<PAGE>
[JANUS LOGO]
JANUS EQUITY FUNDS
PROSPECTUS
JANUS FUND
JANUS ENTERPRISE FUND
JANUS MERCURY FUND
JANUS SPECIAL SITUATIONS FUND
JANUS STRATEGIC VALUE FUND
JANUS GROWTH AND INCOME FUND
JANUS BALANCED FUND
JANUS EQUITY INCOME FUND
JANUARY 31, 2000 AS SUPPLEMENTED
MARCH 16, 2000 AND MAY 10, 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
Equity Funds................................. 2
Fees and expenses............................ 11
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS
Equity Funds................................. 13
General portfolio policies................... 20
Risks........................................ 23
SHAREHOLDER'S MANUAL
Minimum investments.......................... 31
Types of account ownership................... 31
To purchase shares........................... 34
To exchange shares........................... 35
To redeem shares............................. 35
Shareholder services and account policies.... 40
MANAGEMENT OF THE FUNDS
Investment adviser........................... 44
Investment personnel......................... 46
OTHER INFORMATION............... ............... 51
DISTRIBUTIONS AND TAXES
Distributions................................ 53
Taxes........................................ 55
FINANCIAL HIGHLIGHTS.............. ............. 57
GLOSSARY
Glossary of investment terms................. 65
</TABLE>
Janus Equity Funds prospectus 1
<PAGE>
RISK/RETURN SUMMARY
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EQUITY FUNDS
The Equity Funds are designed for long-term investors who seek
growth of capital and who can tolerate the greater risks
associated with common stock investments. Janus Balanced Fund,
Janus Equity Income Fund and Janus Growth and Income Fund are
designed for investors who primarily seek growth of capital with
varying degrees of emphasis on income. Janus Balanced Fund, Janus
Equity Income Fund and Janus Growth and Income Fund are not
designed for investors who desire a consistent level of income.
1. WHAT ARE THE INVESTMENT OBJECTIVES OF THE EQUITY FUNDS?
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JANUS EQUITY FUNDS
- JANUS FUND seeks long-term growth of capital in a manner
consistent with the preservation of capital.
- JANUS ENTERPRISE FUND, JANUS MERCURY FUND AND JANUS
STRATEGIC VALUE FUND seek long-term growth of capital.
- JANUS SPECIAL SITUATIONS FUND seeks capital appreciation.
- JANUS GROWTH AND INCOME FUND seeks long-term capital growth
and current income.
- JANUS BALANCED FUND seeks long-term capital growth,
consistent with preservation of capital and balanced by
current income.
- JANUS EQUITY INCOME FUND seeks current income and long-term
growth of capital.
The Funds' Trustees may change these objectives without a
shareholder vote and the Funds will notify you of any changes
that are material. If there is a material change to a Fund's
objective or policies, you should consider whether that Fund
remains an appropriate investment for you. There is no guarantee
that a Fund will meet its objective.
2 Janus Equity Funds prospectus
<PAGE>
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE EQUITY FUNDS?
The portfolio managers apply a "bottom up" approach in choosing
investments. In other words, the Funds' portfolio managers look
for companies with earnings growth potential one at a time, and
in the case of Janus Strategic Value Fund, the Fund's portfolio
manager looks for undervalued companies one at a time. Janus
Balanced Fund's, Janus Equity Income Fund's and Janus Growth and
Income Fund's portfolio managers look mostly for equity and
income-producing securities that meet their investment criteria.
If a portfolio manager is unable to find such investments, a
significant portion of a Fund's assets may be in cash or similar
investments.
The Funds may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in
high-yield/high-risk bonds.
JANUS FUND invests primarily in common stocks selected for their
growth potential. Although the Fund can invest in companies of
any size, it generally invests in larger, more established
companies.
JANUS ENTERPRISE FUND invests primarily in common stocks selected
for their growth potential, and normally invests at least 50% of
its equity assets in medium-sized companies.
JANUS MERCURY FUND invests primarily in common stocks selected
for their growth potential. The Fund may invest in companies of
any size, from larger, well-established companies to smaller,
emerging growth companies.
JANUS SPECIAL SITUATIONS 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.
Janus Equity Funds prospectus 3
<PAGE>
JANUS STRATEGIC VALUE FUND invests primarily in common stocks
with the potential for long-term growth of capital using a
"value" approach. The "value" approach emphasizes investments in
companies the portfolio manager believes are undervalued relative
to their intrinsic worth.
The portfolio manager measures value as a function of
price/earnings (P/E) ratios and price/free cash flow. A P/E ratio
is the relationship between the price of a stock and its earnings
per share. This figure is determined by dividing a stock's market
price by the company's earnings per share amount. Price/free cash
flow is the relationship between the price of a stock and the
company's available cash from operations minus capital
expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving
their returns on invested capital. These companies may also
include special situations companies that are experiencing
management changes and/or are temporarily out of favor.
JANUS GROWTH AND INCOME FUND normally emphasizes investments in
common stocks. It will normally invest up to 75% of its assets in
equity securities selected primarily for their growth potential,
and at least 25% of its assets in securities the portfolio
manager believes have income potential. Equity securities may
make up part of this income component if they currently pay
dividends or the portfolio manager believes they have potential
for increasing or commencing dividend payments.
JANUS BALANCED FUND normally invests 40-60% of its assets in
securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for their
income potential. The Fund will normally invest at least 25% of
its assets in fixed-income securities.
JANUS EQUITY INCOME FUND normally emphasizes investments in
common stocks, and growth potential is a significant investment
consideration. Normally, it invests at least 65% of its invested
assets in income-producing equity securities.
4 Janus Equity Funds prospectus
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3. WHAT ARE THE MAIN RISKS OF INVESTING IN THE EQUITY FUNDS?
The biggest risk is that the Funds' returns may vary, and you
could lose money. If you are considering investing in any of the
Equity Funds, remember that they are each 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 a Fund's portfolio may decrease if the value of
an individual company in the portfolio decreases and, in the
case of Janus Special Situations Fund and Janus Strategic
Value Fund, if the portfolio manager's belief about a
company's intrinsic worth is incorrect. The value of a Fund's
portfolio could also decrease if the stock market goes down.
If the value of a Fund's portfolio decreases, a Fund's net
asset value (NAV) will also decrease, which means if you sell
your shares in a Fund you would get back less money.
The income component of Janus Balanced Fund, Janus Equity
Income Fund and Janus Growth and Income Fund portfolios
includes fixed-income securities. A fundamental risk to the
income component is that the value of these securities will
fall if interest rates rise. Generally, the value of a
fixed-income portfolio will decrease when interest rates rise,
which means the Fund's NAV may likewise decrease. Another
fundamental risk associated with fixed-income securities is
credit risk, which is the risk that an issuer will be unable
to make principal and interest payments when due.
JANUS SPECIAL SITUATIONS 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 17 for an explanation of what the portfolio manager may
consider a special situation.
Janus Equity Funds prospectus 5
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JANUS ENTERPRISE FUND, JANUS SPECIAL SITUATIONS FUND AND JANUS
STRATEGIC VALUE FUND are nondiversified. In other words, they
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 a
Fund's NAV and total return.
An investment in these Funds is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
6 Janus Equity Funds prospectus
<PAGE>
The following information illustrates how each of the Equity
Fund's performance has varied over time. The bar charts depict
the change in performance from year-to-year during the period
indicated. The tables compare each Fund's average annual returns
for the periods indicated to a broad-based securities market
index.
JANUS FUND
Annual Returns for periods ended 12/31
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(0.74%) 42.80% 6.87% 10.92% (1.10%) 29.43% 19.61% 22.72% 38.89% 47.13%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
</TABLE>
Best Quarter: 4th-1998 28.44% Worst Quarter: 3rd-1990 (13.91%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year 5 years 10 years (2/5/70)
<S> <C> <C> <C> <C>
Janus Fund 47.13% 31.16% 20.49% 18.49%
S&P 500 Index* 21.03% 28.54% 18.79% 14.03%
--------------------------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
Janus Equity Funds prospectus 7
<PAGE>
JANUS ENTERPRISE FUND
Annual Returns for periods ended 12/31
15.64% 8.92% 27.25% 11.65% 10.82% 33.75% 121.90%
1993 1994 1995 1996 1997 1998 1999
Best Quarter: 4th-1999 57.93% Worst Quarter: 3rd-1998 (14.63%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/1/92)
<S> <C> <C> <C>
Janus Enterprise Fund 121.90% 36.12% 31.95%
S&P MidCap 400 Index+ 14.72% 23.05% 18.69%
----------------------------------
</TABLE>
+ The S&P MidCap 400 Index is an unmanaged group of 400
domestic stocks chosen for their market size, liquidity and
industry group representation.
JANUS MERCURY FUND
Annual Returns for periods ended 12/31
15.86% 33.01% 17.67% 11.88% 58.41% 96.23%
1994 1995 1996 1997 1998 1999
Best Quarter: 4th-1999 42.72% Worst Quarter: 3rd-1998 (6.94%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year 5 years (5/3/93)
<S> <C> <C> <C>
Janus Mercury Fund 96.23% 40.33% 35.46%
S&P 500 Index* 21.03% 28.54% 22.29%
----------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
8 Janus Equity Funds prospectus
<PAGE>
JANUS SPECIAL SITUATIONS FUND
Annual Returns for periods ended 12/31
46.04% 25.31% 52.46%
1997 1998 1999
Best Quarter: 4th-1998 28.53% Worst Quarter: 3rd-1998 (19.55%)
Average annual total return for periods ended 12/31/99
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<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.
Since Janus Strategic Value Fund did not commence operations
until January 31, 2000, there is no performance available as of
the date of this prospectus.
JANUS GROWTH AND INCOME FUND
Annual Returns for periods ended 12/31
5.35% 6.70% (4.87%) 36.35% 26.03% 34.66% 34.87% 51.18%
1992 1993 1994 1995 1996 1997 1998 1999
Best Quarter: 4th-1999 29.20% Worst Quarter: 3rd-1998 (8.97%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year 5 years (5/15/91)
<S> <C> <C> <C>
Janus Growth and Income Fund 51.18% 36.38% 25.12%
S&P 500 Index* 21.03% 28.54% 20.11%
----------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
Janus Equity Funds prospectus 9
<PAGE>
JANUS BALANCED FUND
Annual Returns for periods ended 12/31
10.56% 0.02% 27.31% 15.30% 21.81% 31.20% 23.51%
1993 1994 1995 1996 1997 1998 1999
Best Quarter: 4th-1998 18.75% Worst Quarter: 3rd-1998 (4.49%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year 5 years (9/1/92)
<S> <C> <C> <C>
Janus Balanced Fund 23.51% 23.71% 19.12%
S&P 500 Index* 21.03% 28.54% 21.46%
Lehman Brothers Gov't/Corp Bond Index+ 2.15% 7.61% 5.44%
----------------------------------
</TABLE>
* The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
+ Lehman Brothers Gov't/Corp Bond Index is composed of all bonds
that are of investment grade with at least one year until
maturity.
JANUS EQUITY INCOME FUND
Annual Returns for periods ended 12/31
31.08% 40.05% 38.50%
1997 1998 1999
Best Quarter: 4th-1998 26.34% Worst Quarter: 3rd-1998 (8.06%)
Average annual total return for periods ended 12/31/99
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<TABLE>
<CAPTION>
Since Inception
1 year (6/28/96)
<S> <C> <C>
Janus Equity Income Fund 38.50% 35.96%
S&P 500 Index++ 21.03% 27.15%
------------------------
</TABLE>
++ The S&P 500 is the Standard & Poor's Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
The Equity Funds' past performance does not necessarily indicated how they will
perform in the future.
10 Janus Equity Funds 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 Funds.
ANNUAL FUND OPERATING EXPENSES are paid out of a 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
on the next page shows, these costs are borne indirectly by all
shareholders.
Janus Equity Funds prospectus 11
<PAGE>
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds. 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>
Management Other Total Annual Fund
Fee(1) Expenses Operating Expenses
<S> <C> <C> <C>
Janus Fund 0.65% 0.20% 0.85%
Janus Enterprise Fund 0.65% 0.29% 0.94%
Janus Mercury Fund 0.65% 0.27% 0.92%
Janus Special Situations Fund 0.65% 0.31% 0.96%
Janus Strategic Value Fund 0.65% 0.60%(2) 1.25%
Janus Growth and Income Fund 0.65% 0.26% 0.91%
Janus Balanced Fund 0.65% 0.25% 0.90%
Janus Equity Income Fund 0.65% 0.31% 0.96%
</TABLE>
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(1) "Management Fee" information has been restated to reflect a new fee
schedule effective January 31, 2000.
(2) "Other Expenses" are based on the estimated expenses that the Fund
expects to incur in its initial fiscal year.
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EXAMPLE:
This example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in each of the Funds 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 Funds' operating expenses remain the same.
Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
-----------------------------------------
Janus Fund $ 87 $271 $471 $1,049
Janus Enterprise Fund $ 96 $300 $520 $1,155
Janus Mercury Fund $ 94 $293 $509 $1,131
Janus Special Situations Fund $ 98 $306 $531 $1,178
Janus Strategic Value Fund $127 $397 N/A N/A
Janus Growth and Income Fund $ 93 $290 $504 $1,120
Janus Balanced Fund $ 92 $287 $498 $1,108
Janus Equity Income Fund $ 98 $306 $531 $1,178
</TABLE>
12 Janus Equity Funds prospectus
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENTS
STRATEGIES AND RISKS
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EQUITY FUNDS
This section takes a closer look at the investment objectives of
each of the Equity Funds, their principal investment strategies
and certain risks of investing in the Equity Funds. 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 23-27 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 EQUITY FUNDS
JANUS FUND
Janus Fund seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its
objective by investing primarily in common stocks selected for
their growth potential. Although the Fund can invest in companies
of any size, it generally invests in larger, more established
companies.
JANUS ENTERPRISE FUND
Janus Enterprise Fund seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks
selected for their growth potential, and normally invests at
least 50% of its equity assets in medium-sized companies. Medium-
sized companies are those whose market capitalization falls
within the range of companies in the S&P MidCap 400 Index. Market
capitalization is a commonly used measure of the size and value
of a company. The market capitalizations within the Index will
vary, but as of December 31, 1999, they ranged from approximately
$170 million to $37 billion.
Janus Equity Funds prospectus 13
<PAGE>
JANUS MERCURY FUND
Janus Mercury Fund seeks long-term growth of capital. It pursues
its objective by investing primarily in common stocks selected
for their growth potential. The Fund may invest in companies of
any size, from larger, well-established companies to smaller,
emerging growth companies.
JANUS SPECIAL SITUATIONS FUND
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.
JANUS STRATEGIC VALUE FUND
Janus Strategic Value Fund seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks
with the potential for long-term growth of capital using a
"value" approach. The "value" approach the portfolio manager uses
emphasizes investments in companies he believes are undervalued
relative to their intrinsic worth.
The portfolio manager measures value as a function of
price/earnings (P/E) ratios and price/free cash flow. A P/E ratio
is the relationship between the price of a stock and its earnings
per share. This figure is determined by dividing a stock's market
price by the company's earnings per share amount. Price/free cash
flow is the relationship between the price of a stock and its
available cash from operations minus capital expenditures.
The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving
their returns on invested capital. These companies may also
14 Janus Equity Funds prospectus
<PAGE>
include special situations companies that are experiencing
management changes and/or are temporarily out of favor.
JANUS GROWTH AND INCOME FUND
Janus Growth and Income Fund seeks long-term capital growth and
current income. It normally emphasizes investments in common
stocks. It will normally invest up to 75% of its assets in equity
securities selected primarily for their growth potential, and at
least 25% of its assets in securities the portfolio manager
believes have income potential. Because of this investment
strategy, the Fund is not designed for investors who need
consistent income.
JANUS BALANCED FUND
Janus Balanced Fund seeks long-term capital growth, consistent
with preservation of capital and balanced by current income. It
pursues its objective by normally investing 40-60% of its assets
in securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for their
income potential. This Fund normally invests at least 25% of its
assets in fixed-income securities.
JANUS EQUITY INCOME FUND
Janus Equity Income Fund seeks current income and long-term
growth of capital. It pursues its objective by normally
emphasizing investments in common stocks, and growth potential is
a significant investment consideration. The Fund tries to provide
a lower level of volatility than the S&P 500 Index. Normally, it
invests at least 65% of its invested assets in income-producing
equity securities including common and preferred stocks, warrants
and securities that are convertible to common or preferred
stocks.
Janus Equity Funds prospectus 15
<PAGE>
The following questions and answers are designed to help you better understand
the Equity Funds' principal investment strategies.
1. HOW ARE COMMON STOCKS SELECTED?
Each of the Funds may invest substantially all of its assets in
common stocks if its portfolio manager believes 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.
Except for the Janus Growth and Income Fund, Janus Balanced Fund
and Janus Equity Income Fund, realization of income is not a
significant consideration when choosing investments for the
Funds. Income realized on the Funds' investments may be
incidental to their objectives. In the case of Janus Growth and
Income Fund, Janus Balanced Fund and Janus Equity Income Fund, a
portfolio manager may consider dividend-paying characteristics to
a greater degree in selecting common stock.
2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?
Generally, yes. The portfolio managers seek companies that meet
their 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 Funds may invest and the Funds may at
times have significant foreign exposure.
16 Janus Equity Funds prospectus
<PAGE>
3. WHAT IS A "SPECIAL SITUATION"?
Each Fund may invest in special situations. A special situation
arises when a portfolio manager believes that the securities of
an issuer will be recognized and appreciate in value due to a
specific development with respect to that issuer. Special
situations may include significant changes in a company's
allocation of its existing capital, a restructuring of assets, or
a redirection of free cash flows. For example, issuers undergoing
significant capital changes may include companies involved in
spin-offs, sales of divisions, mergers or acquisitions, companies
emerging from bankruptcy, or companies initiating large changes
in their debt to equity ratio. Companies that are redirecting
cash flows may be reducing debt, repurchasing shares or paying
dividends. Special situations may also result from (i)
significant changes in industry structure through regulatory
developments or shifts in competition; (ii) a new or improved
product, service, operation or technological advance; (iii)
changes in senior management; or (iv) significant changes in cost
structure. As noted previously, Janus Special Situations Fund
emphasizes this type of strategy.
4. WHAT DOES "MARKET CAPITALIZATION" MEAN?
Market capitalization is the most commonly used measure of the
size and value of a company. It is computed by multiplying the
current market price of a share of the company's stock by the
total number of its shares outstanding. As noted previously,
market capitalization is an important investment criteria for
Janus Enterprise Fund. Although the other Equity Funds offered by
this Prospectus do not emphasize companies of any particular
size, Funds with a larger asset base (e.g., Janus Fund) are more
likely to invest in larger, more established issuers.
Janus Equity Funds prospectus 17
<PAGE>
5. HOW DOES JANUS STRATEGIC VALUE FUND'S PORTFOLIO MANAGER DETERMINE THAT A
COMPANY MAY BE UNDERVALUED?
A company may be undervalued when, in the opinion of the Fund's
portfolio manager, the company is selling for a price that is
below its intrinsic worth. A company may be undervalued due to
market or economic conditions, temporary earnings declines,
unfavorable developments affecting the company or other factors.
Such factors may provide buying opportunities at attractive
prices compared to historical or market price-earnings ratios,
price/free cash flow, book value, or return on equity. The
portfolio manager believes that buying these securities at a
price that is below its intrinsic worth may generate greater
returns for the Fund than those obtained by paying premium prices
for companies currently in favor in the market.
6. HOW DO JANUS GROWTH AND INCOME FUND, JANUS BALANCED FUND AND JANUS EQUITY
INCOME FUND DIFFER FROM EACH OTHER?
Janus Growth and Income Fund places a greater emphasis on
aggressive growth stocks and may derive a greater portion of its
income from dividend-paying common stocks. Because of these
factors, its NAV can be expected to fluctuate more than Janus
Balanced Fund or Janus Equity Income Fund. Although Janus Equity
Income Fund invests substantially all of its assets in common
stocks, it emphasizes investments in dividend-paying common
stocks and other equity securities characterized by relatively
greater price stability, and thus may be expected to be less
volatile than Janus Growth and Income Fund, as discussed in more
detail below. Janus Balanced Fund places a greater emphasis on
the income component of its portfolio and invests to a greater
degree in securities selected primarily for their income
potential. As a result it is expected to be less volatile than
Janus Growth and Income Fund and Janus Equity Income Fund.
7. HOW DOES JANUS EQUITY INCOME FUND TRY TO LIMIT PORTFOLIO VOLATILITY?
Janus Equity Income Fund seeks to provide a lower level of
volatility than the stock market at large, as measured by the
18 Janus Equity Funds prospectus
<PAGE>
S&P 500 Index. The lower volatility sought by this Fund is
expected to result primarily from investments in dividend-paying
common stocks and other equity securities characterized by
relatively greater price stability. The greater price stability
sought by Janus Equity Income Fund may be characteristic of
companies that generate above average free cash flows. A company
may use free cash flows for a number of purposes including
commencing or increasing dividend payments, repurchasing its own
stock or retiring outstanding debt. The portfolio manager also
considers growth potential in selecting this Fund's securities
and may hold securities selected solely for their growth
potential.
8. HOW ARE ASSETS ALLOCATED BETWEEN THE GROWTH AND INCOME COMPONENTS OF JANUS
BALANCED FUND'S AND JANUS GROWTH AND INCOME FUND'S PORTFOLIOS?
Janus Balanced Fund and Janus Growth and Income Fund shift assets
between the growth and income components of their portfolios
based on the portfolio managers' analysis of relevant market,
financial and economic conditions. If a portfolio manager
believes that growth securities will provide better returns than
the yields then available or expected on income-producing
securities, that Fund will place a greater emphasis on the growth
component.
9. WHAT TYPES OF SECURITIES MAKE UP THE GROWTH COMPONENT OF JANUS GROWTH AND
INCOME FUND'S, JANUS BALANCED FUND'S AND JANUS EQUITY INCOME FUND'S
PORTFOLIOS?
The growth component of these Funds' portfolios is expected to
consist primarily of common stocks, but may also include
warrants, preferred stocks or convertible securities selected
primarily for their growth potential.
10. WHAT TYPES OF SECURITIES MAKE UP THE INCOME COMPONENT OF JANUS BALANCED
FUND'S AND JANUS GROWTH AND INCOME FUND'S PORTFOLIOS?
The income component of Janus Balanced Fund and Janus Growth and
Income Fund will consist of securities that a portfolio manager
believes have income potential. Such securities may include
equity securities, convertible securities and all types of debt
securities. Equity securities may be included in the income
Janus Equity Funds prospectus 19
<PAGE>
component of a Fund if they currently pay dividends or a
portfolio manager believes they have the potential for either
increasing their dividends or commencing dividends, if none are
currently paid.
GENERAL PORTFOLIO POLICIES
Unless otherwise stated, each of the following policies applies
to all of the Funds. The percentage limitations included in these
policies and elsewhere in this Prospectus apply at the time of
purchase of the security. So, for example, if a Fund exceeds a
limit as a result of market fluctuations or the sale of other
securities, it will not be required to dispose of any securities.
CASH POSITION
When a Fund's portfolio manager believes that market conditions
are unfavorable for profitable investing, or when he or she is
otherwise unable to locate attractive investment opportunities,
the Funds' cash or similar investments may increase. In other
words, the Funds do not always stay fully invested in stocks and
bonds. Cash or similar investments generally are a
residual - they represent the assets that remain after a
portfolio manager has committed available assets to desirable
investment opportunities. However, a portfolio manager may also
temporarily increase a Fund's cash position to protect its assets
or maintain liquidity. Partly because the portfolio managers act
independently of each other, the cash positions of the Funds may
vary significantly.
When a Fund's investments in cash or similar investments
increase, it may not participate in market advances or declines
to the same extent that it would if the Fund remained more fully
invested in stocks or bonds.
20 Janus Equity Funds prospectus
<PAGE>
OTHER TYPES OF INVESTMENTS
The Equity Funds invest primarily in domestic and foreign equity
securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred
stocks. Janus Growth and Income Fund, Janus Balanced Fund and
Janus Equity Income Fund also invest in domestic and foreign
equity securities with varying degrees of emphasis on income. The
Funds 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 each 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
Each 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 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 Funds' Trustees,
certain restricted securities may be deemed liquid, and will not
be counted toward this 15% limit.
FOREIGN SECURITIES
The Funds may invest without limit in foreign equity and debt
securities. The Funds may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in
Janus Equity Funds prospectus 21
<PAGE>
the United States. Other ways of investing in foreign securities
include depositary receipts or shares, and passive foreign
investment companies.
SPECIAL SITUATIONS
Each Fund may invest in special situations. A special situation
arises when, in the opinion of a Fund's portfolio manager, the
securities of a particular issuer will be recognized and
appreciate in value due to a specific development with respect to
that issuer. Developments creating a special situation might
include, among others, a new product or process, a technological
breakthrough, a management change or other extraordinary
corporate event, or differences in market supply of and demand
for the security. A 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 Funds generally intend to purchase securities for long-term
investment although, to a limited extent, a 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. A Fund may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or
securities prices. Changes are made in a Fund's portfolio
whenever its portfolio manager believes such changes are
desirable. Portfolio turnover rates are generally not a factor in
making buy and sell decisions.
22 Janus Equity Funds prospectus
<PAGE>
RISKS
Because the Funds may invest substantially all of their assets in
common stocks, the main risk is the risk that the value of the
stocks they hold might decrease in response to the activities of
an individual company or in response to general market and/or
economic conditions. If this occurs, a Fund's share price may
also decrease. A Fund's performance may also be affected by risks
specific to certain types of investments, such as foreign
securities, derivative investments, non-investment grade debt
securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on
a fund with a small asset base. A fund may not experience similar
performance as its assets grow.
The following questions and answers are designed to help you better understand
some of the risks of investing in the Funds.
1. HOW DOES THE NONDIVERSIFIED STATUS OF JANUS ENTERPRISE FUND, JANUS SPECIAL
SITUATIONS FUND AND JANUS STRATEGIC VALUE FUND AFFECT THEIR 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 a Fund.
2. 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 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
Janus Equity Funds prospectus 23
<PAGE>
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. In
technology-related industries, competitive pressures may have a
significant effect on the performance of companies in which a
fund may invest. In addition, technology and technology-related
companies often progress at an accelerated rate, and these
companies may be subject to short product cycles and aggressive
pricing which may increase their volatility.
3. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?
If the portfolio manager's perception of a company's worth is not
realized in the time frame he expects, the overall performance of
Janus Strategic Value Fund may suffer. In addition, if the market
value of a company declines Janus Strategic Value Fund's
performance could suffer. In general, the portfolio manager
believes these risks are mitigated by investing in companies that
are undervalued in the market in relation to earnings, dividends
and/or assets.
4. 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 managers carefully research each potential
investment before making an investment decision and, among other
things consider 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 a
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.
24 Janus Equity Funds prospectus
<PAGE>
5. HOW COULD THE FUNDS' INVESTMENTS IN FOREIGN SECURITIES AFFECT THEIR
PERFORMANCE?
The Funds 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 Funds' performance may depend on
issues other than the performance of a particular company. These
issues include:
- CURRENCY RISK. As long as a Fund holds a foreign security, its
value will be affected by the value of the local currency
relative to the U.S. dollar. When a Fund sells a foreign
denominated security, its value may be worth less in U.S.
dollars even if the security increases in value in its home
country. U.S. dollar denominated securities of foreign issuers
may also be affected by currency risk.
- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject
to heightened political and economic risks, particularly in
emerging markets which may have relatively unstable
governments, immature economic structures, national policies
restricting investments by foreigners, different legal systems,
and economies based on only a few industries. In some
countries, there is the risk that the government may take over
the assets or operations of a company or that the government
may impose taxes or limits on the removal of a Fund's assets
from that country.
- REGULATORY RISK. There may be less government supervision of
foreign markets. As a result, foreign issuers may not be
subject to the uniform accounting, auditing and financial
reporting standards and practices applicable to domestic
issuers and there may be less publicly available information
about foreign issuers.
- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile
than domestic markets. Certain markets may require payment
Janus Equity Funds prospectus 25
<PAGE>
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.
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.
Please refer to the SAI for a description of bond rating
categories.
7. HOW DO THE FUNDS TRY TO REDUCE RISK?
The Funds may use futures, options, swaps and other derivative
instruments to "hedge" or protect their portfolios from adverse
movements in securities prices and interest rates. The Funds may
also use a variety of currency hedging techniques, including
forward currency contracts, to manage exchange rate risk. The
Funds believe the use of these instruments will benefit the
Funds. However, a Fund's performance could be worse than if the
Fund had not used such instruments if a portfolio manager's
judgement proves incorrect. Risks associated with the use of
derivative instruments are described in the SAI.
26 Janus Equity Funds prospectus
<PAGE>
8. THE FUNDS MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?
Particularly in the area of technology, 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.
Janus Equity Funds prospectus 27
<PAGE>
<PAGE>
[JANUS LOGO]
Janus Equity Funds
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.
30 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 Funds reserve the right to change the amount of these minimums from time
to time or to waive them in whole or in part for certain types of accounts.
** An Automatic Investment Program requires a $100 minimum automatic investment
per month until the account balance reaches $2,500.
+ The minimum subsequent investment for a retirement account or UGMA/UTMA is
$50.
TYPES OF ACCOUNT OWNERSHIP
If you are investing in the Funds for the first time, you will
need to establish an account. You can establish the following
types of accounts by completing a New Account Application.
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 31
<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 Funds. 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.
32 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 FUNDS ARE 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 33
<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.
34 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 38. Also for written requests on page 38.
refer to the exchange policies - Please see page 38 for information
listed on page 37 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 35
<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 Funds reserve 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, for investment in one of our closed funds, or for investment
in a fund that is not yet available for public sale, the undesignated amount
or entire investment, as applicable, will be invested in the Janus Money
Market Fund-Investor Shares ("Money Market Fund"). For investments without a
specific Fund designation and for investments in closed Funds, unless you
later direct Janus to (1) purchase shares of another Janus Fund or (2) redeem
shares of the Money Market Fund and return the proceeds (including any
dividends earned) to you, Janus will treat your inaction as approval of the
purchase of the Money Market Fund. If you hold shares of a closed Fund and
submit an order for a new account in that closed Fund, the order must clearly
indicate that you are currently a shareholder of the closed Fund or your money
will be invested in the Money Market Fund. If you submit an order to purchase
shares of a Fund that is not yet available for investment (during a
subscription period), your investment will be held in the Money Market Fund
until the new Fund's commencement of operations. At that time, your investment
(including any dividends) will be automatically exchanged from the Money
Market Fund to the new Fund. All orders for purchase, exchange, or redemption
will receive the NAV next calculated after your order is received and accepted
by a 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.
36 Shareholder's manual
<PAGE>
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 each 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.
- The Funds reserve the right to reject any purchase order or exchange request
and to modify or terminate the exchange privilege at any time. For example,
the Funds may reject exchanges from accounts engaged in or known to engage in
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.
Shareholder's manual 37
<PAGE>
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 FUNDS MAY DELAY
THE PAYMENT OF YOUR REDEMPTION PROCEEDS FOR UP TO 15 DAYS FROM THE DAY OF
PURCHASE TO ALLOW THE PURCHASE TO CLEAR. Unless you provide alternate
instructions, your proceeds will be invested in Janus Money Market
Fund - Investor Shares during the 15 day hold period.
WRITTEN INSTRUCTIONS
To redeem or exchange all or part of your shares in writing, your
request should be sent to one of the addresses listed on page 36
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
38 Shareholder's manual
<PAGE>
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 FUNDS RESERVE 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
guarantee signatures: banks, savings and loan associations, trust
companies, credit unions, broker-dealers, and member firms of a
national securities exchange. Call your financial institution to
see if they have the ability to guarantee a signature. A
signature guarantee cannot be provided by a notary public.
If you live outside the United States, a foreign bank properly
authorized to do business in your country of residence or a U.S.
consulate may be able to authenticate your signature.
PRICING OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the
NAV next calculated after your request is received and accepted
by a Fund (or a Fund's agent or authorized designee). A Fund's
NAV is calculated at the close of the regular trading session of
the NYSE (normally 4:00 p.m. New York time) each day that the
Shareholder's manual 39
<PAGE>
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 31 or
to close such accounts. This policy will apply to accounts
participating in the Automatic Monthly Investment Program only if
your account balance does not reach the required minimum initial
investment or falls below such minimum and you have discontinued
monthly investments. This policy does not apply to accounts that
fall below the minimums solely as a result of market value
fluctuations. It is expected that, for purposes of this policy,
accounts will be valued in September, and the $10 fee will be
assessed on the second Friday of September of each year. You will
receive notice before we charge the $10 fee or close your account
so that you may increase your account balance to the required
minimum.
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
40 Shareholder's manual
<PAGE>
other employee benefit plans (a "Processing Organization").
Processing Organizations may charge you a fee for this service
and may require different minimum initial and subsequent
investments than the Funds. Processing Organizations may also
impose other charges or restrictions different from those
applicable to shareholders who invest in the Funds directly. A
Processing Organization, rather than its customers, may be the
shareholder of record of your shares. The Funds are not
responsible for the failure of any Processing Organization to
carry out its obligations to its customers. Certain Processing
Organizations may receive compensation from Janus Capital or its
affiliates and certain Processing Organizations may receive
compensation from the Funds for shareholder recordkeeping and
similar services.
TAXPAYER IDENTIFICATION NUMBER
On the application or other appropriate form, you will be asked
to certify that your Social Security or taxpayer identification
number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you are
subject to the 31% backup withholding or you did not certify your
taxpayer identification number, the IRS requires the Funds to
withhold 31% of any dividends paid and redemption or exchange
proceeds. In addition to the 31% backup withholding, you may be
subject to a $50 fee to reimburse the Funds for any penalty that
the IRS may impose.
INVOLUNTARY REDEMPTIONS
The Funds reserve the right to close an account if the
shareholder is deemed to engage in activities which are illegal
or otherwise believed to be detrimental to the Funds.
TELEPHONE TRANSACTIONS
You may initiate many transactions by telephone. The Funds and
their agents will not be responsible for any losses resulting
from
Shareholder's manual 41
<PAGE>
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 Funds or their agents may, in case of emergency, temporarily
suspend telephone transactions and other shareholder services.
ADDRESS CHANGES
To change the address on your account, call 1-800-525-3713 or
send a written request signed by the shareholder(s) of record.
Include the name of your Fund(s), the account number(s), the
name(s) on the account and both the old and new addresses.
Certain options may be suspended for 10 days following an address
change unless a signature guarantee is provided.
REGISTRATION CHANGES
To change the name on an account, the shares are generally
transferred to a new account. In some cases, legal documentation
may be required. For 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. In
addition, the Funds will send you an immediate transaction
confirmation statement after every non-systematic transaction.
Janus Growth and Income Fund, Janus Balanced Fund, and Janus
Equity Income Fund distribute
42 Shareholder's manual
<PAGE>
dividend information quarterly. All of the other Equity Funds
distribute dividend information annually.
The Funds produce financial reports, which include a list of each
of the Fund's portfolio holdings, semiannually and update their
prospectus annually. To reduce expenses, the Funds 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 Funds reserve the right to charge a
fee for additional statement requests.
Shareholder's manual 43
<PAGE>
MANAGEMENT OF THE FUNDS
--------------------------------------------------------------------------------
INVESTMENT ADVISER
Janus Capital Corporation, 100 Fillmore Street, Denver, Colorado
80206-4928, is the investment adviser to each of the Funds and is
responsible for the day-to-day management of their investment
portfolios and other business affairs of the Funds.
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 Funds' investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for
the Funds, and may be reimbursed by the Funds for its costs in
providing those services. In addition, Janus Capital employees
serve as officers of the Trust and Janus Capital provides office
space for the Funds and pays the salaries, fees and expenses of
all Fund officers and those Trustees who are affiliated with
Janus Capital.
MANAGEMENT EXPENSES
The Funds pay Janus Capital a management fee which is calculated
daily and paid monthly. Each Fund's advisory agreement spells out
the management fee and other expenses that the Funds must pay.
Each Fund incurs expenses not assumed by Janus Capital including
transfer agent and custodian fees and expenses, legal and
auditing fees, printing and mailing costs of sending reports and
other information to existing shareholders, and independent
Trustees' fees and expenses. For the most recent fiscal year,
each
44 Janus Equity Funds prospectus
<PAGE>
Fund paid Janus Capital the following management fees based upon
each Fund's average net assets:
<TABLE>
<CAPTION>
Management Fee
(for the Fiscal Year Ended
October 31, 1999)(1)
<S> <C>
Janus Fund 0.65%
Janus Enterprise Fund 0.69%
Janus Mercury Fund 0.66%
Janus Special Situations Fund 0.69%
Janus Strategic Value Fund(2) 0.65%
Janus Growth and Income Fund 0.66%
Janus Balanced Fund 0.67%
Janus Equity Income Fund 0.71%
</TABLE>
(1) Effective January 31, 2000, each Fund's management fee has
been changed to 0.65% of average daily net assets.
(2) Janus Strategic Value Fund had not commenced operations as of
October 31, 1999. The fee shown is the management fee that
will be effective upon the Fund's commencement of operations
on February 29, 2000.
Janus Equity Funds prospectus 45
<PAGE>
INVESTMENT PERSONNEL
PORTFOLIO MANAGERS
DAVID J. CORKINS
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Growth and Income Fund which he has managed since August
1997. He is an assistant portfolio manager of Janus
Mercury Fund. He joined Janus Capital in 1995 as a
research analyst specializing in domestic financial
services companies and a variety of foreign industries.
Prior to joining Janus he was the Chief Financial Officer
of Chase U.S. Consumer Services, Inc., a Chase Manhattan
mortgage business. He holds a Bachelor of Arts in English
and Russian from Dartmouth and received his Master of
Business Administration from Columbia University in 1993.
DAVID C. DECKER
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Special Situations Fund and Janus Strategic Value Fund,
both of which he has managed since inception, and an
assistant portfolio manager of Janus Fund. He joined Janus
Capital in 1992 as a research analyst and focused on
companies in the automotive and defense industries prior
to managing Janus Special Situations Fund. He obtained his
Master of Business Administration in Finance from the
Fuqua School of Business at Duke University and a Bachelor
of Arts in Economics and Political Science from Tufts
University. Mr. Decker has earned the right to use the
Chartered Financial Analyst designation.
46 Janus Equity Funds prospectus
<PAGE>
JAMES P. GOFF
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Enterprise Fund. Mr. Goff joined Janus Capital in 1988 and
has managed Janus Enterprise Fund since its inception. Mr.
Goff managed or co-managed Janus Venture Fund from
December 1993 to February 1, 1997. He holds a Bachelor of
Arts in Economics from Yale University. Mr. Goff has
earned the right to use the Chartered Financial Analyst
designation.
WARREN B. LAMMERT
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Mercury Fund. Mr. Lammert joined Janus Capital in 1987 and
has managed Janus Mercury Fund since its inception. He
previously co-managed Janus Venture Fund from December
1993 to December 1996. He holds a Bachelor of Arts in
Economics from Yale University and a Master of Science in
Economic History from the London School of Economics. Mr.
Lammert has earned the right to use the Chartered
Financial Analyst designation.
KAREN L. REIDY
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Balanced Fund and Janus Equity Income Fund. She is also an
assistant portfolio manager of Janus Fund. Prior to
joining Janus Capital in 1995, she worked for Price
Waterhouse as a manager in both the Mergers and
Acquisitions and Audit business units. In this capacity,
Ms. Reidy performed due diligence work for corporate
clients and oversaw audit engagements. She received an
undergraduate degree in Accounting from the University of
Colorado in 1989 and passed the CPA exam in 1992. Ms.
Reidy has earned the right to use the Chartered Financial
Analyst designation.
Janus Equity Funds prospectus 47
<PAGE>
BLAINE P. ROLLINS
--------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of Janus
Fund. Mr. Rollins served as Executive Vice President and
portfolio manager of Janus Balanced Fund from January 1996
through December 1999, Executive Vice President and
portfolio manager of Janus Equity Income Fund from June
1996 through December 1999 and an assistant portfolio
manager of Janus Fund from January 1994 through December
1999. Mr. Rollins joined Janus Capital in 1990 and gained
experience as a fixed-income trader and equity research
analyst prior to managing Janus Balanced Fund. He holds a
Bachelor of Science in Finance from the University of
Colorado and has earned the right to use the Chartered
Financial Analyst designation.
48 Janus Equity Funds prospectus
<PAGE>
ASSISTANT PORTFOLIO MANAGERS
MATTHEW A. ANKRUM
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Enterprise
Fund. Mr. Ankrum joined Janus Capital as an intern in June
1996, and became an equity research analyst in August
1997. Prior to joining Janus, Mr. Ankrum worked as a
corporate finance analyst at William Blair and Company
from 1993-1995. He was also a fixed-income research
analyst at Conseco Capital Management. Mr. Ankrum has an
undergraduate degree in Business Administration from the
University of Wisconsin and a Master of Business
Administration from the University of Chicago. Mr. Ankrum
has earned the right to use the Chartered Financial
Analyst designation.
MIKE DUGAS
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Mercury Fund.
Prior to joining Janus in 1993, Mr. Dugas was an Audit
Senior with Price Waterhouse for three years. Mr. Dugas
has an undergraduate degree in Spanish from Louisiana
State University and a Master's degree in professional
accounting from the University of Texas.
RON SACHS
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Enterprise
Fund. Mr. Sachs joined Janus Capital in 1996 as a research
analyst. Prior to coming to Janus, he worked as a
consultant for Bain & Company and as an attorney for
Wilkie, Farr & Gallagher. Mr. Sachs graduated from
Princeton cum laude with an undergraduate degree in
Economics. He obtained his law degree from the University
of Michigan. Mr. Sachs has earned the right to use the
Chartered Financial Analyst designation.
Janus Equity Funds prospectus 49
<PAGE>
JOHN H. SCHREIBER
--------------------------------------------------------------------------------
is an assistant portfolio manager of Janus Fund. Mr.
Schreiber joined Janus Capital in 1997 as an equity
research analyst. Prior to joining Janus Capital, he was
an equity analyst with Fidelity Investments. Mr. Schreiber
holds a Bachelor of Science degree in Mechanical
Engineering from the University of Washington and a Master
of Business Administration from Harvard University. Mr.
Schreiber has earned the right to use the Chartered
Financial Analyst designation.
50 Janus Equity Funds prospectus
<PAGE>
OTHER INFORMATION
--------------------------------------------------------------------------------
SIZE OF FUNDS
Although there is no present intention to do so, the Funds may
discontinue sales of their shares if management and the Trustees
believe that continued sales may adversely affect a Fund's
ability to achieve its investment objective. If sales of a Fund
are discontinued, it is expected that existing shareholders of
that Fund would be permitted to continue to purchase shares and
to reinvest any dividends or capital gains distributions, absent
highly unusual circumstances.
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 Equity Funds prospectus 51
<PAGE>
DISTRIBUTION OF FUNDS
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.
52 Janus Equity Funds prospectus
<PAGE>
DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
DISTRIBUTIONS
To avoid taxation of the Funds, the Internal Revenue Code
requires each Fund to distribute net income and any net capital
gains realized on its investments annually. A Fund's income from
dividends and interest and any net realized short-term gains are
paid to shareholders as ordinary income dividends. Net realized
long-term gains are paid to shareholders as capital gains
distributions.
DISTRIBUTION SCHEDULE
<TABLE>
<CAPTION>
Dividends Capital Gains
Janus Growth and Income Normally declared Normally declared
Fund, Janus Balanced Fund and paid in March, and paid in
and Janus Equity Income June, September and December
Fund December
----------------------------------------------------------------------
<S> <C> <C>
All other Equity Funds Normally declared Normally declared
and paid in and paid in
December December
</TABLE>
HOW DISTRIBUTIONS AFFECT A FUND'S NAV
Distributions are paid to shareholders as of the record date of a
distribution of a Fund, regardless of how long the shares have
been held. Dividends and capital gains awaiting distribution are
included in each Fund's daily NAV. The share price of a Fund
drops by the amount of the distribution, net of any subsequent
market fluctuations. As an example, assume that on December 31,
Janus Fund declared a dividend in the amount of $0.25 per share.
If Janus Fund's share price was $10.00 on December 30, the Fund's
share price on December 31 would be $9.75, barring market
fluctuations. Shareholders should be aware that distributions
from a taxable mutual fund are not value-enhancing and may create
income tax obligations.
"BUYING A DIVIDEND"
If you purchase shares of a Fund just before the distribution,
you will pay the full price for the shares and receive a portion
of the purchase price back as a taxable distribution. This is
referred to as
Janus Equity Funds prospectus 53
<PAGE>
"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 Funds at one of
the addresses on page 30 or calling 1-800-525-3713. The Funds
offer the following options:
1. REINVESTMENT OPTION. You may reinvest your income dividends
and capital gains distributions in additional shares. This
option is assigned automatically if no other choice is made.
2. CASH OPTION. You may receive your income dividends and capital
gains distributions in cash.
3. REINVEST AND CASH OPTION. You may receive either your income
dividends or capital gains distributions in cash and reinvest
the other in additional shares.
4. REDIRECT OPTION. You may direct your dividends or capital
gains to purchase shares of another Janus fund.
The Funds reserve the right to reinvest into your account
undeliverable and uncashed dividend and distribution checks that
remain outstanding for six months in shares of the applicable
Fund at the NAV next computed after the check is cancelled.
Subsequent distributions may also be reinvested.
54 Janus Equity Funds prospectus
<PAGE>
TAXES
As with any investment, you should consider the tax consequences
of investing in the Funds. 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 Funds. You may wish to consult your own tax
adviser. Additionally, state or local taxes may apply to your
investment, depending upon the laws of your state of residence.
TAXES ON DISTRIBUTIONS
Dividends and distributions of the Funds are subject to federal
income tax, regardless of whether the distribution is made in
cash or reinvested in additional shares of a Fund. Distributions
may be taxable at different rates depending on the length of time
a Fund holds a security. In certain states, a portion of the
dividends and distributions (depending on the sources of a Fund's
income) may be exempt from state and local taxes. Information
regarding the tax status of income dividends and capital gains
distributions will be mailed to shareholders on or before January
31st of each year. Account tax information will also be sent to
the IRS.
TAXATION OF THE FUNDS
Dividends, interest, and some capital gains received by the Funds
on foreign securities may be subject to tax withholding or other
foreign taxes. The Funds may from year to year make the election
permitted under section 853 of the Internal Revenue Code to pass
through such taxes to shareholders as a foreign tax credit. If
such an election is not made, any foreign taxes paid or accrued
will represent an expense to the Funds.
Janus Equity Funds prospectus 55
<PAGE>
The Funds do not expect to pay federal income or excise taxes
because they intend to meet certain requirements of the Internal
Revenue Code. It is important that the Funds meet these
requirements so that any earnings on your investment will not be
taxed twice.
56 Janus Equity Funds prospectus
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The financial highlights tables are intended to help you
understand the Funds' financial performance for the past 5 years
through October 31st of each fiscal year shown (or for Funds with
a performance history shorter than 5 years, 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 tables
represent the rate that an investor would have earned (or lost)
on an investment in each of the Funds (assuming reinvestment of
all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
the Funds' financial statements, are included in the Annual
Reports, which are available upon request and incorporated by
reference into the SAI.
FINANCIAL HIGHLIGHTS ARE NOT PRESENTED FOR JANUS STRATEGIC VALUE
FUND BECAUSE THE FUND HAD NOT COMMENCED OPERATIONS AS OF OCTOBER
31, 1999.
Janus Equity Funds prospectus 57
<PAGE>
<TABLE>
<CAPTION>
JANUS FUND
---------------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $27.97 $29.36 $26.65 $23.37 $19.62
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income -- (.02) 0.15 0.31 0.16
3. Net gains or (losses) on securities
(both realized and unrealized) 15.63 3.70 5.69 4.23 3.99
4. Total from investment operations 15.63 3.68 5.84 4.54 4.15
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- (0.23) (0.21) (0.13) (0.01)
6. Dividends (in excess of net investment
income) -- -- -- -- --
7. Distributions (from capital gains) (0.82) (4.84) (2.92) (1.13) (0.39)
8. Total distributions (0.82) (5.07) (3.13) (1.26) (0.40)
9. NET ASSET VALUE, END OF PERIOD $42.78 $27.97 $29.36 $26.65 $23.37
10. Total return 56.75% 15.12% 24.18% 20.31% 21.62%
11. Net assets, end of period (in millions) $35,835 $20,721 $19,029 $15,313 $11,963
12. Average net assets for the period (in
millions) $28,993 $20,777 $17,515 $13,753 $10,560
13. Ratio of gross expenses to average net
assets 0.85% 0.87% 0.87% 0.86% 0.87%
14. Ratio of net expenses to average net
assets 0.84% 0.86% 0.86% 0.85% 0.86%
15. Ratio of net investment income/(loss) to
average net assets (0.14%) -- 0.85% 0.91% 1.25%
16. Portfolio turnover rate 63% 70% 132% 104% 118%
---------------------------------------------------------------------------------------------------
</TABLE>
58 Janus Equity Funds prospectus
<PAGE>
<TABLE>
<CAPTION>
JANUS ENTERPRISE FUND
-------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $32.33 $30.86 $31.19 $27.14 $24.43
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income -- -- -- -- 0.52
3. Net gains or (losses) on securities (both
realized and unrealized) 30.61 3.43 0.95 5.85 3.09
4. Total from investment operations 30.61 3.43 0.95 5.85 3.61
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- -- -- -- (0.52)
6. Dividends (in excess of net investment
income) -- -- -- -- --
7. Distributions (from capital gains) (4.30) (1.96) (1.28) (1.80) (0.38)
8. Total distributions (4.30) (1.96) (1.28) (1.80) (0.90)
9. NET ASSET VALUE, END OF PERIOD $58.64 $32.33 $30.86 $31.19 $27.14
10. Total return 104.09% 11.79% 3.31% 22.43% 15.46%
11. Net assets, end of period (in millions) $2,330 $559 $552 $732 $459
12. Average net assets for the period (in
millions) $1,127 $551 $614 $596 $408
13. Ratio of gross expenses to average net
assets 0.98% 1.08% 1.07% 1.14% 1.26%
14. Ratio of net expenses to average net
assets 0.95% 1.06% 1.04% 1.12% 1.23%
15. Ratio of net investment income/(loss) to
average net assets (0.67%) (0.67%) (0.61%) (0.78%) 0.02%
16. Portfolio turnover rate 98% 134% 111% 93% 194%
-------------------------------------------------------------------------------------------
</TABLE>
Janus Equity Funds prospectus 59
<PAGE>
<TABLE>
<CAPTION>
JANUS MERCURY FUND
-------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $20.77 $18.65 $18.20 $17.38 $14.12
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income -- (0.01) (0.01) 0.14 0.16
3. Net gains or (losses) on securities (both
realized and unrealized) 16.89 4.07 2.82 2.74 3.37
4. Total from investment operations 16.89 4.06 2.81 2.88 3.53
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) -- -- (0.08) -- (0.16)
6. Dividends (in excess of net investment
income) -- (0.04) -- -- --
7. Distributions (from capital gains) (2.01) (1.90) (2.28) (2.06) (0.11)
8. Total distributions (2.01) (1.94) (2.36) (2.06) (0.27)
9. NET ASSET VALUE, END OF PERIOD $35.65 $20.77 $18.65 $18.20 $17.38
10. Total return 86.02% 24.75% 17.07% 18.18% 25.53%
11. Net assets, end of period (in millions) $9,060 $2,368 $1,971 $2,002 $1,521
12. Average net assets for the period (in
millions) $5,258 $2,103 $2,046 $1,839 $1,116
13. Ratio of gross expenses to average net
assets 0.93% 0.97% 0.98% 1.02% 1.14%
14. Ratio of net expenses to average net
assets 0.91% 0.94% 0.96% 1.00% 1.12%
15. Ratio of net investment income/(loss) to
average net assets (0.39%) (0.33%) 0.21% 0.45% 0.50%
16. Portfolio turnover rate 89% 105% 157% 177% 201%
-------------------------------------------------------------------------------------------
</TABLE>
60 Janus Equity Funds prospectus
<PAGE>
<TABLE>
<CAPTION>
JANUS SPECIAL SITUATIONS FUND
----------------------------------------------------------------------------------------
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.
Janus Equity Funds prospectus 61
<PAGE>
<TABLE>
<CAPTION>
JANUS GROWTH AND INCOME FUND
------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $26.45 $25.07 $20.05 $18.13 $14.69
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.26 0.08 0.01 0.16 0.11
3. Net gains or (losses) on securities
(both realized and unrealized) 12.27 3.72 6.98 4.01 3.43
4. Total from investment operations 12.53 3.80 6.99 4.17 3.54
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.27) (0.04) (0.11) (0.08) (0.10)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) (1.87) (2.38) (1.86) (2.17) --
8. Total distributions (2.14) (2.42) (1.97) (2.25) (0.10)
9. NET ASSET VALUE, END OF PERIOD $36.84 $26.45 $25.07 $20.05 $18.13
10. Total return 49.59% 16.73% 37.78% 25.56% 24.20%
11. Net assets, end of period (in
millions) $5,837 $2,819 $1,889 $1,033 $583
12. Average net assets for the period
(in millions) $4,375 $2,479 $1,416 $773 $498
13. Ratio of gross expenses to average
net assets 0.92% 0.96% 0.98% 1.05% 1.19%
14. Ratio of net expenses to average net
assets 0.90% 0.94% 0.96% 1.03% 1.17%
15. Ratio of net investment
income/(loss) to average net assets 0.37% 0.33% 0.30% 0.70% 1.11%
16. Portfolio turnover rate 43% 95% 127% 153% 195%
------------------------------------------------------------------------------------------
</TABLE>
62 Janus Equity Funds prospectus
<PAGE>
<TABLE>
<CAPTION>
JANUS BALANCED FUND
------------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $17.22 $16.73 $15.20 $13.72 $12.17
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.42 0.33 0.36 0.33 0.61
3. Net gains or (losses) on securities
(both realized and unrealized) 4.69 2.00 2.88 2.22 1.52
4. Total from investment operations 5.11 2.33 3.24 2.55 2.13
LESS DISTRIBUTIONS:
5. Dividends (from net investment
income) (0.43) (0.35) (0.36) (0.26) (0.58)
6. Dividends (in excess of net
investment income) -- -- -- -- --
7. Distributions (from capital gains) (0.11) (1.49) (1.35) (0.81) --
8. Total distributions (0.54) (1.84) (1.71) (1.07) (0.58)
9. NET ASSET VALUE, END OF PERIOD $21.79 $17.22 $16.73 $15.20 $13.72
10. Total return 29.89% 15.48% 23.38% 19.39% 18.26%
11. Net assets, end of period (in
millions) $2,930 $830 $360 $207 $125
12. Average net assets for the period
(in millions) $1,954 $537 $283 $159 $107
13. Ratio of gross expenses to average
net assets 0.92% 1.03% 1.12% 1.23% 1.35%
14. Ratio of net expenses to average net
assets 0.91% 1.01% 1.10% 1.21% 1.32%
15. Ratio of net investment
income/(loss) to average net assets 2.37% 2.34% 2.63% 2.35% 2.52%
16. Portfolio turnover rate 64% 73% 139% 151% 185%
------------------------------------------------------------------------------------------
</TABLE>
Janus Equity Funds prospectus 63
<PAGE>
<TABLE>
<CAPTION>
JANUS EQUITY INCOME FUND
---------------------------------------------------------------------------------------
Periods ending October 31st
1999 1998 1997 1996(1)
<S> <C> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $15.59 $13.98 $11.29 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.14 0.05 0.09 0.07
3. Net gains or (losses) on securities (both
realized and unrealized) 7.17 2.47 3.11 1.25
4. Total from investment operations 7.31 2.52 3.20 1.32
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.15) (0.03) (0.12) (0.03)
6. Dividends (in excess of net investment
income) -- -- -- --
7. Distributions (from capital gains) (0.18) (0.88) (0.39) --
8. Total distributions (0.33) (0.91) (0.51) (0.03)
9. NET ASSET VALUE, END OF PERIOD $22.57 $15.59 $13.98 $11.29
10. Total return* 47.22% 19.21% 29.46% 13.20%
11. Net assets, end of period (in millions) $781 $201 $74 $30
12. Average net assets for the period (in
millions) $571 $134 $46 $21
13. Ratio of gross expenses to average net
assets** 1.02% 1.21% 1.48% 1.79%
14. Ratio of net expenses to average net
assets** 1.01% 1.18% 1.45% 1.71%
15. Ratio of net investment income/(loss) to
average net assets** 0.81% 0.41% 0.62% 3.09%
16. Portfolio turnover rate** 81% 101% 180% 325%
---------------------------------------------------------------------------------------
</TABLE>
(1) Fiscal period from June 28, 1996 (inception) to October 31, 1996.
* Total return is not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
64 Janus Equity Funds 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 Funds may
invest. The Funds may invest in these instruments to the extent
permitted by their investment objectives and policies. The Funds
are not limited by this discussion and may invest in any other
types of instruments not precluded by the policies discussed
elsewhere in this Prospectus. Please refer to the SAI for a more
detailed discussion of certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required
to pay the holder the amount of the loan (or par value of the
bond) at a specified maturity and to make scheduled interest
payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and
other borrowers to investors seeking to invest idle cash. The
Funds may purchase commercial paper issued 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 on original
purchase discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital
gains
Janus Equity Funds prospectus 65
<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, a portfolio manager may have to reinvest the
proceeds from the securities at a lower rate. Potential market
gains on a security subject to prepayment risk may be more
limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or
hold certain amounts of assets for the production of passive
income. Passive income includes dividends, interest, royalties,
rents and annuities. To avoid taxes and interest that the Funds
must pay if these investments are profitable, the Funds may make
66 Janus Equity Funds prospectus
<PAGE>
various elections permitted by the tax laws. These elections
could require that the Funds recognize taxable income, which in
turn must be distributed, before the securities are sold and
before cash is received to pay the distributions.
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 a
Fund and a simultaneous agreement by the seller (generally a bank
or dealer) to repurchase the security from the Fund at a
specified date or upon demand. This technique offers a method of
earning income on idle cash. These securities involve the risk
that the seller will fail to repurchase the security, as agreed.
In that case, a Fund will bear the risk of market value
fluctuations until the security can be sold and may encounter
delays and incur costs in liquidating the security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by a
Fund to another party (generally a bank or dealer) in return for
cash and an agreement by the Fund to buy the security back at a
specified price and time. This technique will be used primarily
to provide cash to satisfy unusually high redemption requests, or
for other temporary or emergency purposes.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit.
Treasury bills have initial maturities of less than one year,
Treasury notes have initial maturities of one to ten years and
Treasury bonds may be issued with any maturity but generally have
maturities of at least ten years. U.S. government securities also
include indirect obligations of the U.S. government that are
issued by federal agencies and government sponsored entities.
Unlike Treasury securities, agency securities generally are not
backed by the full faith and credit of the U.S. government. Some
agency securities are supported by the right of the issuer to
borrow from the Treasury, others are supported by the
discretionary authority
Janus Equity Funds prospectus 67
<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 stock or
bonds, that give the holder the right to buy a proportionate
amount of common stock at a specified price, usually at a price
that is higher than the market price at the time of issuance of
the warrant. The right may last for a period of years or
indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at
some time in the future - i.e., beyond normal settlement. The
Funds do not earn interest on such securities until settlement
and bear the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in
this manner.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified
amount of a financial instrument for an agreed upon price at a
specified time. Forward contracts are not currently exchange
traded and are typically negotiated on an individual basis. The
Funds may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose
value is tied to, a currency other than the U.S. dollar or to
reduce the impact of currency appreciation on purchases of such
securities. They may also enter into forward contracts to
purchase or sell securities or other financial indices.
FUTURES CONTRACTS are contracts that obligate the buyer to
receive and the seller to deliver an instrument or money at a
specified price on a specified date. The Funds may buy and sell
futures contracts on foreign currencies, securities and financial
indices including interest rates or an index of U.S. government,
foreign government, equity or fixed-income securities. The Funds
may also buy options on futures contracts. An option on a futures
contract gives the buyer the right, but not the obligation, to
buy
68 Janus Equity Funds prospectus
<PAGE>
or sell a futures contract at a specified price on or before a
specified date. Futures contracts and options on futures are
standardized and traded on designated exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or
interest rate is linked to currencies, interest rates, equity
securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively
indexed (i.e. their value may increase or decrease if the
reference index or instrument appreciates). Indexed/structured
securities may have return characteristics similar to direct
investments in the underlying instruments and may be more
volatile than the underlying instruments. A Fund bears the market
risk of an investment in the underlying instruments, as well as
the credit risk of the issuer.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a
fixed date at a predetermined price. The Funds may purchase and
write put and call options on securities, securities indices and
foreign currencies.
Janus Equity Funds prospectus 69
<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 Funds' Annual Reports, you will
find a discussion of the market conditions and investment
strategies that significantly affected the Funds' performance
during their last fiscal year. Other information is also
available from financial intermediaries that sell shares of the
Funds.
The Statement of Additional Information provides detailed
information about the Funds and is incorporated into this
Prospectus by reference. You may review and copy information
about the Funds (including the Funds' Statement of Additional
Information) at the Public Reference Room of the SEC or get text
only copies, after paying a duplicating fee, by sending an
electronic request by e-mail to [email protected] or by writing
to or calling the Public Reference Room, Washington, D.C.
20549-0102 (1-202-942-8090). You may also obtain reports and
other information about the Funds from the Electronic Data
Gathering Analysis and Retrieval (EDGAR) Database on 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
