999, by and between JANUS INVESTMENT FUND, a Delaware Business Trust, organized
under the laws of Delaware, acting on behalf of Janus Money Market Fund, Janus
Government Money Market Fund, and Janus Tax-Exempt Money Market Fund and/or as
agent on behalf of each of the funds, (each such fund being separately referred
to herein as the "Client"), having its principal place of business at 100
Fillmore Street, Denver, Colorado 80206 and CITIBANK, N.A., acting as a
custodian hereunder through its office located at 111 Wall Street, New York, New
York 10005 (the "Custodian").
WHEREAS, each Client is a separate series of the Trust representing shares of
beneficial interest in a separate portfolio of assets, and
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended; and
WHEREAS, each Client desires to appoint Custodian as its custodian for the
custody of its assets owned by such Client; and
WHEREAS, Custodian is willing to accept such appointment on the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto, intending to be legally bound, mutually covenant and agree as
follows:
1. DEFINITIONS
"Agreement" means this Global Custodial Services Agreement, as amended
from time to time, and any other terms and conditions agreed upon by the Client
and the Custodian in writing from time to time in connection with this
Agreement.
"Assured Income Payment Service" means the Custodian's services in
which interest, dividends or other such periodic income, to which the Client is
entitled, on Securities specified by the Custodian from time to time at its
absolute discretion, are credited to the Custody Cash Account in respect of such
Securities.
"Assured Income Payment Standards" means the terms and conditions
governing the Assured Income Payment Service, as such terms and conditions are
amended and/or supplemented from time to time by, and at the absolute discretion
of, the Custodian.
"Assured Payment" means, in relation to those Securities specified by
the Custodian under the Assured Income Payment Service, an amount equal to the
interest, dividends or periodic income that is due to the Client in respect of
such Securities less any taxes, duties, levies, charges or any other withholding
payments payable in respect of such interest, dividends or periodic income.
"Assured Payment Date" means, in relation to the payment of any
interest, dividend or periodic income of any particular Securities specified by
the Custodian under the Assured Income Payment Service, the date on which such
interest, dividend or periodic income is normally payable in respect of such
Securities or such other date as may be notified by the Custodian to the Client
from time to time.
"Authorized Person" means (i) any person who has been authorized by the
Client, by notice in writing to the Custodian, to act on its behalf in the
performance of any act, discretion or duty under this Agreement, or (ii) any
other person holding a duly executed power of attorney from the Client which is
in a form acceptable to the Custodian (including, for avoidance of doubt, any
officer or employee of such agent or person).
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"Branch" means any branch or office of Citibank, N.A.
"Citigroup Organization" means Citigroup and any company of which
Citigroup is, now or hereafter, directly or indirectly a shareholder or owner.
For the purposes of this Agreement, each Branch shall be deemed to be a separate
member of the Citigroup Organization.
"Clearance System" means The Federal Reserve Bank of New York, The
Depository Trust Company, Participants Trust Company, Cedel Bank, S.A., the
Euroclear System operated by Morgan Guaranty Trust Company of New York, CEDEL
Bank, the CREST system operated by CREST CO. Limited, the Central Money Markets
Office, the Central Gilts Office and such other clearing agency, settlement
system or depository as may from time to time be used in connection with
transactions relating to Securities, and any nominee, clearing agency, or
depository for any of the foregoing.
"Client" shall mean each Fund individually and not jointly.
"Custody Account" means the custody account or accounts in the name of
the Client and/or such other name as the Client may reasonably designate, for
the deposit of any Property (other than cash) from time to time received by the
Custodian for the account of the Client.
"Custody Cash Account" means the cash account or accounts, which, at
the discretion of the Client, may be either a subaccount(s) of the Custody
Account or a demand deposit account(s), in the name of the Client and/or such
other name as the Client may reasonably designate (but not in the name of the
Custodian), for the deposit of cash in any currency received by the Custodian
from time to time for the account of the Client, whether by way of deposit or
arising out of or in connection with any Property in the Custody Account.
"Fee Agreement" means the agreement between the Custodian and the
Client setting forth the fees, costs and expenses to be paid by the Client to
the Custodian in connection with the custodial services provided pursuant to
this Agreement, as such fee agreement may be amended at the Custodian's
reasonable discretion from time to time by prior written notice to the Client.
"Instructions" means any and all instructions received by the Custodian
from, or reasonably believed by the Custodian in good faith to be from, any
Authorized Person, including any instructions communicated through any manual or
electronic medium or system agreed between the Client and the Custodian and on
such terms and conditions as the Custodian may specify from time to time.
"person" means any person, firm, company, corporation, government,
state or agency of a state, or any association or partnership (whether or not
having separate legal personality) of two or more of the foregoing.
"Property" means, as the context requires, all or any part of any
Securities, cash, or any other property from time to time held for the Client
under the terms of this Agreement.
"Rules" means any rules and regulations (whether of a local regulatory
authority, stock exchange or other entity) in any jurisdiction with which the
Custodian may from time to time be required to comply in the provision of its
services hereunder.
"Securities" means bonds, debentures, notes, stocks, shares, securities or other
financial assets acceptable to the Custodian and all moneys, rights or property
which may at any time accrue or be offered (whether by way of bonus, redemption,
preference, option or otherwise) in respect of any of the foregoing and any
certificates, receipts, warrants or other instruments (whether in registered or
unregistered form) representing rights to receive, purchase or subscribe for any
of the foregoing or evidencing or representing any other rights or interests
therein (including, without limitation, any of the foregoing not constituted,
evidenced or represented by a certificate or other document
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but by an entry in the books or other permanent records of the issuer, a trustee
or other fiduciary thereof, a Clearance System or other person).
"Subcustodian" means a subcustodian (other than a Clearance System)
appointed by the Custodian for the safe-keeping, administration, clearance and
settlement of Securities.
"Taxes" means all taxes, levies, imposts, charges, assessments,
deductions, withholdings and related liabilities, including additions to tax,
penalties and interest imposed on or in respect of the Property, the
transactions effected under this Agreement or the Client; PROVIDED THAT Taxes
does not include income or franchise taxes imposed on or measured by the net
income of the Custodian or its agents.
2. APPOINTMENT OF CUSTODIAN
(A) The Client hereby appoints the Custodian to act as its custodian in
accordance with the terms hereof and authorizes the Custodian to establish on
its books, on the terms of this Agreement, the Custody Account, to be designated
to show that the Securities belong to the Client and are segregated from the
Custodian's assets and the Custody Cash Account.
(B) Subject to the express terms of this Agreement, the Client understands and
agrees that the obligations and duties hereunder of the Custodian shall be
performed only by the Custodian or its agents, and shall not be deemed
obligations or duties of any other member of the Citigroup Organization. The
Client agrees that the Custodian may register or record legal title to any
Securities in the name of a nominee company or a Subcustodian in the Citigroup
Organization and may appoint a member of the Citigroup Organization to be a
Subcustodian.
(C) The Client agrees to take any such action which may be necessary and to
execute further documents and provide such materials and information as may be
reasonably requested by the Custodian to enable the Custodian to perform the
duties and obligations under this Agreement, including participation in any
relevant Clearance System, and will notify the Custodian as soon as it becomes
aware of any inaccuracy in such materials or information.
(D) All custody services by the Custodian hereunder shall be provided in
accordance with the operating procedures, a copy of which the Custodian may
supply to the Client from time to time. In the event of any conflict between any
term of this Agreement and any Operating Procedure, this Agreement shall prevail
with respect to such term.
(E) The Client agrees to comply with any relevant security procedures relating
to the provision of custody services under this Agreement which may be specified
by the Custodian or imposed on the Client by any relevant Clearance System.
3. PROPERTY ACCEPTED
(A) Subject to Section 3(C) below, the Custodian agrees to accept for custody in
the Custody Account any Securities which are capable of deposit under the terms
of this Agreement.
(B) Subject to Section 3(C) below, the Custodian agrees to accept for deposit in
the Custody Cash Account, cash in any currency (which shall, if necessary, be
credited by the Custodian to different accounts in the currencies concerned),
such cash to be owed to the Client by the Custodian as banker.
(C) The Custodian may in its reasonable discretion refuse to accept (in whole or
in part) any proposed deposit in either the Custody Account or the Custody Cash
Account if the Custodian reasonably believes that the acceptance of such deposit
would violate any law, rule, regulation, practice or policy to which the
Custodian is subject.
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4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
(A) The Client hereby represents, warrants and undertakes to the Custodian that:
(i) it is duly organized and validly existing under the laws of
the jurisdiction of its organization;
(ii) during the term of this Agreement it (and any person on whose
behalf it may act as agent or otherwise in a representative
capacity) has and will continue to have, or will take all
action necessary to obtain, full capacity and authority to
enter into this Agreement and to carry out the transactions
contemplated herein, and has taken and will continue to take
all action (including, without limitation, the obtaining of
all necessary governmental consents in any applicable
jurisdiction) to authorize the execution, delivery and
performance of obligations of the Client, and the validity and
enforceability of such obligations and the rights of the
Custodian, under this Agreement;
(iii) it will not assert any interest in Property held by the
Custodian in any Clearance System in any way which could
prevent a transfer of title to a unit of such Property by the
Custodian (or by any other person) where such transfer is
required by the Clearance System;
(iv) this Agreement is legal, valid and binding on the Client;
(v) on or prior to the execution of this Agreement, the Client has
provided to the Custodian certified true copies of evidence of
the due authorization for the execution, delivery and
performance of this Agreement;
(vi) except as provided in Clause 16 of this Agreement, all
Property deposited with the Custodian shall, at all times, be
free from all charges, mortgages, pledges or other such
encumbrances; and
(vii) the Client shall, at all times, be entitled or otherwise duly
authorized to deal with, and dispose of, all or any part of
the Property, whether through a relevant Clearance System or
otherwise.
The Client agrees to inform the Custodian promptly if any
statement set forth in this Section 4(A) ceases to be true and correct as of any
date after the date hereof.
(B) The Custodian hereby represents, warrants and undertakes to the Client that:
(i) it is duly organized and validly existing under the laws of
the jurisdiction of its organization;
(ii) during the term of this Agreement it has and will continue to
have, or will take all action necessary to obtain, full
capacity and authority to enter into this Agreement and to
carry out the transactions contemplated herein, and has taken
and will continue to take all action (including, without
limitation, the obtaining of all necessary governmental
consents in any applicable jurisdiction) to authorize the
execution, delivery and performance of this Agreement; and
(iii) this Agreement is legal, valid and binding on the Custodian;
and
(iv) The Custodian is a bank that meets the qualifications
prescribed in Section 26(a)(1) of the Investment Company Act
of 1940.
The Custodian agrees to inform the Client promptly if any
statement set forth in this Section 4(B) ceases to be true and correct as of any
date after the date hereof.
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5. INSTRUCTIONS
(A) The Custodian may, in its absolute discretion and without liability on its
part, rely and act upon (and the Client shall be bound by) any Instructions.
Instructions shall continue in full force and effect until canceled or
superseded; PROVIDED THAT any Instruction canceling or superseding a prior
Instruction must be received by the Custodian at a time and in a manner that
accords the Custodian a reasonable opportunity to act upon such Instruction. The
Custodian shall be entitled to rely upon the continued authority of any
Authorized Person to give Instructions until the Custodian receives notice from
the Client to the contrary.
(B) Instructions shall be governed by and carried out subject to the prevailing
laws, rules, operating procedures and market practice of any relevant stock
exchange, Clearance System or market where or through which they are to be
executed or carried out, and shall be acted upon only during banking hours
(including applicable cut-off times) and on banking days when the applicable
financial markets are open for business.
(C) Instructions delivered to the Custodian by telephone or facsimile shall be
promptly confirmed in writing, by tested telex, SWIFT, letter, the Custodian's
proprietary electronic banking system or as provided in the Service Standards,
such confirmation shall, where relevant, be made by an Authorized Person.
However, the Custodian may, in its absolute discretion, rely and act upon
telephone or facsimile Instructions before the written confirmation is received.
(D) The Custodian has offered the Client security procedures for the
transmission of Instructions to the Custodian (and the Client acknowledges that
it has received the same and agrees that the security procedures mutually agreed
to by the Client and the Custodian are commercially reasonable). As long as the
Custodian acts in compliance with such security procedures and this Section 5,
it shall have no further duty to verify the identity or authority of the person
giving or confirming, or the genuineness or contents of, any Instruction.
(E) The Custodian is authorized to rely upon any Instructions received by any
means, provided that the Custodian and the Client have agreed upon the means of
transmission and the method of identification for such Instructions.
(F) Instructions are to be given in the English language. The Custodian may in
its reasonable discretion and without any liability on its part, act upon what
it reasonably believes in good faith such Instructions to be; notwithstanding
any other provision hereof, the Custodian shall have the right, in its
reasonable discretion to refuse to execute any such Instruction, in which event
the Custodian shall notify the Client of such refusal without undue delay.
(G) The Client agrees to be bound by any Instructions, whether or not
authorized, given to the Custodian in the Client's name and accepted by the
Custodian in accordance with the provisions of this Section 5.
6. PERFORMANCE BY THE CUSTODIAN
(A) Custodial duties not requiring further Instructions. In the absence of
contrary Instructions, the Custodian is authorized by the Client to, and where
applicable, the Custodian shall, carry out the following actions in relation to
the Property:
(i) separately identify the Property on its records as being held
for the account of the Client and to the extent permitted by
applicable law or through rules and procedures of any
Clearance System, segregate all Property held on behalf of the
Client by the Custodian from the assets of the Custodian;
(ii) sign any affidavits, certificates of ownership or other
certificates relating to the Property which
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may be required by any tax or regulatory authority or under
the laws of any relevant jurisdiction, whether governmental
or otherwise, and whether relating to ownership, or income,
capital gains or other tax, duty or levy (and the Client
further agrees to ratify and to confirm or to do, or to
procure the doing of, such things as may be necessary or
appropriate to complete or evidence the Custodian's actions
under this Section 6(A)(ii) or otherwise under the terms of
this Agreement);
(iii) collect and receive, for the account of the Client, all
income, payments and distributions in respect of the Property,
and credit the same to the Custody Cash Account;
(iv) take any action which is necessary and proper in connection
with the receipt of income, payments and distributions as are
referred to in Section 6(A)(iii) above, including, without
limitation, the presentation of coupons and other interest
items;
(v) collect, receive and hold for the account of the Client any
capital arising out of or in connection with the Property
whether as a result of it being called or redeemed or
otherwise becoming payable and credit the same to the Custody
Cash Account;
(vi) take any action which is necessary and proper in connection
with the receipt of any capital as is referred to in Section
6(A)(v) above, including, without limitation, the presentation
for payment of any Property which becomes payable as a result
of its being called or redeemed or otherwise becoming payable
and the endorsement for collection of checks, drafts and other
negotiable instruments;
(vii) take any action which is necessary and proper to enable the
Custodian to provide services to the Client within, and to
observe and perform its obligations in respect of, any
relevant Clearance System;
(viii) receive and hold for the account of the Client all Securities
received by the Custodian as a result of a stock dividend,
share sub-division or reorganization, capitalization of
reserves or otherwise including taking any action required in
regard to any non discretion or right in connection with the
Property;
(ix) exchange interim or temporary receipts for definitive
certificates, and old or overstamped certificates for new
certificates and hold such definitive and/or new certificates
in the Custody Account;
(x) make cash disbursements for any expenses incurred in handling
the Property and for similar items in connection with the
Custodian's duties under this Agreement in accordance with the
Fee Agreement, and debit the same to the Custody Cash Account;
and
(xi) deliver to the Client transaction advices and/or regular
statements of account showing the Property held at such
intervals as may be agreed between the parties hereto but
subject always to applicable Rules.
(B) Custodial duties requiring Instructions. The Custodian is authorized by the
Client to, and where applicable, the Custodian shall, carry out the following
actions in relation to the Property only upon receipt of and in accordance with
specific Instructions:
(i) make payment for and receive Property, or deliver or dispose
of Property;
(ii) (subject to Section 7(D)) deal with subscription, rights,
bonus or scrip issues, conversions,
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options, warrants and other similar interests or any other
discretionary right in connection with the Property; and
(iii) subject to the agreement of the Custodian, to carry out
any action other than those mentioned in Section 6(A) above.
7. REGISTRATION AND OTHER ACTION
(A) The Client understands and agrees that, except as may be specified in any
operating procedures, Property shall be registered as the Custodian may direct
either in the name of the Custodian, Subcustodian or Clearance System, or
nominee of any of them, in the jurisdiction where the Property is required to be
registered or otherwise held. Where feasible, the Custodian will arrange for the
registration of Property, consistent of certificated securities held by the
Custodian, with the issuer or its agent in the name of the Client or its
nominee. The Client understands and agrees, however, that the Custodian shall
have discretion to determine whether such direct registration is feasible.
(B) The Custodian shall, to the extent reasonably possible, notify, make
available or deliver to the Client, in a timely manner, all official notices,
circulars, reports and announcements that are received by the Custodian in such
capacity concerning the Securities held on the Client's behalf that require
discretionary action.
(C) The Custodian shall provide proxy services to the Client only where there is
a separate agreement in relation to proxy services between the Custodian and the
Client; provided, however, the Custodian shall deliver to the Client any proxy
received from an issuer, which shall be signed by the Custodian.
(D) Upon receipt of each transaction advice and/or statement of account, the
Client shall examine the same and notify the Custodian within thirty (30) days
of the date of any such advice or statement of any discrepancy between
Instructions given and the situation shown in the transaction advice and/or
statement, and/or of any other errors therein. In the event that the Client does
not inform the Custodian in writing of any exceptions or objections within
thirty (30) days after the date of such transaction advice and/or statement, the
Client shall be deemed to have approved such transaction advice and/or
statement.
8. CUSTODY CASH ACCOUNT PAYMENTS
(A) Except as otherwise provided herein, the Custodian shall make, or cause its
agents to make, payments of cash credited to the Custody Cash Account:
(i) in connection with the purchase of Property (other than
cash) for the account of the Client in accordance with
Instructions;
(ii) in payment for the account of the Client of (A) all Taxes,
claims, liabilities, fees, costs and expenses incurred by the
Custodian or its agents under or in connection with the terms
of this Agreement, and (B) all amounts owed to the Custodian
pursuant to the Fee Agreement;
(iii) for payments to be made in connection with the conversion,
exchange or surrender of Property held in the Custody Account;
(iv) pursuant to Assured Payment obligations incurred in the
capacity of settlement bank on behalf of the Client within a
relevant Clearance System;
(v) for other purposes as may be specified by the Client in its
Instructions; or
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(vi) upon the termination of this Agreement on the terms hereof;
PROVIDED THAT, unless otherwise agreed, the payments referred to above shall not
exceed the funds available in the Custody Cash Account at any time. The Client
shall promptly reimburse the Custodian for any advance of cash or any such
taxes, charges, expenses, assessments, claims or liabilities upon request for
payment. Notwithstanding the foregoing, nothing in this Agreement shall obligate
the Custodian to extend credit, grant financial accommodation or otherwise
advance moneys to the Client or assume financial risk on behalf of the Client
for the purpose of meeting any such payments or otherwise carrying out any
Instructions.
(B) Unless otherwise provided herein, the proceeds from the sale or exchange of
Property will be credited to the Custody Cash Account on the date the proceeds
are actually received by the Custodian.
9. ASSURED INCOME PAYMENT SERVICE
(A) The Custodian may, at its absolute discretion, offer the Client an Assured
Income Payment Service in respect of specific Securities, as may be notified by
the Custodian to the Client from time to time. In relation to any such
Securities, the Custodian may, at its absolute discretion, cause the Custody
Cash Account to be credited with an Assured Payment on the Assured Payment Date
relevant thereto; PROVIDED THAT the Custodian shall be entitled to reverse any
credit (in whole or in part) made in respect of that Assured Payment if the
Custodian fails to receive the full amount corresponding to such Assured Payment
within a reasonable time, as determined by the Custodian in its absolute
discretion, after the relevant Assured Payment Date, for any reason whatsoever
other than as a result of the negligence or willful default of the Custodian.
The Assured Income Payment Service shall be provided by the Custodian
in accordance with the Assured Income Payment Standards.
(B) Where the Custodian acts as a settlement bank in any relevant Clearance
System:
(i) upon the Custodian incurring any assured payment obligation,
the Client shall reimburse the Custodian for such amount, and
the Custodian may debit the Custody Cash Account with such
amount;
(ii) the Custodian may without notice set, revise or disable debit
caps in respect of the maximum aggregate amount of assured
payment obligations it will incur on behalf of the Client; and
(iii) if another settlement bank in such Clearance System defaults
on an assured payment obligation owed to the Custodian wholly
or partially, the Custodian has no liability to make good the
loss and will, where appropriate, attribute the loss pro rata
between all Clients on whose behalf such payment should have
been received by the Custodian.
10. WITHDRAWAL AND DELIVERY
Subject to the terms of this Agreement, the Client may at any time
demand withdrawal of all or any part of the Property in the Custody Account
and/or the Custody Cash Account. Delivery of any Property will be made without
undue delay at the expense of the Client at such location as the parties hereto
may agree; PROVIDED THAT if the Custodian has effected any transaction on behalf
of the Client the settlement of which is likely to occur after a withdrawal
pursuant to this Section 10, then the Custodian shall be entitled in its
absolute discretion to close out or complete such transaction and to retain
sufficient funds from the Property for that purpose.
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11. ACCESS AND RECORDS AND REPORTS
(A) Access to the Custodian's Records. Except as otherwise provided in this
Agreement, during the Custodian's regular business hours and upon receipt of
reasonable notice from the Client, any officer or employee of the Client, any
independent public accountant(s) selected by the Client and any person
designated by any regulatory authority having jurisdiction over the Client shall
be entitled to examine on the Custodian's premises Property held by the
Custodian and the Custodian's records regarding Property deposited with entities
authorized to hold Property in accordance with Section 12 hereof and Custodian
shall cooperate in responding to inquiries from such persons, but only upon the
Client's furnishing the Custodian with Instructions to that effect; PROVIDED
THAT such examination shall be consistent with the Custodian's obligations of
confidentiality to other parties. The Custodian's reasonable costs and expenses
in facilitating such examinations, including but not limited to the cost to the
Custodian of providing personnel in connection with examinations, shall be borne
by the Client.
(B) Access to Third Party Records. The Custodian shall also, subject to
restrictions under applicable laws and regulations, seek to obtain from any
entity with which the Custodian maintains the physical possession or book-entry
record of any of the Property in the Custody Account or the Custody Cash Account
such records as may be required by the Client or its agents.
(C) Custodian will provide such reports to Client as Client may reasonably
request. In particular, the Custodian shall maintain such records relating to
its activities under this Agreement as are required to be maintained by Rule
31a-1 under the Investment Company Act of 1940 and to preserve them for the
periods prescribed in Rule 31a-2 under the Act. Furthermore, the Custodian shall
provide accountings relating to its activities under this Agreement as shall be
agreed upon by the Client and the Custodian.
(D) Opinion of the Client's Independent Certified Public Accountants. The
Custodian shall take all reasonable action as the Client may request to obtain
from year to year favorable opinions from the Client's independent certified
accountants with respect to the Custodian's activities hereunder and in
connection with the preparation of each such Client's periodic reports to the
SEC and with respect to any other requirements of the SEC.
12. USE OF AGENTS
(A) The Custodian is authorized subject to any relevant Rules, to appoint agents
(each an "agent", which term includes, without limitation, service providers and
Subcustodians that are qualified to act as Custodian under the Investment
Company Act of 1940, but not Clearance Systems, and which agents may be a member
or members of the Citigroup Organization) and to participate in Clearance
Systems, whether in its own name or that of the Client, and whether by
participation as a member, sponsor or settlement bank within the Clearance
System, to perform any of the duties of the Custodian under this Agreement. The
Custodian may delegate to any such agent or Clearance System any of its
functions under this Agreement, including, without limitation, the collection of
any payment or payments, whether of an income or a capital nature, due on the
Property.
(B) In the selection and use of such agents and participation in such Clearance
Systems, the Custodian shall comply with any relevant Rules, and shall be
responsible only for the negligence in the selection of such agents and
Clearance Systems but shall otherwise have no responsibility for the performance
by such agents or Clearance System of any of the duties delegated to them under
this Agreement; notwithstanding the foregoing, the Custodian shall be
responsible for the negligence, fraud or willful default of any Subcustodian and
for any agent that is a Branch or subsidiary of Citibank, N.A., and shall have
the same level of responsibility to the Client for any nominee company
controlled by the Custodian or by any of the Custodian's affiliated companies as
the Custodian has for itself.
(C) Subject to any relevant Rules and regulations, the Property may be deposited
with any Subcustodian deemed appropriate by the Custodian or in any Clearance
System deemed appropriate by the Custodian or a
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Subcustodian, as the case may be, provided any Subcustodian shall be qualified
to act as a Custodian under the Investment Company Act of 1940 and shall be
approved by the Client's Board of Trustees. Subcustodians approved by the Client
as of the date of this Agreement are specified on Schedule I, annexed hereto.
Property held in any Clearance System shall be subject to the rules or operating
procedures of such Clearance System, including rules regarding supervision or
termination of membership of such Clearance System, and such further information
provided by the Custodian to the Client, or acknowledgments or agreements which
may be required from the Client, for the purposes of this Section 12(C) in
connection with use of a Clearance System from time to time. The Custodian will
direct each Subcustodian and Clearance System to separately identify on its
books Securities held by it pursuant to this Agreement as being held for the
account of the Custodian's customers. The Custodian will direct each
Subcustodian and Clearance System to segregate any such Securities held by such
entity from the assets of the Custodian and such entity.
Upon receipt of appropriate Instruction, the Custodian shall, on behalf
of the Client, appoint one or more banks, trust companies or other entities
designated in such Instructions to act as a subcustodian for purposes of
effecting third party repurchase transactions with third parties through the use
of a common custodian or subcustodian, establishing a joint trading account with
any other person or effecting any other transaction designated by the Client in
the Instruction. Each such duly appointed subcustodian shall not be deemed to be
a Subcustodian as provided in this Agreement. In connection with the appointment
of such subcustodian, the Custodian shall enter in a subcustodian agreement with
the subcustodian in form and substance approved by the Client. The Custodian
shall not amend any such subcustodian agreement or agree to change or permit any
changes thereunder, or waive rights under such agreement, except upon prior
approval by the Client. Notwithstanding anything else in this agreement to the
contrary, the Custodian shall not be liable to the Client for any loss, damage
or expense suffered or incurred by the Client resulting from the actions or
omissions of such subcustodian unless such loss, damage or expense is caused by,
or results from, the act or omission of the Custodian in breach of this
Agreement; provided, however, that in the event of any such loss, damage or
expense the Custodian shall take all reasonable steps to enforce such rights as
it may have against the subcustodian to protect the interests of the Client.
The Client is hereby advised that, where the Custodian arranges for any
Property to be held overseas, there may be different settlement, legal and
regulatory requirements in overseas jurisdictions from those applying in the
United States, together with different practices for the separate identification
of the Client's Property.
(D) The Custodian shall provide services as a Foreign Custody Manager, as
defined in Rule 17f-5 under the Investment Company Act of 1940 or where there is
a separate Agreement between the Custodian and the Client.
13. CITIGROUP ORGANIZATION INVOLVEMENT
(A) To the extent permitted by applicable law, the Client hereby authorizes the
Custodian without the need for the Custodian to obtain the Client's prior
consent:
(i) when acting on Instructions to purchase and/or sell Property
(other than cash) from, to or through itself or any other
member of the Citigroup Organization and from and/or to any
other customer of the Custodian or any other member of the
Citigroup Organization; and
(ii) to obtain and keep, without being liable to account to the
Client, any commission payable by any third party or any other
member of the Citigroup Organization in connection with
dealings arising out of or in connection with the Custody
Account and/or the Custody Cash Account.
(B) The Client agrees and understands that if in accordance with Instructions,
an investment is made in any property, held, issued or managed by any member of
the Citigroup Organization, then such member of the Citigroup Organization may
retain a profit arising therefrom (in addition to the charges, commissions and
fees payable by the Client under this Agreement) without being liable to account
to the Client for such profit.
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(C) The Client agrees and understands that (i) the Custodian and other members
of the Citigroup Organization may have banking or other business relationships
with issuers of Securities held in the Custody Account or Securities purchased
and sold for the Custody Account, and (ii) the Custodian shall not have any
obligations to the Client as a result of such relationships.
14. SCOPE OF RESPONSIBILITY
(A) Subject to the terms hereof, the Custodian shall use all reasonable care in
the performance of its duties under this Agreement and will exercise the due
care of a professional custodian for hire with respect to the Property in its
possession or control. The Custodian shall not be responsible for any loss or
damage suffered by the Client as a result of the Custodian performing such
duties unless the same results from an act of fraud, negligence or willful
default on the part of the Custodian or any Subcustodian, and as provided in
Section 12(B) hereof; in which event the liability of the Custodian in
connection with any Property shall not exceed the market value of the Property,
to which such loss or damage relates, at the time of such fraud, negligence or
willful default plus interest at the rate applicable to the base currency of the
Custody Cash Account accruing from the date of such fraud, negligence or willful
default until the date of discharge (together with reasonable attorneys' fees).
Notwithstanding the foregoing, in no event shall the Custodian be liable to the
Client for indirect, special or consequential damages, even if advised of the
possibility of such damages.
(B) The Custodian is not obliged to maintain any insurance on the Property held
under the terms of this Agreement.
(C) In the event that any law, regulation, decree, order, government act,
custom, procedure or practice to which the Custodian, or any Subcustodian or
Clearance System is subject, or to which the Property is subject, prevents or
limits the performance of the duties and obligations of the Custodian, or any
Subcustodian or Clearance System, then until such time as the Custodian,
Subcustodian or Clearance System is again able to perform such duties and
obligations hereunder, such duties and obligations of the Custodian,
Subcustodian or Clearance System shall be suspended.
(D) Neither the Custodian nor any member of the Citigroup Organization shall be
responsible for any loss or damage, or failure to comply or delay in complying
with any duty or obligation, under or pursuant to this Agreement arising as a
direct or indirect result of any reason, cause or contingency beyond its
reasonable control, including (without limitation) natural disasters,
nationalization, currency restrictions, act of war, act of terrorism, act of
God, postal or other strikes or industrial actions, or the failure, suspension
or disruption of any relevant stock exchange, Clearance System or market.
(E) Subject to Section 14(A) above, the Custodian shall not be liable for any
loss resulting from, or caused by, the collection of any Property and/or any
funds or other property paid or distributed in respect of the Property.
(F) The Custodian does not warrant or guarantee the authenticity or validity of
any Security or other Property received by the Custodian, or any other entity
authorized to hold Property under this Agreement. If the Custodian becomes aware
of any defect in title or forgery of any Property, the Custodian shall promptly
notify the Client.
(G) The Client shall be responsible for all filings, tax returns and reports on
any transactions undertaken pursuant to this Agreement, or in respect of the
Property or collections relating to the Property as may be requested by any
relevant authority, whether governmental or otherwise, and for the payment of
all unpaid calls, Taxes (including without limitation any value added tax),
imposts, levies or duties due on or with respect to any principal, interest or
other collections, or any other liability or payment arising out of or in
connection with the Property, and in so far as the Custodian is under any
obligation (whether of a governmental nature or otherwise) to pay the same on
behalf of the Client it may do so out of any Property held by the Custodian
pursuant to the terms of this Agreement.
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(H) The Custodian is not acting under this Agreement as an investment manager,
nor as an investment, legal or tax adviser to the Client and the Custodian's
duty is solely to act as a custodian in accordance with the terms of this
Agreement.
(I) Nothing herein shall obligate the Custodian to perform any obligation or to
allow, take or omit taking any action which will breach any relevant Rules, or
any law, rule, regulation or practice of any relevant government, stock
exchange, Clearance System, self-regulatory organization or market.
(J) The Custodian may at any time suspend or terminate its participation and
holding of assets in a Clearance System, and will give reasonable notice to the
Client of any such action. In such case, or in the event of suspension as
contemplated in Section 14(C) above, the Custodian may arrange for the relevant
Securities to be held in certificated form.
(K) The Custodian shall not be responsible for the acts or omissions, default or
insolvency of any broker, counterparty, issuer of Securities or, except as
provided in Section 12(B), Subcustodian, agent or Clearance System.
(L) The Custodian is not responsible for the form, accuracy or content of any
notice, circular, report, announcement or other material received from a third
party (not covered under Section 14(A)) forwarded to the Client.
(M) The Custodian shall only have such duties and responsibilities as are
specifically set forth or referred to in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
15. LITIGATION; INDEMNITY
(A) The Custodian or any of its agents, as the case may be, may (but without
being under any duty or obligation to) institute or defend legal proceedings, or
take any other action arising out of or in connection with the Property and the
Client shall indemnify the Custodian or agent against any costs and expenses,
including without limitation any reasonable attorneys' fees and disbursements,
arising from such proceedings or other action and make available to the
Custodian such security in respect of such costs and expenses as the Custodian
or agent in its absolute discretion deems necessary or appropriate, provided
that the Custodian shall not be entitled to be indemnified or reimbursed of
costs in connection with losses resulting from the Custodian's failure or
Subcustodian's failure to exercise the standard of care required by Section 14
(A) hereof.
(B) In the event the Custodian does not institute or defend legal proceedings,
or take any other action arising out of or in connection with the Property, the
Custodian hereby agrees that the Client shall, to the extent of any loss of the
Client's interest in the Property and to the extent permitted by applicable law
and not prohibited by contract, be subrogated to all of the rights of recovery
of the Custodian therefor against any third party person or entity; PROVIDED
THAT nothing herein shall be interpreted as granting the Client any rights to
bring any direct action under any insurance policy issued in favor of the
Custodian or as limiting the Custodian's right to bring any action against any
such third party for any damages suffered by the Custodian. Notwithstanding any
other provision hereof, in no event shall the Custodian be obliged to bring suit
in its own name or be obliged to allow suit to be brought in its name. Subject
to the terms of this Section 15(B) and to the extent permitted by law, the
Custodian shall execute and deliver any and all such instruments and documents
which the Client may reasonably request and take such other actions as
reasonably necessary or appropriate to assist the Client in the exercise of such
rights of recovery and to enable the Client to recover against any and all such
third party persons or entities. The Client shall reimburse the Custodian for
any reasonable out-of-pocket costs incurred in connection with the actions
contemplated by this Section 15(B).
(C) The Client agrees to indemnify the Custodian and to defend and hold the
Custodian harmless against all losses, liabilities, claims, expenses and Taxes,
including any reasonable legal fees and disbursements, (each referred
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to as a "LOSS") arising directly or indirectly:
(i) from the fact that the Property is registered in the name of
or held by the Custodian or any nominee or agent of the
Custodian or any Clearance System;
(ii) without limiting the generality of Section 15(C)(i), from any
act which the Custodian or any nominee or agent performs or
permits (including the provision of any overdraft or other
financial accommodation which arises on the books of the
Custodian, whether on an advised or unadvised basis) in
relation to the Property pursuant to this Agreement or any
Instructions;
(iii) from the Custodian or any such nominee, agent or Clearance
System carrying out any Instructions pursuant to the terms of
this Agreement, including, without limitation, Instructions
transmitted orally, by telephone, telex, facsimile
transmission or any other means agreed by the Client and the
Custodian from time to time or otherwise;
(iv) from any reclaim or refund of Taxes effected by the Custodian
or any agent for the Client; and
(v) from the Custodian's reliance or action on any information
provided by the Client in connection with this Agreement;
PROVIDED THAT the Custodian shall not be indemnified against or held harmless
from any liability arising out of the Custodian's negligence, fraud or willful
default.
(D) The disclosure by the Client to the Custodian that the Client has entered
into this Agreement as the agent or representative of another person shall not
prevent the Custodian from being entitled to treat the Client as incurring all
obligations as principal under this Agreement.
(E) The Custodian shall give notice of any Loss in respect of which the Client
is obliged to provide indemnification pursuant to this Agreement. Such notice
shall describe the Loss in reasonable detail, and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Loss that has been
or may be suffered by Custodian.
(F) The Custodian agrees to indemnify the Client and to defend and hold the
Client harmless to the extent of (i) the replacement of any Security or cash
lost from the Custody Account or the Custody Cash Account, respectively, (ii)
compensatory interest accrued for the time any cash in the Custody Cash Account
cannot be transferred as provided in this Agreement and (iii) reasonable legal
fees, incurred by the Client as a result of any failure by the Custodian or
Subcustodian to observe the standard of care specified in Section 14(A) of this
Agreement.
16. LIEN AND SET-OFF
(A) In addition to any remedies available to the Custodian under applicable law,
the Custodian shall have, and the Client hereby grants, a continuing general
lien on all Property (other than cash) until the satisfaction of all liabilities
(whether actual or contingent) of the Client to the Custodian, including any
fees and expenses or credit exposures incurred in the performance of services
under this Agreement. Notwithstanding anything to the contrary in this Agreement
and to the extent applicable, no liabilities or obligations the Client has
arising out of or constituting Purpose Credit shall be secured by, and the
Custodian shall have no lien upon, any Margin Stock, and any such lien or
security interest being hereby expressly disclaimed by the Custodian. "Purpose
Credit" and "Margin Stock", shall have the same meaning set forth in Regulation
U and X of the Board of Governors of the Federal Reserve System of the United
States of America.
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(B) In addition to any other remedies available to the Custodian under
applicable law, the Custodian may, without prior notice to the Client, set off
any payment obligation owed to it by the Client against any payment obligation
(whether or not matured) owed by it to the Client regardless of the place of
payment or currency of either obligation (and for such purposes may make any
currency conversion necessary). If any obligation is unliquidated or
unascertained the Custodian may set off an amount estimated by it in good faith
to the amount of that obligation.
17. FEES AND EXPENSES
The Custodian agrees that it shall not look to the Client for
compensation for its services provided under this Agreement. The Custodian shall
be compensated entirely by Janus Capital Corporation, the Client's administrator
as determined in accordance with the terms of the Fee Agreement, attached hereto
as Schedule II, together with any applicable taxes or levies, including, without
limitation, all those items referred to in Section 8 (ii) hereof.
Notwithstanding anything else in this Agreement, the Client shall be liable for
any other obligation under this Agreement including without limitation, any
overdraft or advance and any indemnity specified herein.
18. TAX STATUS/WITHHOLDING TAXES
(A) The Client will provide the Custodian with information as to its tax status
as reasonably requested by the Custodian from time to time.
(B) The Client may be required from time to time to file such proof of taxpayer
status or residence, to execute such certificates and to make such
representations and warranties, or to provide any other information or documents
in respect of the Property, as the Custodian or any of its agents may deem
necessary or proper to fulfill the obligations of the Custodian or its agents
under applicable law. The Client shall provide the Custodian or its agents, as
appropriate, in a timely manner, with copies, or originals if necessary and
appropriate, of any such proofs of residence, taxpayer status or identity,
beneficial ownership of Property and any other information or documents which
the Custodian or its agents may reasonably request.
(C) If any Taxes shall become payable with respect to any payment due to the
Client, such Taxes may be withheld from such payment in accordance with
applicable law. The Custodian and any agents may withhold any interest, any
dividends or other distributions or securities receivable in respect of
Securities, proceeds from the sale or distribution of Securities ("Payments"),
or (after prior notice to the Client with a reasonable opportunity to respond)
may sell for the account of the Client any part thereof or all of the
Securities, and may apply such Payment and/or cash from the Custody Cash Account
in satisfaction of such Taxes, the Client remaining liable for any deficiency.
If any Taxes shall become payable with respect to any payment made to the Client
by the Custodian or its agents in a prior year, the Custodian or its agents may
withhold Payments in satisfaction of such prior year's Taxes.
(D) In the event the Client requests that the Custodian provide tax relief
services and the Custodian agrees to provide such services, the Custodian or any
of its agents, shall apply for appropriate tax relief (either by way of reduced
tax rates at the time of an income payment or retrospective tax reclaims in
certain markets as agreed from time to time); PROVIDED THAT the Client provides
to the Custodian such documentation and information as is necessary to secure
such tax relief. In no event shall the Custodian or any of its agents be
responsible for the difference between the statutory rate of withholding and the
treaty rate of withholding if the Custodian or any of its agents are unable to
secure tax relief.
19. TERMINATION
(A) The Custodian or the Client may terminate this Agreement by giving not less
than 60 days' prior written notice to the other party; PROVIDED THAT within 60
days of such notice, the Client shall provide the Custodian with Instructions
specifying the person to whom the Custodian shall deliver the Property in the
Custody Account
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<PAGE>
and Custody Cash Accounts; PROVIDED FURTHER THAT if the Custodian has effected
any transaction on behalf of the Client the settlement of which is likely to
extend beyond the expiration of such notice, then the Custodian shall be
entitled in its absolute discretion to close out or complete such transaction
and to retain sufficient funds from the Property for that purpose. If within 60
days following termination, the Client fails to give the Custodian Instructions
specifying the person to whom the Custodian shall deliver the Property in the
Custody Account and Custody Cash Account, the Custodian shall deliver the
Property to the Client at its address set out above.
(B) The rights and obligations contained in Sections 15, 16, 17 and 18 of
this Agreement shall survive the termination of this Agreement.
20. ASSIGNMENT
This Agreement shall bind and enure for the benefit of the parties
hereto and their respective successors and permitted assigns, and the Client
shall not assign, transfer or charge all or any rights or benefits hereunder
without the written consent of the Custodian. The Custodian may not assign,
transfer or charge all or any of its rights or benefits hereunder without the
written consent of the Client; PROVIDED HOWEVER that this Agreement may be
assigned by the Custodian to another member of the Citigroup Organization with
prior written notice to the Client, and such assignee shall, without the
execution or filing of any consents or other documents, succeed to and be
substituted for the Custodian with like effect as though such assignee had been
originally named as the Custodian hereunder. Any purported assignment, transfer
or charge made in contravention of this Section shall be null and void and of no
effect whatsoever.
21. SEPARATE LIABILITY
Each Fund that is a party to this Agreement, as set forth above, shall
be regarded for all purposes as a separate party apart from any other Fund which
is a party. Each Fund shall be responsible for only its own transactions and no
property of a Fund shall be commingled with the property of any other Fund. The
use of this single document to memorialize the separate agreement of each Fund
is understood to be for clerical convenience only and shall not constitute any
basis for joining the Funds for any respect.
22. DISCLOSURE
(A) The Client agrees and understands that the Custodian or its agents may
disclose information regarding the Custody Account and/or the Custody Cash
Account if required to do so (i) to establish under the laws of any relevant
jurisdiction the nominee (or similar) status of the Custodian or its agents with
respect to Property in the Custody Account and/or Custody Cash Account for the
purpose of performing or discharging its duties and obligations under this
Agreement, (ii) to enable auditors to perform auditing services, (iii) to make
the required tax certifications in the relevant jurisdictions, (iv) by any
applicable law, statute or regulation or court order or similar process in any
relevant jurisdiction, (v) by order of an authority having power over the
Custodian or its agents within the jurisdiction of such authority, whether of a
governmental nature or otherwise, or (vi) where required by the operating rules
of any relevant Clearance System.
(B) The Client hereby authorizes (i) the collection, storage and processing of
any information relating to the Client by the Custodian and the Branches,
subsidiaries, affiliates and agents of, or Clearance Systems used by, Citibank,
N.A.; and (ii) the transfer of any information relating to the Client to and
between the Branches, subsidiaries, affiliates and agents of, or Clearance
Systems used by, Citibank, N.A. and third parties selected by any of them,
wherever situated, for confidential use in connection with the provision of
services to the Client, and further acknowledges that any such Branch,
subsidiary, affiliate, agent, third party or Clearance System shall be entitled
to transfer any such information as required by any law, court, legal process or
as requested by any authority in accordance with which it is required to act, as
it shall reasonably determine.
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<PAGE>
(C) The Client agrees that the terms of this Agreement shall be kept strictly
confidential and no printed materials or other matter in any language (including
without limitation, prospectuses, statements of additional information, notices
to shareholders, annual reports and promotional materials) which mention
Citigroup, Citibank, N.A. or the Custodian's name, or the rights, powers or
duties of the Custodian, shall be issued by the Client or on the Client's behalf
unless Citibank, N.A. and/or the Custodian (as applicable) shall first have
given its specific written consent thereto; PROVIDED THAT no prior consent shall
be required if the only reference to the Custodian's name is in identifying the
Custodian as one of the Client's custodians.
(D) The Client agrees that the Custodian or its agents may, upon reasonable
request, review the Client's premises, and security controls and procedures,
where necessary for the performance of the Custodian's obligations regarding any
relevant Clearance System.
23. NOTICES
All notices and communications to be given by one party to the other
under this Agreement shall be in writing in the English language and (except for
notices, reports and information from the Custodian, and Instructions given by
electronic means) shall be made either by telex or facsimile, other electronic
means agreed to by the parties or by letter addressed to the party concerned at
the addresses set out above (or at such other addresses as may be notified in
writing by either party to the other from time to time). Any such notice or
communication hereunder shall be effective upon actual receipt.
24. GOVERNING LAW AND JURISDICTION
(A) This Agreement shall be governed by and construed in accordance with the
internal laws (and not the laws of conflict) of the state of New York. The
Client agrees for the benefit of the Custodian and, without prejudice to the
right of the Custodian to take any proceedings in relation hereto before any
other court of competent jurisdiction, that the courts of the State of New York
shall have jurisdiction to hear and determine any suit, action or proceeding,
and to settle any disputes, which may arise out of or in connection with this
Agreement and, for such purposes, irrevocably submits to the non-exclusive
jurisdiction of such courts.
(B) Each party hereto waives any objection it may have at any time to the laying
of venue of any actions or proceedings brought in a court of the State of New
York, waives any claim that such actions or proceedings have been brought in an
inconvenient forum and further waives the right to object that such court does
not have jurisdiction over such party.
(C) The Client irrevocably waives, to the fullest extent permitted by applicable
law, with respect to itself and its revenues and assets (irrespective of their
use or intended use), all immunity on the grounds of sovereignty or similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of
injunction, order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment), and (v) execution
or enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any actions or proceedings in such courts, and
irrevocably agrees, to the fullest extent permitted by applicable law, that it
will not claim such immunity in any such actions or proceedings.
(D) The Client hereby understands and agrees that the opening of, the holding of
all or any part of the Property in, and the delivery of any Securities and other
Property to or from, the Custody Account and Custody Cash Account and the
performance of any activities contemplated in this Agreement by the Custodian,
including acting on any Instructions, are subject to the relevant local laws,
regulations, decrees, orders, government acts, customs, procedures and practices
(i) to which the Custodian, or any Subcustodian or Clearance System, is subject
and (ii) as exist in the country in which the Property is held.
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<PAGE>
25. MISCELLANEOUS
(A) This Agreement shall not be amended except by a written agreement and any
purported amendment made in contravention of this Section shall be null and void
and of no effect whatsoever.
(B) This Agreement shall constitute the entire agreement between the Client and
the Custodian and, unless otherwise expressly agreed in writing, shall supersede
all prior agreements relating to global custodial services, written or oral,
between the parties hereto.
(C) The parties hereto agree that (i) the rights, powers, privileges and
remedies stated in this Agreement are cumulative and not exclusive of any
rights, powers, privileges and remedies provided by law, unless specifically
waived, and (ii) any failure or delay in exercising any right power, privilege
or remedy will not be deemed to constitute a waiver thereof and a single or
partial exercise of any right, power, privilege or remedy will not preclude any
subsequent or further exercise of that or any other right, power, privilege or
remedy.
(D) In the event that any provision of this Agreement, or the application
thereof to any person or circumstances, shall be determined by a court of proper
jurisdiction to be invalid or unenforceable to any extent, the remaining
provisions of this Agreement, and the application of such provisions to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall be unaffected thereby and such provisions shall be valid
and enforced to the fullest extent permitted by law in such jurisdiction.
(E) Titles to Sections of this Agreement are included for convenience of
reference only and shall be disregarded in construing the language contained in
this Agreement.
(F) This Agreement may be executed in several counterparts, each of which shall
be an original, but all of which together shall constitute one and the same
agreement.
(G) All the parties hereto acknowledge and agree that all liabilities of Janus
Investment Fund arising, directly or indirectly, under this Agreement, of any
and every nature whatsoever, shall be satisfied solely out of the assets of
Janus Investment Fund and that no Trustee, officer or holder of shares of
beneficial interest of Janus Investment Fund shall be personally liable for any
of the foregoing liabilities. Janus Investment Fund's Declaration of Trust, as
amended from time to time, is on file in the Office of the Secretary of State of
the Commonwealth of Massachusetts. Such Declaration of Trust describes in detail
the respective responsibilities and limitations of liability of the Trustees,
officers and holders of shares of beneficial interest of Janus Investment Fund.
19
<PAGE>
(H) Additional Funds. In the event that Janus Investment Fund establishes one or
more series of shares in addition to Funds named herein with respect to which it
desires to have the Custodian render services as custodian under the terms
hereof, it shall so notify the Custodian in writing, and it the Custodian agrees
in writing to provide such services, such series of shares shall become a Fund
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
CITIBANK, N.A., New York Office JANUS INVESTMENT FUND
By: /s/ Donald E. Colombo By /s/ Steven R. Goodbarn
Name: Donald E. Colombo Name: Steven R. Goodbarn
Title: Vice President Title: Vice President
JANUS CAPITAL CORPORATION, as
principal with regard to
obligations for fees and expenses
as provided in Section 17.
By: /s/ Steven R. Goodbarn
Name: Steven R. Goodbarn
Title: Vice President
20
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Schedule I
JANUS CAPITAL CORPORATION
Approved Subcustodians
None
21
<PAGE>
Schedule II
Citibank, N.A.
Custody Fee Schedule
for
JANUS CAPITAL CORPORATION
I. HOLDINGS (Annual Holding Fee)
o Depository Assets (DTC, FED, PTC)..............................0.18 bp
o Money Market Physical..........................................0.30 bp
o Other Physical (e.g., private placements)......................0.30 bp
o Euroclear/Cedel................................................1.50 bp
II. TRANSACTIONS
A transaction is defined as a purchase, sale, maturity, free receive or
free delivery.
Automated Manual
Entry Entry
o FBE, DTC Transactions...................$5.00...................$10.00
(Including DTC Commercial Paper)
o PTC Transaction.........................$8.00...................$13.00
o Physical Transactions...................$15.00..................$20.00
o (Including Physical Commercial Paper)
Euroclear Transactions..............$25.00..................$30.00
o P&I Paydowns........................... $1.00
(MBS Agency, CMO, Asset Backed, REMIC, Private Placement)
III. CITIBANKING (On-line Communication)
o Annual Maintenance Charge (Per Location).....................$1,200.00
IV. ADDITIONAL SERVICES
o Corporate Action Notification.................................Included
o Income Servicing..............................................Included
o Account/Asset Statements......................................Included
o Non-Standard Contract Counsel.................................Included
V. ADMINISTRATION
o Monthly Account Maintenance.....................................Waived
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VI. MINIMUM ANNUAL SERVICE FEE......................................$120.00
Out of pocket expenses to include overnight express mail, transfer
agent fees etc. will be passed along at cost.
AGREED:
CITIBANK, N.A. JANUS CAPITAL CORPORATION
Name: /s/ Donald E. Colombo Name: /s/ Steve R. Goodbarn
Title: Vice President Title: Vice President
Date: March 15, 1999 Date: March 11, 1999
-------------- --------------
23
<PAGE>
FOREIGN CUSTODY MANAGER Addendum to GLOBAL CUSTODIAL SERVICES AGREEMENT, dated
as of 15 March , 1999, by and between JANUS INVESTMENT FUND (the "Client") and
CITIBANK, N.A. (the "Custodian").
The Client desires to have the Custodian assume and discharge the responsibility
of the Client's board of directors (hereinafter the "Board") to select, contract
with and monitor certain custodians of non-U.S. assets of the Client held by the
Custodian pursuant to the Global Custodial Services Agreement (the "Agreement").
The Custodian agrees to accept the delegation and to perform the responsibility
as provided in this Addendum.
(A) Foreign Custody Manager:
(i) The Board hereby delegates to the Custodian, and the Custodian
hereby accepts the delegation to it, of the obligation to serve as the
Client's "Foreign Custody Manager" (as defined in Rule 17f-5(a)(2)
under the Investment Company Act of 1940, as amended from time to
time), in respect to the Client's foreign investments held from time to
time by the Custodian with any Subcustodian or Clearance System (each
defined in the Agreement) that is an Eligible Foreign Custodian (as
defined in Rule 17f-5(a)(1)) and that is not a Compulsory Depository as
defined below. Foreign investments are any Property (as defined in the
Agreement) for which the primary market is outside the U.S.A.
(ii) As Foreign Custody Manager, the Custodian shall:
(1) select Eligible Foreign Custodians to serve as foreign
custodians and place and maintain the Client's foreign
investments with such foreign custodians;
(2) in selecting an Eligible Foreign Custodian, first
determine that foreign investments placed and maintained in
the safekeeping of each Eligible Foreign Custodian shall be
subject to reasonable care, based on the standards applicable
to custodians in the relevant market, after having considered
all factors relevant to the safekeeping of such investments
including, without limitation, those factors set forth in Rule
17f-5(c)(1)(i)- (iv);
(3) enter into written agreements with each Eligible Foreign
Custodian selected by the Custodian hereunder;
(4) determine that the written contract with each Eligible
Foreign Custodian (or, in the case of an Eligible Foreign
Custodian that is a Clearance System such contract (which may
be between the Custodian and the Clearance System or between
an Eligible Foreign Custodian selected by the Custodian and
the Clearance System), the rules or established practices or
procedures of the Clearance System, or any combination of the
foregoing) requires that the Eligible Foreign Custodian will
provide reasonable care for the foreign investments, based on
the standards applicable to custodians in the relevant market,
and that all such contracts, rules, practices and procedures
satisfy the requirements of Rule 17f-5(c)(2);
(5) provide written reports (x) notifying the Board of the
placement of foreign investments with each Eligible Foreign
Custodian, such reports to be provided at such regularly
scheduled meetings of the Board, and (y) promptly notifying
the Board of the occurrence of any material change in the
arrangements with an Eligible Foreign Custodian;
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<PAGE>
(6) monitor the continued appropriateness of (x) maintaining
the foreign investments with Eligible Foreign Custodians
selected hereunder and (y) the governing contractual
arrangements; it being understood, however, that in the event
the Custodian shall determine that any Eligible Foreign
Custodian would no longer afford the foreign investments
reasonable care, the Custodian shall promptly so advise the
Client and shall then act in accordance with Instructions (as
defined in the Agreement) with respect to the disposition of
the foreign investments held by such Eligible Foreign
Custodian; and (7) exercise such reasonable care, prudence and
diligence in serving as the Foreign Custody Manager as the
Custodian exercises in performing its responsibility under the
Agreement for the safekeeping of the Client's Property (as
defined in the Agreement).
(iii) Nothing in this paragraph shall relieve the Custodian of any
responsibility otherwise provided in the Agreement or this Addendum for
loss or damage suffered by the Client from an act of negligence or
willful misconduct on the part of the Custodian.
(iv) Nothing in this Addendum shall require the Custodian to make any
selection on behalf of the Client that would entail consideration of
any factor reasonably related to the systemic risk of holding assets in
a particular country including, but not limited to, such country's
financial infrastructure and prevailing settlement practices. The
Custodian agrees to provide to the Client such information relating to
such risk as the Client shall reasonably request from time to time and
such other information as the Custodian generally makes available to
customers with regard to such countries and risk. The Client and the
Board may reasonably rely on the veracity and completeness of such
information.
(B) Compulsory Depositories:
(i) Notwithstanding the provisions of Section A above, the Custodian
shall not serve as Foreign Custody Manager in respect of any Compulsory
Depository, as defined below. The Custodian, through its branches or
any Subcustodians, shall be entitled to deposit and maintain the
foreign investments in Compulsory Depositories as the Custodian deems
prudent and appropriate, unless otherwise instructed by the Client or
its delegate;
(ii) Prior to depositing the foreign investments in any Compulsory
Depository, the Custodian shall notify the Client that a Compulsory
Depository will be used and provide the Client, in respect of the
Compulsory Depository, with current information of the type the
Custodian provided to clients in the Custodian's informational binders
entitled "SEC Rule 17f-5 Package". The Custodian, shall make its
representatives available to consult, in good faith, with such of the
Client's delegates as the Client shall designate regarding the
advisability of depositing the Client's foreign investments with any
Compulsory Depository;
(iii) The Custodian shall provide the Client with reports regarding
Compulsory Depositories as provided in Section (A)(ii)(5), above and
shall provide the Client with such other information with regard to any
Compulsory Depository as the Client shall reasonably request;
(iv) A "Compulsory Depository" shall mean a Clearance System that is a
non-U.S. securities depository or clearing agency the use of which is
mandatory (x) by law or regulation, (y) because securities cannot be
withdrawn from the depository or clearing agency or (z) because
maintaining securities outside the securities depository or clearing
agency is not consistent with prevailing local custodial practices. The
Custodian shall supply to the Client from time to time a schedule of
the Compulsory Depositories in which the Custodian holds the Client's
foreign investments; and
(v) Notwithstanding anything to the contrary contained in this Section
(B), the Custodian agrees that if, and at such time as, the Securities
and Exchange Commission further revises Rule 17f-5 to
25
<PAGE>
modify the application of the Rule with respect to the selection of,
monitoring of and contracting with Compulsory Depositories, the
Custodian will negotiate with the Client in good faith as to the terms
under which it will accept such further delegation.
<PAGE>
(C) Termination:
(i) The Client may terminate this delegation upon written notice
to the Custodian.
(ii) The Custodian may terminate its acceptance of this delegation
upon ninety (90) days written notice to the Client.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed as of
the 15 day of March, 1999, by their respective officers thereunto duly
authorized.
CITIBANK, N.A., NEW YORK OFFICE JANUS INVESTMENT FUND
By: /s/ Donald E. Colombo By: /s/ Steven R. Goodbarn
Name: Donald E. Colombo Name: Steven R. Goodbarn
Title: Vice President Title: Vice President
26
Exhibit 8(l)
September 14, 1999
Ms. Marjorie G. Hurd
Janus Service Corporation
100 Fillmore Street
Denver, Colorado 80206
Dear Ms. Hurd:
Attached are revised Appendix A and Appendix B to the Transfer Agency Agreement
dated as of September 27, 1995 (the "Agreement"), between Janus Investment Fund
(the "Trust") and Janus Service Corporation ("JSC"). The revised Appendices will
be effective as of September 14, 1999. The purpose of the revisions is to add
Janus Strategic Value Fund as an additional portfolio of the Trust. Pursuant to
Section 9 of the Agreement, the Fund hereby requests that JSC acknowledge its
acceptance of the terms contained in each of the revised Appendices.
Please indicate your acceptance of the foregoing by executing two copies of this
letter, returning one copy to the Trust and retaining one copy for your records.
JANUS INVESTMENT FUND
By: /s/ Stephen L. Stieneker
Stephen L. Stieneker
Assistant Vice President
JANUS SERVICE CORPORATION
By: /s/ Marjorie G. Hurd
Marjorie G. Hurd
President
Agreed to this 14th day of September, 1999
cc: Suzanne F. Olczak
<PAGE>
Revised as of September 14, 1999
APPENDIX A
Janus Money Market Fund
Janus Government Money Market Fund
Janus Tax-Exempt Money Market Fund
Janus High-Yield Fund
Janus Olympus Fund
Janus Venture Fund
Janus Fund
Janus Twenty Fund
Janus Enterprise Fund
Janus Mercury Fund
Janus Overseas Fund
Janus Worldwide Fund
Janus Growth and Income Fund
Janus Balanced Fund
Janus Flexible Income Fund
Janus Short-Term Bond Fund
Janus Federal Tax-Exempt Fund
Janus Equity Income Fund
Janus Special Situations Fund
Janus Global Life Sciences Fund
Janus Global Technology Fund
Janus Strategic Value Fund
<PAGE>
Revised as of September 14, 1999
APPENDIX B
I. NON-MONEY MARKET PORTFOLIOS
Each non-money market portfolio of the Trust shall pay JSC for its transfer
agency services a fee, calculated and payable for each day that this Agreement
is in effect, of 1/365 of 0.16% of the daily closing net asset value of such
portfolio, plus reasonable out-of-pocket expenses incurred in connection with
JSC's services as transfer agent. In addition, each of the non-money market
portfolios listed below shall pay a monthly fee at the annual rate of $4.00 per
open shareholder account per year:
Janus Balanced Fund
Janus Enterprise Fund
Janus Equity Income Fund
Janus Federal Tax-Exempt Fund
Janus Flexible Income Fund
Janus Global Life Sciences Fund
Janus Global Technology Fund
Janus Growth and Income Fund
Janus High-Yield Fund
Janus Mercury Fund
Janus Olympus Fund
Janus Short-Term Bond Fund
Janus Special Situations Fund
Janus Strategic Value Fund
Janus Twenty Fund
Janus Worldwide Fund
All such fees shall be subject to reduction as set forth in section 5.c. of this
Agreement. If an account is open on any day of a month, the per account fee (if
applicable) shall be payable for that month.
II. MONEY MARKET PORTFOLIOS
Notwithstanding the above, however, JSC agrees that it shall not look to the
Funds or the Trust for compensation for its services provided under this
Agreement to Janus Money Market Fund, Janus Government Money Market Fund or
Janus Tax-Exempt Money Market Fund (collectively, the "Money Funds"). JSC shall
be compensated for its services to the Money Funds entirely by Janus Capital
Corporation, the administrator to the Money Funds, pursuant to an Administration
Agreement between Janus Capital Corporation and each of the Money Funds.
Exhibit 9(r)
November 12, 1999
Janus Investment Fund
100 Fillmore Street
Denver, Colorado 80206-4928
Re: Public Offering of Janus Strategic Value Fund
Gentlemen:
I have acted as counsel for Janus Investment Fund, a Massachusetts business
trust (the "Trust"), in connection with the filing with the Securities and
Exchange Commission of a post-effective amendment to the Trust's registration
statement with respect to the proposed sale of shares of beneficial interest,
$0.01 par value, of Janus Strategic Value Fund (the "Shares").
I have examined the Trust's Agreement and Declaration of Trust and Bylaws, as
amended, the proceedings of its trustees relating to the authorization, issuance
and proposed sale of the Shares, and such other records and documents as I have
deemed relevant. Based upon such examination, it is my opinion that upon the
issuance and sale of the Shares in the manner contemplated by the aforesaid
post-effective amendment to the Trust's registration statement, such Shares will
be legally issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
above-referenced registration statement. This opinion is for the exclusive use
of the Trust in connection with the filing of such post-effective amendment to
the Trust's registration statement with the Securities and Exchange Commission
(and certain state securities commissions) and is not to be used, circulated,
quoted, relied upon or otherwise referred to by any other person or for any
other purpose. This opinion is given as of the date hereof and I render no
opinion and disclaim any obligation to revise or supplement this opinion based
upon any change in applicable law or any factual matter that occurs or comes to
my attention after the date hereof.
Very truly yours,
/s/ Thomas A. Early
Thomas A. Early
Vice President and General Counsel
/djw
Exhibit 10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Independent
Accountants" in the Statement of Additional Information constituting part of
this Post-Effective Amendment No. 88 to the Registration Statement on Form N-1A
of Janus Investment Fund.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
November 12, 1999
