<PAGE>
[JANUS LOGO]
JANUS GROWTH AND
INCOME FUND
PROSPECTUS
JANUARY 31, 2000
The Securities and Exchange Commission has not
approved or disapproved of these securities or passed
on the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
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<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus Growth and Income 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
To purchase shares........................... 20
To exchange shares........................... 21
To redeem shares............................. 21
Shareholder services and account policies.... 25
MANAGEMENT OF THE FUND
Investment adviser........................... 29
Portfolio manager............................ 30
OTHER INFORMATION............................... 31
DISTRIBUTIONS AND TAXES
Distributions................................ 33
Taxes........................................ 34
FINANCIAL HIGHLIGHTS.............. ............. 36
GLOSSARY
Glossary of investment terms................. 37
</TABLE>
Janus Growth and Income Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
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JANUS GROWTH AND INCOME FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS GROWTH AND INCOME FUND?
The Fund seeks long-term capital growth and current income.
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 GROWTH AND INCOME FUND?
The Fund normally emphasizes investments in common stocks. It
will normally invest up to 75% of its assets in equity securities
selected primarily for their growth potential, and at least 25%
of its assets in securities the portfolio manager believes have
income potential. Equity securities may make up part of this
income component if they currently pay dividends or the portfolio
manager believes they have potential for increasing or commencing
dividend payments.
The Fund may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in
high-yield/high-risk bonds.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks mostly for equity and
income-producing securities that meet his investment criteria one
at a time. If the portfolio manager is unable to find such
investments, much of the Fund's assets may be in cash or similar
investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS GROWTH AND INCOME 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
2 Janus Growth and Income Fund prospectus
<PAGE>
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.
The income component of the Fund's portfolio includes fixed-
income securities. A fundamental risk to the income component is
that the value of these securities will fall if interest rates
rise. Generally, the value of a fixed-income portfolio will
decrease when interest rates rise, which means the Fund's NAV may
likewise decrease. Another fundamental risk associated with
fixed-income securities is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments
when due.
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.
Janus Growth and Income Fund prospectus 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 GROWTH AND INCOME FUND
A BAR CHART showing Annual Total Returns for Janus Growth and
Income Fund from 1992 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
5.35% 6.70% (4.87%) 36.35% 26.03% 34.66% 34.87% 51.18%
1992 1993 1994 1995 1996 1997 1998 1999
Each percentage is represented by a bar of proportionate size
with the actual total return printed above the bar.
Best Quarter: 4th-1998 29.20% Worst Quarter: 3rd-1998 (8.97%)
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (5/15/91)
<S> <C> <C> <C>
Janus Growth and Income Fund 51.18% 36.38% 25.12%
S&P 500 Index* 21.03% 28.54% 20.11%
----------------------------------
</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 Growth and Income Fund prospectus
<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). All
of the fees and expenses shown were determined based on net
assets as of the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
Janus Growth and Income Fund
<S> <C>
Management Fee(1) 0.65%
Other Expenses 0.26%
Total Annual Fund Operating Expenses 0.91%
</TABLE>
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(1) "Management Fee" information has been restated to reflect a new fee
schedule effective January 31, 2000.
- --------------------------------------------------------------------------------
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 Growth and Income Fund $93 $290 $504 $1,120
</TABLE>
Janus Growth and Income Fund prospectus 5
<PAGE>
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
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This section takes a closer look at the investment objective of
the Fund, its principal investment strategies and certain risks
of investing in the Fund. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.
Please carefully review the "Risks" section of this Prospectus on
pages 10-12 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Growth and Income Fund seeks long-term capital growth and
current income. It normally emphasizes investments in common
stocks. It will normally invest up to 75% of its assets in equity
securities selected primarily for their growth potential, and at
least 25% of its assets in securities the portfolio manager
believes have income potential. Because of this investment
strategy, the Fund is not designed for investors who need
consistent income.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENTS OF THE
FUND'S PORTFOLIO?
The Fund shifts assets between the growth and income components
of its portfolio based on the portfolio manager's analysis of
relevant market, financial and economic conditions. If the
portfolio manager believes that growth securities will provide
better returns than the yields then available or expected on
income-producing securities, the Fund will place a greater
emphasis on the growth component.
2. WHAT TYPES OF SECURITIES MAKE UP THE GROWTH COMPONENT OF THE FUND'S
PORTFOLIO?
The growth component of the Fund's portfolio is expected to
consist primarily of common stocks, but may also include
6 Janus Growth and Income Fund prospectus
<PAGE>
warrants, preferred stocks or convertible securities selected
primarily for their growth potential.
3. WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF THE FUND'S
PORTFOLIO?
The income component of the Fund will consist of securities that
the portfolio manager believes have income potential. Such
securities may include equity securities, convertible securities
and all types of debt securities. Equity securities may be
included in the income component of the Fund if they currently
pay dividends or the portfolio manager believes they have the
potential for either increasing their dividends or commencing
dividends, if none are currently paid.
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 and bonds.
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 or bonds.
Janus Growth and Income Fund prospectus 7
<PAGE>
OTHER TYPES OF INVESTMENTS
The Fund invests in domestic and foreign equity securities with a
degree of emphasis on income. The Fund may also invest to a
lesser degree in other types of securities. These securities
(which are described in the Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
- options, futures, forwards, swaps and other types of
derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return
- securities purchased on a when-issued, delayed delivery or
forward commitment basis
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other
position that cannot be disposed of quickly in the normal course
of business. For example, some securities are not registered
under the U.S. securities laws and cannot be sold to the U.S.
public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Fund's Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Fund may invest without limit in foreign equity and debt
securities. The Fund may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
8 Janus Growth and Income Fund prospectus
<PAGE>
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 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.
Janus Growth and Income Fund prospectus 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, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on
a fund with a small asset base. A fund may not experience similar
performance as its assets grow.
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.
10 Janus Growth and Income Fund prospectus
<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 what impact, if any, the Year 2000 transition
has had on the company's operations when selecting portfolio
holdings. However, there is no guarantee that the information the
portfolio manager receives regarding a company's Year 2000
transition status 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.
Janus Growth and Income Fund prospectus 11
<PAGE>
4. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?
High-yield/high-risk bonds (or "junk" bonds) are bonds rated
below investment grade by the primary rating agencies such as
Standard & Poor's and Moody's. The value of lower quality bonds
generally is more dependent on credit risk, or the ability of the
issuer to meet interest and principal payments, than investment
grade bonds. Issuers of high-yield bonds may not be as strong
financially as those issuing bonds with higher credit ratings and
are more vulnerable to real or perceived economic changes,
political changes or adverse developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options, swaps and other derivative
instruments to "hedge" or protect its portfolio from adverse
movements in securities prices and interest rates. The Fund may
also use a variety of currency hedging techniques, including
forward currency contracts, to manage exchange rate risk. The
portfolio manager 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 Growth and Income Fund prospectus
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Janus Growth and Income Fund prospectus 13
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[JANUS LOGO]
JANUS GROWTH AND
INCOME FUND
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
INVESTOR SERVICE CENTERS
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
(Hours: Monday-Friday 7:00 a.m.-6:00 p.m., and Saturday 9:00 a.m.-1:00 p.m.,
Mountain time.)
MAILING ADDRESS
Janus
P.O. Box 173375
Denver, CO 80217-3375
FOR OVERNIGHT CARRIER
Janus
Suite 101
3773 Cherry Creek Drive North
Denver, CO 80209-3821
INVESTOR SERVICE REPRESENTATIVES
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00 a.m.-8:00
p.m., and Saturday: 10:00 a.m.-4:00 p.m., New York time.
JANUS XPRESSLINE(TM)
1-888-979-7737
JANUS INTERNET ADDRESS
JANUS.COM
For 24-hour access to account and fund information, exchanges, purchases and
redemptions, automated daily quotes on fund share prices, yields and total
returns.
JANUS.COM SPECIALISTS
1-800-975-9932
TDD
1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
JANUS LITERATURE LINE
1-800-525-8983
To request a prospectus, shareholder reports or marketing materials 24 hours a
day.
16 Shareholder's manual
<PAGE>
MINIMUM INVESTMENTS*
<TABLE>
<S> <C>
To open a new regular
account $2,500
To open a new
retirement account,
education account or
UGMA/UTMA $ 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 a retirement account or UGMA/UTMA 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.
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 is a custodial account managed for the benefit of a
minor. To open an UGMA or UTMA, 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. Please refer to the Janus
retirement guide for more complete information regarding the
different types of IRAs, including 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.
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.
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.
18 Shareholder's manual
<PAGE>
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.
PLEASE REFER TO THE CHART ON THE FOLLOWING PAGES FOR INFORMATION
ON OPENING AN ACCOUNT AND CONDUCTING BUSINESS WITH JANUS. WITH
CERTAIN LIMITED EXCEPTIONS, THE FUND IS AVAILABLE ONLY TO U.S.
CITIZENS OR RESIDENTS. WHEN YOU PURCHASE, EXCHANGE, OR REDEEM
SHARES, YOUR REQUEST WILL BE PROCESSED AT THE NEXT NAV CALCULATED
AFTER YOUR ORDER IS RECEIVED AND ACCEPTED.
Shareholder's manual 19
<PAGE>
TO PURCHASE SHARES
BY MAIL/IN WRITING
------------------------------------------------------------------------------
- To open your account, complete and sign the appropriate application and make
your check payable to Janus.
- To purchase additional shares, complete the remittance slip attached at the
bottom of your confirmation statement. If you are making a purchase into a
retirement account, please indicate whether the purchase is a rollover or a
current or prior year contribution. Send your check and remittance slip or
written instructions to the address listed on the slip.
BY TELEPHONE
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to purchase additional
shares quickly and conveniently through an electronic transfer of money.
After establishing this option on your account, call an Investor Service
Representative during normal business hours or the Janus XpressLine for
access to this option 24 hours a day. Janus will automatically debit your
predesignated bank account.
- Purchases may also be made by wiring money from your bank account to your
Janus account. Call an Investor Service Representative for wiring
instructions.
BY INTERNET
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to make a purchase into
an existing account on our Web site at janus.com.
BY AUTOMATIC INVESTMENT
------------------------------------------------------------------------------
- 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.
- 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.
20 Shareholder's manual
<PAGE>
<TABLE>
<S> <C>
TO EXCHANGE SHARES TO REDEEM SHARES
- --------------------------------------- ---------------------------------------
- To request an exchange in writing, - To request a redemption in writ-
please follow the instructions for ing, please follow the instructions
written requests on page 24. Also for written requests on page 24.
refer to the exchange policies - Please see page 23 for information
listed on page 22 for more infor- about payment of redemption
mation. proceeds.
- --------------------------------------- ---------------------------------------
- All accounts are automatically eli- - The telephone redemption option
gible to exchange shares by tele- enables you to request redemp-
phone. To exchange all or a portion tions daily from your account by
of your shares into any other calling an Investor Service Repre-
available Janus fund, call an sentative by the close of the
Investor Service Representative or regular trading session of the
the Janus XpressLine. NYSE, normally 4:00 p.m. New York
time. You may also use Janus
XpressLine for access to this
option 24 hours a day.
- --------------------------------------- ---------------------------------------
- Exchanges may be made on our Web - Redemptions may be made on our Web
site at janus.com. site at janus.com.
- --------------------------------------- ---------------------------------------
- Systematic Exchange - You deter- - Systematic Redemption - This option
mine the amount of money you would allows you to redeem a specific
like automatically exchanged from dollar amount from your account on
one Janus account to another on any a regular basis.
day of the month. You may establish
this program for as little as $100
per month on existing accounts. You
may establish a new account with a
$500 initial purchase and subse-
quent $100 systematic exchanges.
</TABLE>
Shareholder's manual 21
<PAGE>
PAYING FOR SHARES
Please note the following when purchasing shares:
- - Cash, credit cards, third party checks, travelers cheques, credit card checks
or money orders will not be accepted.
- - All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks.
- - We may make additional attempts to debit the bank account for ACH purchases.
- - The Fund reserves the right to reject any specific purchase request.
- - If all or a portion of a check is received for investment without a specific
fund designation, the undesignated amount will be invested in the Janus Money
Market Fund -- Investor Shares. Shares that are subsequently exchanged from
Janus Money Market Fund -- Investor Shares into the selected Fund will receive
the NAV next calculated after your order is received and accepted by the Fund.
- - 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.
EXCHANGE POLICIES
The exchange privilege is not intended as a vehicle for short-term or excessive
trading. The Fund does not permit excessive trading or market timing. Excessive
purchases, redemptions, or exchanges of Fund shares disrupt portfolio management
and drive Fund expenses higher.
Please note the following when exchanging shares:
- - 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 Exchange). Exchanges in excess of this limit are considered
excessive trading and may be subject to an exchange fee or may result in
termination of the exchange privilege or the right to make future purchases of
Fund shares.
22 Shareholder's manual
<PAGE>
- - The Fund reserves the right to reject any purchase order or 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) or
whose trading has been or may be disruptive to the Fund.
- - 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 Janus prior to making any exchanges. Effective June 4,
1999, shares are no longer available in certificate form.
- - 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-retirement account.
- - 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.
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. During the 10 days following an address change, checks sent to a new
address require a signature guarantee.
- - 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. Wire redemptions are not available for
retirement accounts.
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 Money Market
Fund - Investor Shares during the 15 day hold period.
Shareholder's manual 23
<PAGE>
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your
request should be sent to one of the addresses listed on page 16
and must include the following information:
- the name of the Fund(s)
- the account number(s)
- 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 (see account
application for signature requirements)
- your daytime telephone number
SIGNATURE GUARANTEE
A SIGNATURE GUARANTEE IS REQUIRED if any of the following is
applicable:
- You request a redemption by check that exceeds $100,000.
- You would like a check made payable to anyone other than the
shareholder(s) of record.
- You would like a check mailed to an address which has been
changed within 10 days of the redemption request.
- You would like a 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.
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-
24 Shareholder's manual
<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
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
Shareholder's manual 25
<PAGE>
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.
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 customers, 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
26 Shareholder's manual
<PAGE>
your taxpayer identification number, the IRS requires the Fund to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Fund for any penalty that
the IRS may impose.
INVOLUNTARY REDEMPTIONS
The Fund reserves the right to close an account if the
shareholder is deemed to engage in activities which are illegal
or otherwise believed to be detrimental to the Fund.
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.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by the shareholder(s) of record.
Include the name of your 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 27
<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 further instructions, please call an
Investor Service Representative.
STATEMENTS AND REPORTS
Investors will receive quarterly confirmations of all
transactions. Quarterly statements for all investors are
available on our Web site. You may make an election on our Web
site to discontinue delivery of your paper statements. Dividend
information will be distributed quarterly. 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 requests.
28 Shareholder's manual
<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. For the most recent fiscal year, the
Fund paid Janus Capital a management fee equal to 0.66% of
average daily net assets.
Janus Growth and Income Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
DAVID J. CORKINS
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund which he has managed since August 1997. He is an
assistant portfolio manager of Janus Mercury Fund. He
joined Janus Capital in 1995 as a research analyst
specializing in domestic financial services companies and
a variety of foreign industries. Prior to joining Janus he
was the Chief Financial Officer of Chase U.S. Consumer
Services, Inc., a Chase Manhattan mortgage business. He
holds a bachelor of Arts in English and Russian from
Dartmouth and received his Master of Business
Administration from Columbia University in 1993.
30 Janus Growth and Income Fund prospectus
<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 will 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 has been a high priority for Janus
Capital. A dedicated group was established to address this issue.
Janus Capital devoted considerable internal resources and engaged
one of the foremost experts in the field to achieve Year 2000
readiness. Janus Capital successfully completed all five steps of
its Year 2000 preparedness plans including the upgrade and
replacement of all systems, as well as full-scale testing and
implementation of those systems. Janus Capital's detailed
contingency plans were also thoroughly tested. As of the date of
this Prospectus, Janus Capital has not seen any adverse impact as
a result of the Year 2000 transition on any of its systems or
those of its vendors, or on the companies in which the Fund
invests or worldwide markets and economies. Nonetheless, Janus
Capital will continue to monitor the effect of the Year 2000
transition, and there can be no absolute assurance that Year 2000
issues will not in the future adversely affect the Fund's or
Janus Capital's operations.
Janus Growth and Income Fund prospectus 31
<PAGE>
DISTRIBUTION OF THE FUND
The Fund is distributed by Janus Distributors, Inc., a member of
the National Association of Securities Dealers, Inc. ("NASD"). To
obtain information about NASD member firms and their associated
persons, you may contact NASD Regulation, Inc. at www.nasdr.com,
or the Public Disclosure Hotline at 800-289-9999. An investor
brochure containing information describing the Public Disclosure
Program is available from NASD Regulation, Inc.
32 Janus Growth and Income Fund prospectus
<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 are normally declared and paid in March,
June, September and December, while 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
Janus Growth and Income Fund prospectus 33
<PAGE>
purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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.
34 Janus Growth and Income Fund prospectus
<PAGE>
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax
adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal
income tax, regardless of whether the distribution is made in
cash or reinvested in additional shares of the Fund.
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.
Janus Growth and Income Fund prospectus 35
<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.
JANUS GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $26.45 $25.07 $20.05 $18.13 $14.69
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.26 0.08 0.01 0.16 0.11
3. Net gains or (losses) on securities
(both realized and unrealized) 12.27 3.72 6.98 4.01 3.43
4. Total from investment operations 12.53 3.80 6.99 4.17 3.54
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.27) (0.04) (0.11) (0.08) (0.10)
6. Dividends (in excess of net investment
income) -- -- -- -- --
7. Distributions (from capital gains) (1.87) (2.38) (1.86) (2.17) --
8. Total distributions (2.14) (2.42) (1.97) (2.25) (0.10)
9. NET ASSET VALUE, END OF PERIOD $36.84 $26.45 $25.07 $20.05 $18.13
10. Total return 49.59% 16.73% 37.78% 25.56% 24.20%
11. Net assets, end of period (in millions) $5,837 $2,819 $1,889 $1,033 $583
12. Average net assets for the period (in
millions) $4,375 $2,479 $1,416 $773 $498
13. Ratio of gross expenses to average net
assets 0.92% 0.96% 0.98% 1.05% 1.19%
14. Ratio of net expenses to average net
assets 0.90% 0.94% 0.96% 1.03% 1.17%
15. Ratio of net investment income/(loss)
to average net assets 0.37% 0.33% 0.30% 0.70% 1.11%
16. Portfolio turnover rate 43% 95% 127% 153% 195%
- --------------------------------------------------------------------------------------------------
</TABLE>
36 Janus Growth and Income Fund prospectus
<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 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
Janus Growth and Income Fund prospectus 37
<PAGE>
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 BONDS are securities that are rated below
investment grade by the primary rating agencies (e.g., BB or
lower by Standard & Poor's and Ba or lower by Moody's). Other
terms commonly used to describe such securities include "lower
rated bonds," "noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio managers may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or
hold certain amounts of assets for the production of passive
income. Passive income includes dividends, interest, royalties,
rents and annuities. To avoid taxes and interest that the Fund
must pay if these investments are profitable, the Fund may make
38 Janus Growth and Income Fund prospectus
<PAGE>
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
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
Janus Growth and Income Fund prospectus 39
<PAGE>
of the U.S. government to purchase the agency's obligations and
others are supported only by the credit of the sponsoring agency.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
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
40 Janus Growth and Income Fund prospectus
<PAGE>
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 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.
Janus Growth and Income Fund prospectus 41
<PAGE>
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42
<PAGE>
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43
<PAGE>
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44
<PAGE>
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<PAGE>
[JANUS LOGO]
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
1-800-525-3713
PO Box 173375 Denver, CO 80217-3375
janus.com
4262
<PAGE>
[JANUS LOGO]
JANUS BALANCED FUND
PROSPECTUS
JANUARY 31, 2000
The Securities and Exchange Commission has not
approved or disapproved of these securities or passed
on the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus Balanced 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
To purchase shares........................... 20
To exchange shares........................... 21
To redeem shares............................. 21
Shareholder services and account policies.... 25
MANAGEMENT OF THE FUND
Investment adviser........................... 29
Portfolio manager............................ 30
OTHER INFORMATION............... ............... 31
DISTRIBUTIONS AND TAXES
Distributions................................ 33
Taxes........................................ 34
FINANCIAL HIGHLIGHTS.............. ............. 36
GLOSSARY
Glossary of investment terms................. 37
</TABLE>
Janus Balanced Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS BALANCED FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS BALANCED FUND?
The Fund seeks long-term capital growth, consistent with
preservation of capital and balanced by current income.
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 BALANCED FUND?
The Fund normally invests 40-60% of its assets in securities
selected primarily for their growth potential and 40-60% of its
assets in securities selected primarily for their income
potential. The Fund will normally invest at least 25% of its
assets in fixed-income securities.
The Fund may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in
high-yield/high-risk bonds.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, she looks mostly for equity and
income-producing securities that meet her investment criteria one
at a time. If the portfolio manager is unable to find such
investments, much of the Fund's assets may be in cash or similar
investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS BALANCED 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.
2 Janus Balanced Fund prospectus
<PAGE>
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.
The income component of the Fund's portfolio includes fixed-
income securities. A fundamental risk to the income component is
that the value of these securities will fall if interest rates
rise. Generally, the value of a fixed-income portfolio will
decrease when interest rates rise, which means the Fund's NAV may
likewise decrease. Another fundamental risk associated with
fixed-income securities is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments
when due.
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.
Janus Balanced Fund prospectus 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 BALANCED FUND
A BAR CHART showing Annual Total Returns for Janus Balanced Fund
from 1993 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
10.56% 0.02% 27.31% 15.30% 21.81% 31.20% 23.51%
1993 1994 1995 1996 1997 1998 1999
Each percentage is represented by a bar of proportionate size
with the actual total return printed above the bar.
Best Quarter: 4th-1998 18.75% Worst Quarter: 3rd-1998 (4.49%)
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/1/92)
<S> <C> <C> <C>
Janus Balanced Fund 23.51% 23.71% 19.12%
S&P 500 Index* 21.03% 28.54% 19.87%
Lehman Brothers Gov't/Corp Bond
Index+ (2.15)% 7.61% 9.92%
---------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
+ Lehman Brothers Gov't/Corp Bond Index is composed of all bonds
that are of investment grade with at least one year until
maturity.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
4 Janus Balanced Fund prospectus
<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). All
of the fees and expenses shown were determined based on net
assets as of the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
Janus Balanced Fund
<S> <C>
Management Fee(1) 0.65%
Other Expenses 0.25%
Total Annual Fund Operating Expenses 0.90%
</TABLE>
- --------------------------------------------------------------------------------
(1) "Management Fee" information has been restated to reflect a new fee
schedule effective January 31, 2000.
- --------------------------------------------------------------------------------
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 Balanced Fund $92 $287 $498 $1,108
</TABLE>
Janus Balanced Fund prospectus 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 10-12 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 Balanced Fund seeks long-term capital growth, consistent
with preservation of capital and balanced by current income. It
pursues its objective by normally investing 40-60% of its assets
in securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for their
income potential. The Fund normally invests at least 25% of its
assets in fixed-income securities.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENTS OF THE
FUND'S PORTFOLIO?
The Fund shifts assets between the growth and income components
of its portfolio based on the portfolio manager's analysis of
relevant market, financial and economic conditions. If the
portfolio manager believes that growth securities will provide
better returns than the yields then available or expected on
income-producing securities, the Fund will place a greater
emphasis on the growth component.
2. WHAT TYPES OF SECURITIES MAKE UP THE GROWTH COMPONENT OF THE FUND'S
PORTFOLIO?
The growth component of the Fund's portfolio is expected to
consist primarily of common stocks, but may also include
warrants, preferred stocks or convertible securities selected
primarily for their growth potential.
6 Janus Balanced Fund prospectus
<PAGE>
3. WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF THE FUND'S
PORTFOLIO?
The income component of the Fund will consist of securities that
the portfolio manager believes have income potential. Such
securities may include equity securities, convertible securities
and all types of debt securities. Equity securities may be
included in the income component of the Fund if they currently
pay dividends or the portfolio manager believes they have the
potential for either increasing their dividends or commencing
dividends, if none are currently paid.
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 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 and
bonds. 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 or bonds.
Janus Balanced Fund prospectus 7
<PAGE>
OTHER TYPES OF INVESTMENTS
The Fund invests in domestic and foreign equity securities with a
degree of emphasis on income. The Fund may also invest to a
lesser degree in other types of securities. These securities
(which are described in the Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
- options, futures, forwards, swaps and other types of
derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return
- securities purchased on a when-issued, delayed delivery or
forward commitment basis
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other
position that cannot be disposed of quickly in the normal course
of business. For example, some securities are not registered
under the U.S. securities laws and cannot be sold to the U.S.
public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Fund's Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Fund may invest without limit in foreign equity and debt
securities. The Fund may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
8 Janus Balanced Fund prospectus
<PAGE>
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 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.
Janus Balanced Fund prospectus 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, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on
a fund with a small asset base. A fund may not experience similar
performance as its assets grow.
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.
10 Janus Balanced Fund prospectus
<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 what impact, if any, the Year 2000 transition
has had on the company's operations when selecting portfolio
holdings. However, there is no guarantee that the information the
portfolio manager receives regarding a company's Year 2000
transition status 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
BONDS?
High-yield/high-risk bonds (or "junk" bonds) are bonds rated
below investment grade by the primary rating agencies such as
Standard & Poor's and Moody's. The value of lower quality bonds
Janus Balanced Fund prospectus 11
<PAGE>
generally is more dependent on credit risk, or the ability of the
issuer to meet interest and principal payments, than investment
grade bonds. Issuers of high-yield bonds may not be as strong
financially as those issuing bonds with higher credit ratings and
are more vulnerable to real or perceived economic changes,
political changes or adverse developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options, swaps and other derivative
instruments to "hedge" or protect its portfolio from adverse
movements in securities prices and interest rates. The Fund may
also use a variety of currency hedging techniques, including
forward currency contracts, to manage exchange rate risk. The
portfolio manager 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 Balanced Fund prospectus
<PAGE>
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Janus Balanced Fund prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
Janus Balanced Fund
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
INVESTOR SERVICE CENTERS
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
(Hours: Monday-Friday 7:00 a.m.-6:00 p.m., and Saturday 9:00 a.m.-1:00 p.m.,
Mountain time.)
MAILING ADDRESS
Janus
P.O. Box 173375
Denver, CO 80217-3375
FOR OVERNIGHT CARRIER
Janus
Suite 101
3773 Cherry Creek Drive North
Denver, CO 80209-3821
INVESTOR SERVICE REPRESENTATIVES
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00 a.m.-8:00
p.m., and Saturday: 10:00 a.m.-4:00 p.m., New York time.
JANUS XPRESSLINE(TM)
1-888-979-7737
JANUS INTERNET ADDRESS
JANUS.COM
For 24-hour access to account and fund information, exchanges, purchases and
redemptions, automated daily quotes on fund share prices, yields and total
returns.
JANUS.COM SPECIALISTS
1-800-975-9932
TDD
1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
JANUS LITERATURE LINE
1-800-525-8983
To request a prospectus, shareholder reports or marketing materials 24 hours a
day.
16 Shareholder's manual
<PAGE>
MINIMUM INVESTMENTS*
<TABLE>
<S> <C>
To open a new regular
account $2,500
To open a new
retirement account,
education account or
UGMA/UTMA $ 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 a retirement account or UGMA/UTMA 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.
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 is a custodial account managed for the benefit of a
minor. To open an UGMA or UTMA, 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. Please refer to the Janus
retirement guide for more complete information regarding the
different types of IRAs, including 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.
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.
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.
18 Shareholder's manual
<PAGE>
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.
PLEASE REFER TO THE CHART ON THE FOLLOWING PAGES FOR INFORMATION
ON OPENING AN ACCOUNT AND CONDUCTING BUSINESS WITH JANUS. WITH
CERTAIN LIMITED EXCEPTIONS, THE FUND IS AVAILABLE ONLY TO U.S.
CITIZENS OR RESIDENTS. WHEN YOU PURCHASE, EXCHANGE, OR REDEEM
SHARES, YOUR REQUEST WILL BE PROCESSED AT THE NEXT NAV CALCULATED
AFTER YOUR ORDER IS RECEIVED AND ACCEPTED.
Shareholder's manual 19
<PAGE>
TO PURCHASE SHARES
BY MAIL/IN WRITING
------------------------------------------------------------------------------
- To open your account, complete and sign the appropriate application and make
your check payable to Janus.
- To purchase additional shares, complete the remittance slip attached at the
bottom of your confirmation statement. If you are making a purchase into a
retirement account, please indicate whether the purchase is a rollover or a
current or prior year contribution. Send your check and remittance slip or
written instructions to the address listed on the slip.
BY TELEPHONE
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to purchase additional
shares quickly and conveniently through an electronic transfer of money.
After establishing this option on your account, call an Investor Service
Representative during normal business hours or the Janus XpressLine for
access to this option 24 hours a day. Janus will automatically debit your
predesignated bank account.
- Purchases may also be made by wiring money from your bank account to your
Janus account. Call an Investor Service Representative for wiring
instructions.
BY INTERNET
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to make a purchase into
an existing account on our Web site at janus.com.
BY AUTOMATIC INVESTMENT
------------------------------------------------------------------------------
- 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.
- 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.
20 Shareholder's manual
<PAGE>
<TABLE>
<S> <C>
TO EXCHANGE SHARES TO REDEEM SHARES
- --------------------------------------- ---------------------------------------
- To request an exchange in writing, - To request a redemption in writ-
please follow the instructions for ing, please follow the instructions
written requests on page 24. Also for written requests on page 24.
refer to the exchange policies - Please see page 23 for information
listed on page 22 for more infor- about payment of redemption
mation. proceeds.
- --------------------------------------- ---------------------------------------
- All accounts are automatically eli- - The telephone redemption option
gible to exchange shares by tele- enables you to request redemp-
phone. To exchange all or a portion tions daily from your account by
of your shares into any other calling an Investor Service Repre-
available Janus fund, call an sentative by the close of the
Investor Service Representative or regular trading session of the
the Janus XpressLine. NYSE, normally 4:00 p.m. New York
time. You may also use Janus
XpressLine for access to this
option 24 hours a day.
- --------------------------------------- ---------------------------------------
- Exchanges may be made on our Web - Redemptions may be made on our Web
site at janus.com. site at janus.com.
- --------------------------------------- ---------------------------------------
- Systematic Exchange - You deter- - Systematic Redemption - This option
mine the amount of money you would allows you to redeem a specific
like automatically exchanged from dollar amount from your account on
one Janus account to another on any a regular basis.
day of the month. You may establish
this program for as little as $100
per month on existing accounts. You
may establish a new account with a
$500 initial purchase and subse-
quent $100 systematic exchanges.
</TABLE>
Shareholder's manual 21
<PAGE>
PAYING FOR SHARES
Please note the following when purchasing shares:
- - Cash, credit cards, third party checks, travelers cheques, credit card checks
or money orders will not be accepted.
- - All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks.
- - We may make additional attempts to debit the bank account for ACH purchases.
- - The Fund reserves the right to reject any specific purchase request.
- - If all or a portion of a check is received for investment without a specific
fund designation, the undesignated amount will be invested in the Janus Money
Market Fund -- Investor Shares. Shares that are subsequently exchanged from
Janus Money Market Fund -- Investor Shares into the selected Fund will receive
the NAV next calculated after your order is received and accepted by the Fund.
- - 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.
EXCHANGE POLICIES
The exchange privilege is not intended as a vehicle for short-term or excessive
trading. The Fund does not permit excessive trading or market timing. Excessive
purchases, redemptions, or exchanges of Fund shares disrupt portfolio management
and drive Fund expenses higher.
Please note the following when exchanging shares:
- - 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 Exchange). Exchanges in excess of this limit are considered
excessive trading and may be subject to an exchange fee or may result in
termination of the exchange privilege or the right to make future purchases of
Fund shares.
22 Shareholder's manual
<PAGE>
- - The Fund reserves the right to reject any purchase order or 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) or
whose trading has been or may be disruptive to the Fund.
- - 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 Janus prior to making any exchanges. Effective June 4,
1999, shares are no longer available in certificate form.
- - 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-retirement account.
- - 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.
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. During the 10 days following an address change, checks sent to a new
address require a signature guarantee.
- - 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. Wire redemptions are not available for
retirement accounts.
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 Money Market
Fund - Investor Shares during the 15 day hold period.
Shareholder's manual 23
<PAGE>
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your
request should be sent to one of the addresses listed on page 16
and must include the following information:
- the name of the Fund(s)
- the account number(s)
- 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 (see account
application for signature requirements)
- your daytime telephone number
SIGNATURE GUARANTEE
A SIGNATURE GUARANTEE IS REQUIRED if any of the following is
applicable:
- You request a redemption by check that exceeds $100,000.
- You would like a check made payable to anyone other than the
shareholder(s) of record.
- You would like a check mailed to an address which has been
changed within 10 days of the redemption request.
- You would like a 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.
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-
24 Shareholder's manual
<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
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
Shareholder's manual 25
<PAGE>
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.
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 customers, 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
26 Shareholder's manual
<PAGE>
your taxpayer identification number, the IRS requires the Fund to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Fund for any penalty that
the IRS may impose.
INVOLUNTARY REDEMPTIONS
The Fund reserves the right to close an account if the
shareholder is deemed to engage in activities which are illegal
or otherwise believed to be detrimental to the Fund.
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.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by the shareholder(s) of record.
Include the name of your 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 27
<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 further instructions, please call an
Investor Service Representative.
STATEMENTS AND REPORTS
Investors will receive quarterly confirmations of all
transactions. Quarterly statements for all investors are
available on our Web site. You may make an election on our Web
site to discontinue delivery of your paper statements. Dividend
information will be distributed quarterly. 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 requests.
28 Shareholder's manual
<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. For the most recent fiscal year, the
Fund paid Janus Capital a management fee equal to 0.67% of
average daily net assets.
Janus Balanced Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
KAREN L. REIDY
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund and Janus Equity Income Fund. She is also an
assistant portfolio manager of Janus Fund. Prior to
joining Janus Capital in 1995, she worked for Price
Waterhouse as a manager in both the Mergers and
Acquisitions and Audit business units. In this capacity,
Ms. Reidy performed due diligence work for corporate
clients and oversaw audit engagements. She received an
undergraduate degree in Accounting from the University of
Colorado in 1989 and passed the CPA exam in 1992. She is a
Chartered Financial Analyst.
30 Janus Balanced Fund prospectus
<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 will 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 has been a high priority for Janus
Capital. A dedicated group was established to address this issue.
Janus Capital devoted considerable internal resources and engaged
one of the foremost experts in the field to achieve Year 2000
readiness. Janus Capital successfully completed all five steps of
its Year 2000 preparedness plans including the upgrade and
replacement of all systems, as well as full-scale testing and
implementation of those systems. Janus Capital's detailed
contingency plans were also thoroughly tested. As of the date of
this Prospectus, Janus Capital has not seen any adverse impact as
a result of the Year 2000 transition on any of its systems or
those of its vendors, or on the companies in which the Fund
invests or worldwide markets and economies. Nonetheless, Janus
Capital will continue to monitor the effect of the Year 2000
transition, and there can be no absolute assurance that Year 2000
issues will not in the future adversely affect the Fund's or
Janus Capital's operations.
Janus Balanced Fund prospectus 31
<PAGE>
DISTRIBUTION OF THE FUND
The Fund is distributed by Janus Distributors, Inc., a member of
the National Association of Securities Dealers, Inc. ("NASD"). To
obtain information about NASD member firms and their associated
persons, you may contact NASD Regulation, Inc. at www.nasdr.com,
or the Public Disclosure Hotline at 800-289-9999. An investor
brochure containing information describing the Public Disclosure
Program is available from NASD Regulation, Inc.
32 Janus Balanced Fund prospectus
<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 are normally declared and paid in March,
June, September and December, while 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
Janus Balanced Fund prospectus 33
<PAGE>
purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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.
34 Janus Balanced Fund prospectus
<PAGE>
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax
adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions by the Fund are subject to federal
income tax, regardless of whether the distribution is made in
cash or reinvested in additional shares of the Fund.
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.
Janus Balanced Fund prospectus 35
<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.
JANUS BALANCED FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF
PERIOD $17.22 $16.73 $15.20 $13.72 $12.17
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.42 0.33 0.36 0.33 0.61
3. Net gains or (losses) on securities
(both realized and unrealized) 4.69 2.00 2.88 2.22 1.52
4. Total from investment operations 5.11 2.33 3.24 2.55 2.13
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.43) (0.35) (0.36) (0.26) (0.58)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) (0.11) (1.49) (1.35) (0.81) --
8. Total distributions (0.54) (1.84) (1.71) (1.07) (0.58)
9. NET ASSET VALUE, END OF PERIOD $21.79 $17.22 $16.73 $15.20 $13.72
10. Total return 29.89% 15.48% 23.38% 19.39% 18.26%
11. Net assets, end of period (in
millions) $2,930 $830 $360 $207 $125
12. Average net assets for the period
(in millions) $1,954 $537 $283 $159 $107
13. Ratio of gross expenses to average
net assets 0.92% 1.03% 1.12% 1.23% 1.35%
14. Ratio of net expenses to average
net assets 0.91% 1.01% 1.10% 1.21% 1.32%
15. Ratio of net investment
income/(loss) to average net assets 2.37% 2.34% 2.63% 2.35% 2.52%
16. Portfolio turnover rate 64% 73% 139% 151% 185%
- -------------------------------------------------------------------------------------
</TABLE>
36 Janus Balanced Fund prospectus
<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 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
Janus Balanced Fund prospectus 37
<PAGE>
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 BONDS are bonds 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 bonds 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
38 Janus Balanced Fund prospectus
<PAGE>
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
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
Janus Balanced Fund prospectus 39
<PAGE>
of the U.S. government to purchase the agency's obligations and
others are supported only by the credit of the sponsoring agency.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
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
40 Janus Balanced Fund prospectus
<PAGE>
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 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.
Janus Balanced Fund prospectus 41
<PAGE>
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42
<PAGE>
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43
<PAGE>
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44
<PAGE>
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<PAGE>
[JANUS LOGO]
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
1-800-525-3713
PO Box 173375 Denver, CO 80217-3375
janus.com
4263
<PAGE>
[JANUS LOGO]
JANUS EQUITY INCOME
FUND
PROSPECTUS
JANUARY 31, 2000
The Securities and Exchange Commission has not
approved or disapproved of these securities or passed
on the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus Equity Income 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
To purchase shares........................... 20
To exchange shares........................... 21
To redeem shares............................. 21
Shareholder services and account policies.... 25
MANAGEMENT OF THE FUNDS
Investment adviser........................... 29
Portfolio manager............................ 30
OTHER INFORMATION............... ............... 31
DISTRIBUTIONS AND TAXES
Distributions................................ 33
Taxes........................................ 34
FINANCIAL HIGHLIGHTS.............. ............. 36
GLOSSARY
Glossary of investment terms................. 37
</TABLE>
Janus Equity Income Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS EQUITY INCOME FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS EQUITY INCOME FUND?
The Fund seeks current income and 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 EQUITY INCOME FUND?
The Fund normally emphasizes investments in common stocks, and
growth potential is a significant investment consideration.
Normally, it invests at least 65% of its invested assets in
income-producing equity securities.
The Fund may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in
high-yield/high-risk bonds.
The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, she looks mostly for equity and
income-producing securities that meet her investment criteria one
at a time. If the portfolio manager is unable to find such
investments, 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 EQUITY INCOME 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
2 Janus Equity Income Fund prospectus
<PAGE>
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.
The income component of the Fund's portfolio includes fixed-
income securities. A fundamental risk to the income component is
that the value of these securities will fall if interest rates
rise. Generally, the value of a fixed-income portfolio will
decrease when interest rates rise, which means the fund's NAV may
likewise decrease. Another fundamental risk associated with
fixed-income securities is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments
when due.
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.
Janus Equity Income Fund prospectus 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 EQUITY INCOME FUND
A BAR CHART showing Annual Total Returns for Janus Equity Income
Fund from 1997 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C>
31.08% 40.05% 38.50%
1997 1998 1999
Each percentage is represented by a bar of proportionate size
with the actual total return printed above the bar.
Best Quarter: 4th-1998 26.34% Worst Quarter: 3rd-1998 (8.06%)
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (6/28/96)
<S> <C> <C>
Janus Equity Income Fund 38.50% 35.96%
S&P 500 Index* 21.03% 27.15%
-----------------------------
</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 Equity Income Fund prospectus
<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). All
of the fees and expenses shown were determined based on net
assets as of the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
Janus Equity Income Fund
<S> <C>
Management Fee(1) 0.65%
Other Expenses 0.31%
Total Annual Fund Operating Expenses 0.96%
</TABLE>
(1) "Management Fee" information has been restated to reflect a new fee
schedule effective January 31, 2000.
- --------------------------------------------------------------------------------
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 Equity Income Fund $ 98 $306 $531 $1,178
</TABLE>
Janus Equity Income Fund prospectus 5
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
- --------------------------------------------------------------------------------
This section takes a closer look at the investment objective of
the Fund, its principal investment strategies and certain risks
of investing in the Fund. Strategies and policies that are noted
as "fundamental" cannot be changed without a shareholder vote.
Please carefully review the "Risks" section of this Prospectus on
pages 10-12 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Equity Income Fund seeks current income and long-term
growth of capital. It pursues its objective by normally
emphasizing investments in common stocks, and growth potential is
a significant investment consideration. The Fund tries to provide
a lower level of volatility than the S&P 500 Index. Normally, it
invests at least 65% of its invested assets in income-producing
equity securities. Such securities may include dividend paying
common and preferred stocks, warrants and securities that are
converted into common or preferred stocks.
The lower volatility sought by the Fund is expected to result
primarily from investments in dividend-paying common stocks and
other equity securities characterized by relatively greater price
stability. The greater price stability sought by the Fund may be
characteristic of companies that generate above average free cash
flows. A company may use free cash flows for a number of purposes
including commencing or increasing dividend payments,
repurchasing its own stock or retiring outstanding debt. The
portfolio manager also considers growth potential in selecting
the Fund's securities and may hold securities selected solely for
their growth potential. The growth component of the Fund's
portfolio is expected to consist primarily of common stocks, but
may also include warrants, preferred stocks or convertible
securities selected primarily for their growth potential.
6 Janus Equity Income Fund prospectus
<PAGE>
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 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 and
bonds. 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 or bonds.
OTHER TYPES OF INVESTMENTS
The Fund invests in domestic and foreign equity securities with a
degree of emphasis on income. The Fund may also invest to a
lesser degree in other types of securities. These securities
(which are described in the Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
Janus Equity Income Fund prospectus 7
<PAGE>
- options, futures, forwards, swaps and other types of
derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return
- securities purchased on a when-issued, delayed delivery or
forward commitment basis
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other
position that cannot be disposed of quickly in the normal course
of business. For example, some securities are not registered
under the U.S. securities laws and cannot be sold to the U.S.
public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Fund's Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Fund may invest without limit in foreign equity and debt
securities. The Fund may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
SPECIAL SITUATIONS
The Fund may invest in special situations. A special situation
arises when, in the opinion of the Fund's portfolio manager, the
securities of a particular issuer will be recognized and
appreciate in value due to a specific development with respect to
that issuer. Developments creating a special situation might
include, among others, a new product or process, a technological
breakthrough, a management change or other extraordinary
corporate event, or differences in market supply of and demand
for the security. The Fund's performance could suffer if the
anticipated development in
8 Janus Equity Income Fund prospectus
<PAGE>
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.
Janus Equity Income Fund prospectus 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, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on
a fund with a small asset base. A fund may not experience similar
performance as its assets grow.
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.
10 Janus Equity Income Fund prospectus
<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 what impact, if any, the Year 2000 transition
has had on the company's operations when selecting portfolio
holdings. However, there is no guarantee that the information the
portfolio manager receives regarding a company's Year 2000
transition status 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
BONDS?
High-yield/high-risk bonds (or "junk" bonds) are bonds rated
below investment grade by the primary rating agencies such as
Standard & Poor's and Moody's. The value of lower quality bonds
Janus Equity Income Fund prospectus 11
<PAGE>
generally is more dependent on credit risk, or the ability of the
issuer to meet interest and principal payments, than investment
grade bonds. Issuers of high-yield bonds may not be as strong
financially as those issuing bonds with higher credit ratings and
are more vulnerable to real or perceived economic changes,
political changes or adverse developments specific to the issuer.
Please refer to the SAI for a description of bond rating
categories.
5. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options, swaps and other derivative
instruments to "hedge" or protect its portfolio from adverse
movements in securities prices and interest rates. The Fund may
also use a variety of currency hedging techniques, including
forward currency contracts, to manage exchange rate risk. The
Fund believes the use of these instruments will benefit the Fund.
However, the Fund's performance could be worse than if the Fund
had not used such instruments if the portfolio manager's
judgement proves incorrect. Risks associated with the use of
derivative instruments are described in the SAI.
12 Janus Equity Income Fund prospectus
<PAGE>
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Janus Equity Income Fund prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
JANUS EQUITY INCOME
FUND
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
INVESTOR SERVICE CENTERS
100 Fillmore Street, Suite 100
Denver, CO 80206
3773 Cherry Creek North Drive, Suite 101
Denver, CO 80209
(Hours: Monday-Friday 7:00 a.m.-6:00 p.m., and Saturday 9:00 a.m.-1:00 p.m.,
Mountain time.)
MAILING ADDRESS
Janus
P.O. Box 173375
Denver, CO 80217-3375
FOR OVERNIGHT CARRIER
Janus
Suite 101
3773 Cherry Creek Drive North
Denver, CO 80209-3821
INVESTOR SERVICE REPRESENTATIVES
If you have any questions while reading this Prospectus, please call one of our
Investor Service Representatives at 1-800-525-3713 Monday-Friday: 8:00 a.m.-8:00
p.m., and Saturday: 10:00 a.m.-4:00 p.m., New York time.
JANUS XPRESSLINE(TM)
1-888-979-7737
JANUS INTERNET ADDRESS
JANUS.COM
For 24-hour access to account and fund information, exchanges, purchases and
redemptions, automated daily quotes on fund share prices, yields and total
returns.
JANUS.COM SPECIALISTS
1-800-975-9932
TDD
1-800-525-0056
A telecommunications device for our hearing- and speech-impaired shareholders.
JANUS LITERATURE LINE
1-800-525-8983
To request a prospectus, shareholder reports or marketing materials 24 hours a
day.
16 Shareholder's manual
<PAGE>
MINIMUM INVESTMENTS*
<TABLE>
<S> <C>
To open a new regular
account $2,500
To open a new
retirement account,
education account or
UGMA/UTMA $ 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 a retirement account or UGMA/UTMA 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.
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 is a custodial account managed for the benefit of a
minor. To open an UGMA or UTMA, 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. Please refer to the Janus
retirement guide for more complete information regarding the
different types of IRAs, including 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.
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.
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.
18 Shareholder's manual
<PAGE>
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.
PLEASE REFER TO THE CHART ON THE FOLLOWING PAGES FOR INFORMATION
ON OPENING AN ACCOUNT AND CONDUCTING BUSINESS WITH JANUS. WITH
CERTAIN LIMITED EXCEPTIONS, THE FUND IS AVAILABLE ONLY TO U.S.
CITIZENS OR RESIDENTS. WHEN YOU PURCHASE, EXCHANGE, OR REDEEM
SHARES, YOUR REQUEST WILL BE PROCESSED AT THE NEXT NAV CALCULATED
AFTER YOUR ORDER IS RECEIVED AND ACCEPTED.
Shareholder's manual 19
<PAGE>
TO PURCHASE SHARES
BY MAIL/IN WRITING
------------------------------------------------------------------------------
- To open your account, complete and sign the appropriate application and make
your check payable to Janus.
- To purchase additional shares, complete the remittance slip attached at the
bottom of your confirmation statement. If you are making a purchase into a
retirement account, please indicate whether the purchase is a rollover or a
current or prior year contribution. Send your check and remittance slip or
written instructions to the address listed on the slip.
BY TELEPHONE
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to purchase additional
shares quickly and conveniently through an electronic transfer of money.
After establishing this option on your account, call an Investor Service
Representative during normal business hours or the Janus XpressLine for
access to this option 24 hours a day. Janus will automatically debit your
predesignated bank account.
- Purchases may also be made by wiring money from your bank account to your
Janus account. Call an Investor Service Representative for wiring
instructions.
BY INTERNET
------------------------------------------------------------------------------
- The "Telephone Purchase of Shares Option" allows you to make a purchase into
an existing account on our Web site at janus.com.
BY AUTOMATIC INVESTMENT
------------------------------------------------------------------------------
- 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.
- 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.
20 Shareholder's manual
<PAGE>
<TABLE>
<S> <C>
TO EXCHANGE SHARES TO REDEEM SHARES
- --------------------------------------- ---------------------------------------
- To request an exchange in writing, - To request a redemption in writ-
please follow the instructions for ing, please follow the instructions
written requests on page 24. Also for written requests on page 24.
refer to the exchange policies - Please see page 23 for information
listed on page 22 for more infor- about payment of redemption
mation. proceeds.
- --------------------------------------- ---------------------------------------
- All accounts are automatically eli- - The telephone redemption option
gible to exchange shares by tele- enables you to request redemp-
phone. To exchange all or a portion tions daily from your account by
of your shares into any other calling an Investor Service Repre-
available Janus fund, call an sentative by the close of the
Investor Service Representative or regular trading session of the
the Janus XpressLine. NYSE, normally 4:00 p.m. New York
time. You may also use Janus
XpressLine for access to this
option 24 hours a day.
- --------------------------------------- ---------------------------------------
- Exchanges may be made on our Web - Redemptions may be made on our Web
site at janus.com. site at janus.com.
- --------------------------------------- ---------------------------------------
- Systematic Exchange - You deter- - Systematic Redemption - This option
mine the amount of money you would allows you to redeem a specific
like automatically exchanged from dollar amount from your account on
one Janus account to another on any a regular basis.
day of the month. You may establish
this program for as little as $100
per month on existing accounts. You
may establish a new account with a
$500 initial purchase and subse-
quent $100 systematic exchanges.
</TABLE>
Shareholder's manual 21
<PAGE>
PAYING FOR SHARES
Please note the following when purchasing shares:
- - Cash, credit cards, third party checks, travelers cheques, credit card checks
or money orders will not be accepted.
- - All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks.
- - We may make additional attempts to debit the bank account for ACH purchases.
- - The Fund reserves the right to reject any specific purchase request.
- - If all or a portion of a check is received for investment without a specific
fund designation, the undesignated amount will be invested in the Janus Money
Market Fund -- Investor Shares. Shares that are subsequently exchanged from
Janus Money Market Fund -- Investor Shares into the selected Fund will receive
the NAV next calculated after your order is received and accepted by the Fund.
- - 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.
EXCHANGE POLICIES
The exchange privilege is not intended as a vehicle for short-term or excessive
trading. The Fund does not permit excessive trading or market timing. Excessive
purchases, redemptions, or exchanges of Fund shares disrupt portfolio management
and drive Fund expenses higher.
Please note the following when exchanging shares:
- - 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 Exchange). Exchanges in excess of this limit are considered
excessive trading and may be subject to an exchange fee or may result in
termination of the exchange privilege or the right to make future purchases of
Fund shares.
22 Shareholder's manual
<PAGE>
- - The Fund reserves the right to reject any purchase order or 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) or
whose trading has been or may be disruptive to the Fund.
- - 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 Janus prior to making any exchanges. Effective June 4,
1999, shares are no longer available in certificate form.
- - 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-retirement account.
- - 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.
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. During the 10 days following an address change, checks sent to a new
address require a signature guarantee.
- - 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. Wire redemptions are not available for
retirement accounts.
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 Money Market
Fund - Investor Shares during the 15 day hold period.
Shareholder's manual 23
<PAGE>
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your
request should be sent to one of the addresses listed on page 16
and must include the following information:
- the name of the Fund(s)
- the account number(s)
- 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 (see account
application for signature requirements)
- your daytime telephone number
SIGNATURE GUARANTEE
A SIGNATURE GUARANTEE IS REQUIRED if any of the following is
applicable:
- You request a redemption by check that exceeds $100,000.
- You would like a check made payable to anyone other than the
shareholder(s) of record.
- You would like a check mailed to an address which has been
changed within 10 days of the redemption request.
- You would like a 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.
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-
24 Shareholder's manual
<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
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
Shareholder's manual 25
<PAGE>
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.
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 customers, 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
26 Shareholder's manual
<PAGE>
your taxpayer identification number, the IRS requires the Fund to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Fund for any penalty that
the IRS may impose.
INVOLUNTARY REDEMPTIONS
The Fund reserves the right to close an account if the
shareholder is deemed to engage in activities which are illegal
or otherwise believed to be detrimental to the Fund.
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.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by the shareholder(s) of record.
Include the name of your 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 27
<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 further instructions, please call an
Investor Service Representative.
STATEMENTS AND REPORTS
Investors will receive quarterly confirmations of all
transactions. Quarterly statements for all investors are
available on our Web site. You may make an election on our Web
site to discontinue delivery of your paper statements. Dividend
information will be distributed quarterly. 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 requests.
28 Shareholder's manual
<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. For the most recent fiscal year, the
Fund paid Janus Capital a management fee equal to 0.71% of
average daily net assets.
Janus Equity Income Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
KAREN L. REIDY
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund and Janus Balanced Fund. She is also an assistant
portfolio manager of Janus Fund. Prior to joining Janus
Capital in 1995, she worked for Price Waterhouse as a
manager in both the Mergers and Acquisitions and Audit
business units. In this capacity, Ms. Reidy performed due
diligence work for corporate clients and oversaw audit
engagements. She received an undergraduate degree in
Accounting from the University of Colorado in 1989 and
passed the CPA exam in 1992. She is a Chartered Financial
Analyst.
30 Janus Equity Income Fund prospectus
<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 will 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 has been a high priority for Janus
Capital. A dedicated group was established to address this issue.
Janus Capital devoted considerable internal resources and engaged
one of the foremost experts in the field to achieve Year 2000
readiness. Janus Capital successfully completed all five steps of
its Year 2000 preparedness plans including the upgrade and
replacement of all systems, as well as full-scale testing and
implementation of those systems. Janus Capital's detailed
contingency plans were also thoroughly tested. As of the date of
this Prospectus, Janus Capital has not seen any adverse impact as
a result of the Year 2000 transition on any of its systems or
those of its vendors, or on the companies in which the Fund
invests or worldwide markets and economies. Nonetheless, Janus
Capital will continue to monitor the effect of the Year 2000
transition, and there can be no absolute assurance that Year 2000
issues will not in the future adversely affect the Fund's or
Janus Capital's operations.
Janus Equity Income Fund prospectus 31
<PAGE>
DISTRIBUTION OF THE FUND
The Fund is distributed by Janus Distributors, Inc., a member of
the National Association of Securities Dealers, Inc. ("NASD"). To
obtain information about NASD member firms and their associated
persons, you may contact NASD Regulation, Inc. at www.nasdr.com,
or the Public Disclosure Hotline at 800-289-9999. An investor
brochure containing information describing the Public Disclosure
Program is available from NASD Regulation, Inc.
32 Janus Equity Income Fund prospectus
<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 are normally declared and paid in March,
June, September and December, while 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
Janus Equity Income Fund prospectus 33
<PAGE>
purposes, even though you may not have participated in the
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION
You may reinvest your income dividends and capital gains
distributions in additional shares. This option is assigned
automatically if no other choice is made.
2. CASH OPTION
You may receive your income dividends and capital gains
distributions in cash.
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
34 Janus Equity Income Fund prospectus
<PAGE>
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
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.
Janus Equity Income Fund prospectus 35
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The financial highlights table is intended to help you understand
the Fund's financial performance through October 31st of each
fiscal period 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 EQUITY INCOME FUND
- -------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996(1)
<S> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $15.59 $13.98 $11.29 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.14 0.05 0.09 0.07
3. Net gains or (losses) on securities (both
realized and unrealized) 7.17 2.47 3.11 1.25
4. Total from investment operations 7.31 2.52 3.20 1.32
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.15) (0.03) (0.12) (0.03)
6. Dividends (in excess of net investment
income) -- -- -- --
7. Distributions (from capital gains) (0.18) (0.88) (0.39) --
8. Total distributions (0.33) (0.91) (0.51) (0.03)
9. NET ASSET VALUE, END OF PERIOD $22.57 $15.59 $13.98 $11.29
10. TOTAL RETURN* 47.22% 19.21% 29.46% 13.20%
11. Net assets, end of period (in millions) $781 $201 $74 $30
12. Average net assets for the period (in
millions) $571 $134 $46 $21
13. Ratio of gross expenses to average net
assets** 1.02% 1.21% 1.48% 1.79%
14. Ratio of net expenses to average net
assets** 1.01% 1.18% 1.45% 1.71%
15. Ratio of net investment income/(loss) to
average net assets** 0.81% 0.41% 0.62% 3.09%
16. Portfolio turnover rate** 81% 101% 180% 325%
- -------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from June 28, 1996 (inception) to October 31, 1996.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
36 Janus Equity Income Fund prospectus
<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 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
Janus Equity Income Fund prospectus 37
<PAGE>
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 BONDS are bonds 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 bonds 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
38 Janus Equity Income Fund prospectus
<PAGE>
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
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
Janus Equity Income Fund prospectus 39
<PAGE>
of the U.S. government to purchase the agency's obligations and
others are supported only by the credit of the sponsoring agency.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
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
40 Janus Equity Income Fund prospectus
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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 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.
Janus Equity Income Fund prospectus 41
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[JANUS LOGO]
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
1-800-525-3713
PO Box 173375 Denver, CO 80217-3375
janus.com
4264
