<PAGE>
[JANUS LOGO]
Janus Fund
PROSPECTUS
FEBRUARY 17, 1999
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 Fund................................... 2
Fees and expenses............................ 4
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 5
General portfolio policies................... 6
Risks........................................ 9
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
Assistant portfolio managers................. 32
OTHER INFORMATION............... ............... 34
DISTRIBUTIONS AND TAXES
Distributions................................ 35
Taxes........................................ 36
FINANCIAL HIGHLIGHTS.............. ............. 38
GLOSSARY
Glossary of investment terms................. 39
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
JANUS FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS FUND?
The Fund seeks long-term growth of capital in a manner consistent
with the preservation 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 FUND?
The Fund invests primarily in common stocks selected for their
growth potential. Although the Fund can invest in companies of
any size, it generally invests in larger, more established
companies.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks for companies with earnings
growth potential one at a time. If the portfolio manager is
unable to find investments with earnings growth potential, a
significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS 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. 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.
2 Janus Fund
<PAGE>
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.
The following information illustrates how the Fund's performance
has varied over time. The bar chart depicts the change in the
Fund's performance from year-to-year during the periods
indicated. The table compares the Fund's average annual returns
for the periods indicated to a broad-based securities market
index.
JANUS FUND
A BAR CHART showing Annual Total Returns for Janus Fund from 1989 through 1998:
<TABLE>
<CAPTION>
Annual returns for periods ended 12/31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46.32% (0.74%) 42.80% 6.87% 10.92% (1.10%) 29.43% 19.61% 22.72% 38.89%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Each percentage is represented by a bar of proportionate size with the actual
total return printed above the bar.
Best Quarter: 4th-1998 28.44%, Worst Quarter: 3rd-1990 (13.91%)
</TABLE>
<TABLE>
<CAPTION>
Average annual total return for periods ended 12/31/98
------------------------------------------------------
Since Inception
1 year 5 years 10 years (2/5/70)
<S> <C> <C> <C> <C>
Janus Fund 38.89% 21.15% 20.43% 17.59%
S&P 500 Index* 28.74% 24.08% 19.20% 13.83%
--------------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
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. It is based upon gross
expenses (without the effect of expense offset arrangements) for
the fiscal year ended October 31, 1998.
<TABLE>
<CAPTION>
Janus Fund
<S> <C>
Management Fee 0.65%
Other Expenses 0.22%
Total Annual Fund Operating Expenses 0.87%
</TABLE>
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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 5 Years 10 Years
----------------------------------------
<S> <C> <C> <C> <C>
Janus Fund $89 $278 $482 $1,073
</TABLE>
4 Janus Fund
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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 9-11 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 Fund seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its
objective by investing primarily in common stocks selected for
their growth potential. Although the Fund can invest in companies
of any size, it generally invests in larger, more established
companies.
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.
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.
Investment objective, principal investment strategies and risks 5
<PAGE>
There are no limitations on the countries in which the Fund may
invest and the Fund may at times have significant foreign
exposure.
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 securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
6 Janus Fund
<PAGE>
- high-yield/high-risk securities (less than 35% of the Fund's
assets)
- options, futures, forwards 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. 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
Investment objective, principal investment strategies and risks 7
<PAGE>
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.
8 Janus Fund
<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. 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 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.
Investment objective, principal investment strategies and risks 9
<PAGE>
2. 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.
3. 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.
4. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
SECURITIES?
High-yield/high-risk securities (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
10 Janus Fund
<PAGE>
investment grade debt securities. Issuers of high-yield
securities may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real
or perceived economic changes, political changes or adverse
developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options 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.
Investment objective, principal investment strategies and risks 11
<PAGE>
Janus 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 refunds.
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 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 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 the 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 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 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>
- If the shares you are exchanging are held in certificate form,
you must return the certificate to the Fund prior to making any
exchanges.
- 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 24.
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 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 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
26 Janus Fund
<PAGE>
duplicate 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.
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.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate
form because account transactions such as exchanges and
redemptions cannot be completed until the certificate has been
returned to the Fund. The Fund will issue share certificates upon
written request only and reserves the right to charge a fee for
this service.
28 Janus Fund
<PAGE>
Share certificates will not be issued until the shares have been
held for at least 15 days and will not be issued for accounts
that do not meet the minimum investment requirements. Share
certificates cannot be issued for retirement accounts. In
addition, if the certificate is lost, there may be a replacement
charge.
INVOLUNTARY REDEMPTIONS
The 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.
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.
Shareholder's manual 29
<PAGE>
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For more information call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors participating in an automatic investment program will
receive quarterly confirmations of all transactions. Dividend
information will be distributed annually. In addition, the 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 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 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. The Annual Fund Operating Expenses
table on page 4 lists the actual management fee and total
operating expenses of the Fund for the most recent fiscal year.
Management of the fund 31
<PAGE>
PORTFOLIO MANAGER
JAMES P. CRAIG, III
- --------------------------------------------------------------------------------
is Chief Investment Officer of Janus Capital. He is
Executive Vice President and portfolio manager of the
Fund, which he has managed since 1986. He is also
Executive Vice President and a co-manager of Janus Venture
Fund, which he has managed since February 1, 1997. Mr.
Craig previously managed Janus Balanced Fund from December
1993 to December 1995. He holds a Bachelor of Arts in
Business from the University of Alabama and a Master of
Arts in Finance from the Wharton School of the University
of Pennsylvania.
ASSISTANT PORTFOLIO MANAGERS
DAVID C. DECKER
- --------------------------------------------------------------------------------
is an assistant portfolio manager of the Fund. He is
Executive Vice President and portfolio manager of Janus
Special Situations Fund, which he has managed since
inception. He joined Janus Capital in 1992 as a research
analyst and focused on companies in the automotive and
defense industries prior to managing Janus Special
Situations Fund. He obtained his Master of Business
Administration in Finance from the Fuqua School of
Business at Duke University and a Bachelor of Arts in
Economics and Political Science from Tufts University. Mr.
Decker received the Chartered Financial Analyst
designation.
32 Janus Fund
<PAGE>
KAREN L. REIDY
- --------------------------------------------------------------------------------
is an assistant portfolio manager of the Fund. Prior to
joining Janus Capital in 1995, she worked for Price
Waterhouse in the Mergers and Acquisitions area,
performing corporate due diligence, and as an audit
senior, analyzing financials for corporate clients. She
received an undergraduate degree in Accounting from the
University of Colorado. She is seeking the Chartered
Financial Analyst designation.
BLAINE P. ROLLINS
- --------------------------------------------------------------------------------
is an assistant portfolio manager of the Fund. He is
Executive Vice President and portfolio manager of Janus
Balanced Fund, which he has managed since January 1996,
and Janus Equity Income Fund, which he has managed since
inception. Mr. Rollins joined Janus Capital in 1990 and
gained experience as a fixed-income trader and equity
research analyst prior to managing Janus Balanced Fund. He
holds a Bachelor of Science in Finance from the University
of Colorado and received the Chartered Financial Analyst
designation.
Management of the fund 33
<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.
34 Janus Fund
<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
Distributions and taxes 35
<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
36 Janus Fund
<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.
Distributions and taxes 37
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years through
October 31st of each fiscal year shown. Items 1 through 9 reflect
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned
(or lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
the Fund's financial statements, are included in the Annual
Report, which is available upon request and incorporated by
reference into the SAI.
<TABLE>
<CAPTION>
JANUS FUND
- ----------------------------------------------------------------------------------------
Periods ending October 31st
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $29.36 $26.65 $23.37 $19.62 $20.81
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (0.02) 0.15 0.31 0.16 0.17
3. Net gains or losses on securities
(both realized and unrealized) 3.70 5.69 4.23 3.99 (0.03)
4. Total from investment operations 3.68 5.84 4.54 4.15 0.14
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.23) (0.21) (0.13) (0.01) (0.39)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) (4.84) (2.92) (1.13) (0.39) (0.94)
8. Total distributions (5.07) (3.13) (1.26) (0.40) (1.33)
9. NET ASSET VALUE, END OF PERIOD $27.97 $29.36 $26.65 $23.37 $19.62
10. Total return 15.12% 24.18% 20.31% 21.62% 0.75%
11. Net assets, end of period (in
millions) $20,721 $19,029 $15,313 $11,963 $9,647
12. Average net assets for the period
(in millions) $20,777 $17,515 $13,753 $10,560 $9,339
13. Ratio of gross expenses to average
net assets 0.87% 0.87% 0.86% 0.87% N/A
14. Ratio of net expenses to average
net assets 0.86% 0.86% 0.85% 0.86% 0.91%
15. Ratio of net investment
income/(loss) to average net assets -- 0.85% 0.91% 1.25% 1.12%
16. Portfolio turnover rate 70% 132% 104% 118% 139%
- ----------------------------------------------------------------------------------------
</TABLE>
38 Janus 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 39
<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 SECURITIES are securities that are rated
below investment grade by the primary rating agencies (e.g., BB
or lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio 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
40 Janus 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 41
<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.
42 Janus 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 43
<PAGE>
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44
<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, Annual Report or Semiannual Report, free of
charge, by contacting Janus at 1-800-525-3713 or visiting our Web
site at janus.com. In the Fund's Annual Report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal
year. 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
3176
<PAGE>
[JANUS LOGO]
Janus Mercury Fund
PROSPECTUS
FEBRUARY 17, 1999
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 Mercury Fund........................... 2
Fees and expenses............................ 4
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 5
General portfolio policies................... 6
Risks........................................ 9
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
FINANCIAL HIGHLIGHTS.............. ............. 37
GLOSSARY
Glossary of investment terms................. 38
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
JANUS MERCURY FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS MERCURY 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 MERCURY FUND?
The Fund invests primarily in common stocks selected for their
growth potential. The Fund may invest in companies of any size,
from larger, well-established companies to smaller, emerging
growth companies.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks for companies with earnings
growth potential one at a time. If the portfolio manager is
unable to find investments with earnings growth potential, a
significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS MERCURY 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. 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.
2 Janus Mercury Fund
<PAGE>
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.
The following information illustrates how the Fund's performance
has varied over time. The bar chart depicts the change in the
Fund's performance from year-to-year during the periods
indicated. The table compares the Fund's average annual returns
for the periods indicated to a broad-based securities market
index.
JANUS MERCURY FUND
A BAR CHART showing Annual Total Returns for Janus Mercury Fund from 1994
through 1998:
Annual returns for period ended 12/31
15.86% 33.01% 17.67% 11.86% 58.41%
1994 1995 1996 1997 1998
Each percentage is represented by a bar of proportionate size with the actual
total return printed above the bar.
Best Quarter: 4th-1998 30.04%; Worst Quarter: 3rd-1998 (6.94%)
<TABLE>
<CAPTION>
Average annual total return for periods ended 12/31/98
------------------------------------------------------
Since Inception
1 year 5 years (5/3/93)
<S> <C> <C> <C>
Janus Mercury Fund 58.41% 26.30% 26.86%
S&P 500 Index* 28.74% 24.08% 22.64%
--------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
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. It is based upon gross
expenses (without the effect of expense offset arrangements) for
the fiscal year ended October 31, 1998.
<TABLE>
<CAPTION>
Janus Mercury Fund
<S> <C>
Management Fee 0.67%
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.97%
</TABLE>
- --------------------------------------------------------------------------------
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 5 Years 10 Years
----------------------------------------
<S> <C> <C> <C> <C>
Janus Mercury Fund $99 $309 $536 $1,190
</TABLE>
4 Janus Mercury 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 9-11 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 Mercury Fund seeks long-term growth of capital. It pursues
its objective by investing primarily in common stocks selected
for their growth potential. The Fund may invest in companies of
any size, from larger, well-established companies to smaller,
emerging growth companies.
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.
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.
Investment objective, principal investment strategies and risks 5
<PAGE>
There are no limitations on the countries in which the Fund may
invest and the Fund may at times have significant foreign
exposure.
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 securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
6 Janus Mercury Fund
<PAGE>
- high-yield/high-risk securities (less than 35% of the Fund's
assets)
- options, futures, forwards 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. 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
Investment objective, principal investment strategies and risks 7
<PAGE>
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.
8 Janus Mercury Fund
<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. 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 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.
2. 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
Investment objective, principal investment strategies and risks 9
<PAGE>
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.
3. 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.
4. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
SECURITIES?
High-yield/high-risk securities (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
securities may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real
or perceived economic changes, political changes or adverse
developments specific to the issuer.
10 Janus Mercury Fund
<PAGE>
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options 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.
Investment objective, principal investment strategies and risks 11
<PAGE>
Janus Mercury 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 Mercury 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 Mercury 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 Mercury 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 Mercury 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>
- If the shares you are exchanging are held in certificate form,
you must return the certificate to the Fund prior to making any
exchanges.
- 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 24.
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 Mercury 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 Mercury 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 Mercury 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.
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.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate
form because account transactions such as exchanges and
redemptions cannot be completed until the certificate has been
returned to the Fund. The Fund will issue share certificates upon
written request only and reserves the right to charge a fee for
this service.
28 Janus Mercury Fund
<PAGE>
Share certificates will not be issued until the shares have been
held for at least 15 days and will not be issued for accounts
that do not meet the minimum investment requirements. Share
certificates cannot be issued for retirement accounts. In
addition, if the certificate is lost, there may be a replacement
charge.
INVOLUNTARY REDEMPTIONS
The 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.
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.
Shareholder's manual 29
<PAGE>
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For more information call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors participating in an automatic investment program will
receive quarterly confirmations of all transactions. Dividend
information will be distributed annually. In addition, the 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 Mercury 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 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. The Annual Fund Operating Expenses
table on page 4 lists the actual management fee and total
operating expenses of the Fund for the most recent fiscal year.
Management of the fund 31
<PAGE>
PORTFOLIO MANAGER
WARREN B. LAMMERT
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund. Mr. Lammert joined Janus Capital in 1987 and has
managed the Fund since its inception. He previously co-
managed Janus Venture Fund from December 1993 to December
1996. He holds a Bachelor of Arts in Economics from Yale
University and a Master of Science in Economic History
from the London School of Economics. Mr. Lammert received
the Chartered Financial Analyst designation.
32 Janus Mercury 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 Mercury 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 Mercury Fund
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years through
October 31st of each fiscal year shown. Items 1 through 9 reflect
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned
(or lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
the Fund's financial statements, are included in the Annual
Report, which is available upon request and incorporated by
reference into the SAI.
<TABLE>
<CAPTION> JANUS MERCURY FUND
- -------------------------------------------------------------------------------------
Periods ending October 31st
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $18.65 $18.20 $17.38 $14.12 $11.70
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income (0.01) (0.01) 0.14 0.16 0.02
3. Net gains or (losses) on securities
(both realized and unrealized) 4.07 2.82 2.74 3.37 2.40
4. Total from investment operations 4.06 2.81 2.88 3.53 2.42
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) -- (0.08) -- (0.16) --
6. Dividends (in excess of net
investment income) (0.04) -- -- -- --
7. Distributions (from capital gains) (1.90) (2.28) (2.06) (0.11) --
8. Total distributions (1.94) (2.36) (2.06) (0.27) --
9. NET ASSET VALUE, END OF PERIOD $20.77 $18.65 $18.20 $17.38 $14.12
10. Total return 24.75% 17.07% 18.18% 25.53% 20.68%
11. Net assets, end of period (in
millions) $2,368 $1,971 $2,002 $1,521 $596
12. Average net assets for the period
(in millions) $2,103 $2,046 $1,839 $1,116 $258
13. Ratio of gross expenses to average
net assets 0.97% 0.98% 1.02% 1.14% N/A
14. Ratio of net expenses to average
net assets 0.94% 0.96% 1.00% 1.12% 1.33%
15. Ratio of net investment
income/(loss) to average net assets (0.33%) 0.21% 0.45% 0.50% 0.25%
16. Portfolio turnover rate 105% 157% 177% 201% 283%
- -------------------------------------------------------------------------------------
</TABLE>
Financial highlights 37
<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
38 Janus Mercury Fund
<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 SECURITIES are securities that are rated
below investment grade by the primary rating agencies (e.g., BB
or lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio 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
Glossary of investment terms 39
<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.
40 Janus Mercury Fund
<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.
Glossary of investment terms 41
<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.
42 Janus Mercury Fund
<PAGE>
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43
<PAGE>
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44
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[JANUS LOGO]
1-800-525-3713
P.O. Box 173375
Denver, Colorado 80217-3375
janus.com
You can request other information, including a Statement of
Additional Information, Annual Report or Semiannual Report, free of
charge, by contacting Janus at 1-800-525-3713 or visiting our Web
site at janus.com. In the Fund's Annual Report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal
year. 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
3178
<PAGE>
[JANUS LOGO]
Janus Worldwide Fund
PROSPECTUS
FEBRUARY 17, 1999
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 Worldwide Fund......................... 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and
principal investment strategies.............. 6
General portfolio policies................... 7
Risks........................................ 10
SHAREHOLDER'S MANUAL
Minimum investments.......................... 17
Types of account ownership................... 17
How to open your Janus account............... 19
How to purchase shares....................... 20
How to exchange shares....................... 22
How to redeem shares......................... 24
Shareholder services and account policies.... 29
MANAGEMENT OF THE FUND
Investment adviser........................... 33
Portfolio manager............................ 34
Assistant portfolio manager.................. 34
OTHER INFORMATION............... ............... 35
DISTRIBUTIONS AND TAXES
Distributions................................ 36
Taxes........................................ 37
FINANCIAL HIGHLIGHTS.............. ............. 39
GLOSSARY
Glossary of investment terms................. 40
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
JANUS WORLDWIDE FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS WORLDWIDE FUND?
The Fund seeks long-term growth of capital in a manner consistent
with the preservation 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 WORLDWIDE FUND?
The Fund invests primarily in common stocks of companies of any
size throughout the world. The Fund normally invests in issuers
from at least five different countries, including the United
States. The Fund may at times invest in fewer than five countries
or even a single country.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, she looks for companies with
earnings growth potential one at a time. If the portfolio manager
is unable to find investments with earnings growth potential, a
significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS WORLDWIDE 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 foreign 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. 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
2 Janus Worldwide Fund
<PAGE>
your shares in the Fund you would get back less money. The Fund
may have significant exposure to foreign markets. As a result,
its returns and NAV may be affected to a large degree by
fluctuations in currency exchange rates or political or economic
conditions in a particular country.
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>
The following information illustrates how the Fund's performance
has varied over time. The bar chart depicts the change in the
Fund's performance from year-to-year during the periods
indicated. The table compares the Fund's average annual returns
for the periods indicated to a broad-based securities market
index.
JANUS WORLDWIDE FUND
A BAR CHART showing Annual Total Returns for Janus Worldwide Fund from 1992
through 1998:
Annual returns for periods ended 12/31
9.01% 28.41% 3.61% 21.90% 26.40% 20.48% 25.87%
1992 1993 1994 1995 1996 1997 1998
Each percentage is represented by a bar of proportionate size with the actual
total return printed above the bar.
Best Quarter: 4th-1998 20.24%; Worst Quarter: 3rd-1998 (16.10%)
<TABLE>
<CAPTION>
Average annual total return for periods ended 12/31/98
------------------------------------------------------
Since
Inception
1 year 5 years (5/15/91)
<S> <C> <C> <C>
Janus Worldwide Fund 25.87% 19.34% 20.72%
Morgan Stanley International
Worldwide Index* 24.34% 15.68% 13.22%
-----------------------------------
</TABLE>
* The Morgan Stanley International Worldwide Index is a market
capitalization weighted index composed of countries
representative of the market structure of 47 developed and
emerging markets.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
4 Janus Worldwide Fund
<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. It is based upon gross
expenses (without the effect of expense offset arrangements) for
the fiscal year ended October 31, 1998.
<TABLE>
<CAPTION>
Janus Worldwide Fund
<S> <C>
Management Fee 0.65%
Other Expenses 0.27%
Total Annual Fund Operating Expenses 0.92%
</TABLE>
- --------------------------------------------------------------------------------
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 5 Years 10 Years
-----------------------------------------
<S> <C> <C> <C> <C>
Janus Worldwide Fund $94 $293 $509 $1,131
</TABLE>
Risk return summary 5
<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 10-13 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 Worldwide Fund seeks long-term growth of capital in a
manner consistent with the preservation of capital. It pursues
its objective by investing primarily in common stocks of
companies of any size throughout the world. The Fund normally
invests in issuers from at least five different countries,
including the United States. The Fund may at times invest in
fewer than five countries or even a single country.
The Fund may invest substantially all of its assets in common
stocks of foreign issuers 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, she seeks to identify individual companies with
earnings growth potential that may not be recognized by the
market at large. She 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.
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
6 Janus Worldwide Fund
<PAGE>
for economic growth among countries, regions or geographic areas
may warrant greater consideration in selecting foreign
securities.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the
general policies listed below. The percentage limitations
included in these policies and elsewhere in this Prospectus apply
at the time of purchase of the security. 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 she 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 securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
Investment objective, principal investment strategies and risks 7
<PAGE>
- high-yield/high-risk securities (less than 35% of the Fund's
assets)
- options, futures, forwards 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. 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
8 Janus Worldwide Fund
<PAGE>
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. 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. 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,
10 Janus Worldwide Fund
<PAGE>
there is the risk that the government may take over the assets
or operations of a company or that the government may impose
taxes or limits on the removal of the Fund's assets from that
country.
- 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.
- 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.
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 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
Investment objective, principal investment strategies and risks 11
<PAGE>
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. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
SECURITIES?
High-yield/high-risk securities (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
securities may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real
or perceived economic changes, political changes or adverse
developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options 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
12 Janus Worldwide Fund
<PAGE>
incorrect. Risks associated with the use of derivative
instruments are described in the SAI.
Investment objective, principal investment strategies and risks 13
<PAGE>
Janus Worldwide 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>
16 Janus Worldwide 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 17
<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 IRAs.
18 Janus Worldwide 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 if you do not meet these criteria.
Send all items to one of the addresses listed in the "Quick
Address and Telephone Reference" on page 16.
Shareholder's manual 19
<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
20 Janus Worldwide Fund
<PAGE>
retirement account, please indicate whether the purchase is a
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 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.
Shareholder's manual 21
<PAGE>
AUTOMATIC INVESTMENT PROGRAMS
Janus offers several automatic investment programs to help
investors achieve their financial goals as simply and
conveniently as possible. You may open a new account with a $500
initial purchase and $100 automatic subsequent investments.
AUTOMATIC MONTHLY INVESTMENT PROGRAM
You select the day each month that your money ($100 minimum) will
be electronically transferred from your bank account to your Fund
account. To establish this option, complete the "Automatic
Monthly Investment Program" section on the application and attach
a "voided" check 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.
BY SYSTEMATIC EXCHANGE
With a Systematic Exchange you determine the amount of money
($100 minimum) you would like automatically exchanged from one
Janus account to another on any day of the month. For more
information on how to establish this option, call 1-800-525-3713.
HOW TO EXCHANGE SHARES
On any business day, you may exchange all or a portion of your
shares into any other available Janus fund.
IN WRITING
To request an exchange in writing, please follow the instructions
for written requests on page 26.
22 Janus Worldwide Fund
<PAGE>
BY TELEPHONE
All accounts are automatically eligible for the telephone
exchange option. To exchange shares by telephone, call an
Investor Service Representative at 1-800-525-3713 during normal
business hours or call the Janus 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 a $100 subsequent purchase per month on established
accounts. You may establish a new account with a $500 initial
purchase and subsequent $100 systematic exchanges. If the balance
in the account you are exchanging from falls below the systematic
exchange amount, all remaining shares will be exchanged and the
program will be discontinued.
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
Shareholder's manual 23
<PAGE>
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.
- If the shares you are exchanging are held in certificate form,
you must return the certificate to your Fund prior to making
any exchanges.
- Be sure that you read the prospectus for the fund into which
you are exchanging.
- An exchange represents the sale of shares from one fund and the
purchase of shares of another fund, which may produce a taxable
gain or loss in a non-tax deferred account.
HOW TO REDEEM SHARES
On any business day, you may redeem all or a portion of your
shares. If the shares are held in certificate form, the
certificate must be returned 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
24 Janus Worldwide Fund
<PAGE>
day. (There is a daily limit of $100,000 per account for
redemptions payable by check).
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 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
Shareholder's manual 25
<PAGE>
PURCHASE TO ALLOW THE PURCHASE TO CLEAR. Unless you provide
alternate instructions, your proceeds will be invested in Janus
Money Market Fund - Investor Shares during the 15 day hold
period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your
request should be sent to one of the addresses listed on page 16
and must include the following information:
- the name of the Fund
- the account number
- the amount of money or number of shares being redeemed or
exchanged
- the name(s) on the account
- the signature(s) of all registered account owners
- your daytime telephone number
SIGNATURE REQUIREMENTS BASED ON ACCOUNT TYPE
INDIVIDUAL, JOINT TENANTS, TENANTS IN COMMON
Written instructions must be signed by each shareholder, exactly
as the names appear in the account registration.
UGMA OR UTMA
Written instructions must be signed by the custodian in his/her
capacity as it appears in the account registration.
SOLE PROPRIETOR, GENERAL PARTNER
Written instructions must be signed by an authorized individual
in his/her capacity as it appears on the account registration.
CORPORATION, ASSOCIATION
Written instructions must be signed by the person(s) authorized
to act on the account. In addition, a certified copy of the
corporate
26 Janus Worldwide Fund
<PAGE>
resolution authorizing the signer to act must accompany the
request.
TRUST
Written instructions must be signed by the trustee(s). If the
name(s) of the current trustee(s) does not appear in the account
registration, a certificate of incumbency dated within 60 days
must also be submitted.
IRA
Written instructions must be signed by the account owner. If you
do not want federal income tax withheld from your redemption, you
must state that you elect not to have such withholding apply. In
addition, your instructions must state whether the distribution
is normal (after age 59 1/2) or premature (before age 59 1/2)
and, if premature, whether any exceptions such as death or
disability apply with regard to the 10% additional tax on early
distributions.
SIGNATURE GUARANTEE
In addition to the signature requirements, A SIGNATURE GUARANTEE
IS ALSO REQUIRED if any of the following is applicable:
- You request a redemption 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.
Shareholder's manual 27
<PAGE>
HOW TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. The
signature guarantee protects shareholders from unauthorized
account transfers. The following financial institutions may
guarantee signatures: banks, savings and loan associations, trust
companies, credit unions, broker-dealers and member firms of a
national securities exchange. Call your financial institution to
see if they have the ability to guarantee a signature. A
signature guarantee 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. The Fund's
portfolio securities are valued at market value or, if a market
quotation is not readily available, at their fair value
determined in good faith under procedures established by and
under the supervision of the Trustees. Short-term instruments
maturing within 60 days are valued at amortized cost, which
approximates market value. See the SAI for more detailed
information.
28 Janus Worldwide Fund
<PAGE>
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
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.
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 17 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
Shareholder's manual 29
<PAGE>
accounts that fall below the minimums solely as a result of
market value fluctuations. It is expected that accounts will be
valued in September and the $10 fee will be assessed on the
second Friday of September of each year. You will receive notice
before we charge the $10 fee or close your account so that you
may increase your account balance to the required minimum.
TRANSACTIONS THROUGH PROCESSING ORGANIZATIONS
You may purchase or sell Fund shares through a broker-dealer,
bank or other financial institution, or an organization that
provides recordkeeping and consulting services to 401(k) plans or
other employee benefit plans (a "Processing Organization").
Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent
investments than the Fund. Processing Organizations may also
impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. A
Processing Organization, rather than its customer, may be the
shareholder of record of your shares. The Fund is not responsible
for the failure of any Processing Organization to carry out its
obligations to its customers. Certain Processing Organizations
may receive compensation from Janus Capital or its affiliates and
certain Processing Organizations may receive compensation from
the Fund for shareholder recordkeeping and similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked
to certify that your Social Security or taxpayer identification
number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you are
subject to the 31% backup withholding or you did not certify your
taxpayer identification number, the IRS requires the Fund to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Fund for any penalty that
the IRS may impose.
30 Janus Worldwide Fund
<PAGE>
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate
form because account transactions such as exchanges and
redemptions cannot be completed until the certificate has been
returned to the Fund. The Fund will issue share certificates upon
written request only and reserves the right to charge a fee for
this service. Share certificates will not be issued until the
shares have been held for at least 15 days and will not be issued
for accounts that do not meet the minimum investment
requirements. Share certificates cannot be issued for retirement
accounts. In addition, if the certificate is lost, there may be a
replacement charge.
INVOLUNTARY REDEMPTIONS
The 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.
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 and other shareholder services.
Shareholder's manual 31
<PAGE>
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by all account owners. Include the
name of the Fund, the account number(s), the name(s) on the
account and both the old and new addresses. Certain options may
be suspended for 10 days following an address change unless a
signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For more information call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors participating in an automatic investment program will
receive quarterly confirmations of all transactions. Dividend
information will be distributed annually. 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.
32 Janus Worldwide 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 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. The Annual Fund Operating Expenses
table on page 5 lists the actual management fee and total
operating expenses of the Fund for the most recent fiscal year.
Management of the funds 33
<PAGE>
PORTFOLIO MANAGER
HELEN YOUNG HAYES
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund. She is also Executive Vice President and co-manager
of Janus Overseas Fund. Ms. Hayes joined Janus Capital in
1987 and has managed or co-managed the Fund and Janus
Overseas Fund since their inceptions. She holds a Bachelor
of Arts in Economics from Yale University and received the
Chartered Financial Analyst designation.
ASSISTANT PORTFOLIO MANAGER
LAURENCE J. CHANG
- --------------------------------------------------------------------------------
is assistant portfolio manager of the Fund. He is also
Executive Vice President and co-manager of Janus Overseas
Fund. Mr. Chang joined Janus Capital in 1993 as a research
analyst. He received an undergraduate degree with honors
in Religion and Philosophy from Dartmouth College and a
Master's Degree in Political Science from Stanford
University. Mr. Chang received the Chartered Financial
Analyst designation.
34 Janus Worldwide 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 35
<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 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 A FUND'S NAV
Distributions are paid to shareholders as of the record date of
the distribution of the Fund, regardless of how long the shares
have been held. Dividends and capital gains awaiting distribution
are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
the Fund declared a dividend in the amount of $0.25 per share. If
the Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as "buying a dividend." In the above example, if you
bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as
a dividend and your shares would now be worth $9.75 per share.
Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for
tax purposes, even though you may not have participated in the
36 Janus Worldwide 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 listed on page 16 or calling 1-800-525-3713. The Fund
offers the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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 37
<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.
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 meets these
requirements so that any earnings on your investment will not be
taxed twice.
38 Janus Worldwide Fund
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years through
October 31st of each fiscal year shown. Items 1 through 9 reflect
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned
(or lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
the Fund's financial statements, are included in the Annual
Report, which is available upon request and incorporated by
reference into the SAI.
<TABLE>
<CAPTION>
JANUS WORLDWIDE FUND
- ---------------------------------------------------------------------------------------
Periods ending October 31st
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $40.05 $34.60 $27.65 $27.00 $24.16
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 1.26 (0.08) 0.49 0.81 0.15
3. Net gains or (losses) on securities
(both realized and unrealized) 3.01 7.73 7.79 1.39 3.34
4. Total from investment operations 4.27 7.65 8.28 2.20 3.49
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (1.35) (0.15) (0.26) (0.54) (0.27)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) (1.45) (2.05) (1.07) (1.01) (0.38)
8. Total distributions (2.80) (2.20) (1.33) (1.55) (0.65)
9. NET ASSET VALUE, END OF PERIOD $41.52 $40.05 $34.60 $27.65 $27.00
10. Total return 11.40% 23.34% 31.00% 8.89% 14.76%
11. Net assets, end of period (in
millions) $13,932 $10,358 $4,467 $1,804 $1,587
12. Average net assets for the period
(in millions) $13,078 $7,784 $2,953 $1,622 $1,244
13. Ratio of gross expenses to average
net assets 0.92% 0.97% 1.02% 1.24% N/A
14. Ratio of net expenses to average net
assets 0.90% 0.95% 1.01% 1.23% 1.12%
15. Ratio of net investment
income/(loss) to average net assets 0.47% 0.65% 0.73% 0.99% 0.42%
16. Portfolio turnover rate 86% 79% 80% 142% 158%
- ---------------------------------------------------------------------------------------
</TABLE>
Financial highlights 39
<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 stock are
not fixed but are declared at the discretion of the issuer's
board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a
fixed dividend or interest payment and are convertible into
common stock at a specified price or conversion ratio.
DEBT SECURITIES are 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.
40 Janus Worldwide Fund
<PAGE>
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital
gains on the underlying security. Receipts include those issued
by domestic banks (American Depositary Receipts), foreign banks
(Global or European Depositary Receipts) and broker- dealers
(depositary shares).
FIXED-INCOME SECURITIES are securities that pay a specified rate
of return. The term generally includes short- and long-term
government, corporate and municipal obligations that pay a
specified rate of interest or coupons for a specified period of
time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the
case of adjustable and floating rate securities, for a shorter
period.
HIGH-YIELD/HIGH-RISK SECURITIES are securities that are rated
below investment grade by the primary rating agencies (e.g., BB
or lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio manager may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES ("PFICs") are any foreign
corporations which generate amounts of passive income or hold
Glossary of investment terms 41
<PAGE>
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the Fund must pay if
these investments are profitable, the Fund may make various
elections permitted by the tax laws. These elections could
require that the Fund recognize taxable income, which in turn
must be distributed, before the securities are sold and before
cash is received to pay the distributions.
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
42 Janus Worldwide Fund
<PAGE>
include indirect obligations of the U.S. government that are
issued by federal agencies and government sponsored entities.
Unlike Treasury securities, agency securities generally are not
backed by the full faith and credit of the U.S. government. Some
agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit
of the sponsoring agency.
VARIABLE AND FLOATING RATE SECURITIES have variable or floating
rates of interest and, under certain limited circumstances, may
have varying principal amounts. These securities pay interest at
rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or
market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
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
Glossary of investment terms 43
<PAGE>
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines on the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or
interest rate is linked to currencies, interest rates, equity
securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the
reference index or instrument appreciates). Indexed/structured
securities may have return characteristics similar to direct
investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the
market risk of an investment in the underlying instruments, as
well as the credit risk of the issuer.
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.
44 Janus Worldwide Fund
<PAGE>
This page intentionally left blank
<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, Annual Report or Semiannual Report, free of
charge, by contacting Janus at 1-800-525-3713 or visiting our Web
site at janus.com. In the Fund's Annual Report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during their last
fiscal year. 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
3184
<PAGE>
[JANUS LOGO]
Janus Twenty Fund
PROSPECTUS
FEBRUARY 17, 1999
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 Twenty Fund............................ 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 6
General portfolio policies................... 7
Risks........................................ 9
SHAREHOLDER'S MANUAL
Minimum investments.......................... 17
Types of account ownership................... 17
How to open your Janus account............... 19
How to purchase shares....................... 20
How to exchange shares....................... 22
How to redeem shares......................... 24
Shareholder services and account policies.... 28
MANAGEMENT OF THE FUND
Investment adviser........................... 33
Portfolio manager............................ 34
OTHER INFORMATION............... ............... 35
DISTRIBUTIONS AND TAXES
Distributions................................ 36
Taxes........................................ 37
FINANCIAL HIGHLIGHTS.............. ............. 39
GLOSSARY
Glossary of investment terms................. 40
</TABLE>
Table of contents 1
<PAGE>
Risk return summary
JANUS TWENTY FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS TWENTY 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 TWENTY FUND?
The Fund invests primarily in common stocks selected for their
growth potential. The Fund normally concentrates its investments
in a core group of 20-30 common stocks.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks for companies with earnings
growth potential one at a time. If the portfolio manager is
unable to find investments with earnings growth potential, a
significant portion of the Fund's assets may be in cash or
similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS TWENTY 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. 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.
2 Janus Twenty Fund
<PAGE>
The Fund is nondiversified. In other words, it may hold larger
positions in a smaller number of securities than a diversified
fund. As a result, a single security's increase or decrease in
value may have a greater impact on the Fund's NAV and total
return. Since the Fund normally concentrates in a core portfolio
of 20-30 stocks, this risk may be increased.
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>
The following information illustrates how the Fund's performance
has varied over time. The bar chart depicts the change in the
Fund's performance from year-to-year during the periods
indicated. The table compares the Fund's average annual returns
for the periods indicated to a broad-based securities market
index.
JANUS TWENTY FUND
A BAR CHART showing Annual Total Returns for Janus Twenty Fund from 1989 through
1998:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
23.93% 0.59% 69.21% 1.97% 3.43% (6.73%) 36.22% 27.85% 29.70% 73.39%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
Each percentage is represented by a bar of proportionate size with the actual
total return printed above the bar.
Best Quarter: 4th-1998 26.67%; Worst Quarter: 3rd-1990 (17.71%)
<TABLE>
<CAPTION>
Average annual total return for periods ended 12/31/98
------------------------------------------------------
Since Inception
1 year 5 years 10 years (4/30/85)
<S> <C> <C> <C> <C>
Janus Twenty Fund 73.39% 29.58% 25.76% 20.90%
S&P 500 Index* 28.74% 24.08% 19.20% 18.51%
---------------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
4 Janus Twenty Fund
<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. It is based upon gross expenses (without the effect of
expense offset arrangements) for the fiscal year ended October 31, 1998.
<TABLE>
<CAPTION>
Janus Twenty Fund
<S> <C>
Management Fee 0.65%
Other Expenses 0.26%
Total Annual Fund Operating Expenses 0.91%
</TABLE>
- --------------------------------------------------------------------------------
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 5 Years 10 Years
<S> <C> <C> <C> <C>
-----------------------------------------
Janus Twenty Fund $ 93 $290 $504 $1,120
</TABLE>
Risk return summary 5
<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 9-12 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 Twenty Fund seeks long-term growth of capital. It pursues
its objective by investing primarily in common stocks selected
for their growth potential. The Fund normally concentrates its
investments in a core group of 20-30 common stocks.
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.
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
6 Janus Twenty Fund
<PAGE>
may invest and the Fund may at times have significant foreign
exposure.
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 securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
Investment objective, principal investment strategies and risks 7
<PAGE>
- high-yield/high-risk securities (less than 35% of the Fund's
assets)
- options, futures, forwards 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. 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
8 Janus Twenty Fund
<PAGE>
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.
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.
Investment objective, principal investment strategies and risks 9
<PAGE>
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. 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 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.
2. HOW DOES THE NONDIVERSIFIED STATUS OF THE FUND AFFECT ITS RISK?
Diversification is a way to reduce risk by investing in a broad
range of stocks or other securities. A "nondiversified" fund has
the ability to take larger positions in a smaller number of
issuers. Because the appreciation or depreciation of a single
stock may have a greater impact on the NAV of a nondiversified
fund, its share price can be expected to fluctuate more than a
comparable diversified fund. This fluctuation, if significant,
may affect the performance of the Fund.
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
10 Janus Twenty Fund
<PAGE>
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.
5. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
SECURITIES?
High-yield/high-risk securities (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
securities may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real
or perceived economic changes, political changes or adverse
developments specific to the issuer.
Investment objective, principal investment strategies and risks 11
<PAGE>
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 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 Twenty Fund
<PAGE>
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13
<PAGE>
Janus Twenty 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>
16 Janus Twenty 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 17
<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.
18 Janus Twenty 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 16.
Shareholder's manual 19
<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
20 Janus Twenty 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 21
<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 26.
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
22 Janus Twenty 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 23
<PAGE>
- If the shares you are exchanging are held in certificate form,
you must return the certificate to the Fund prior to making any
exchanges.
- 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.)
24 Janus Twenty 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 25
<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 16 and must
include the following information:
- the name of the Fund
- the account number
- the amount of money or number of shares being redeemed 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.
26 Janus Twenty 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 27
<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
28 Janus Twenty 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.
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 17 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 29
<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.
SHARE CERTIFICATES
Most shareholders choose not to hold their shares in certificate
form because account transactions such as exchanges and
redemptions cannot be completed until the certificate has been
returned to the Fund. The Fund will issue share certificates upon
written request only and reserves the right to charge a fee for
this service.
30 Janus Twenty Fund
<PAGE>
Share certificates will not be issued until the shares have been
held for at least 15 days and will not be issued for accounts
that do not meet the minimum investment requirements. Share
certificates cannot be issued for retirement accounts. In
addition, if the certificate is lost, there may be a replacement
charge.
INVOLUNTARY REDEMPTIONS
The 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.
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.
Shareholder's manual 31
<PAGE>
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For more information call 1-800-525-3713.
STATEMENTS AND REPORTS
Investors participating in an automatic investment program will
receive quarterly confirmations of all transactions. Dividend
information will be distributed annually. In addition, the 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.
32 Janus Twenty 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 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. The Annual Fund Operating Expenses
table on page 5 lists the actual management fee and total
operating expenses of the Fund for the most recent fiscal year.
Management of the fund 33
<PAGE>
PORTFOLIO MANAGER
SCOTT W. SCHOELZEL
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund, which he has managed since August 1997. He
previously managed Janus Olympus Fund from its inception
to August 1997. Mr. Schoelzel joined Janus Capital in
January 1994. He holds a Bachelor of Arts in Business from
Colorado College.
34 Janus Twenty 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 35
<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
36 Janus Twenty 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 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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 37
<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.
38 Janus Twenty Fund
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years through
October 31st of each fiscal year shown. Items 1 through 9 reflect
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned
(or lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
the Fund's financial statements, are included in the Annual
Report, which is available upon request and incorporated by
reference into the SAI.
<TABLE>
<CAPTION>
JANUS TWENTY FUND
- -------------------------------------------------------------------------
Periods ending October 31st
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $35.16 $31.90 $30.12 $24.24 $25.85
INCOME FROM INVESTMENT
OPERATIONS:
2. Net investment income 0.12 (0.09) 0.37 0.01 0.16
3. Net gains or (losses) on
securities (both realized and
unrealized) 12.26 8.85 6.68 5.94 (1.07)
4. Total from investment operations 12.38 8.76 7.05 5.95 (0.91)
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.10) (0.18) -- (0.07) (0.25)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital
gains) (4.46) (5.32) (5.27) -- (0.45)
8. Total distributions (4.56) (5.50) (5.27) (0.07) (0.70)
9. NET ASSET VALUE, END OF PERIOD $42.98 $35.16 $31.90 $30.12 $24.24
10. Total return 40.58% 31.65% 27.59% 24.67% (3.52%)
11. Net assets, end of period (in
millions) $11,255 $5,871 $3,937 $2,996 $2,743
12. Average net assets for the
period (in millions) $8,025 $4,990 $3,386 $2,716 $3,051
13. Ratio of gross expenses to
average net assets 0.91% 0.93% 0.93% 1.00% N/A
14. Ratio of net expenses to average
net assets 0.90% 0.91% 0.92% 0.99% 1.02%
15. Ratio of net investment
income/(loss) to average net
assets 0.39% 0.33% 0.67% 0.62% 0.57%
16. Portfolio turnover rate 54% 123% 137% 147% 102%
- -----------------------------------------------------------------------------------
</TABLE>
Financial highlights 39
<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
40 Janus Twenty Fund
<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 SECURITIES are securities that are rated
below investment grade by the primary rating agencies (e.g., BB
or lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio 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
Glossary of investment terms 41
<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.
42 Janus Twenty Fund
<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.
Glossary of investment terms 43
<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.
44 Janus Twenty Fund
<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, Annual Report or Semiannual Report, free of
charge, by contacting Janus at 1-800-525-3713 or visiting our Web
site at janus.com. In the Fund's Annual Report, you will find a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during their last
fiscal year. 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
3181
