<PAGE>
[JANUS LOGO]
JANUS HIGH-YIELD 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.
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TABLE OF CONTENTS
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<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus High-Yield Fund........................ 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objectives and principal
investment strategies........................ 6
General portfolio policies................... 8
Risks........................................ 11
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........................................ 35
FINANCIAL HIGHLIGHTS............................ 37
GLOSSARY
Glossary of investment terms................. 38
RATING CATEGORIES
Explanation of rating categories............. 45
</TABLE>
Janus High-Yield Fund prospectus 1
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RISK/RETURN SUMMARY
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JANUS HIGH-YIELD FUND
1. WHAT ARE THE INVESTMENT OBJECTIVES OF JANUS HIGH-YIELD FUND?
The Fund seeks to obtain high current income. Capital
appreciation is a secondary objective when consistent with its
primary objective.
The Fund's Trustees may change these objectives 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
objectives or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee
that the Fund will meet its objectives.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS HIGH-YIELD FUND?
The Fund normally invests at least 65% of its assets in high-
yield/high-risk fixed-income securities, and may at times invest
all of its assets in these securities.
The Fund may invest without limit in foreign equity and debt
securities.
In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for income-producing securities that meet
his investment criteria one at a time. If the portfolio manager
is unable to find such investments, the Fund's assets may be in
cash or similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS HIGH-YIELD FUND?
Although the Fund may be less volatile than funds that invest
most of their assets in common stocks, the Fund's returns and
yields will vary, and you could lose money.
The Fund invests in a variety of income-producing securities. A
fundamental risk 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 net
2 Janus High-Yield Fund prospectus
<PAGE>
asset value (NAV) will likewise decrease. Another fundamental
risk associated with fixed-income funds is credit risk, which is
the risk that an issuer will be unable to make principal and
interest payments when due.
The Fund may invest an unlimited amount of its assets in high-
yield/high-risk bonds, also known as "junk" bonds. Junk bonds may
be sensitive to economic changes, political changes, or adverse
developments specific to the company that issued the bond. These
securities generally have a greater credit risk than other types
of fixed-income securities. Because of these factors, the
performance and NAV of the Fund may vary significantly, depending
upon its holdings in junk bonds.
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 High-Yield Fund prospectus 3
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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 HIGH-YIELD FUND
A BAR CHART showing Annual Total Returns for Janus High-Yield
Fund from 1996 through 1999:
Annual returns for periods ended 12/31
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23.99% 15.47% 0.97% 5.54%
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: 1st-1996 7.34% Worst Quarter: 3rd-1998 (5.76%)
</TABLE>
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year (12/29/95)
<S> <C> <C>
Janus High-Yield Fund 5.54% 11.11%
Lehman Brothers High-Yield Bond Index* 2.39% 6.98%
-----------------------------
</TABLE>
* Lehman Brothers High-Yield Bond Index is composed of
fixed-rate, publicly issued, noninvestment grade debt.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
4 Janus High-Yield Fund prospectus
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FEES AND EXPENSES
SHAREHOLDER FEES, such as sales loads, redemption fees or
exchange fees, are charged directly to an investor's account. All
Janus funds are no-load investments, so you will not pay any
shareholder fees when you buy or sell shares of the Fund.
ANNUAL FUND OPERATING EXPENSES are paid out of the Fund's assets
and include fees for portfolio management, maintenance of
shareholder accounts, shareholder servicing, accounting and other
services. You do not pay these fees directly but, as the example
below shows, these costs are borne indirectly by all
shareholders.
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund. It is based upon gross
expenses (without the effect of expense offset arrangements) for
the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
Janus High-Yield Fund
<S> <C>
Management Fee 0.75%
Other Expenses 0.30%
Total Annual Fund Operating Expenses Without Waivers* 1.05%
Total Waivers (0.03%)
Total Annual Fund Operating Expenses With Waivers* 1.02%
</TABLE>
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* All expenses are stated both with and without contractual waivers by
Janus Capital. Waivers for the Fund are first applied against the
Management Fee and then against Other Expenses. Janus Capital has
agreed to continue such waivers until at least the next annual renewal
of the advisory agreements.
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EXAMPLE
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods
indicated then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and
that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
Janus High-Yield Fund $107 $334 $579 $1,283
</TABLE>
Janus High-Yield Fund prospectus 5
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INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
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This section takes a closer look at the investment objectives 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 11-13 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
Janus High-Yield Fund seeks to obtain high current income.
Capital appreciation is a secondary objective when consistent
with its primary objective. It pursues its objectives by normally
investing 65% of its assets in high-yield/high-risk fixed-income
securities, and may at times invest all of its assets in these
securities.
In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for 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.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
Generally, a bond will increase in value when interest rates fall
and decrease in value when interest rates rise. Longer-term bonds
are generally more sensitive to interest rate changes than
shorter-term bonds, but they generally offer higher yields to
compensate investors for the associated risks. High-yield bond
prices are generally less directly responsive to interest rate
changes than investment grade issues and may not always follow
this pattern. A
6 Janus High-Yield Fund prospectus
<PAGE>
bond fund's average-weighted effective maturity and its duration
are measures of how the fund may react to interest rate changes.
2. HOW DOES THE FUND MANAGE INTEREST RATE RISK?
The Fund may vary the average-weighted effective maturity of its
portfolio to reflect its portfolio manager's analysis of interest
rate trends and other factors. The Fund's average-weighted
effective maturity will tend to be shorter when the portfolio
manager expects interest rates to rise and longer when its
portfolio manager expects interest rates to fall. The Fund may
also use futures, options and other derivatives to manage
interest rate risks.
3. WHAT IS MEANT BY THE FUND'S "AVERAGE-WEIGHTED EFFECTIVE MATURITY"?
The stated maturity of a bond is the date when the issuer must
repay the bond's entire principal value to an investor. Some
types of bonds may also have an "effective maturity" that is
shorter than the stated date due to prepayment or call
provisions. Securities without prepayment or call provisions
generally have an effective maturity equal to their stated
maturity. Dollar-weighted effective maturity is calculated by
averaging the effective maturity of bonds held by the Fund with
each effective maturity "weighted" according to the percentage of
net assets that it represents.
4. WHAT IS MEANT BY THE FUND'S "DURATION"?
A bond's duration indicates the time it will take an investor to
recoup his investment. Unlike average maturity, duration reflects
both principal and interest payments. Generally, the higher the
coupon rate on a bond, the lower its duration will be. The
duration of a bond fund is calculated by averaging the duration
of bonds held by a fund with each duration "weighted" according
to the percentage of net assets that it represents. Because
duration accounts for interest payments, the Fund's duration is
usually shorter than its average maturity.
5. WHAT IS A HIGH-YIELD/HIGH-RISK BOND?
A high-yield/high-risk bond (also called a "junk" bond) is a bond
rated below investment grade by major rating agencies (i.e., BB
or
Janus High-Yield Fund prospectus 7
<PAGE>
lower by Standard & Poor's or Ba or lower by Moody's) or an
unrated bond of similar quality. It presents greater risk of
default (the failure to make timely interest and principal
payments) than higher quality bonds.
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 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
bonds.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in fixed-income securities, which may
include corporate bonds and notes, government securities,
preferred stock, high-yield/high-risk bonds and municipal
obligations. The Fund may also invest to a lesser degree in other
types of
8 Janus High-Yield Fund prospectus
<PAGE>
securities. These securities (which are described in the
Glossary) may include:
- common stocks
- mortgage- and asset-backed securities (without limit)
- zero coupon, pay-in-kind and step coupon securities (without
limit)
- 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
Janus High-Yield Fund prospectus 9
<PAGE>
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.
10 Janus High-Yield Fund prospectus
<PAGE>
RISKS
Because the Fund invests substantially all of its assets in
fixed-income securities, it is subject to risks such as credit or
default risks, and decreased value due to interest rate
increases. The Fund's performance may also be affected by risks
to certain types of investments, such as foreign securities and
derivative instruments.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. WHAT IS MEANT BY "CREDIT QUALITY" AND WHAT ARE THE RISKS ASSOCIATED WITH IT?
Credit quality measures the likelihood that the issuer will meet
its obligations on a bond. One of the fundamental risks
associated with all fixed-income funds is credit risk, which is
the risk that an issuer will be unable to make principal and
interest payments when due. U.S. government securities are
generally considered to be the safest type of investment in terms
of credit risk. Municipal obligations generally rank between U.S.
government securities and corporate debt securities in terms of
credit safety. Corporate debt securities, particularly those
rated below investment grade, present the highest credit risk.
2. HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized statistical rating
agencies such as Standard & Poor's and Moody's are widely
accepted measures of credit risk. The lower a bond issue is rated
by an agency, the more credit risk it is considered to represent.
Lower rated bonds generally pay higher yields to compensate
investors for the associated risk. Please refer to "Explanation
of Rating Categories" on page 45 for a description of rating
categories.
3. 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
Janus High-Yield Fund prospectus 11
<PAGE>
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/high-risk 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.
The junk bond market can experience sudden and sharp price swings. Because
the Fund may invest a significant portion of its portfolio in
high-yield/high-risk bonds, investors should be willing to tolerate a
corresponding increase in the risk of significant and sudden changes in NAV.
Please refer to the "Explanation of Rating Categories" on page 45 for a
description of rating categories.
4. 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.
5. 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
12 Janus High-Yield Fund prospectus
<PAGE>
transition status is completely accurate. If a company has not
satisfactorily addressed Year 2000 issues, the Fund's performance
could suffer.
6. 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 High-Yield Fund prospectus 13
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[JANUS LOGO]
Janus High-Yield 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]
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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
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MINIMUM INVESTMENTS*
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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
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- 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
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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 confirmed 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 all of its expenses not assumed by
Janus Capital, including auditing fees and independent Trustees'
fees and expenses.
The Fund pays Janus Capital a management fee which is calculated
daily and paid monthly. The advisory agreement with the Fund
spells out the management fee and other expenses that the Fund
must pay.
The Fund 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 (net of any fee waivers)
equal to 0.72% of average daily net assets. Without such waivers,
the management fee would have been 0.75% of average daily net
assets. Janus Capital has agreed to continue such waivers
Janus High-Yield Fund prospectus 29
<PAGE>
until at least the next annual renewal of the advisory agreement.
You will be notified of any change in this limit.
PORTFOLIO MANAGER
SANDY R. RUFENACHT
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund and Janus Short-Term Bond Fund. He has served as
manager or co-manager of the Fund since June 1996 and has
served as manager of Janus Short-Term Bond Fund since
January 1996. He previously served as Executive Vice
President and co-manager of Janus Flexible Income Fund.
Mr. Rufenacht joined Janus Capital in 1990. He holds a
Bachelor of Arts in Business from the University of
Northern Colorado.
30 Janus High-Yield 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 objectives. 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 Funds
invest 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 Funds' or
Janus Capital's operations.
Janus High-Yield Fund prospectus 31
<PAGE>
DISTRIBUTION OF THE FUND
The Funds are 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 High-Yield 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.
Income dividends are declared daily, Saturdays, Sundays and
holidays are included, and are generally paid as of the last
business day of each month. If a month begins on a Saturday,
Sunday or holiday, dividends for those days are paid at the end
of the preceding month. You will begin accruing income dividends
the day after a purchase is effective. If shares are redeemed,
you will receive all dividends accrued through the day of the
redemption. Capital gains, if any, are declared and paid in
December.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions, other than daily income dividends, are paid to
shareholders as of the record date of the distribution of the
Fund, regardless of how long the shares have been held.
Undistributed income and realized gains 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
Janus High-Yield Fund prospectus 33
<PAGE>
to as "buying a dividend." In the above example, if you bought
shares on December 30, you would have paid $10.00 per share. On
December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your
account is set up as a tax-deferred account, dividends paid to
you would be included in your gross income for tax purposes, even
though you may not have participated in the increase in NAV of
the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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.
34 Janus High-Yield Fund prospectus
<PAGE>
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax
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.
Janus High-Yield Fund prospectus 35
<PAGE>
The Fund does not expect to pay federal income or excise taxes
because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meet these
requirements so that any earnings on your investment will not be
taxed twice.
36 Janus High-Yield Fund prospectus
<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 8 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 HIGH-YIELD FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996(1)
<S> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $10.25 $11.83 $11.12 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.89 0.90 0.97 0.80
3. Net gains or (losses) on securities (both
realized and unrealized) (0.22) (1.02) 0.82 1.12
4. Total from investment operations 0.67 (0.12) 1.79 1.92
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.89) (0.90) (0.97) (0.80)
6. Distributions (from capital gains) -- (0.56) (0.11) --
7. Total distributions (0.89) (1.46) (1.08) (0.80)
8. NET ASSET VALUE, END OF PERIOD $10.03 $10.25 $11.83 $11.12
9. Total return* 6.34% (1.45%) 16.94% 19.71%
10. Net assets, end of period (in millions) $264 $268 $301 $211
11. Average net assets for the period (in
millions) $297 $381 $266 $88
12. Ratio of gross expenses to average net
assets** 1.02%(2) 0.99%(2) 1.03%(2) 1.01%(2)
13. Ratio of net expenses to average net
assets** 1.00% 0.96% 1.00% 1.00%
14. Ratio of net investment income to average
net assets** 8.48% 7.85% 8.45% 9.00%
15. Portfolio turnover rate** 310% 336% 404% 324%
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from December 29, 1995 (inception) to October 31, 1996.
(2) The ratio was 1.05% in 1999, N/A in 1998, 1.04% in 1997 and 1.18% in 1996
before waiver of certain Fund expenses.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
Janus High-Yield Fund prospectus 37
<PAGE>
GLOSSARY OF INVESTMENT TERMS
- --------------------------------------------------------------------------------
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Fund may
invest. The Fund may invest in these instruments to the extent
permitted by its investment objectives 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.
CERTIFICATES OF PARTICIPATION ("COPS") are certificates
representing an interest in a pool of securities. Holders are
entitled to a proportionate interest in the underlying
securities. Municipal lease obligations are often sold in the
form of COPs. See "Municipal lease obligations" below.
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
38 Janus High-Yield Fund prospectus
<PAGE>
maturities and usually a specific rate of interest or an original
purchase discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital
gains on the underlying security. Receipts include those issued
by domestic banks (American Depositary Receipts), foreign banks
(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."
INDUSTRIAL DEVELOPMENT BONDS are revenue bonds that are issued by
a public authority but which may be backed only by the credit and
security of a private issuer and may involve greater credit risk.
See "Municipal securities" below.
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates. In that case, the portfolio managers may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains
Janus High-Yield Fund prospectus 39
<PAGE>
on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not
subject to prepayment risk.
MUNICIPAL LEASE OBLIGATIONS are revenue bonds backed by leases or
installment purchase contracts for property or equipment. Lease
obligations may not be backed by the issuing municipality's
credit and may involve risks not normally associated with general
obligation bonds and other revenue bonds. For example, their
interest may become taxable if the lease is assigned and the
holders may incur losses if the issuer does not appropriate funds
for the lease payments on an annual basis, which may result in
termination of the lease and possible default.
MUNICIPAL SECURITIES are bonds or notes issued by a U.S. state or
political subdivision. A municipal security may be a general
obligation backed by the full faith and credit (i.e., the
borrowing and taxing power) of a municipality or a revenue
obligation paid out of the revenues of a designated project,
facility or revenue source.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or
hold certain amounts of assets for the production of passive
income. Passive income includes dividends, interest, royalties,
rents and annuities. To avoid taxes and interest that the Fund
must pay if these investments are profitable, the Fund may make
various elections permitted by the tax laws. These elections
could require that the Fund recognize taxable income, which in
turn must be distributed, before the securities are sold and
before cash is received to pay the distributions.
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.
PAY-IN-KIND BONDS are debt securities that normally give the
issuer an option to pay cash at a coupon payment date or give the
holder of the security a similar bond with the same coupon rate
40 Janus High-Yield Fund prospectus
<PAGE>
and a face value equal to the amount of the coupon payment that
would have been made.
REPURCHASE AGREEMENTS involve the purchase of a security by the
Fund and a simultaneous agreement by the seller (generally a bank
or dealer) to repurchase the security from the Fund at a
specified date or upon demand. This technique offers a method of
earning income on idle cash. These securities involve the risk
that the seller will fail to repurchase the security, as agreed.
In that case, the Fund will bear the risk of market value
fluctuations until the security can be sold and may encounter
delays and incur costs in liquidating the security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by
the Fund to another party (generally a bank or dealer) in return
for cash and an agreement by the Fund to buy the security back at
a specified price and time. This technique will be used primarily
to provide cash to satisfy unusually heavy redemption requests,
or for other temporary or emergency purposes.
RULE 144A SECURITIES are securities that are not registered for
sale to the general public under the Securities Act of 1933, but
that may be resold to certain institutional investors.
STANDBY COMMITMENTS are obligations purchased by the Fund from a
dealer that give the Fund the option to sell a security to the
dealer at a specified price.
STEP COUPON BONDS are debt securities that trade at a discount
from their face value and pay coupon interest. The discount from
the face value depends on the time remaining until cash payments
begin, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer.
STRIP BONDS are debt securities that are stripped of their
interest (usually by a financial intermediary) after the
securities are issued. The market value of these securities
generally fluctuates more in response to changes in interest
rates than interest-paying securities of comparable maturity.
Janus High-Yield Fund prospectus 41
<PAGE>
TENDER OPTION BONDS are generally long-term securities that are
coupled with an option to tender the securities to a bank,
broker-dealer or other financial institution at periodic
intervals and receive the face value of the bond. This type of
security is commonly used as a means of enhancing the security's
liquidity.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit.
Treasury bills have initial maturities of less than one year,
Treasury notes have initial maturities of one to ten years and
Treasury bonds may be issued with any maturity but generally have
maturities of at least ten years. U.S. government securities also
include indirect obligations of the U.S. government that are
issued by federal agencies and government sponsored entities.
Unlike Treasury securities, agency securities generally are not
backed by the full faith and credit of the U.S. government. Some
agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit
of the sponsoring agency.
VARIABLE AND FLOATING RATE SECURITIES have variable or floating
rates of interest and, under certain limited circumstances, may
have varying principal amounts. These securities pay interest at
rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or
market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
42 Janus High-Yield Fund prospectus
<PAGE>
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
ZERO COUPON BONDS are debt securities that do not pay regular
interest at regular intervals, but are issued at a discount from
face value. The discount approximates the total amount of
interest the security will accrue from the date of issuance to
maturity. The market value of these securities generally
fluctuates more in response to changes in interest rates than
interest-paying securities.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or
interest rate is
Janus High-Yield Fund prospectus 43
<PAGE>
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.
INTEREST RATE SWAPS involve the exchange by two parties of their
respective commitments to pay or receive interest (e.g., an
exchange of floating rate payments for fixed rate payments).
INVERSE FLOATERS are debt instruments whose interest rate bears
an inverse relationship to the interest rate on another
instrument or index. For example, upon reset the interest rate
payable on a security may go down when the underlying index has
risen. Certain inverse floaters may have an interest rate reset
mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the
security's market value.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Fund may purchase and
write put and call options on securities, securities indices and
foreign currencies.
44 Janus High-Yield Fund prospectus
<PAGE>
EXPLANATION OF RATING CATEGORIES
- --------------------------------------------------------------------------------
The following is a description of credit ratings issued by two of
the major credit ratings agencies. Credit ratings evaluate only
the safety of principal and interest payments, not the market
value risk of lower quality bonds. Credit rating agencies may
fail to change credit ratings to reflect subsequent events on a
timely basis. Although Janus Capital considers ratings when
making investment decisions, it also performs its own investment
analysis and does not rely solely on the ratings assigned by
credit agencies.
Janus High-Yield Fund prospectus 45
<PAGE>
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong
capacity to pay principal and
interest.
AA.......................... High quality; very strong capacity
to pay principal and interest.
A........................... Strong capacity to pay principal
and interest; somewhat more
susceptible to the adverse effects
of changing circumstances and
economic conditions.
BBB......................... Adequate capacity to pay principal
and interest; normally exhibit
adequate protection parameters, but
adverse economic conditions or
changing circumstances more likely
to lead to a weakened capacity to
pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, Predominantly speculative with
CCC, CC, C.................. respect to the issuer's capacity to
meet required interest and
principal payments. BB - lowest
degree of speculation; C - the
highest degree of speculation.
Quality and protective
characteristics outweighed by large
uncertainties or major risk
exposure to adverse conditions.
D........................... In default.
</TABLE>
46 Janus High-Yield Fund prospectus
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of
investment risk.
Aa.......................... High quality; together with Aaa
bonds, they compose the high-grade
bond group.
A........................... Upper-medium grade obligations;
many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither
highly protected nor poorly
secured. Interest and principal
appear adequate for the present but
certain protective elements may be
lacking or may be unreliable over
any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative
elements. Protection of interest
and principal payments not well
safeguarded during good and bad
times.
B........................... Lack characteristics of desirable
investment; potentially low
assurance of timely interest and
principal payments or maintenance
of other contract terms over time.
Caa......................... Poor standing, may be in default;
elements of danger with respect to
principal or interest payments.
Ca.......................... Speculative in a high degree; could
be in default or have other marked
shortcomings.
C........................... Lowest-rated; extremely poor
prospects of ever attaining
investment standing.
</TABLE>
Janus High-Yield Fund prospectus 47
<PAGE>
Unrated securities will be treated as noninvestment grade
securities unless a portfolio manager determines that such
securities are the equivalent of investment grade securities.
Securities that have received ratings from more than one agency
are considered investment grade if at least one agency has rated
the security investment grade.
SECURITIES HOLDINGS BY RATING CATEGORY
During the fiscal period ended October 31, 1999, the percentage
of securities holdings for the Fund by rating category based upon
a weighted monthly average was:
<TABLE>
<CAPTION>
JANUS HIGH-YIELD FUND
------------------------------------------------------------------
<S> <C>
BONDS-S&P RATING:
AAA 0%
AA 0%
A 0%
BBB 0%
BB 6%
B 65%
CCC 7%
CC 0%
C 0%
Not Rated 11%
Preferred Stock 1%
Cash and Options 10%
TOTAL 100%
------------------------------------------------------------------
</TABLE>
48 Janus High-Yield Fund prospectus
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<PAGE>
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50
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51
<PAGE>
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52
<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
4265
<PAGE>
[JANUS LOGO]
JANUS FLEXIBLE
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 Flexible Income Fund................... 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 6
General portfolio policies................... 8
Risks........................................ 11
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........................................ 35
FINANCIAL HIGHLIGHTS.............. ............. 37
GLOSSARY
Glossary of investment terms................. 38
RATING CATEGORIES
Explanation of rating categories............. 45
</TABLE>
Janus Flexible Income Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS FLEXIBLE INCOME FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS FLEXIBLE INCOME FUND?
The Fund seeks to obtain maximum total return, consistent with
preservation of capital.
The Fund's Trustees may change this objective without a
shareholder vote and the Fund will notify you of any changes that
are material. If there is a material change in the Fund's
objective or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee
that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS FLEXIBLE INCOME FUND?
The Fund invests primarily in a wide variety of income-producing
securities such as corporate bonds and notes, government
securities and preferred stock. As a fundamental policy, the Fund
will invest at least 80% of its assets in income-producing
securities. The Fund may own an unlimited amount of high-yield/
high-risk bonds, and these securities may be a big part of the
portfolio.
The Fund may invest without limit in foreign equity and debt
securities.
In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for income-producing securities that meet
his investment criteria one at a time. If the portfolio manager
is unable to find such investments, the Fund's assets may be in
cash or similar investments.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS FLEXIBLE INCOME FUND?
Although the Fund may be less volatile than funds that invest
most of their assets in common stocks, the Fund's returns and
yields will vary, and you could lose money.
2 Janus Flexible Income Fund prospectus
<PAGE>
The Fund invests in a variety of income-producing securities. A
fundamental risk 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 net asset value (NAV) will likewise decrease. Another
fundamental risk associated with fixed-income funds is credit
risk, which is the risk that an issuer will be unable to make
principal and interest payments when due.
The Fund may invest an unlimited amount of its assets in high-
yield/high-risk bonds, also known as "junk" bonds. Junk bonds may
be sensitive to economic changes, political changes, or adverse
developments specific to the company that issued the bond. These
bonds generally have a greater credit risk than other types of
fixed-income securities. Because of these factors, the
performance and NAV of the Fund may vary significantly, depending
upon its holdings in junk bonds.
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 Flexible 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 FLEXIBLE INCOME FUND
A BAR CHART showing Annual Total Returns for Janus Flexible
Income Fund from 1990 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(4.62%) 25.96% 11.85% 15.70% (2.92%) 21.15% 6.88% 11.43% 8.84% 0.46%
1990 1991 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: 1st-1991 8.17% Worst Quarter: 1st-1990 (8.37%)
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year 5 years 10 years (7/7/87)
<S> <C> <C> <C> <C>
Janus Flexible Income Fund 0.46% 9.53% 9.06% 8.65%
Lehman Brothers Gov't/Corp
Bond Index* (2.15)% 7.61% 7.65% 8.08%
---------------------------------------------
</TABLE>
* 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 Flexible 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) for
the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
Janus Flexible Income Fund
<S> <C>
Management Fee 0.57%
Other Expenses 0.25%
Total Annual Fund Operating Expenses 0.82%
</TABLE>
- --------------------------------------------------------------------------------
EXAMPLE:
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods
indicated then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, and
that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
----------------------------------------
<S> <C> <C> <C> <C>
Janus Flexible Income Fund $84 $262 $455 $1,014
</TABLE>
Janus Flexible Income 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 11-13 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Flexible Income Fund seeks to obtain maximum total return,
consistent with preservation of capital. It pursues its objective
by primarily investing in a wide variety of income-producing
securities such as corporate bonds and notes, government
securities and preferred stock. As a fundamental policy, the Fund
will invest at least 80% of its assets in income-producing
securities. The Fund may own an unlimited amount of high-yield/
high-risk bonds, and these may be a big part of the portfolio.
This Fund generates total return from a combination of current
income and capital appreciation, but income is usually the
dominant portion.
In addition to considering economic factors such as the effect of
interest rates on the Fund's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for 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.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
Generally, a fixed-income security will increase in value when
interest rates fall and decrease in value when interest rates
rise. Longer-term securities are generally more sensitive to
interest rate
6 Janus Flexible Income Fund prospectus
<PAGE>
changes than shorter-term securities, but they generally offer
higher yields to compensate investors for the associated risks.
High-yield bond prices are generally less directly responsive to
interest rate changes than investment grade issues and may not
always follow this pattern. A bond fund's average-weighted
effective maturity and its duration are measures of how the fund
may react to interest rate changes.
2. HOW DOES THE FUND MANAGE INTEREST RATE RISK?
The Fund may vary the average-weighted effective maturity of its
portfolio to reflect its portfolio manager's analysis of interest
rate trends and other factors. The Fund's average-weighted
effective maturity will tend to be shorter when the portfolio
manager expects interest rates to rise and longer when its
portfolio manager expects interest rates to fall. The Fund may
also use futures, options and other derivatives to manage
interest rate risks.
3. WHAT IS MEANT BY THE FUND'S "AVERAGE-WEIGHTED EFFECTIVE MATURITY"?
The stated maturity of a bond is the date when the issuer must
repay the bond's entire principal value to an investor. Some
types of bonds may also have an "effective maturity" that is
shorter than the stated date due to prepayment or call
provisions. Securities without prepayment or call provisions
generally have an effective maturity equal to their stated
maturity. Dollar-weighted effective maturity is calculated by
averaging the effective maturity of bonds held by the Fund with
each effective maturity "weighted" according to the percentage of
net assets that it represents.
4. WHAT IS MEANT BY THE FUND'S "DURATION"?
A bond's duration indicates the time it will take an investor to
recoup his investment. Unlike average maturity, duration reflects
both principal and interest payments. Generally, the higher the
coupon rate on a bond, the lower its duration will be. The
duration of a bond fund is calculated by averaging the duration
of bonds held by a fund with each duration "weighted" according
to the percentage of net assets that it represents. Because
duration
Janus Flexible Income Fund prospectus 7
<PAGE>
accounts for interest payments, the Fund's duration is usually
shorter than its average maturity.
5. WHAT IS A HIGH-YIELD/HIGH-RISK BOND?
A high-yield/high-risk bond (also called a "junk" bond) is a bond
rated below investment grade by major rating agencies (i.e., BB
or lower by Standard & Poor's or Ba or lower by Moody's) or an
unrated bond of similar quality. It presents greater risk of
default (the failure to make timely interest and principal
payments) than higher quality bonds.
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 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
bonds.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in fixed-income securities, which may
include corporate bonds and notes, government securities, pre-
8 Janus Flexible Income Fund prospectus
<PAGE>
ferred stock, high-yield/high-risk bonds and municipal
obligations. The Fund may also invest to a lesser degree in other
types of securities. These securities (which are described in the
Glossary) may include:
- common stocks
- mortgage- and asset-backed securities
- zero coupon, pay-in-kind and step coupon securities
- 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.
Janus Flexible Income Fund prospectus 9
<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.
10 Janus Flexible Income Fund prospectus
<PAGE>
RISKS
Because the Fund invests substantially all of its assets in
fixed-income securities, it is subject to risks such as credit or
default risks, and decreased value due to interest rate
increases. The Fund's performance may also be affected by risks
to certain types of investments, such as foreign securities and
derivative instruments.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. WHAT IS MEANT BY "CREDIT QUALITY" AND WHAT ARE THE RISKS ASSOCIATED WITH IT?
Credit quality measures the likelihood that the issuer will meet
its obligations on a bond. One of the fundamental risks
associated with all fixed-income funds is credit risk, which is
the risk that an issuer will be unable to make principal and
interest payments when due. U.S. government securities are
generally considered to be the safest type of investment in terms
of credit risk. Municipal obligations generally rank between U.S.
government securities and corporate debt securities in terms of
credit safety. Corporate debt securities, particularly those
rated below investment grade, present the highest credit risk.
2. HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized statistical rating
agencies such as Standard & Poor's and Moody's are widely
accepted measures of credit risk. The lower a bond issue is rated
by an agency, the more credit risk it is considered to represent.
Lower rated bonds generally pay higher yields to compensate
investors for the associated risk. Please refer to "Explanation
of Rating Categories" on page 45 for description of rating
categories.
3. 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
Janus Flexible Income Fund prospectus 11
<PAGE>
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/high-risk 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.
The junk bond market can experience sudden and sharp price
swings. Because the Fund may invest a significant portion of its
portfolio in high-yield/high-risk bonds, investors should be
willing to tolerate a corresponding increase in the risk of
significant and sudden changes in NAV. Please refer to
"Explanation of Rating Categories" on page 45 for a description
of rating categories.
4. 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.
5. 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
12 Janus Flexible Income Fund prospectus
<PAGE>
satisfactorily addressed Year 2000 issues, the Fund's performance
could suffer.
6. 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 Flexible Income Fund prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
JANUS FLEXIBLE
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 confirmed 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 all of its expenses not assumed by
Janus Capital, including auditing fees and independent Trustees'
fees and expenses.
The Fund pays Janus Capital a management fee which is calculated
daily and paid monthly. The advisory agreement with the Fund
spells out the management fee and other expenses that the Fund
must pay.
The Fund 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 0.57% of
average daily net assets.
Janus Flexible Income Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
RONALD V. SPEAKER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund, which he has managed or co-managed since December
1991. He previously served as co-manager of Janus
High-Yield Fund from its inception to February 1998 and
manager of Janus Short-Term Bond Fund and Janus Federal
Tax-Exempt Fund from their inceptions through December
1995. He holds a Bachelor of Arts in Finance from the
University of Colorado and is a Chartered Financial
Analyst.
In January 1997, Mr. Speaker settled an administrative
action involving two personal trades made by him in
January of 1993. Without admitting or denying the
allegations, Mr. Speaker agreed to civil money penalty,
disgorgement, and interest payments totaling $37,199 and
to a 90-day suspension which ended on April 25, 1997.
30 Janus Flexible 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 Funds
invest 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 Funds' or
Janus Capital's operations.
Janus Flexible 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 Flexible 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.
Income dividends are declared daily, Saturdays, Sundays and
holidays included, and are generally paid as of the last business
day of each month. If a month begins on a Saturday, Sunday or
holiday, dividends for those days are paid at the end of the
preceding month. You will begin accruing income dividends the day
after a purchase is effective. If shares are redeemed, you will
receive all dividends accrued through the day of the redemption.
Capital gains, if any, are declared and paid in December.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions, other than daily income dividends, are paid to
shareholders as of the record date of the distribution of the
Fund, regardless of how long the shares have been held.
Undistributed income and realized gains 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
Janus Flexible Income Fund prospectus 33
<PAGE>
to as "buying a dividend." In the above example, if you bought
shares on December 30, you would have paid $10.00 per share. On
December 31, the Fund would pay you $0.25 per share as a dividend
and your shares would now be worth $9.75 per share. Unless your
account is set up as a tax-deferred account, dividends paid to
you would be included in your gross income for tax purposes, even
though you may not have participated in the increase in NAV of
the Fund, whether or not you reinvested the dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
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.
34 Janus Flexible Income Fund prospectus
<PAGE>
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
investing in the Fund. You may wish to consult your own tax
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.
Janus Flexible Income Fund prospectus 35
<PAGE>
TAXATION OF THE FUND
Dividends, interest, and some capital gains received by the Fund
on foreign securities may be subject to tax withholding or other
foreign taxes. The Fund may from year to year make the election
permitted under section 853 of the Internal Revenue Code to pass
through such taxes to shareholders as a foreign tax credit. If
such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Fund.
The Fund does not expect to pay federal income or excise taxes
because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meet these
requirements so that any earnings on your investment will not be
taxed twice.
36 Janus Flexible Income Fund prospectus
<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 8 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 FLEXIBLE 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 $9.91 $10.00 $9.65 $9.55 $8.96
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.63 0.67 0.69 0.73 0.72
3. Net gains or (losses) on securities (both
realized and unrealized) (0.45) 0.12 0.37 0.10 0.59
4. Total from investment operations 0.18 0.79 1.06 0.83 1.31
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.63) (0.67) (0.69) (0.73) (0.72)
6. Distributions (from capital gains) (0.11) (0.21) (0.02) -- --
7. Total distributions (0.74) (0.88) (0.71) (0.73) (0.72)
8. NET ASSET VALUE, END OF PERIOD $9.35 $9.91 $10.00 $9.65 $9.55
9. Total return 1.75% 8.14% 11.48% 9.01% 15.35%
10. Net assets, end of period (in millions) $1,279 $1,104 $727 $604 $580
11. Average net assets for the period (in
millions) $1,266 $893 $656 $604 $450
12. Ratio of gross expenses to average net
assets 0.82% 0.84% 0.87% 0.88% 0.96%
13. Ratio of net expenses to average net
assets 0.81% 0.82% 0.86% 0.87% 0.96%
14. Ratio of net investment income to average
net assets 6.54% 6.68% 7.10% 7.60% 7.91%
15. Portfolio turnover rate 119% 148% 207% 214% 250%
- ------------------------------------------------------------------------------------------
</TABLE>
Janus Flexible Income Fund prospectus 37
<PAGE>
GLOSSARY OF INVESTMENT TERMS
- --------------------------------------------------------------------------------
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Fund may
invest. The Fund may invest in these instruments to the extent
permitted by its investment objective and policies. The Fund is
not limited by this discussion and may invest in any other types
of instruments not precluded by the policies discussed elsewhere
in this Prospectus. Please refer to the SAI for a more detailed
discussion of certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required
to pay the holder the amount of the loan (or par value of the
bond) at a specified maturity and to make scheduled interest
payments.
CERTIFICATES OF PARTICIPATION ("COPS") are certificates
representing an interest in a pool of securities. Holders are
entitled to a proportionate interest in the underlying
securities. Municipal lease obligations are often sold in the
form of COPs. See "Municipal lease obligations" below.
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.
38 Janus Flexible Income Fund prospectus
<PAGE>
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 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."
INDUSTRIAL DEVELOPMENT BONDS are revenue bonds that are issued by
a public authority but which may be backed only by the credit and
security of a private issuer and may involve greater credit risk.
See "Municipal securities" below.
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-
through securities, which means that principal and interest
payments on the underlying securities (less servicing fees) are
passed through to shareholders on a pro rata basis. These
securities involve prepayment risk, which is the risk that the
underlying mortgages or other debt may be refinanced or paid off
prior to their maturities during periods of declining interest
rates.
Janus Flexible Income Fund prospectus 39
<PAGE>
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.
MUNICIPAL LEASE OBLIGATIONS are revenue bonds backed by leases or
installment purchase contracts for property or equipment. Lease
obligations may not be backed by the issuing municipality's
credit and may involve risks not normally associated with general
obligation bonds and other revenue bonds. For example, their
interest may become taxable if the lease is assigned and the
holders may incur losses if the issuer does not appropriate funds
for the lease payments on an annual basis, which may result in
termination of the lease and possible default.
MUNICIPAL SECURITIES are bonds or notes issued by a U.S. state or
political subdivision. A municipal security may be a general
obligation backed by the full faith and credit (i.e., the
borrowing and taxing power) of a municipality or a revenue
obligation paid out of the revenues of a designated project,
facility or revenue source.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or
hold certain amounts of assets for the production of passive
income. Passive income includes dividends, interest, royalties,
rents and annuities. To avoid taxes and interest that the Fund
must pay if these investments are profitable, the Fund may make
various elections permitted by the tax laws. These elections
could require that the Fund recognize taxable income, which in
turn must be distributed, before the securities are sold and
before cash is received to pay the distributions.
PAY-IN-KIND BONDS are debt securities that normally give the
issuer an option to pay cash at a coupon payment date or give the
holder of the security a similar bond with the same coupon rate
and a face value equal to the amount of the coupon payment that
would have been made.
40 Janus Flexible Income Fund prospectus
<PAGE>
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.
RULE 144A SECURITIES are securities that are not registered for
sale to the general public under the Securities Act of 1933, but
that may be resold to certain institutional investors.
STANDBY COMMITMENTS are obligations purchased by the Fund from a
dealer that give the Fund the option to sell a security to the
dealer at a specified price.
STEP COUPON BONDS are debt securities that trade at a discount
from their face value and pay coupon interest. The discount from
the face value depends on the time remaining until cash payments
begin, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer.
STRIP BONDS are debt securities that are stripped of their
interest (usually by a financial intermediary) after the
securities are issued. The market value of these securities
generally fluctuates more in
Janus Flexible Income Fund prospectus 41
<PAGE>
response to changes in interest rates than interest-paying
securities of comparable maturity.
TENDER OPTION BONDS are generally long-term securities that are
coupled with an option to tender the securities to a bank,
broker-dealer or other financial institution at periodic
intervals and receive the face value of the bond. This type of
security is commonly used as a means of enhancing the security's
liquidity.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit.
Treasury bills have initial maturities of less than one year,
Treasury notes have initial maturities of one to ten years and
Treasury bonds may be issued with any maturity but generally have
maturities of at least ten years. U.S. government securities also
include indirect obligations of the U.S. government that are
issued by federal agencies and government sponsored entities.
Unlike Treasury securities, agency securities generally are not
backed by the full faith and credit of the U.S. government. Some
agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit
of the sponsoring agency.
VARIABLE AND FLOATING RATE SECURITIES have variable or floating
rates of interest and, under certain limited circumstances, may
have varying principal amounts. These securities pay interest at
rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or
market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
42 Janus Flexible Income Fund prospectus
<PAGE>
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
ZERO COUPON BONDS are debt securities that do not pay regular
interest at regular intervals, but are issued at a discount from
face value. The discount approximates the total amount of
interest the security will accrue from the date of issuance to
maturity. The market value of these securities generally
fluctuates more in response to changes in interest rates than
interest-paying securities.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date.
Janus Flexible Income Fund prospectus 43
<PAGE>
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.
INTEREST RATE SWAPS involve the exchange by two parties of their
respective commitments to pay or receive interest (e.g., an
exchange of floating rate payments for fixed rate payments).
INVERSE FLOATERS are debt instruments whose interest rate bears
an inverse relationship to the interest rate on another
instrument or index. For example, upon reset the interest rate
payable on a security may go down when the underlying index has
risen. Certain inverse floaters may have an interest rate reset
mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the
security's market value.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Fund may purchase and
write put and call options on securities, securities indices and
foreign currencies.
44 Janus Flexible Income Fund prospectus
<PAGE>
EXPLANATION OF RATING CATEGORIES
- --------------------------------------------------------------------------------
The following is a description of credit ratings issued by two of
the major credit ratings agencies. Credit ratings evaluate only
the safety of principal and interest payments, not the market
value risk of lower quality securities. Credit rating agencies
may fail to change credit ratings to reflect subsequent events on
a timely basis. Although Janus Capital considers security ratings
when making investment decisions, it also performs its own
investment analysis and does not rely solely on the ratings
assigned by credit agencies.
Janus Flexible Income Fund prospectus 45
<PAGE>
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong
capacity to pay principal and
interest.
AA.......................... High quality; very strong capacity
to pay principal and interest.
A........................... Strong capacity to pay principal
and interest; somewhat more
susceptible to the adverse effects
of changing circumstances and
economic conditions.
BBB......................... Adequate capacity to pay principal
and interest; normally exhibit
adequate protection parameters, but
adverse economic conditions or
changing circumstances more likely
to lead to a weakened capacity to
pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with
respect to the issuer's capacity to
meet required interest and
principal payments. BB - lowest
degree of speculation; C - the
highest degree of speculation.
Quality and protective
characteristics outweighed by large
uncertainties or major risk
exposure to adverse conditions.
D........................... In default.
</TABLE>
46 Janus Flexible Income Fund prospectus
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
----------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of
investment risk.
Aa.......................... High quality; together with Aaa
bonds, they compose the high-grade
bond group.
A........................... Upper-medium grade obligations;
many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither
highly protected nor poorly
secured. Interest and principal
appear adequate for the present but
certain protective elements may be
lacking or may be unreliable over
any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative
elements. Protection of interest
and principal payments not well
safeguarded during good and bad
times.
B........................... Lack characteristics of desirable
investment; potentially low
assurance of timely interest and
principal payments or maintenance
of other contract terms over time.
Caa......................... Poor standing, may be in default;
elements of danger with respect to
principal or interest payments.
Ca.......................... Speculative in a high degree; could
be in default or have other marked
shortcomings.
C........................... Lowest-rated; extremely poor
prospects of ever attaining
investment standing.
</TABLE>
Janus Flexible Income Fund prospectus 47
<PAGE>
Unrated securities will be treated as noninvestment grade
securities unless a portfolio manager determines that such
securities are the equivalent of investment grade securities.
Securities that have received ratings from more than one agency
are considered investment grade if at least one agency has rated
the security investment grade.
SECURITIES HOLDINGS BY RATING CATEGORY
During the fiscal period ended October 31, 1999, the percentage
of securities holdings for the Fund by rating category based upon
a weighted monthly average was:
<TABLE>
<CAPTION>
JANUS FLEXIBLE INCOME FUND
------------------------------------------------------------------
<S> <C>
BONDS-S&P RATING:
AAA 10%
AA 8%
A 13%
BBB 27%
BB 7%
B 19%
CCC 1%
CC 0%
C 0%
Not Rated 4.0%
Preferred Stock 2%
Cash and Options 9%
TOTAL 100%
------------------------------------------------------------------
</TABLE>
48 Janus Flexible Income Fund prospectus
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51
<PAGE>
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52
<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
4266
<PAGE>
JANUS GLOBAL LIFE
SCIENCES 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.
[JANUS LOGO]
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Janus Global Life Sciences 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.......................... 19
Type of account ownership.................... 19
To purchase shares........................... 22
To exchange shares........................... 23
To redeem shares............................. 23
Shareholder services and account policies.... 27
MANAGEMENT OF THE FUND
Investment adviser........................... 31
Portfolio manager............................ 32
OTHER INFORMATION............... ............... 33
DISTRIBUTIONS AND TAXES
Distributions................................ 35
Taxes........................................ 36
FINANCIAL HIGHLIGHTS.............. ............. 38
GLOSSARY
Glossary of investment terms................. 40
</TABLE>
Janus Global Life Sciences Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS GLOBAL LIFE SCIENCES FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS GLOBAL LIFE SCIENCES FUND?
The Fund seeks long-term growth of capital.
The Fund's Trustees may change this objective without a
shareholder vote and the Fund will notify you of any changes that
are material. If there is a material change in the Fund's
objective or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee
that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS GLOBAL LIFE SCIENCES FUND?
The Fund invests primarily in equity securities of U.S. and
foreign companies selected for their growth potential. Normally,
it invests at least 65% of its total assets in securities of
companies that the portfolio manager believes have a life science
orientation. Generally speaking, the "life sciences" relate to
maintaining or improving quality of life. So, for example,
companies with a "life science orientation" include companies
engaged in research, development, production or distribution of
products or services related to health and personal care,
medicine or pharmaceuticals. As a fundamental policy, the Fund
normally invests at least 25% of its total assets, in the
aggregate, in the following industry groups: health care;
pharmaceuticals; agriculture; cosmetics/personal care; and
biotechnology.
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 for companies with earnings
growth potential 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.
2 Janus Global Life Sciences Fund prospectus
<PAGE>
3. WHAT ARE THE MAIN RISKS OF INVESTING IN JANUS GLOBAL LIFE SCIENCES FUND?
The biggest risk of investing in this Fund is that its returns
may vary and you could lose money. If you are considering
investing in the Fund, remember that it is designed for long-term
investors who can accept the risks of investing in a portfolio
with significant common stock holdings. Common stocks tend to be
more volatile than other investment choices.
The value of the Fund's portfolio may decrease if the value of an
individual company in the portfolio decreases. The value of the
Fund's portfolio could also decrease if the stock market goes
down. If the value of the Fund's portfolio decreases, the Fund's
net asset value (NAV) will also decrease which means if you sell
your shares in the Fund you would get back less money.
The Fund concentrates its investments in related industry groups.
Because of this, companies in its portfolio may share common
characteristics and react similarly to market developments. For
example, many companies with a life science orientation are
highly regulated and may be dependent upon certain types of
technology. As a result, changes in government funding or
subsidies, new or anticipated legislative changes, or
technological advances could affect the value of such companies
and, therefore, the Fund's NAV. The Fund's returns may be more
volatile than those of a less concentrated portfolio.
The Fund may have significant exposure to foreign markets. As a
result, its returns and NAV may be affected to a large degree by
fluctuations in currency exchange rates or political or economic
conditions in a particular country.
The Fund is nondiversified. In other words, it may hold larger
positions in a smaller number of securities than a diversified
fund. As a result, a single security's increase or decrease in
value may have a greater impact on the Fund's NAV and total
return.
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 Global Life Sciences Fund prospectus 3
<PAGE>
The following information illustrates how the Fund's performance
has varied over time. The bar chart depicts the change in
performance from year-to-year during the period indicated. The
table compares the Fund's average annual returns for the periods
indicated to a broad-based securities market index.
JANUS GLOBAL LIFE SCIENCES FUND
A BAR CHART showing the Annual Total Return for Janus Global
Life Sciences Fund for 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C>
61.00%
1999
The percentage is represented by a bar of proportionate size
with the actual total return printed above the bar.
Best Quarter: 4th-1999 31.32% Worst Quarter: 1st-1999 4.20%
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
1 year and Since Inception
(12/31/98)
<S> <C>
Janus Global Life Sciences Fund 61.00%
S&P 500 Index* 21.03%
---------------------------
</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
they will perform in the future.
4 Janus Global Life Sciences 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 Global Life Sciences Fund
<S> <C>
Management Fee(1) 0.65%
Other Expenses 0.46%(2)
Total Annual Fund Operating Expenses 1.11%
</TABLE>
- --------------------------------------------------------------------------------
(1) "Management Fee" information has been restated to reflect a new fee
schedule effective January 31, 2000.
(2) For the fiscal period from December 31, 1998 (inception) to October
31, 1999.
- --------------------------------------------------------------------------------
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 Global Life Sciences Fund $113 $353 $612 $1,352
</TABLE>
Janus Global Life Sciences 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 10-14 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 Global Life Sciences Fund seeks long-term growth of
capital. It pursues its objective by investing primarily in
equity securities of U.S. and foreign companies selected for
their growth potential. Normally, it invests at least 65% of its
total assets in securities of companies that the portfolio
manager believes have a life science orientation. As a
fundamental policy, the Fund normally invests at least 25% of its
total assets, in the aggregate, in the following industry groups:
healthcare; pharmaceuticals; agriculture; cosmetics/personal
care; and biotechnology.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common
stocks if its portfolio manager believes that common stocks will
appreciate in value. The portfolio manager generally takes a
"bottom up" approach to selecting companies. In other words, he
seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. He
makes this assessment by looking at companies one at a time,
regardless of size, country of organization, place of principal
business activity, or other similar selection criteria.
Realization of income is not a significant consideration when
choosing investments for the Fund. Income realized on the Fund's
investments will be incidental to its objective.
6 Janus Global Life Sciences Fund prospectus
<PAGE>
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies that meet
his selection criteria, regardless of where a company is located.
Foreign securities are generally selected on a stock-by-stock
basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected
levels of inflation, government policies influencing business
conditions, the outlook for currency relationships, and prospects
for economic growth among countries, regions or geographic areas
may warrant greater consideration in selecting foreign
securities. There are no limitations on the countries in which
the Fund may invest and the Fund may at times have significant
foreign exposure.
3. WHAT DOES "LIFE SCIENCE ORIENTATION" MEAN IN RELATION TO THE FUND?
Generally speaking, the "life sciences" relate to maintaining or
improving quality of life. So, for example, companies with a
"life science orientation" include companies engaged in research,
development, production or distribution of products or services
related to health and personal care, medicine or pharmaceuticals.
Life science oriented companies also include companies that the
portfolio manager believes have growth potential primarily as a
result of particular products, technology, patents or other
market advantages in the life sciences. Life sciences encompass a
variety of industries, including health care, nutrition,
agriculture, medical diagnostics, nuclear and biochemical
research and development and health care facilities ownership and
operation.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the
general policies listed below. The percentage limitations
included in these policies and elsewhere in this Prospectus apply
at the time of purchase of the security. So, for example, if the
Fund exceeds a limit as a result of market fluctuations or the
sale of securities, it will not be required to dispose of any
securities.
Janus Global Life Sciences Fund prospectus 7
<PAGE>
CASH POSITION
When the Fund's portfolio manager believes that market conditions
are unfavorable for profitable investing, or when he is otherwise
unable to locate attractive investment opportunities, the Fund's
cash or similar investments may increase. In other words, the
Fund does not always stay fully invested in stocks. Cash or
similar investments generally are a residual - they represent the
assets that remain after the portfolio manager has committed
available assets to desirable investment opportunities. However,
the portfolio manager may also temporarily increase the Fund's
cash position to protect its assets or maintain liquidity. When
the Fund's investments in cash or similar investments increase,
it may not participate in market advances or declines to the same
extent that it would if the Fund remained more fully invested in
stocks.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred
stocks, but it may also invest to a lesser degree in other types
of securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
- 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
8 Janus Global Life Sciences Fund prospectus
<PAGE>
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 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
Janus Global Life Sciences Fund prospectus 9
<PAGE>
other developments not foreseen at the time of the investment
decision. The Fund may also sell one security and simultaneously
purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices.
Changes are made in the Fund's portfolio whenever its portfolio
manager believes such changes are desirable. Portfolio turnover
rates are generally not a factor in making buy and sell
decisions.
Increased portfolio turnover may result in higher costs for
brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Higher costs
associated with increased portfolio turnover may offset gains in
the Fund's performance.
RISKS
Because the Fund may invest substantially all of its assets in
common stocks, the main risk is the risk that the value of the
stocks it holds might decrease in response to the activities of
an individual company or in response to general market and/or
economic conditions. If this occurs, the Fund's share price may
also decrease. The Fund's performance may also be affected by
risks specific to certain types of investments, such as foreign
securities, derivative investments, non-investment grade bonds,
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 Fund's performance may also be affected
by industry risk.
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
10 Janus Global Life Sciences Fund prospectus
<PAGE>
realize more substantial growth than larger or more established
issuers because they may lack depth of management, be unable to
generate funds necessary for growth or potential development, or
be developing or marketing new products or services for which
markets are not yet established and may never become established.
In addition, such companies may be insignificant factors in their
industries and may become subject to intense competition from
larger or more established companies. Securities of smaller or
newer companies may have more limited trading markets than the
markets for securities of larger or more established issuers, and
may be subject to wide price fluctuations. Investments in such
companies tend to be more volatile and somewhat more speculative.
2. HOW COULD THE FUND'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?
The Fund may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign
markets. Investments in foreign securities, including those of
foreign governments, may involve greater risks than investing in
domestic securities because the Fund's performance may depend on
issues other than the performance of a particular company. These
issues include:
- CURRENCY RISK As long as the Fund holds a foreign security, its
value will be affected by the value of the local currency
relative to the U.S. dollar. When the Fund sells a foreign
denominated security, its value may be worth less in U.S.
dollars even if the security increases in value in its home
country. U.S. dollar denominated securities of foreign issuers
may also be affected by currency risk.
- POLITICAL AND ECONOMIC RISK Foreign investments may be subject
to heightened political and economic risks, particularly in
emerging markets which may have relatively unstable
governments, immature economic structures, national policies
restricting investments by foreigners, different legal systems,
and economies based on only a few industries. In some
countries,
Janus Global Life Sciences Fund prospectus 11
<PAGE>
there is the risk that the government may take over the assets
or operations of a company or that the government may impose
taxes or limits on the removal of the Fund's assets from that
country.
- REGULATORY RISK There may be less government supervision of
foreign markets. As a result, foreign issuers may not be
subject to the uniform accounting, auditing and financial
reporting standards and practices applicable to domestic
issuers and there may be less publicly available information
about foreign issuers.
- MARKET RISK Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile
than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in
settling securities transactions. In some foreign markets,
there may not be protection against failure by other parties to
complete transactions.
- TRANSACTION COSTS Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.
3. HOW DOES THE NONDIVERSIFIED STATUS OF THE FUND AFFECT ITS RISK?
Diversification is a way to reduce risk by investing in a broad
range of stocks or other securities. A "nondiversified" fund has
the ability to take larger positions in a smaller number of
issuers. Because the appreciation or depreciation of a single
stock may have a greater impact on the NAV of a nondiversified
fund, its share price can be expected to fluctuate more than a
comparable diversified fund. This fluctuation, if significant,
may affect the performance of the Fund.
4. WHAT IS "INDUSTRY RISK"?
Industry risk is the possibility that a group of related stocks
will decline in price due to industry-specific developments.
Companies in the same or similar industries may share common
characteristics and are more likely to react similarly to
industry-specific
12 Janus Global Life Sciences Fund prospectus
<PAGE>
market or economic developments. In the life sciences, for
example, many companies are subject to government regulation and
approval of their products and services, which may affect their
price or availability. In addition, the products and services
offered by these companies may quickly become obsolete in the
face of scientific or technological developments. The economic
outlook of such companies may fluctuate dramatically due to
changes in regulatory or competitive environments.
The Fund invests in a concentrated portfolio, which may result in
greater exposure to related industries. As a result, the Fund may
be more volatile than a less concentrated portfolio.
5. 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.
6. 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.
Janus Global Life Sciences Fund prospectus 13
<PAGE>
Please refer to the SAI for a description of bond rating
categories.
7. 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.
14 Janus Global Life Sciences Fund prospectus
<PAGE>
This page intentionally left blank
Janus Global Life Sciences Fund prospectus 15
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
JANUS GLOBAL LIFE
SCIENCES 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.
18 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 19
<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.
20 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 21
<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.
22 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 26. Also for written requests on page 26.
refer to the exchange policies - Please see page 25 for information
listed on page 24 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 23
<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.
24 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 25
<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 18
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-
26 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 19 or
to close such accounts. This policy will apply to accounts
Shareholder's manual 27
<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
28 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 29
<PAGE>
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For 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 annually. In addition, the Fund
will send you an immediate transaction confirmation statement
after every non-systematic transaction.
The Fund produces financial reports, which include a list of the
Fund's portfolio holdings, semiannually and updates its
prospectus annually. To reduce expenses, the Fund may choose to
mail only one report or prospectus to your household, even if
more than one person in the household has a Fund account. Please
call 1-800-525-3713 if you would like to receive additional
reports or prospectuses. The Fund reserves the right to charge a
fee for additional statement requests.
30 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 0.75% of
average daily net assets.
Janus Global Life Sciences Fund prospectus 31
<PAGE>
PORTFOLIO MANAGER
THOMAS R. MALLEY
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund, which he has managed since inception. He joined
Janus Capital in 1991 as a research analyst and has
focused on companies in the health care, pharmaceutical
and biotechnology industries. Mr. Malley has a Bachelor of
Science in Biology from Stanford University. Mr. Malley is
a Chartered Financial Analyst.
32 Janus Global Life Sciences Fund prospectus
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
SIZE OF THE FUND
The Fund may discontinue sales of its shares if management and
the Trustees believe that continued sales may adversely affect
the Fund's ability to achieve its investment objective. If sales
of the Fund are discontinued, it is expected that existing
shareholders of the Fund would be permitted to continue to
purchase shares and to reinvest any dividends or capital gains
distributions, absent highly unusual circumstances.
YEAR 2000
Preparing for Year 2000 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 Funds
invest 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 Funds' or
Janus Capital's operations.
Janus Global Life Sciences Fund prospectus 33
<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.
34 Janus Global Life Sciences 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 gains realized on
its investments annually. The Fund's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.
Dividends and capital gains distributions are normally declared
and paid in December.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of
the distribution of the Fund, regardless of how long the shares
have been held. Dividends and capital gains awaiting distribution
are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
the Fund declared a dividend in the amount of $0.25 per share. If
the Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as "buying a dividend." In the above example, if you
bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as
a dividend and your shares would now be worth $9.75 per share.
Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for
tax purposes, even though you may not have participated in the
Janus Global Life Sciences Fund prospectus 35
<PAGE>
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses listed on page 18 or calling 1-800-525-3713. The Fund
offers the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income
dividends or capital gains distributions in cash and reinvest
the other in additional shares.
4. REDIRECT OPTION. You may direct your dividends or capital
gains to purchase shares of another Janus fund.
The Fund reserves the right to reinvest into your account
undeliverable and uncashed dividend and distribution checks that
remain outstanding for six months in shares of the Fund at the
NAV next computed after the check is cancelled. Subsequent
distributions may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
36 Janus Global Life Sciences Fund prospectus
<PAGE>
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.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund
on foreign securities may be subject to tax withholding or other
foreign taxes. The Fund may from year to year make the election
permitted under Section 853 of the Internal Revenue Code to pass
through such taxes to shareholders as a foreign tax credit. If
such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Fund.
The Fund does not expect to pay federal income or excise taxes
because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meets these
requirements so that any earnings on your investment will not be
taxed twice.
Janus Global Life Sciences Fund prospectus 37
<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 Reports, which
are available upon request and incorporated by reference into the
SAI.
38 Janus Global Life Sciences Fund prospectus
<PAGE>
<TABLE>
<CAPTION>
JANUS GLOBAL LIFE SCIENCES FUND
- -----------------------------------------------------------------------------
Period ending
October 31st
1999(1)
<S> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income --
3. Net gains or (losses) on securities (both realized and
unrealized) 1.97
4. Total from investment operations 1.97
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) --
6. Dividends (in excess of net investment income) --
7. Distributions (from capital gains) --
8. Total distributions --
9. NET ASSET VALUE, END OF PERIOD $11.97
10. Total return* 19.70%
11. Net assets, end of period (in millions) $344
12. Average net assets for the period (in millions) $228
13. Ratio of gross expenses to average net assets** 1.21%
14. Ratio of net expenses to average net assets** 1.19%
15. Ratio of net investment income/(loss) to average net
assets** (0.41%)
16. Portfolio turnover rate** 235%
- -----------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from December 31, 1998 (inception) to October 31, 1999.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
Janus Global Life Sciences Fund prospectus 39
<PAGE>
GLOSSARY OF INVESTMENT TERMS
- --------------------------------------------------------------------------------
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Fund may
invest. The Fund may invest in these instruments to the extent
permitted by its investment objective and policies. The Fund is
not limited by this discussion and may invest in any other types
of instruments not precluded by the policies discussed elsewhere
in this Prospectus. Please refer to the SAI for a more detailed
discussion of certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required
to pay the holder the amount of the loan (or par value of the
bond) at a specified maturity and to make scheduled interest
payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and
other borrowers to investors seeking to invest idle cash. The
Fund may purchase commercial paper issued in private placements
under Section 4(2) of the Securities Act of 1933.
COMMON STOCKS are equity securities representing shares of
ownership in a company, and usually carry voting rights and earns
dividends. Unlike preferred stock, dividends on common stock are
not fixed but are declared at the discretion of the issuer's
board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a
fixed dividend or interest payment and are convertible into
common stock at a specified price or conversion ratio.
DEBT SECURITIES are 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
40 Janus Global Life Sciences Fund prospectus
<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 manager may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES ("PFICS") are any foreign
corporations which generate amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the Fund must pay if
these investments are profitable, the Fund may make various
Janus Global Life Sciences Fund prospectus 41
<PAGE>
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
42 Janus Global Life Sciences Fund prospectus
<PAGE>
of the U.S. government to purchase the agency's obligations and
others are supported only by the credit of the sponsoring agency.
VARIABLE AND FLOATING RATE SECURITIES have variable or floating
rates of interest and, under certain limited circumstances, may
have varying principal amounts. These securities pay interest at
rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or
market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines on the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
Janus Global Life Sciences Fund prospectus 43
<PAGE>
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or
interest rate is linked to currencies, interest rates, equity
securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the
reference index or instrument appreciates). Indexed/structured
securities may have return characteristics similar to direct
investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the
market risk of an investment in the underlying instruments, as
well as the credit risk of the issuer.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Fund may purchase and
write put and call options on securities, securities indices and
foreign currencies.
44 Janus Global Life Sciences Fund prospectus
<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
4237
<PAGE>
[JANUS LOGO]
JANUS SPECIAL
SITUATIONS 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 Special Situations Fund................ 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and principal investment
strategies................................... 6
General portfolio policies................... 8
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 Special Situations Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS SPECIAL SITUATIONS FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS SPECIAL SITUATIONS FUND?
The Fund seeks capital appreciation.
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 SPECIAL SITUATIONS FUND?
The Fund invests primarily in common stocks selected for their
capital appreciation potential. The Fund emphasizes stocks of
"special situation" companies that the portfolio manager believes
have been overlooked or undervalued by other investors. A
"special situation" arises when, in the portfolio manager's
opinion, securities of a particular company will appreciate in
value due to a specific development. The portfolio manager pays
particular attention to companies that he thinks have high free
cash flows.
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 for companies with earnings
growth potential 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 SPECIAL SITUATIONS 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 Special Situations 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 Fund emphasizes investments in special situation companies
which may not appreciate if an anticipated development does not
occur or attract the anticipated attention. See "What is a
'special situation'?" on page 7 for an explanation of what the
portfolio manager may consider a special situation.
The Fund is nondiversified. In other words, it may hold larger
positions in a smaller number of securities than a diversified
fund. As a result, a single security's increase or decrease in
value may have a greater impact on the Fund's NAV and total
return.
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 Special Situations 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 SPECIAL SITUATIONS FUND
A BAR CHART showing Annual Total Returns for Janus Special
Situations Fund from 1997 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C>
46.04% 25.31% 52.46%
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 28.53% Worst Quarter: 3rd-1998 (19.55%)
</TABLE>
Average annual total return for periods ended 12/31/99
------------------------------------------------------
<TABLE>
<CAPTION>
Since Inception
1 year (12/31/96)
<S> <C> <C>
Janus Special Situations Fund 52.46% 40.78%
S&P 500 Index* 21.03% 27.56%
----------------------------
</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 Special Situations 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 Special Situations 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 Special Situations Fund $98 $306 $531 $1,178
</TABLE>
Janus Special Situations 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 10-13 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Special Situations Fund seeks capital appreciation. It
pursues its objective by investing primarily in common stocks
selected for their capital appreciation potential. The Fund
emphasizes stocks of "special situation" companies that the
portfolio manager believes have been overlooked or undervalued by
other investors. A "special situation" arises when, in the
portfolio manager's opinion, securities of a particular company
will appreciate in value due to a specific development. The
portfolio manager pays particular attention to companies that he
thinks may have high free cash flows.
The following questions and answers are designed to help you better understand
the Fund's principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED?
The Fund may invest substantially all of its assets in common
stocks if its portfolio manager believes that common stocks will
appreciate in value. The portfolio manager generally takes a
"bottom up" approach to selecting companies. In other words, he
seeks to identify individual companies with earnings growth
potential that may not be recognized by the market at large. He
makes this assessment by looking at companies one at a time,
regardless of size, country of organization, place of principal
business activity, or other similar selection criteria.
Realization of income is not a significant consideration when
choosing invest-
6 Janus Special Situations Fund prospectus
<PAGE>
ments for the Fund. Income realized on the Fund's investments
will be incidental to its objective.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio manager seeks companies that meet
his selection criteria regardless of where a company is located.
Foreign securities are generally selected on a stock-by-stock
basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected
levels of inflation, government policies influencing business
conditions, the outlook for currency relationships, and prospects
for economic growth among countries, regions or geographic areas
may warrant greater consideration in selecting foreign
securities. There are no limitations on the countries in which
the Fund may invest and the Fund may at times have significant
foreign exposure.
3. WHAT IS A "SPECIAL SITUATION"?
The Fund emphasizes investments in special situations. A special
situation arises when the portfolio manager believes that the
securities of an issuer will be recognized and appreciate in
value due to a specific development with respect to that issuer.
Special situations may include significant changes in a company's
allocation of its existing capital, a restructuring of assets, or
a redirection of free cash flows. For example, issuers undergoing
significant capital changes may include companies involved in
spin-offs, sales of divisions, mergers or acquisitions, companies
emerging from bankruptcy, or companies initiating large changes
in their debt to equity ratio. Companies that are redirecting
cash flows may be reducing debt, repurchasing shares or paying
dividends. Special situations may also result from (i)
significant changes in industry structure through regulatory
developments or shifts in competition; (ii) a new or improved
product, service, operation or technological advance; (iii)
changes in senior management; and (iv) significant changes in
cost structure. The Fund's performance could suffer if the
anticipated development in
Janus Special Situations Fund prospectus 7
<PAGE>
a "special situation" investment does not occur or does not
attract the expected attention.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the
general policies listed below. The percentage limitations
included in these policies and elsewhere in this Prospectus apply
only at the time of purchase of the security. So, for example, if
the Fund exceeds a limit as a result of market fluctuations or
the sale of securities, it will not be required to dispose of any
securities.
CASH POSITION
When the Fund's portfolio manager believes that market conditions
are unfavorable for profitable investing, or when he is otherwise
unable to locate attractive investment opportunities, the Fund's
cash or similar investments may increase. In other words, the
Fund does not always stay fully invested in stocks. Cash or
similar investments generally are a residual - they represent the
assets that remain after the portfolio manager has committed
available assets to desirable investment opportunities. However,
the portfolio manager may also temporarily increase the Fund's
cash position to protect its assets or maintain liquidity. When
the Fund's investments in cash or similar investments increase,
it may not participate in market advances or declines to the same
extent that it would if the Fund remained more fully invested in
stocks.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred
stocks, but it may also invest to a lesser degree in other types
of securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
8 Janus Special Situations Fund prospectus
<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.
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
Janus Special Situations Fund prospectus 9
<PAGE>
are made in the Fund's portfolio whenever its portfolio manager
believes such changes are desirable. Portfolio turnover rates are
generally not a factor in making buy and sell decisions.
Increased portfolio turnover may result in higher costs for
brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Higher costs
associated with increased portfolio turnover may offset gains in
the Fund's performance.
RISKS
Because the Fund may invest substantially all of its assets in
common stocks, the main risk is the risk that the value of the
stocks it holds might decrease in response to the activities of
an individual company or in response to general market and/or
economic conditions. If this occurs, the Fund's share price may
also decrease. The Fund's performance may also be affected by
risks specific to certain types of investments, such as foreign
securities, derivative investments, non-investment grade bonds,
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.
10 Janus Special Situations Fund prospectus
<PAGE>
The following questions and answers are designed to help you better understand
some of the risks of investing in the Fund.
1. THE FUND MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Many attractive investment opportunities may be smaller, start-up
companies offering emerging products or services. Smaller or
newer companies may suffer more significant losses as well as
realize more substantial growth than larger or more established
issuers because they may lack depth of management, be unable to
generate funds necessary for growth or potential development, or
be developing or marketing new products or services for which
markets are not yet established and may never become established.
In addition, such companies may be insignificant factors in their
industries and may become subject to intense competition from
larger or more established companies. Securities of smaller or
newer companies may have more limited trading markets than the
markets for securities of larger or more established issuers, and
may be subject to wide price fluctuations. Investments in such
companies tend to be more volatile and somewhat more speculative.
2. HOW DOES THE NONDIVERSIFIED STATUS OF THE FUND AFFECT ITS RISK?
Diversification is a way to reduce risk by investing in a broad
range of stocks or other securities. A "nondiversified" fund has
the ability to take larger positions in a smaller number of
issuers. Because the appreciation or depreciation of a single
stock may have a greater impact on the NAV of a nondiversified
fund, its share price can be expected to fluctuate more than a
comparable diversified fund. This fluctuation, if significant,
may affect the performance of the Fund.
3. I'VE HEARD A LOT ABOUT HOW THE CHANGE TO THE YEAR 2000 COULD AFFECT COMPUTER
SYSTEMS. DOES THIS CREATE ANY SPECIAL RISKS?
The portfolio manager carefully researches each potential
investment before making an investment decision and, among other
things considers what impact, if any, the Year 2000
Janus Special Situations Fund prospectus 11
<PAGE>
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.
4. HOW COULD THE FUND'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?
The Fund may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign
markets. Investments in foreign securities, including those of
foreign governments, may involve greater risks than investing in
domestic securities because the Fund's performance may depend on
issues other than the performance of a particular company. These
issues include:
- currency risk
- political and economic risk
- regulatory risk
- market risk
- transaction costs
These risks are described in the SAI.
5. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
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.
12 Janus Special Situations Fund prospectus
<PAGE>
Please refer to the SAI for a description of bond rating
categories.
6. HOW DOES THE FUND TRY TO REDUCE RISK?
The Fund may use futures, options, 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.
Janus Special Situations Fund prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
JANUS SPECIAL
SITUATIONS 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 annually. In addition, the Fund
will send you an immediate transaction confirmation statement
after every non-systematic transaction.
The Fund produces financial reports, which include a list of the
Fund's portfolio holdings, semiannually and updates its
prospectus annually. To reduce expenses, the Fund may choose to
mail only one report or prospectus to your household, even if
more than one person in the household has a Fund account. Please
call 1-800-525-3713 if you would like to receive additional
reports or prospectuses. The Fund reserves the right to charge a
fee for additional statement 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 0.69% of
average daily net assets.
Janus Special Situations Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
DAVID C. DECKER
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of the
Fund, which he has managed since inception. Mr. Decker is
also the portfolio manager of Janus Strategic Value Fund
and is an assistant portfolio manager of Janus Fund. He
joined Janus Capital in 1992 as a research analyst and
focused on companies in the automotive and defense
industries prior to managing the Fund. He obtained his
Master of Business Administration in Finance from the
Fuqua School of Business at Duke University and a Bachelor
of Arts in Economics and Political Science from Tufts
University. Mr. Decker is a Chartered Financial Analyst.
30 Janus Special Situations 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 would be permitted to continue to purchase shares and to
reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
YEAR 2000
Preparing for Year 2000 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 Funds
invest 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 Funds' or
Janus Capital's operations.
Janus Special Situations 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 Special Situations 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 and capital gains distributions are
normally declared and paid in December.
HOW DISTRIBUTIONS AFFECT THE FUND'S NAV
Distributions are paid to shareholders as of the record date of
the distribution of the Fund, regardless of how long the shares
have been held. Dividends and capital gains awaiting distribution
are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
the Fund declared a dividend in the amount of $0.25 per share. If
the Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as "buying a dividend." In the above example, if you
bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as
a dividend and your shares would now be worth $9.75 per share.
Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for
tax purposes, even though you may not have participated in the
Janus Special Situations Fund prospectus 33
<PAGE>
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses on page 16 or calling 1-800-525-3713. The Fund offers
the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income
dividends or capital gains distributions in cash and reinvest
the other in additional shares.
4. REDIRECT OPTION. You may direct your dividends or capital
gains to purchase shares of another Janus fund.
The Fund reserves the right to reinvest into your account
undeliverable and uncashed dividend and distribution checks that
remain outstanding for six months in shares of the Fund at the
NAV next computed after the check is cancelled. Subsequent
distributions may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
34 Janus Special Situations Fund prospectus
<PAGE>
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 Special Situations 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.
JANUS SPECIAL SITUATIONS FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997(1)
<S> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $14.57 $14.08 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income -- -- --
3. Net gains or (losses) on securities (both
realized and unrealized) 8.22 1.15 4.08
4. Total from investment operations 8.22 1.15 4.08
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- -- --
6. Dividends (in excess of net investment income) -- -- --
7. Distributions (from capital gains) (0.04) (0.66) --
8. Total distributions (0.04) (0.66) --
9. NET ASSET VALUE, END OF PERIOD $22.75 $14.57 $14.08
10. Total return* 56.54% 8.49% 40.80%
11. Net assets, end of period (in millions) $1,197 $786 $334
12. Average net assets for the period (in millions) $1,001 $716 $168
13. Ratio of gross expenses to average net assets** 1.00% 1.08% 1.20%
14. Ratio of net expenses to average net assets** 0.98% 1.05% 1.18%
15. Ratio of net investment income/(loss) to average
net assets** (0.76%) (0.49%) (0.08%)
16. Portfolio turnover rate** 104% 117% 146%
- -----------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from December 31, 1996 (inception) to October 31, 1997.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
36 Janus Special Situations 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 Special Situations 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 Special Situations 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 Special Situations 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 Special Situations 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 Special Situations 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
4238
<PAGE>
[JANUS LOGO]
JANUS WORLDWIDE 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 Worldwide Fund......................... 2
Fees and expenses............................ 5
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Investment objective and
principal investment strategies.............. 6
General portfolio policies................... 7
Risks........................................ 9
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 Worldwide Fund prospectus 1
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
JANUS WORLDWIDE FUND
1. WHAT IS THE INVESTMENT OBJECTIVE OF JANUS WORLDWIDE FUND?
The Fund seeks long-term growth of capital in a manner consistent
with the preservation of capital.
The Fund's Trustees may change this objective without a
shareholder vote and the Fund will notify you of any changes that
are material. If there is a material change in the Fund's
objective or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee
that the Fund will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF JANUS WORLDWIDE FUND?
The Fund invests primarily in common stocks of companies of any
size throughout the world. The Fund normally invests in issuers
from at least five different countries, including the United
States. The Fund may at times invest in fewer than five countries
or even a single country.
The 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 managers apply a "bottom up" approach in choosing
investments. In other words, they look for companies with
earnings growth potential one at a time. If the portfolio
managers are 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 WORLDWIDE FUND?
The biggest risk of investing in this Fund is that its returns
may vary and you could lose money. If you are considering
investing in the Fund, remember that it is designed for long-term
investors who can accept the risks of investing in a portfolio
with significant foreign common stock holdings. Common stocks
tend to be more volatile than other investment choices.
2 Janus Worldwide 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 Fund
may have significant exposure to foreign markets. As a result,
its returns and NAV may be affected to a large degree by
fluctuations in currency exchange rates or political or economic
conditions in a particular country.
An investment in the Fund is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Janus Worldwide 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 WORLDWIDE FUND
A BAR CHART showing Annual Total Returns for Janus Worldwide
Fund from 1992 through 1999:
Annual returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
9.01% 28.41% 3.61% 21.90% 26.40% 20.48% 25.87% 64.37%
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-1999 42.11% Worst Quarter: 3rd-1998 (16.10%)
</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 Worldwide Fund 64.37% 30.88% 25.10%
Morgan Stanley International
Worldwide Index* 24.93% 19.76% 14.51%
-------------------------------------
</TABLE>
* The Morgan Stanley International Worldwide Index is a market
capitalization weighted index composed of countries
representative of the market structure of 47 developed and
emerging markets.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
4 Janus Worldwide Fund 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 Worldwide Fund
<S> <C>
Management Fee(1) 0.65%
Other Expenses 0.24%
Total Annual Fund Operating Expenses 0.89%
</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 Worldwide Fund $91 $284 $493 $1,096
</TABLE>
Janus Worldwide 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 9-12 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
Janus Worldwide Fund seeks long-term growth of capital in a
manner consistent with the preservation of capital. It pursues
its objective by investing primarily in common stocks of
companies of any size throughout the world. The Fund normally
invests in issuers from at least five different countries,
including the United States. The Fund may at times invest in
fewer than five countries or even a single country.
The Fund may invest substantially all of its assets in common
stocks of foreign issuers if its portfolio managers believe that
common stocks will appreciate in value. The portfolio managers
generally take a "bottom up" approach to selecting companies. In
other words, they seek to identify individual companies with
earnings growth potential that may not be recognized by the
market at large. They make this assessment by looking at
companies one at a time, regardless of size, country of
organization, place of principal business activity, or other
similar selection criteria. Realization of income is not a
significant consideration when choosing investments for the Fund.
Income realized on the Fund's investments will be incidental to
its objective.
Foreign securities are generally selected on a stock-by-stock
basis without regard to any defined allocation among countries or
geographic regions. However, certain factors such as expected
levels of inflation, government policies influencing business
conditions, the outlook for currency relationships, and prospects
6 Janus Worldwide Fund prospectus
<PAGE>
for economic growth among countries, regions or geographic areas
may warrant greater consideration in selecting foreign
securities.
GENERAL PORTFOLIO POLICIES
In investing its portfolio assets, the Fund will follow the
general policies listed below. The percentage limitations
included in these policies and elsewhere in this Prospectus apply
at the time of purchase of the security. So, for example, if the
Fund exceeds a limit as a result of market fluctuations or the
sale of securities, it will not be required to dispose of any
securities.
CASH POSITION
When the Fund's portfolio managers believe that market conditions
are unfavorable for profitable investing, or when they are
otherwise unable to locate attractive investment opportunities,
the Fund's cash or similar investments may increase. In other
words, the Fund does not always stay fully invested in stocks.
Cash or similar investments generally are a residual - they
represent the assets that remain after the portfolio managers
have committed available assets to desirable investment
opportunities. However, the portfolio managers may also
temporarily increase the Fund's cash position to protect its
assets or maintain liquidity. When the Fund's investments in cash
or similar investments increase, it may not participate in market
advances or declines to the same extent that it would if the Fund
remained more fully invested in stocks.
OTHER TYPES OF INVESTMENTS
The Fund invests primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred
stocks, but it may also invest to a lesser degree in other types
of securities. These securities (which are described in the
Glossary) may include:
- debt securities
- indexed/structured securities
Janus Worldwide Fund prospectus 7
<PAGE>
- high-yield/high-risk bonds (less than 35% of the Fund's assets)
- options, futures, forwards, swaps and other types of
derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return
- securities purchased on a when-issued, delayed delivery or
forward commitment basis
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other
position that cannot be disposed of quickly in the normal course
of business. For example, some securities are not registered
under the U.S. securities laws and cannot be sold to the U.S.
public because of SEC regulations (these are known as "restricted
securities"). Under procedures adopted by the Fund's Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Fund may invest without limit in foreign equity and debt
securities. The Fund may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
SPECIAL SITUATIONS
The Fund may invest in special situations. A special situation
arises when, in the opinion of the Fund's portfolio managers, 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 Worldwide 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 managers believe such changes are
desirable. Portfolio turnover rates are generally not a factor in
making buy and sell decisions.
Increased portfolio turnover may result in higher costs for
brokerage commissions, dealer mark-ups and other transaction
costs and may also result in taxable capital gains. Higher costs
associated with increased portfolio turnover may offset gains in
the Fund's performance.
RISKS
Because the Fund may invest substantially all of its assets in
common stocks, the main risk is the risk that the value of the
stocks it holds might decrease in response to the activities of
an individual company or in response to general market and/or
economic conditions. If this occurs, the Fund's share price may
also decrease. The Fund's performance may also be affected by
risks specific to certain types of investments, such as foreign
securities, derivative investments, non-investment grade debt
securities, 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
Janus Worldwide Fund prospectus 9
<PAGE>
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. HOW COULD THE FUND'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?
The Fund may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign
markets. Investments in foreign securities, including those of
foreign governments, may involve greater risks than investing in
domestic securities because the Fund's performance may depend on
issues other than the performance of a particular company. These
issues include:
- CURRENCY RISK. As long as the Fund holds a foreign security,
its value will be affected by the value of the local currency
relative to the U.S. dollar. When the Fund sells a foreign
denominated security, its value may be worth less in U.S.
dollars even if the security increases in value in its home
country. U.S. dollar denominated securities of foreign issuers
may also be affected by currency risk.
- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject
to heightened political and economic risks, particularly in
emerging markets which may have relatively unstable
governments, immature economic structures, national policies
restricting investments by foreigners, different legal systems,
and economies based on only a few industries. In some
countries, there is the risk that the government may take over
the assets or operations of a company or that the government
may impose taxes or limits on the removal of the Fund's assets
from that country.
- REGULATORY RISK. There may be less government supervision of
foreign markets. As a result, foreign issuers may not be
subject to the uniform accounting, auditing and financial
reporting
10 Janus Worldwide Fund prospectus
<PAGE>
standards and practices applicable to domestic issuers and
there may be less publicly available information about foreign
issuers.
- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile
than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in
settling securities transactions. In some foreign markets,
there may not be protection against failure by other parties to
complete transactions.
- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.
2. THE FUND MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Many attractive investment opportunities may be smaller, start-up
companies offering emerging products or services. Smaller or
newer companies may suffer more significant losses as well as
realize more substantial growth than larger or more established
issuers because they may lack depth of management, be unable to
generate funds necessary for growth or potential development, or
be developing or marketing new products or services for which
markets are not yet established and may never become established.
In addition, such companies may be insignificant factors in their
industries and may become subject to intense competition from
larger or more established companies. Securities of smaller or
newer companies may have more limited trading markets than the
markets for securities of larger or more established issuers, and
may be subject to wide price fluctuations. Investments in such
companies tend to be more volatile and somewhat more speculative.
3. I'VE HEARD A LOT ABOUT HOW THE CHANGE TO THE YEAR 2000 COULD AFFECT COMPUTER
SYSTEMS. DOES THIS CREATE ANY SPECIAL RISKS?
The portfolio manager carefully researches each potential
investment before making an investment decision and, among other
Janus Worldwide Fund prospectus 11
<PAGE>
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.
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
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 Worldwide Fund prospectus
<PAGE>
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Janus Worldwide Fund prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
[JANUS LOGO]
JANUS WORLDWIDE 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 Funds do 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 a 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 annually. In addition, the Fund
will send you an immediate transaction confirmation statement
after every non-systematic transaction.
The Fund produces financial reports, which include a list of the
Fund's portfolio holdings, semiannually and updates its
prospectus annually. To reduce expenses, the Fund may choose to
mail only one report or prospectus to your household, even if
more than one person in the household has a Fund account. Please
call 1-800-525-3713 if you would like to receive additional
reports or prospectuses. The Fund reserves the right to charge a
fee for additional statement 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 0.65% of
average daily net assets.
Janus Worldwide Fund prospectus 29
<PAGE>
PORTFOLIO MANAGER
LAURENCE J. CHANG
- --------------------------------------------------------------------------------
is Executive Vice President and co-manager of the Fund
which he has co-managed since September 1999. He is also
Executive Vice President and co-manager of Janus Overseas
Fund which he has co-managed since April 1998. Mr. Chang
joined Janus Capital in 1993 as a research analyst. He
received an undergraduate degree with honors in Religion
with a concentration in Philosophy from Dartmouth College
and a Master's Degree in Political Science from Stanford
University. Mr. Chang is a Chartered Financial Analyst.
HELEN YOUNG HAYES
- --------------------------------------------------------------------------------
is Executive Vice President and co-manager of the Fund.
She is also Executive Vice President and co-manager of
Janus Overseas Fund. Ms. Hayes joined Janus Capital in
1987 and has managed or co-managed the Fund and Janus
Overseas Fund since their inceptions. She holds a Bachelor
of Arts in Economics from Yale University. Ms. Hayes is a
Chartered Financial Analyst.
30 Janus Worldwide Fund prospectus
<PAGE>
OTHER INFORMATION
- --------------------------------------------------------------------------------
SIZE OF THE FUND
The Fund may discontinue sales of its shares if management and
the Trustees believe that continued sales may adversely affect
the Fund's ability to achieve its investment objective. If sales
of the Fund are discontinued, it is expected that existing
shareholders of the Fund would be permitted to continue to
purchase shares and to reinvest any dividends or capital gains
distributions, absent highly unusual circumstances.
YEAR 2000
Preparing for Year 2000 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 Funds
invest 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 Funds' or
Janus Capital's operations.
Janus Worldwide 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 Worldwide 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 gains realized on
its investments annually. The Fund's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.
Dividends and capital gains distributions are normally declared
and paid in December.
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of
the distribution of the Fund, regardless of how long the shares
have been held. Dividends and capital gains awaiting distribution
are included in the Fund's daily NAV. The share price of the Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
the Fund declared a dividend in the amount of $0.25 per share. If
the Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of the Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as "buying a dividend." In the above example, if you
bought shares on December 30, you would have paid $10.00 per
share. On December 31, the Fund would pay you $0.25 per share as
a dividend and your shares would now be worth $9.75 per share.
Unless your account is set up as a tax-deferred account,
dividends paid to you would be included in your gross income for
tax purposes, even though you may not have participated in the
Janus Worldwide Fund prospectus 33
<PAGE>
increase in NAV of the Fund, whether or not you reinvested the
dividends.
DISTRIBUTION OPTIONS
When you open an account, you must specify on your application
how you want to receive your distributions. You may change your
distribution option at any time by writing the Fund at one of the
addresses listed on page 16 or calling 1-800-525-3713. The Fund
offers the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income
dividends or capital gains distributions in cash and reinvest
the other in additional shares.
4. REDIRECT OPTION. You may direct your dividends or capital
gains to purchase shares of another Janus fund.
The Fund reserves the right to reinvest into your account
undeliverable and uncashed dividend and distribution checks that
remain outstanding for six months in shares of the Fund at the
NAV next computed after the check is cancelled. Subsequent
distributions may also be reinvested.
TAXES
As with any investment, you should consider the tax consequences
of investing in the Fund. Any time you sell or exchange shares of
a Fund in a taxable account, it is considered a taxable event.
Depending on the purchase price and the sale price, you may have
a gain or loss on the transaction. Any tax liabilities generated
by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts,
nor is it a complete analysis of the federal tax implications of
34 Janus Worldwide Fund prospectus
<PAGE>
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.
TAXATION OF THE FUND
Dividends, interest and some capital gains received by the Fund
on foreign securities may be subject to tax withholding or other
foreign taxes. The Fund may from year to year make the election
permitted under Section 853 of the Internal Revenue Code to pass
through such taxes to shareholders as a foreign tax credit. If
such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Fund.
The Fund does not expect to pay federal income or excise taxes
because it intends to meet certain requirements of the Internal
Revenue Code. It is important that the Fund meets these
requirements so that any earnings on your investment will not be
taxed twice.
Janus Worldwide 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 WORLDWIDE 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 $41.52 $40.05 $34.60 $27.65 $27.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.02 1.26 (0.08) 0.49 0.81
3. Net gains or (losses) on securities
(both realized and unrealized) 17.51 3.01 7.73 7.79 1.39
4. Total from investment operations 17.53 4.27 7.65 8.28 2.20
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.18) (1.35) (0.15) (0.26) (0.54)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) -- (1.45) (2.05) (1.07) (1.01)
8. Total distributions (0.18) (2.80) (2.20) (1.33) (1.55)
9. NET ASSET VALUE, END OF PERIOD $58.87 $41.52 $40.05 $34.60 $27.65
10. Total return 42.33% 11.40% 23.34% 31.00% 8.89%
11. Net assets, end of period (in
millions) $24,091 $13,932 $10,358 $4,467 $1,804
12. Average net assets for the period
(in millions) $18,893 $13,078 $7,784 $2,953 $1,622
13. Ratio of gross expenses to average
net assets 0.89% 0.92% 0.97% 1.02% 1.24%
14. Ratio of net expenses to average net
assets 0.88% 0.90% 0.95% 1.01% 1.23%
15. Ratio of net investment
income/(loss) to average net assets 0.07% 0.47% 0.65% 0.73% 0.99%
16. Portfolio turnover rate 68% 86% 79% 80% 142%
- ------------------------------------------------------------------------------
</TABLE>
36 Janus Worldwide 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 stock are
not fixed but are declared at the discretion of the issuer's
board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a
fixed dividend or interest payment and are convertible into
common stock at a specified price or conversion ratio.
DEBT SECURITIES are securities representing money borrowed that
must be repaid at a later date. Such securities have specific
Janus Worldwide Fund prospectus 37
<PAGE>
maturities and usually a specific rate of interest or an original
purchase discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital
gains on the underlying security. Receipts include those issued
by domestic banks (American Depositary Receipts), foreign banks
(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 manager may have to reinvest
the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
38 Janus Worldwide Fund prospectus
<PAGE>
PASSIVE FOREIGN INVESTMENT COMPANIES ("PFICS") are any foreign
corporations which generate amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the Fund must pay if
these investments are profitable, the Fund may make various
elections permitted by the tax laws. These elections could
require that the Fund recognize taxable income, which in turn
must be distributed, before the securities are sold and before
cash is received to pay the distributions.
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
Janus Worldwide Fund prospectus 39
<PAGE>
bonds may be issued with any maturity but generally have
maturities of at least ten years. U.S. government securities also
include indirect obligations of the U.S. government that are
issued by federal agencies and government sponsored entities.
Unlike Treasury securities, agency securities generally are not
backed by the full faith and credit of the U.S. government. Some
agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit
of the sponsoring agency.
VARIABLE AND FLOATING RATE SECURITIES have variable or floating
rates of interest and, under certain limited circumstances, may
have varying principal amounts. These securities pay interest at
rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or
market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.
WARRANTS are securities, typically issued with preferred stocks
or bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Fund does not earn interest on such securities until settlement
and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
40 Janus Worldwide Fund prospectus
<PAGE>
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Fund may enter into forward currency contracts to hedge against
declines on the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. It may also enter into forward contracts to purchase
or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Fund may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Fund
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy or sell a futures contract at a specified price on or before
a specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or
interest rate is linked to currencies, interest rates, equity
securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the
reference index or instrument appreciates). Indexed/structured
securities may have return characteristics similar to direct
investments in the underlying instruments and may be more
volatile than the underlying instruments. The Fund bears the
market risk of an investment in the underlying instruments, as
well as the credit risk of the issuer.
Janus Worldwide Fund prospectus 41
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OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Fund may purchase and
write put and call options on securities, securities indices and
foreign currencies.
42 Janus Worldwide Fund prospectus
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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
4241
