Registration No. 33-63212
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /__/
Pre-Effective Amendment No. /__/
Post-Effective Amendment No. 6 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 /__/
Amendment No. 8 /X/
(Check appropriate box or boxes.)
JANUS ASPEN SERIES
(Exact Name of Registrant as Specified in Charter)
Suite 300, 100 Fillmore Street, Denver, Colorado 80206-9916
Address of Principal Executive Offices (Zip Code)
Registrant's Telephone No., including Area Code: 303-333-3863
David C. Tucker - Suite 300, 100 Fillmore Street, Denver, Colorado 80206-4923
(Name and Address of Agent for Service)
Approximate Date of Proposed Offering: August 25, 1995
It is proposed that this filing will become effective (check appropriate line):
X immediately upon filing pursuant to paragraph (b) of Rule 485.
__ on (date) pursuant to paragraph (b) of Rule 485.
__ 75 days after filing pursuant to paragraph (a) of Rule 485.
__ on (date) pursuant to paragraph (a) of Rule 485.
Registrant has registered an indefinite number of shares of beneficial interest
under the Securities Act of 1933 pursuant to Rule 24f-2(a) and filed a Rule
24f-2 Notice on February 28, 1995, for the fiscal year ended December 31, 1994,
with respect to all of its series in existence as of December 31, 1994.
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JANUS ASPEN SERIES
Cross Reference Sheet
Between Prospectus and Statement of
Additional Information and Form N-1A Item
Form N-1A Item
Part A Caption in Prospectus
1. Cover Page Cover Page
2. Synopsis Cover Page
3. Condensed Financial Financial Highlights; Performance
Information
4. General Description of Investment Objective, Policies and Techniques;
Registrant Miscellaneous Information
5. Management of the Fund Investment Adviser; Miscellaneous Information
6. Capital Stock and Other Distributions and Taxes; Shareholder's Guide
Securities
7. Purchase of Securities Being Shareholder's Guide
Offered
8. Redemption or Repurchase Shareholder's Guide
9. Pending Legal Proceedings Not Applicable
<PAGE>
Part B Caption in Statement of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Miscellaneous Information
History
13. Investment Objectives and Investment Policies and Restrictions; Types of
Policies Securities and Investment Techniques;
Appendix A - Description of Securities Ratings;
Appendix B - Description of Municipal
Securities
14. Management of the Fund Investment Adviser; Officers and Trustees
15. Control Persons and Principal Shareholders
Principal Holders of
Securities
16. Investment Advisory and Investment Adviser; Custodian, Transfer Agent
Other Services and Certain Affiliations; Portfolio Transactions
and Brokerage; Officers and Trustees;
Miscellaneous Information
17. Brokerage Allocation and Portfolio Transactions and Brokerage
Other Practices
18. Capital Stock and Other Shares of the Trust; Miscellaneous Information
Securities
19. Purchase, Redemption and Shares of the Trust
Pricing of Securities Being
Offered
20. Tax Status Dividends and Tax Status
21. Underwriters Not Applicable
22. Calculation of Performance Performance Data
Data
23. Financial Statements Financial Statements
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[LOGO]
JANUS ASPEN SERIES
MONEY MARKET PORTFOLIO
Prospectus
May 1, 1995 as supplemented August 25, 1995
Money Market Portfolio (the "Portfolio") is designed for investors who seek
maximum current income consistent with stability of capital. The Portfolio is a
series of Janus Aspen Series (the "Trust"), an open-end management investment
company. The Portfolio invests exclusively in high quality money market
instruments. The Portfolio is recently organized and has a limited operating
history. AN INVESTMENT IN THE PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Shares of the Trust are issued and redeemed only in connection with investment
in and payments under variable annuity contracts and variable life insurance
contracts (collectively, "variable insurance contracts"), as well as certain
qualified retirement plans. The Trust sells and redeems its shares at net asset
value without any sales charges, commissions or redemption fees. Each variable
insurance contract involves fees and expenses not described in this Prospectus.
The Portfolio may not be available in connection with a particular contract. See
the accompanying contract prospectus for information regarding contract fees and
expenses and any restrictions on purchases or allocations.
This Prospectus contains information about the Portfolio that a prospective
purchaser of a variable insurance contract should consider before allocating
purchase payments or premiums to the Portfolio. It should be read carefully in
conjunction with the separate account prospectus of the specific insurance
product that accompanies this Prospectus and retained for future reference.
Additional information about the Portfolio is contained in the Statement of
Additional Information ("SAI") dated May 1, 1995, as supplemented, August 25,
1995, which is filed with the Securities and Exchange Commission ("SEC") and is
incorporated by reference into this Prospectus. The SAI is available upon
request and without charge by writing or calling your insurance company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus does not constitute an offer to sell securities in any state or
other jurisdiction to any person to whom it is unlawful to make such an offer in
such state or other jurisdiction.
CONTENTS
FINANCIAL HIGHLIGHTS ....................................................... 2
INVESTMENT OBJECTIVE, POLICIES AND TECHNIQUES .............................. 3
INVESTMENT ADVISER ......................................................... 6
DISTRIBUTIONS AND TAXES .................................................... 7
PERFORMANCE ................................................................ 7
MISCELLANEOUS INFORMATION .................................................. 8
SHAREHOLDER'S GUIDE ........................................................ 9
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS
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FINANCIAL HIGHLIGHTS
The unaudited information below is for the semiannual period ended June 30,
1995. Expense and income ratios have been annualized while total returns have
not been annualized.
Money Market
Portfolio(1)
------------
1. Net asset value, beginning of period $1.00
Income from investment operations:
2. Net investment income .01
3. Net gains or (losses) on securities
(both realized and unrealized) --
4. Total from investment operations .01
Less distributions:
5. Dividends (from net investment income) (.01)
6. Distributions (from capital gains) --
7. Total distributions (.01)
8. Net asset value, end of period $1.00
9. Total return 0.91%
10. Net assets, end of period (in thousands) $ 938
11. Ratio of expenses to average net assets .50%(2)
12. Ratio of net investment income to average net assets 5.85%
(1) Period from May 1, 1995 (inception) through June 30, 1995.
(2) The ratio was 1.90% before voluntary waiver of certain fees incurred by the
Portfolio.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
2
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INVESTMENT OBJECTIVE, POLICIES AND TECHNIQUES
The Portfolio has an investment objective and policies which are similar to
Janus Money Market Fund, a retail fund managed by Janus Capital Corporation
("Janus Capital"). Although it is expected that the Portfolio and Janus Money
Market Fund will hold similar securities selections, their investment results
are expected to differ. In particular, differences in asset size and cash flow
needs may result in different securities selections or differences in the
relative weightings of securities selections. Expenses of the Portfolio and
Janus Money Market Fund are expected to differ and the variable contract owner
will also bear various insurance related costs at the insurance company level.
Please see the accompanying separate account prospectus for a summary of
contract fees and expenses.
Unless otherwise stated, the Portfolio's investment objective and policies are
not fundamental and may be changed by the Trustees of the Trust (the "Trustees")
without shareholder approval. The Portfolio is subject to additional investment
policies and restrictions described in the Statement of Additional Information,
some of which are fundamental and may not be changed without shareholder
approval.
INVESTMENT OBJECTIVE
The Portfolio's investment objective is to seek maximum current income to the
extent consistent with stability of capital. There can be no assurance that the
Portfolio will achieve its investment objective or be able to maintain a stable
net asset value of $1.00 per share.
INVESTMENT POLICIES
The Portfolio will invest only in eligible high quality, short-term money market
instruments that present minimal credit risks, as determined by Janus Capital,
the Portfolio's investment adviser, pursuant to procedures adopted by the
Trustees. The Portfolio may invest only in U.S. dollar-denominated instruments
that have a remaining maturity of 397 days or less (as calculated pursuant to
Rule 2a-7 under the Investment Company Act of 1940 ("1940 Act")) and will
maintain a dollar-weighted average portfolio maturity of 90 days or less.
Except to the limited extent permitted by Rule 2a-7 and except for U.S.
Government Securities (as defined below), the Portfolio will not invest more
than 5% of its total assets in the securities of any one issuer. A guarantor is
not considered an issuer for the purpose of this limit, provided that the value
of all securities held by the Portfolio that are issued or guaranteed by that
institution shall not exceed 10% of the Portfolio's total assets. To ensure
adequate liquidity, the Portfolio may not invest more than 10% of its net assets
in illiquid securities, including repurchase agreements maturing in more than
seven days and certain time deposits that are subject to early withdrawal
penalties and mature in more than seven days. Janus Capital determines and
monitors the liquidity of portfolio securities under the supervision of the
Trustees.
Ratings. High quality money market instruments include those that (i) are rated
(or, if unrated, are issued by an issuer with comparable outstanding short-term
debt that is rated) in one of the two highest rating categories for short-term
debt by any two nationally recognized statistical rating organizations
("NRSROs") or, if only one NRSRO has issued a rating, by that NRSRO or (ii) are
otherwise unrated and determined by Janus Capital to be of comparable quality.
The Portfolio will invest at least 95% of its total assets in securities in the
highest rating category (as determined pursuant to Rule 2a-7). Descriptions of
the rating categories of Standard & Poor's Ratings Services, Moody's Investors
Service, Inc., and certain other NRSROs are contained in the SAI, as is a
further description of the Portfolio's investment policies.
Although the Portfolio only invests in high quality money market instruments, an
investment in the Portfolio is subject to risk even if all securities in its
portfolio are paid in full at maturity. All money market instruments, including
U.S. Government Securities, can change in value as a result of changes in
interest rates, the issuer's actual or perceived creditworthiness or the
issuer's ability to meet its obligations.
TYPES OF SECURITIES
The Portfolio pursues its objective by investing primarily in high quality
commercial paper and obligations of financial institutions. It may invest to a
lesser degree in U.S. Government Securities (as defined below) and municipal
securities.
Debt Securities. The Portfolio may invest in debt obligations of domestic
issuers, including commercial paper (short-term promissory notes issued by
companies to finance their, or their affiliates', current obligations), notes
and bonds, and variable amount master demand notes. The Portfolio may invest in
privately issued commercial paper which is restricted as to disposition under
the federal securities laws. In general, any sale of this paper may not be made
absent registration under the Securities Act of 1933 (the "1933 Act") or the
availability of an appropriate exemption therefrom. Pursuant to the provisions
of Section 4(2) of the 1933 Act, however, some privately issued commercial paper
is eligible for resale to institutional investors, and accordingly, Janus
Capital may determine that a liquid market exists for that paper pursuant to
guidelines adopted by the Trustees.
Obligations of Financial Institutions. The Portfolio may invest in obligations
of financial institutions. Examples of obligations in which it may invest
include negotiable certificates of deposit, bankers' acceptances and time
deposits of U.S. banks (including savings and loan associations) having total
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
3
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assets in excess of one billion dollars and U.S. branches of foreign banks
having total assets in excess of ten billion dollars. The Portfolio may also
invest in Eurodollar and Yankee bank obligations as discussed below.
Certificates of deposit represent an institution's obligation to repay funds
deposited with it that earn a specified interest rate over a given period.
Bankers' acceptances are negotiable obligations of a bank to pay a draft which
has been drawn by a customer and are usually backed by goods in international
trade. Time deposits are non-negotiable deposits with a banking institution that
earn a specified interest rate over a given period. Fixed time deposits, which
are payable at the stated maturity date and bear a fixed rate of interest,
generally may be withdrawn on demand by the Portfolio but may be subject to
early withdrawal penalties that could reduce the Portfolio's yield. Unless there
is a readily available market for them, time deposits that are subject to early
withdrawal penalties and that mature in more than seven days will be treated as
illiquid securities.
Eurodollar or Yankee Obligations. The Portfolio may invest in Eurodollar and
Yankee bank obligations. Eurodollar bank obligations are dollar-denominated
certificates of deposit or time deposits issued outside the U.S. capital markets
by foreign branches of U.S. banks and by foreign banks. Yankee bank obligations
are dollar-denominated obligations issued in the U.S. capital markets by foreign
banks.
Eurodollar (and to a limited extent, Yankee) bank obligations are subject to
certain sovereign risks. One such risk is the possibility that a foreign
government might prevent dollar-denominated funds from flowing across its
borders. Other risks include: adverse political and economic developments in a
foreign country; the extent and quality of government regulation of financial
markets and institutions; the imposition of foreign withholding taxes; and
expropriation or nationalization of foreign issuers.
U.S. Government Securities. The Portfolio may invest without limit in U.S.
Government Securities. U.S. government securities shall have the meaning set
forth in the 1940 Act. The 1940 Act defines U.S. government securities to
include securities issued or guaranteed by the U.S. government, its agencies and
instrumentalities and has been interpreted to include repurchase agreements
collateralized and municipal securities refunded with escrowed U.S. government
securities ("U.S. Government Securities"). U.S. Government Securities in which
the Portfolio may invest include U.S. Treasury securities and obligations issued
or guaranteed by U.S. government agencies and instrumentalities that are backed
by the full faith and credit of the U.S. government, such as those guaranteed by
the Small Business Administration or issued by the Government National Mortgage
Association. In addition, U.S. Government Securities in which the Portfolio may
invest include securities supported primarily or solely by the creditworthiness
of the issuer, such as securities of the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation and the Tennessee Valley Authority.
There is no guarantee that the U.S. government will support securities not
backed by its full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to maturity, they
may involve more risk than securities backed by the full faith and credit of the
U.S. government.
Municipal Securities. The municipal securities in which the Portfolio may invest
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for the issuer's short-term capital needs and
generally have maturities of 397 days or less. Examples include tax anticipation
and revenue anticipation notes, which generally are issued in anticipation of
various seasonal revenues, bond anticipation notes, construction loan notes and
tax-exempt commercial paper. Short-term municipal bonds may include "general
obligation bonds," which are secured by the issuer's pledge of its faith, credit
and taxing power for payment of principal and interest, "revenue bonds," which
are generally paid from the revenues of a particular facility or a specific
excise tax or other source and "industrial development bonds," which are issued
by or on behalf of public authorities to provide funding for various privately
operated industrial and commercial facilities. The Portfolio may also invest in
high quality participation interests in municipal securities. A more detailed
description of various types of municipal securities is contained in Appendix B
in the SAI.
When the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
issuing entity and a security is backed only by the assets and revenues of the
issuing entity, that entity will be deemed to be the sole issuer of the
security. Similarly, in the case of an industrial development bond backed only
by the assets and revenues of the non-governmental issuer, the non-governmental
issuer will be deemed to be the sole issuer of the bond.
Yields on municipal securities are dependent on a variety of factors, including
the general conditions of the money market and of the municipal bond and
municipal note markets, the size of a particular offering, the maturity of the
obligation and the rating of the issue. Obligations of issuers of municipal
securities are subject to the provisions of bankruptcy, insolvency and other
laws affecting the rights and remedies of creditors, such as the Bankruptcy
Reform Act of 1978, as amended.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
4
<PAGE>
Therefore, the possibility exists that, as a result of litigation or other
conditions, the ability of any issuer to pay, when due, the principal of and
interest on its municipal securities may be materially affected.
Participation Interests. The Portfolio may invest in participation interests in
any type of security in which the Portfolio may invest. A participation interest
gives a Portfolio an undivided interest in the underlying securities in the
proportion that the Portfolio's participation interest bears to the total
principal amount of the underlying securities. Participation interests usually
carry a demand feature, as described below, backed by a letter of credit or
guarantee of the institution that issued the interests permitting the holder to
tender them back to the institution.
Demand Features. The Portfolio may invest in securities that are subject to puts
and stand-by commitments ("demand features"). Demand features give the Portfolio
the right to resell securities at specified periods prior to their maturity
dates to the seller or to some third party at an agreed-upon price or yield.
Securities with demand features may involve certain expenses and risks,
including the inability of the issuer of the instrument to pay for the
securities at the time the instrument is exercised, non-marketability of the
instrument and differences between the maturity of the underlying security and
the maturity of the instrument. Securities may cost more with demand features
than without them. Demand features can serve three purposes: to shorten the
maturity of a variable or floating rate security, to enhance the instrument's
credit quality and to provide a source of liquidity. Demand features are often
issued by third party financial institutions, generally domestic and foreign
banks. Accordingly, the credit quality and liquidity of the Portfolio's
investments may be dependent in part on the credit quality of the banks
supporting its investments. This will result in exposure to risks pertaining to
the banking industry, including the foreign banking industry. Brokerage firms
and insurance companies also provide certain liquidity and credit support.
Variable and Floating Rate Securities. The securities in which the Portfolio
invests may have variable or floating rates of interest. These securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate. Securities with ultimate maturities of greater than 397 days may be
purchased only pursuant to Rule 2a-7. Under that Rule, only those long-term
instruments that have demand features which comply with certain requirements and
certain variable rate U.S. Government Securities may be purchased. Similar to
fixed rate debt instruments, variable and floating rate instruments are subject
to changes in value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness. The rate of interest on securities
purchased by the Portfolio may be tied to short-term Treasury or other
government securities or indices on securities that are permissible investments
of the Portfolio, as well as other money market rates of interest. The Portfolio
will not purchase securities whose values are tied to interest rates or indices
that are not appropriate for the duration and volatility standards of a money
market fund.
Mortgage- and Asset-Backed Securities. The Portfolio may purchase fixed or
adjustable rate mortgage-backed securities issued by the Government National
Mortgage Association, Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation. In addition, the Portfolio may purchase other
asset-backed securities, including securities backed by automobile loans,
equipment leases or credit card receivables. These securities directly or
indirectly represent a participation in, or are secured by and payable from,
fixed or adjustable rate mortgage or other loans which may be secured by real
estate or other assets. Unlike traditional debt instruments, payments on these
securities include both interest and a partial payment of principal. Prepayments
of the principal of underlying loans may shorten the effective maturities of
these securities and may result in the Portfolio having to reinvest proceeds at
a lower interest rate.
Repurchase Agreements. The Portfolio may seek additional income by entering into
repurchase agreements with respect to obligations that it could otherwise
purchase. Repurchase agreements are transactions in which the Portfolio
purchases securities and simultaneously commits to resell those securities to
the seller at an agreed-upon price on an agreed-upon future date. The resale
price reflects a market rate of interest that is not related to the coupon rate
or maturity of the purchased securities.
Reverse Repurchase Agreements. The Portfolio may enter into reverse repurchase
agreements. Reverse repurchase agreements are transactions in which the
Portfolio sells a security and simultaneously commits to repurchase that
security from the buyer at an agreed upon price on an agreed upon future date.
This technique will be used only for temporary or emergency purposes, such as
meeting redemption requests or to earn additional income on portfolio
securities.
Delayed Delivery Securities. The Portfolio may purchase securities on a
when-issued or delayed delivery basis. Securities so purchased are subject to
market price fluctuation from the time of purchase but no interest on the
securities accrues to the Portfolio until delivery and payment for the
securities take place. Accordingly, the value of the securities on the delivery
date may be more or less than the purchase price. Forward commitments will be
entered into only when the Portfolio has the intention of taking possession of
the securities, but it may sell the securities before the settlement date if
deemed advisable.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
5
<PAGE>
Borrowing and Lending. The Portfolio may borrow money for temporary or emergency
purposes in amounts up to 25% of its total assets. It may not mortgage or pledge
securities except to secure permitted borrowings. As a fundamental policy, the
Portfolio will not lend securities or other assets if, as a result, more than
25% of its total assets would be lent to other parties; however, it does not
currently intend to engage in securities lending. The Portfolio intends to seek
permission from the SEC to borrow money from or lend money to other funds that
permit such transactions and are advised by Janus Capital. There is no assurance
that such permission will be granted.
Portfolio Turnover. Because the Portfolio invests in securities with relatively
short-term maturities, it is expected to have a high portfolio turnover rate.
However, a high turnover rate should not increase the Portfolio's costs because
brokerage commissions are not normally charged on the purchase and sale of money
market instruments.
Joint Accounts. The Portfolio has requested exemptive relief from the SEC to
permit the Portfolio and other funds advised by Janus Capital to invest in
certain money market instruments through a joint account. Accordingly, the
Portfolio may purchase such instruments through a joint account if such relief
is granted.
INVESTMENT ADVISER
The Portfolio has an Investment Advisory Agreement with Janus Capital, 100
Fillmore Street, Suite 300, Denver, Colorado 80206-4923. Janus Capital has
served as investment adviser to Janus Fund since 1970 and currently serves as
investment adviser to all of the Janus retail funds, as well as adviser or
subadviser to other mutual funds and individual, corporate, charitable and
retirement accounts. Kansas City Southern Industries, Inc., a publicly traded
holding company whose primary subsidiaries are engaged in transportation,
information processing and financial services ("KCSI"), owns approximately 83%
of the outstanding voting stock of Janus Capital. Thomas H. Bailey, the
President and Chairman of the Board of Janus Capital, owns approximately 12% of
its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
Pursuant to the Investment Advisory Agreement, Janus Capital furnishes
continuous advice and recommendations concerning the Portfolio's investments.
Janus Capital also furnishes certain administrative, compliance and accounting
services for the Portfolio, and Janus Capital may be reimbursed by the Portfolio
for its costs in providing those services. In addition, Janus Capital provides
office space for the Portfolio and pays the salaries, fees and expenses of all
Portfolio officers and those Trustees who are affiliated with Janus Capital. The
Portfolio pays all of its expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and auditing fees,
printing costs of reports to existing shareholders, registration fees and
expenses, and independent Trustees' fees and expenses. Certain administrative
services that would otherwise be provided by Janus Capital and/or its affiliates
may be performed by participating insurance companies that purchase the
Portfolio's shares and Janus Capital or the Portfolio may pay that company for
such services.
Pursuant to the Investment Advisory Agreement, the Portfolio has agreed to
compensate Janus Capital for its advisory services by the monthly payment of a
fee at the annual rate of 0.25% of the value of the Portfolio's average daily
net assets. In addition, Janus Capital will voluntarily waive its advisory fee
to the extent the advisory fees and other expenses exceed 0.50% of the average
daily closing net asset value of the Portfolio. The agreement to waive its fees
may be terminated by Janus Capital upon 90 days' notice.
Portfolio Transactions
Purchases and sales of securities on behalf of the Portfolio are executed by
brokers and dealers selected by Janus Capital. Broker-dealers are selected on
the basis of their ability to obtain best price and execution for the
Portfolio's transactions and recognizing brokerage, research and other services
provided to the Portfolio and to Janus Capital. Janus Capital may also consider
payments made by brokers effecting transactions for the Portfolio i) to the
Portfolio or ii) to other persons on behalf of the Portfolio for services
provided to the Portfolio for which it would be obligated to pay. The Trustees
have also authorized the Portfolio to place transactions on an agency basis with
a broker-dealer that is affiliated with Janus Capital. Agency trades, if any,
that are placed with such affiliated party serve to reduce certain expenses of
the Portfolio. The SAI further explains the selection of broker-dealers.
Personal Investing
Janus Capital permits investment personnel to purchase and sell securities for
their own accounts subject to Janus Capital's policy governing personal
investing. Janus Capital's policy requires investment and other personnel to
conduct their personal investment activities in a manner that Janus Capital
believes is not detrimental to the Portfolio and Janus Capital's other advisory
clients. See the SAI for more detailed information.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
6
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DISTRIBUTIONS AND TAXES
Dividends representing substantially all of the net investment income and any
net realized gains on sales of securities are declared daily, Saturdays, Sundays
and holidays included, and distributed on the last business day of each month.
All distributions will be automatically reinvested in shares of the Portfolio.
Because shares of the Portfolio may be purchased only through variable insurance
contracts and qualified plans, it is anticipated that any distributions made by
the Portfolio will be exempt from current taxation if left to accumulate within
the variable insurance contract or qualified plan. Generally, withdrawals from
such contracts may be subject to ordinary income tax and, if made before age
591U2, a 10% penalty tax. The tax status of an investment in the Portfolio
depends on the features of the variable insurance contracts offered by
participating insurance companies. Further information may be found in the
prospectus of the separate account offering such contract.
The Portfolio intends to comply with provisions of the Internal Revenue Code
applicable to investment companies, and thus it is not expected that the
Portfolio will be required to pay any federal income taxes. The SAI further
explains the Portfolio's tax status.
PERFORMANCE
The Portfolio may measure performance in several ways, including "yield" and
"effective yield." The Portfolio's yield is a way of showing the rate of income
the Portfolio earns on its investments as a percentage of its share price. Yield
represents the income, less expenses generated by an investment, in the
Portfolio over a seven-day period expressed as an annual percentage rate.
Effective yield is similar in that it is calculated over the same time frame,
but instead the net investment income is compounded and then annualized. Due to
the compounding effect, the effective yield will normally be higher than the
yield.
Performance figures are based upon historical results and are not intended to
indicate future performance.
Yields quoted by the Portfolio include the effect of deducting the Portfolio's
expenses, but may not include charges and expenses attributable to any
particular insurance product. Because shares of the Portfolio may only be
purchased through variable insurance contracts, the prospectus of the
participating insurance company sponsoring such contract should be carefully
reviewed for information on relevant charges and expenses. Excluding these
charges from quotations of the Portfolio's performance has the effect of
increasing the performance quoted. The effect of these charges should be
considered when comparing the Portfolio's performance to that of other mutual
funds.
From time to time in advertisements or sales material, the Portfolio may discuss
its performance ratings or other information as published by recognized
statistical or rating services, such as Lipper Analytical Services, Inc.,
IBC/Donoghue's Money Fund Report, Morningstar or by publications of general
interest, such as Forbes or Money. In addition, the Portfolio may compare its
yield to those of certain U.S. Treasury obligations or other money market
instruments.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
7
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MISCELLANEOUS INFORMATION
The Trust
The Trust is an open-end management investment company organized as a Delaware
business trust on May 20, 1993. The Portfolio has been established as a separate
series of the Trust.
The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to the Portfolio's investment objective and policies.
The Trustees delegate the day-to-day management of the Portfolio to the officers
of the Trust and meet quarterly to review the Portfolio's investment policies,
performance, expenses and other business affairs.
Shareholder Meetings and Voting Rights
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called for a specific portfolio, or for the Trust as a whole,
for purposes such as electing or removing Trustees, terminating or reorganizing
the Trust, changing fundamental policies or voting on matters when required by
the 1940 Act. Separate votes are taken by the Portfolio only if a matter affects
or requires the vote of just the Portfolio. Shareholders are entitled to cast
one vote for each share they own.
An insurance company issuing a variable contract invested in shares of the
Portfolio will request voting instructions from variable contract holders. Under
current law, the insurance company must vote all shares held by the separate
account in proportion to the voting instructions received.
Conflicts of Interest
Portfolio shares are available only to variable annuity and variable life
separate accounts of insurance companies that are unaffiliated with Janus
Capital and to certain qualified retirement plans. The Portfolio does not
foresee any disadvantages to policy owners arising out of the fact that the
Portfolio offers its shares to such entities. Nevertheless, the Trustees intend
to monitor events in order to identify any material irreconcilable conflicts
that may arise and to determine what action, if any, should be taken in response
to such conflicts. If a conflict occurs, the Trustees may require one or more
insurance company separate accounts or plans to withdraw its investments in the
Portfolio and to substitute shares of another portfolio of the Trust. As a
result, the Portfolio may be forced to sell securities at disadvantageous
prices. In addition, the Trustees may refuse to sell shares of the Portfolio to
any separate account or may suspend or terminate the offering of shares of the
Portfolio if such action is required by law or regulatory authority or is in the
best interests of the shareholders of the Portfolio.
Master/Feeder Option
The Trust may in the future seek to achieve the Portfolio's investment objective
by investing all of the Portfolio's assets in another investment company having
the same investment objective and substantially the same investment policies and
restrictions as those applicable to the Portfolio. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the existing Portfolio. The initial shareholder of the Portfolio has
voted to vest the authority to convert to a master/feeder structure in the sole
discretion of the Trustees. No further approval of the shareholders of the
Portfolio is required. You will receive at least 30 days' prior notice of any
such investment. Such investment would be made only if the Trustees determine it
to be in the best interests of the Portfolio and its shareholders. In making
that determination, the Trustees will consider, among other things, the benefits
to shareholders and/or the opportunity to reduce costs and achieve operational
efficiencies. Although management of the Portfolio believes the Trustees will
not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will be materially reduced if this option is
implemented.
The Valuation of Shares
The net asset value ("NAV") of the shares of the Portfolio is determined at the
close of the regular trading session of the New York Stock Exchange (normally
4:00 p.m., New York time) each day that the Exchange is open. NAV per share is
determined by dividing the total value of the securities and other assets, less
liabilities, by the total number of shares outstanding. Portfolio securities are
valued at their amortized cost. Amortized cost valuation involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity (or such other date as permitted by Rule 2a-7) of any discount or
premium. If fluctuating interest rates cause the market value of the portfolio
to deviate more than 1/2 of 1% from the value determined on the basis of
amortized cost, the Trustees will consider whether any action, such as adjusting
the Portfolio's NAV to reflect current market conditions, should be initiated to
prevent any material dilutive effect on shareholders.
Custodian and Transfer Agent United Missouri Bank, N.A., P.O. Box 419226, Kansas
City, Missouri 64141-6226, is the custodian of the Portfolio's assets. The
custodian holds the Portfolio's assets in safekeeping and collects and remits
the income thereon subject to the instructions of the Portfolio.
Janus Service Corporation, P.O. Box 173375, Denver, Colorado 80217-3375, a
wholly-owned subsidiary of Janus Capital, provides transfer agency and
shareholder services for the Portfolio.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
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SHAREHOLDER'S GUIDE
INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIO DIRECTLY. SHARES
MAY BE PURCHASED OR REDEEMED ONLY THROUGH VARIABLE INSURANCE CONTRACTS OFFERED
BY THE SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE COMPANIES OR THROUGH
QUALIFIED RETIREMENT PLANS. REFER TO THE PROSPECTUS FOR THE PARTICIPATING
INSURANCE COMPANY'S SEPARATE ACCOUNT OR YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON
PURCHASING OR SELLING A VARIABLE INSURANCE CONTRACT AND ON HOW TO SELECT THE
PORTFOLIO AS AN INVESTMENT OPTION FOR A CONTRACT OR A QUALIFIED PLAN.
PURCHASES
Purchases of Portfolio shares may be made only by the separate accounts of
insurance companies for the purpose of funding variable insurance contracts or
by qualified plans. Refer to the prospectus of the appropriate insurance
company's separate account or to your plan documents for information on how to
invest in the Portfolio.
All investments in the Portfolio are credited to a participating insurance
company's separate account or a qualified plan immediately upon acceptance of
the investment by the Portfolio. Investments will be processed at the NAV next
calculated after an order is received and accepted by the Portfolio.
The Portfolio reserves the right to reject any specific purchase order. Purchase
orders may be refused if, in Janus Capital's opinion, they are of the size that
would disrupt the management of the Portfolio. The Portfolio may discontinue
sales of its shares if management believes that a substantial further increase
may adversely affect the Portfolio's ability to achieve its investment
objective. In such event, however, it is anticipated that existing policy owners
and plan participants invested in the Portfolio would be permitted to continue
to authorize investment in the Portfolio and to reinvest any dividends or
capital gains distribution.
REDEMPTIONS
Redemptions, like purchases, may be effected only through the separate accounts
of participating insurance companies or through qualified plans. Please refer to
the appropriate separate account prospectus or plan documents for details.
Shares of the Portfolio may be redeemed on any business day. Redemptions are
processed at the NAV next calculated after receipt and acceptance of the
redemption order by the Portfolio. Redemption proceeds will normally be wired to
the participating insurance company the business day following receipt of the
redemption order, but in no event later than seven days after receipt of such
order.
SHAREHOLDER COMMUNICATIONS
Owners of variable insurance contracts and plan participants will receive annual
and semiannual reports including the financial statements of the Portfolio. Each
report will show the investments owned by the Portfolio and market values
thereof, as well as other information about the Portfolio and its operations.
The Trust's fiscal year ends December 31.
JANUS ASPEN SERIES MONEY MARKET PORTFOLIO PROSPECTUS MAY 1, 1995
AS SUPPLEMENTED AUGUST 25, 1995
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[LOGO]
JANUS ASPEN SERIES
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995 as supplemented August 25, 1995
MONEY MARKET PORTFOLIO
Money Market Portfolio (the "Portfolio") is a separate series of Janus
Aspen Series, a Delaware business trust (the "Trust"). Each series of the Trust
represents shares of beneficial interest in a separate portfolio of securities
and other assets with its own objective and policies. The Portfolio is managed
separately by Janus Capital Corporation ("Janus Capital").
Shares of the Portfolio may be purchased only by the separate accounts of
insurance companies for the purpose of funding variable life insurance policies
and variable annuity contracts (collectively "variable insurance contracts") and
by certain qualified retirement plans. The Portfolio is recently organized and
has a limited operating history.
This Statement of Additional Information ("SAI") is not a Prospectus and
should be read in conjunction with the Prospectus dated May 1, 1995, as
supplemented August 25, 1995, which is incorporated by reference into this SAI
and may be obtained from your insurance company. This SAI contains additional
and more detailed information about the Portfolio's operations and activities
than the Prospectus.
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
----
Investment Policies and Restrictions ...................................... 3
Types of Securities and Investment Techniques ............................. 4
Performance Data .......................................................... 7
Determination of Net Asset Value .......................................... 8
Investment Adviser ........................................................ 9
Custodian, Transfer Agent and Certain Affiliations ........................ 10
Portfolio Transactions and Brokerage ...................................... 10
Officers and Trustees ..................................................... 11
Purchase of Shares ........................................................ 13
Redemption of Shares ...................................................... 13
Dividends and Tax Status .................................................. 13
Principal Shareholders .................................................... 14
Miscellaneous Information ................................................. 14
The Trust ............................................................... 14
Shares of the Trust ..................................................... 14
Voting Rights ........................................................... 14
Independent Accountants ................................................. 15
Registration Statement .................................................. 15
Financial Statements ...................................................... 15
Appendix A - Description of Securities Ratings ............................ 16
Appendix B - Description of Municipal Securities .......................... 18
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INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVE
As discussed in the Prospectus, the Portfolio's investment objective is to
seek maximum current income to the extent consistent with stability of capital.
There can be no assurance that the Portfolio will achieve its investment
objective or maintain a stable net asset value of $1.00 per share. The
investment objective of the Portfolio is not fundamental and may be changed by
the Trustees of the Trust (the "Trustees") without shareholder approval.
INVESTMENT RESTRICTIONS
As indicated in the Prospectus, the Portfolio has adopted certain
fundamental investment restrictions that cannot be changed without shareholder
approval. Shareholder approval means approval by the lesser of (i) more than 50%
of the outstanding voting securities of the Trust (or the Portfolio if a matter
affects just the Portfolio), or (ii) 67% or more of the voting securities
present at a meeting if the holders of more than 50% of the outstanding voting
securities of the Trust (or the Portfolio) are present or represented by proxy.
As used in the restrictions set forth below and as used elsewhere in this
SAI, the term "U.S. Government Securities" shall have the meaning set forth in
the Investment Company Act of 1940, as amended (the "1940 Act"). The 1940 Act
defines U.S. government securities as securities issued or guaranteed by the
United States government, its agencies or instrumentalities and has been
interpreted to include repurchase agreements covered and municipal securities
refunded with escrowed U.S. government securities ("U.S. Government
Securities").
The Portfolio has adopted the following fundamental policies:
(1) With respect to 75% of its assets, the Portfolio may not purchase a
security other than a U.S. Government Security, if, as a result, more than 5% of
its total assets would be invested in the securities of a single issuer or the
Portfolio would own more than 10% of the outstanding voting securities of any
single issuer. (As noted in the Prospectus, the Portfolio is currently subject
to the greater diversification standards of Rule 2a-7, which are not
fundamental.)
(2) The Portfolio may not purchase securities if more than 25% of the value
of its total assets would be invested in the securities of issuers conducting
their principal business activities in the same industry; provided that: (i)
there is no limit on investments in U.S. Government Securities or in obligations
of domestic commercial banks (including U.S. branches of foreign banks subject
to regulations under U.S. laws applicable to domestic banks and, to the extent
that its parent is unconditionally liable for the obligation, foreign branches
of U.S. banks); (ii) this limitation shall not apply to the Portfolio's
investments in municipal securities; (iii) there is no limit on investment in
issuers domiciled in a single country; (iv) financial service companies are
classified according to the end users of their services (for example, automobile
finance, bank finance and diversified finance are each considered to be a
separate industry); and (v) utility companies are classified according to their
services (for example, gas, gas transmission, electric, and telephone are each
considered to be a separate industry).
(3) The Portfolio may not act as an underwriter of securities issued by
others, except to the extent that it may be deemed an underwriter in connection
with the disposition of its portfolio securities.
(4) The Portfolio may not lend any security or make any other loan if, as a
result, more than 25% of its total assets would be lent to other parties (but
this limitation does not apply to purchases of commercial paper, debt securities
or repurchase agreements).
(5) The Portfolio may not purchase or sell real estate or any interest
therein, except that the Portfolio may invest in debt obligations secured by
real estate or interests therein or securities issued by companies that invest
in real estate or interests therein.
(6) The Portfolio may borrow money for temporary or emergency purposes (not
for leveraging) in an amount not exceeding 25% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings). If
borrowings exceed 25% of the value of the Portfolio's total assets by reason of
a decline in net assets, it will reduce its borrowings within three business
days to the extent necessary to comply with the 25% limitation. Reverse
repurchase agreements or the segregation of assets in connection with such
agreements shall not be considered borrowing for the purposes of this limit.
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(7) The Portfolio may, notwithstanding any other investment policy or
restriction (whether or not fundamental), invest all of its assets in the
securities of a single open-end management investment company with substantially
the same fundamental investment objectives, policies and restrictions as the
Portfolio.
The Portfolio has adopted the following nonfundamental investment
restrictions that may be changed by the Trustees without shareholder approval:
(1) The Portfolio may not invest in securities or enter into repurchase
agreements with respect to any securities if, as a result, more than 10% of its
net assets would be invested in repurchase agreements not entitling the holder
to payment of principal within seven days and in other securities that are not
readily marketable ("illiquid securities"). The Trustees, or the Portfolio's
investment adviser acting pursuant to authority delegated by the Trustees, may
determine that a readily available market exists for certain securities such as
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, or any successor to such rule, Section 4(2) commercial paper and municipal
lease obligations. Accordingly, such securities may not be subject to the
foregoing limitation.
(2) The Portfolio may not invest in the securities of another investment
company, except to the extent permitted by the 1940 Act.
(3) The Portfolio may not purchase securities on margin, or make short
sales of securities, except for short sales against the box and the use of
short-term credit necessary for the clearance of purchases and sales of
portfolio securities.
(4) The Portfolio may not invest more than 5% of the value of its total
assets in the securities of any issuer that has conducted continuous operations
for less than three years, including operations of predecessors, except that
this shall not affect the Portfolio's ability to invest in U.S. Government
Securities, fully collateralized debt obligations, municipal obligations,
securities that are rated by at least one nationally recognized statistical
rating organization and securities guaranteed as to principal and interest by an
issuer in whose securities the Portfolio could invest.
(5) The Portfolio may not pledge, mortgage, hypothecate or encumber any of
its assets except to secure permitted borrowings or in connection with permitted
short sales.
(6) The Portfolio may not invest directly in interests in oil and gas or
interests in other mineral exploration or development programs or leases;
however, the Portfolio may own debt securities of companies engaged in those
businesses.
(7) The Portfolio may not invest in companies for the purpose of exercising
control of management.
For purposes of the Portfolio's restriction on investing in a particular
industry, the Portfolio will rely primarily on industry classifications as
published by Bloomberg L.P., subject to the exceptions noted in fundamental
restriction number two above. To the extent that such classifications are so
broad that the primary economic characteristics in a single class are materially
different, the Portfolio may further classify issuers in accordance with
industry classifications as published by the Securities and Exchange Commission.
TYPES OF SECURITIES AND INVESTMENT TECHNIQUES
The Portfolio may invest only in "eligible securities" as defined in Rule
2a-7 adopted under the 1940 Act. Generally, an eligible security is a security
that (i) is denominated in U.S. dollars and has a remaining maturity of 397 days
or less (as calculated pursuant to Rule 2a-7); (ii) is rated, or is issued by an
issuer with short-term debt outstanding that is rated, in one of the two highest
rating categories by any two nationally recognized statistical rating
organizations ("NRSROs") or, if only one NRSRO has issued a rating, by that
NRSRO (the "Requisite NRSROs") or is unrated and of comparable quality to a
rated security, as determined by Janus Capital; and (iii) has been determined by
Janus Capital to present minimal credit risks pursuant to procedures approved by
the Trustees. In addition, the Portfolio will maintain a dollar-weighted average
portfolio maturity of 90 days or less. A description of the ratings of some
NRSROs appears in Appendix A.
Under Rule 2a-7, the Portfolio may not invest more than five percent of its
total assets in the securities of any one issuer other than U.S. Government
Securities, provided that in certain cases it may invest more than 5% of its
assets in a single issuer for a period of up to three business days.
Pursuant to Rule 2a-7, the Portfolio will invest at least 95% of its total
assets in "first-tier" securities. First-tier securities are eligible securities
that are rated, or are issued by an issuer with short-term debt
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outstanding that is rated, in the highest rating category by the Requisite
NRSROs or are unrated and of comparable quality to a rated security. In
addition, the Portfolio may invest in "second-tier" securities which are
eligible securities that are not first-tier securities. However, the Portfolio
may not invest in a second-tier security if immediately after the acquisition
thereof it would have invested more than (i) the greater of one percent of its
total assets or one million dollars in second-tier securities issued by that
issuer, or (ii) five percent of its total assets in second-tier securities.
The following discussion of types of securities in which the Portfolio may
invest supplements and should be read in conjunction with the Prospectus.
PARTICIPATION INTERESTS
The Portfolio may purchase participation interests in loans or securities
in which it may invest directly. Participation interests are generally sponsored
or issued by banks or other financial institutions. A participation interest
gives the Portfolio an undivided interest in the underlying loans or securities
in the proportion that the Portfolio's interest bears to the total principal
amount of the underlying loans or securities. Participation interests, which may
have fixed, floating or variable rates, may carry a demand feature backed by a
letter of credit or guarantee of a bank or institution permitting the holder to
tender them back to the bank or other institution. For certain participation
interests, the Portfolio will have the right to demand payment, on not more than
seven days' notice, for all or a part of the Portfolio's participation interest.
The Portfolio intends to exercise any demand rights it may have upon default
under the terms of the loan or security, to provide liquidity or to maintain or
improve the quality of the Portfolio's investment portfolio. The Portfolio will
only purchase participation interests that Janus Capital determines present
minimal credit risks.
VARIABLE AND FLOATING RATE NOTES
The Portfolio also may purchase variable and floating rate demand notes of
corporations, which are unsecured obligations redeemable upon not more than 30
days' notice. These obligations include master demand notes that permit
investment of fluctuating amounts at varying rates of interest pursuant to
direct arrangements with the issuer of the instrument. The issuer of these
obligations often has the right, after a given period, to prepay the outstanding
principal amount of the obligations upon a specified number of days' notice.
These obligations generally are not traded, nor generally is there an
established secondary market for these obligations. To the extent a demand note
does not have a seven day or shorter demand feature and there is no readily
available market for the obligation, it is treated as an illiquid security.
MORTGAGE- AND ASSET-BACKED SECURITIES
The Portfolio may invest in mortgage-backed securities, which represent an
interest in a pool of mortgages made by lenders such as commercial banks,
savings and loan institutions, mortgage bankers, mortgage brokers and savings
banks. Mortgage-backed securities may be issued by governmental or
government-related entities or by non-governmental entities such as banks,
savings and loan institutions, private mortgage insurance companies, mortgage
bankers and other secondary market issuers.
Interests in pools of mortgage-backed securities differ from other forms of
debt securities which normally provide for periodic payment of interest in fixed
amounts with principal payments at maturity or specified call dates. In
contrast, mortgage-backed securities provide periodic payments which consist of
interest and, in most cases, principal. In effect, these payments are a
"pass-through" of the periodic payments and optional prepayments made by the
individual borrowers on their mortgage loans, net of any fees paid to the issuer
or guarantor of such securities. Additional payments to holders of
mortgage-backed securities are caused by prepayments resulting from the sale of
the underlying residential property, refinancing or foreclosure, net of fees or
costs which may be incurred.
As prepayment rates of individual pools of mortgage loans vary widely, it
is not possible to predict accurately the average life of a particular security.
Although mortgage-backed securities are issued with stated maturities of up to
forty years, unscheduled or early payments of principal and interest on the
underlying mortgages may shorten considerably the effective maturities.
Mortgage-backed securities may have varying assumptions for average life. The
volume of prepayments of principal on a pool of mortgages underlying a
particular security will influence the yield of that security, and the principal
returned to the Portfolio may be reinvested in instruments whose yield may be
higher or lower than that which might have been obtained had the prepayments not
occurred. When interest rates are declining, prepayments usually increase, with
the result that reinvestment of principal prepayments will be at a lower rate
than the rate applicable to the original mortgage-backed security.
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The Portfolio may invest in mortgage-backed securities that are issued by
agencies or instrumentalities of the U.S. government. The Government National
Mortgage Association ("GNMA") is the principal federal government guarantor of
mortgage-backed securities. GNMA is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. GNMA Certificates are
debt securities which represent an interest in one mortgage or a pool of
mortgages which are insured by the Federal Housing Administration or the Farmers
Home Administration or are guaranteed by the Veterans Administration. The
Portfolio may also invest in pools of conventional mortgages which are issued or
guaranteed by agencies of the U.S. government. GNMA pass-through securities are
considered to be riskless with respect to default in that (i) the underlying
mortgage loan portfolio is comprised entirely of government-backed loans and
(ii) the timely payment of both principal and interest on the securities is
guaranteed by the full faith and credit of the U.S. government, regardless of
whether or not payments have been made on the underlying mortgages. GNMA
pass-through securities are, however, subject to the same market risk as
comparable debt securities. Therefore, the market value of the Portfolio's GNMA
securities can be expected to fluctuate in response to changes in prevailing
interest rate levels.
Residential mortgage loans are pooled also by the Federal Home Loan
Mortgage Corporation ("FHLMC"). FHLMC is a privately managed, publicly chartered
agency created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. FHLMC issues
participation certificates ("PCs") which represent interests in mortgages from
FHLMC's national portfolio. The mortgage loans in FHLMC's portfolio are not U.S.
government backed; rather, the loans are either uninsured with loan-to-value
ratios of 80% or less, or privately insured if the loan-to-value ratio exceeds
80%. FHLMC guarantees the timely payment of interest and ultimate collection of
principal on FHLMC PCs; the U.S. government does not guarantee any aspect of
FHLMC PCs.
The Federal National Mortgage Association ("FNMA") is a
government-sponsored corporation owned entirely by private shareholders. It is
subject to general regulation by the Secretary of Housing and Urban Development.
FNMA purchases residential mortgages from a list of approved seller/servicers
which include savings and loan associations, savings banks, commercial banks,
credit unions and mortgage bankers. FNMA guarantees the timely payment of
principal and interest on the pass-through securities issued by FNMA; the U.S.
government does not guarantee any aspect of the FNMA pass-through securities.
The Portfolio may also invest in privately-issued mortgage-backed
securities to the extent permitted by their investment restrictions.
Mortgage-backed securities offered by private issuers include pass-through
securities comprised of pools of conventional residential mortgage loans;
mortgage-backed bonds which are considered to be debt obligations of the
institution issuing the bonds and which are collateralized by mortgage loans;
and collateralized mortgage obligations ("CMOs") which are collateralized by
mortgage-backed securities issued by GNMA, FHLMC or FNMA or by pools of
conventional mortgages.
Asset-backed securities represent direct or indirect participation in, or
are secured by and payable from, assets other than mortgage-backed assets such
as motor vehicle installment sales contracts, installment loan contracts, leases
of various types of real and personal property and receivables from revolving
credit agreements (credit cards). Asset-backed securities have yield
characteristics similar to those of mortgage-backed securities and, accordingly,
are subject to many of the same risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are transactions in which the Portfolio sells
a security and simultaneously commits to repurchase that security from the buyer
at an agreed upon price on an agreed upon future date. The resale price in a
reverse repurchase agreement reflects a market rate of interest that is not
related to the coupon rate or maturity of the sold security. For certain demand
agreements, there is no agreed upon repurchase date and interest payments are
calculated daily, often based upon the prevailing overnight repurchase rate. The
Portfolio will use the proceeds of reverse repurchase agreements only to satisfy
unusually heavy redemption requests or for other temporary or emergency purposes
without the necessity of selling portfolio securities or to earn additional
income on portfolio securities.
Generally, a reverse repurchase agreement enables the Portfolio to recover
for the term of the reverse repurchase agreement all or most of the cash
invested in the portfolio securities sold and to keep the interest income
associated with those portfolio securities. Such transactions are only
advantageous if the interest cost to the Portfolio of the reverse repurchase
transaction is less than the cost of obtaining the cash otherwise. In addition,
interest costs on the money received in a reverse repurchase agreement may
exceed the return received on the investments made by the Portfolio with those
monies.
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WHEN ISSUED AND DELAYED DELIVERY SECURITIES
The Portfolio may purchase securities on a when-issued or delayed delivery
basis. The Portfolio will enter into such transactions only when it has the
intention of actually acquiring the securities. To facilitate such acquisitions,
the Portfolio's custodian will segregate cash or high quality liquid assets in
an amount at least equal to such commitments. On delivery dates for such
transactions, the Portfolio will meet its obligations from maturities, sales of
the segregated securities or from other available sources of cash. If it chooses
to dispose of the right to acquire a when-issued security prior to its
acquisition, the Portfolio could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. At the time it makes
the commitment to purchase securities on a when-issued or delayed delivery
basis, the Portfolio will record the transaction as a purchase and thereafter
reflect the value of such securities in determining its net asset value.
MUNICIPAL LEASES
The Portfolio may invest in municipal leases. Municipal leases frequently
have special risks not normally associated with general obligation or revenue
bonds. Leases and installment purchase or conditional sale contracts (which
normally provide for title to the leased asset to pass eventually to the
government issuer) have evolved as a means for governmental issuers to acquire
property and equipment without meeting the constitutional and statutory
requirements for the issuance of debt. The debt-issuance limitations of many
state constitutions and statutes are deemed to be inapplicable because of the
inclusion in many leases or contracts of "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. The Portfolio
will only purchase municipal leases subject to a non-appropriation clause when
the payment of principal and accrued interest is backed by an unconditional
irrevocable letter of credit, or guarantee of a bank or other entity that meets
the criteria described in the Prospectus under "Taxable Investments."
In evaluating municipal lease obligations, Janus Capital will consider such
factors as it deems appropriate, including: (a) whether the lease can be
canceled; (b) the ability of the lease obligee to direct the sale of the
underlying assets; (c) the general creditworthiness of the lease obligor; (d)
the likelihood that the municipality will discontinue appropriating funding for
the leased property in the event such property is no longer considered essential
by the municipality; (e) the legal recourse of the lease obligee in the event of
such a failure to appropriate funding; (f) whether the security is backed by a
credit enhancement such as insurance; and (g) any limitations which are imposed
on the lease obligor's ability to utilize substitute property or services other
than those covered by the lease obligation. If a lease is backed by an
unconditional letter of credit or other unconditional credit enhancement, then
Janus Capital may determine that a lease is an eligible security solely on the
basis of its evaluation of the credit enhancement.
Municipal leases, like other municipal debt obligations, are subject to the
risk of non-payment. The ability of issuers of municipal leases to make timely
lease payments may be adversely impacted in general economic downturns and as
relative governmental cost burdens are allocated and reallocated among federal,
state and local governmental units. Such non-payment would result in a reduction
of income to the Portfolio, and could result in a reduction in the value of the
municipal lease experiencing non-payment and a potential decrease in the net
asset value of the Portfolio.
PERFORMANCE DATA
As described in the Prospectus, the Portfolio may provide current
annualized and effective annualized yield quotations based on its daily
dividends. These quotations may from time to time be used in advertisements,
shareholder reports or other communications to shareholders. All performance
information supplied by the Portfolio in advertising is historical and is not
intended to indicate future returns.
In performance advertising, the Portfolio may compare any of its
performance information with data published by independent evaluators such as
Morningstar, Inc., Lipper Analytical Services, Inc., or CDC/Wiesenberger,
Donoghue's Money Fund Report or other companies which track the investment
performance of investment companies ("Fund Tracking Companies"). The Funds may
also compare their performance information with the performance of recognized
stock, bond and other indices, including but not limited to the Municipal Bond
Buyers Indices, the Salomon Brothers Bond Index, the Lehman Brothers Bond Index,
the Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial
Average, U.S. Treasury bonds, bills or notes and changes in the Consumer Price
Index as published by the U.S. Department of
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Commerce. The Portfolio may refer to general market performance over past time
periods such as those published by Ibbotson Associates (for instance, its
"Stocks, Bonds, Bills and Inflation Yearbook"). The Portfolio may also refer in
such materials to mutual fund performance rankings and other data published by
Fund Tracking Companies. Performance advertising may also refer to discussions
of the Portfolio and comparative mutual fund data and ratings reported in
independent periodicals, such as newspapers and financial magazines.
Any current yield quotation of the Portfolio which is used in such a manner
as to be subject to the provisions of Rule 482(d) under the Securities Act of
1933, as amended, shall consist of an annualized historical yield, carried at
least to the nearest hundredth of one percent, based on a specific seven
calendar day period. The Portfolio's current yield shall be calculated by (a)
determining the net change during a seven calendar day period in the value of a
hypothetical account having a balance of one share at the beginning of the
period, (b) dividing the net change by the value of the account at the beginning
of the period to obtain a base period return, and (c) multiplying the quotient
by 365/7 (i.e., annualizing). For this purpose, the net change in account value
will reflect the value of additional shares purchased with dividends declared on
the original share and dividends declared on both the original share and any
such additional shares, but will not reflect any realized gains or losses from
the sale of securities or any unrealized appreciation or depreciation on
portfolio securities. In addition, the Portfolio may advertise effective yield
quotations. Effective yield quotations are calculated by adding 1 to the base
period return, raising the sum to a power equal to 365/7, and subtracting 1 from
the result (i.e., compounding).
Income calculated for the purpose of determining the Portfolio's yield
differs from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding assumed in
yield calculations, the yield quoted for the Portfolio may differ from the rate
of distribution the Portfolio paid over the same period or the rate of income
reported in the Portfolio's financial statements.
Although published yield information is useful to investors in reviewing
the Portfolio's performance, investors should be aware that the Portfolio's
yield fluctuates from day to day and that the Portfolio's yield for any given
period is not an indication or representation by the Portfolio of future yields
or rates of return on the Portfolio's shares. Also, because shares of the
Portfolio may only be purchased through variable insurance contracts, the
prospectus of the participating insurance company sponsoring such contract
should be carefully reviewed for information on relevant charges and expenses.
The Portfolio's yield is not fixed or guaranteed, and an investment in the
Portfolio is not insured. Accordingly, the Portfolio's yield information may not
necessarily be used to compare Portfolio shares with investment alternatives
which, like money market instruments or bank accounts, may provide a fixed rate
of interest. In addition, because investments in the Portfolio are not insured
or guaranteed, the Portfolio's yield information may not necessarily be used to
compare the Portfolio with investment alternatives which are insured or
guaranteed.
The Portfolio's current yield and effective yield for the seven day period
ended June 30, 1995, were 5.39% and 5.53%, respectively.
DETERMINATION OF NET ASSET VALUE
Pursuant to the rules of the Securities and Exchange Commission, the
Trustees have established procedures to stabilize the Portfolio's net asset
value at $1.00 per share. These procedures include a review of the extent of any
deviation of net asset value per share as a result of fluctuating interest
rates, based on available market rates, from the Portfolio's $1.00 amortized
cost price per share. Should that deviation exceed 1U2 of 1%, the Trustees will
consider whether any action should be initiated to eliminate or reduce material
dilution or other unfair results to shareholders. Such action may include
redemption of shares in kind, selling portfolio securities prior to maturity,
reducing or withholding dividends and utilizing a net asset value per share as
determined by using available market quotations. The Portfolio i) will maintain
a dollar-weighted average portfolio maturity of 90 days or less; ii) will not
purchase any instrument with a remaining maturity greater than 397 days or
subject to a repurchase agreement having a duration of greater than 397 days;
iii) will limit portfolio investments, including repurchase agreements, to those
U.S. dollar-denominated instruments that Janus Capital has determined present
minimal credit risks pursuant to procedures established by the Trustees; and iv)
will comply with certain reporting and recordkeeping procedures. The Trust has
also established procedures to ensure that portfolio securities meet the
Portfolio's high quality criteria.
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INVESTMENT ADVISER
As stated in the Prospectus, the Portfolio has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Suite 300, Denver, Colorado
80206-4923. The Advisory Agreement provides that Janus Capital will furnish
continuous advice and recommendations concerning the Funds' investments, provide
office space for the Portfolio, pay the salaries, fees and expenses of all
Portfolio officers and of those Trustees who are affiliated with Janus Capital,
and pay all expenses of promoting the sale of Portfolio shares other than the
cost of complying with applicable laws relating to the offer or sale of shares
of the Portfolio. Janus Capital also may make payments to selected broker-dealer
firms or institutions which were instrumental in the acquisition of shareholders
for the Funds or which performed services with respect to shareholder accounts.
The minimum aggregate size required for eligibility for such payments, and the
factors in selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital. Janus Capital is
also authorized to perform the management and administrative services necessary
for the operation of the Portfolio.
The Portfolio pays custodian agent fees and expenses, brokerage commissions
and dealer spreads and other expenses in connection with the execution of
Portfolio transactions, legal and accounting expenses, interest and taxes,
registration fees, expenses of shareholders' meetings, and reports to
shareholders, fees and expenses of Trustees who are not affiliated with Janus
Capital, and other costs of complying with applicable laws regulating the sale
of Portfolio shares. Pursuant to the Advisory Agreement, Janus Capital furnishes
certain other services, including net asset value determination, portfolio
accounting and record keeping for which the Portfolio may reimburse Janus
Capital for its costs.
The Portfolio has agreed to compensate Janus Capital for its advisory
services by the monthly payment of an advisory fee at the annual rate of .25% of
the Portfolio's average daily net assets. Janus Capital has agreed to reimburse
the Portfolio by the amount, if any, that the Portfolio's normal operating
expenses chargeable to its income account in any fiscal year, including the
investment advisory fee but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 0.50% of average daily net assets. Mortality
risk, expense risk and other charges imposed by participating insurance
companies are excluded from the above expense limitation.
For the semiannual period ended June 30, 1995, the Portfolio paid an
advisory fee of $308, after applicable fee waivers. Without the waiver, the
advisory fee would have been $1723.
The Advisory Agreement became effective on March 10, 1995 and will continue
in effect until June 16, 1996, and thereafter from year to year so long as such
continuance is approved annually by a majority of the Portfolio's Trustees who
are not parties to the Advisory Agreement or interested persons of any such
party, and by either a majority of the outstanding voting shares or the
Trustees. The Advisory Agreement i) may be terminated without the payment of any
penalty by the Portfolio or Janus Capital on 60 days' written notice; ii)
terminates automatically in the event of its assignment; and iii) generally, may
not be amended without the approval by vote of a majority of the Trustees,
including the Trustees who are not interested persons of the Portfolio or Janus
Capital and, to the extent required by the 1940 Act, the vote of a majority of
the outstanding voting securities of the Portfolio.
Janus Capital also performs investment advisory services for other mutual
funds, and for individual, charitable, corporate and retirement accounts.
Investment decisions for each account managed by Janus Capital, including the
Portfolio, are made independently from those for any other account that is or
may in the future become managed by Janus Capital or its affiliates. If,
however, a number of accounts managed by Janus Capital are contemporaneously
engaged in the purchase or sale of the same security, the orders may be
aggregated and/or the transactions may be averaged as to price and allocated
equitably to each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position obtained or
liquidated for an account.
Each account managed by Janus Capital has its own investment objective and
is managed in accordance with that objective by a particular portfolio manager
or team of portfolio managers. As a result, from time to time two or more
different managed accounts may pursue divergent investment strategies with
respect to investments or categories of investments.
As indicated in the Prospectus, Janus Capital permits investment and other
personnel to purchase and sell securities for their own accounts in accordance
with a Janus Capital policy regarding personal investing by directors, officers
and employees of Janus Capital and the Portfolio. The policy requires investment
personnel and officers of Janus Capital, inside directors of Janus Capital and
the Portfolio and other designated persons deemed to have access to current
trading information to pre-clear all transactions in
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securities not otherwise exempt under the policy. Requests for trading authority
will be denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the policy or would be deemed to
adversely affect any transaction then known to be under consideration for or to
have been effected on behalf of any client account, including the Portfolio.
In addition to the pre-clearance requirement described above, the policy
subjects investment personnel, officers and directors/Trustees of Janus Capital
and the Portfolio to various trading restrictions and reporting obligations. All
reportable transactions are reviewed for compliance with Janus Capital's policy.
Those persons also may be required under certain circumstances to forfeit their
profits made from personal trading.
The provisions of the policy are administered by and subject to exceptions
authorized by Janus Capital.
Kansas City Southern Industries, Inc., a publicly traded holding company
whose primary subsidiaries are engaged in transportation, information processing
and financial services ("KCSI") owns approximately 83% of Janus Capital. Thomas
H. Bailey, the President and Chairman of the Board of Janus Capital, owns 12% of
its voting stock and, by agreement with KCSI, selects a majority of Janus
Capital's Board.
CUSTODIAN, TRANSFER AGENT AND CERTAIN AFFILIATIONS
United Missouri Bank, N.A., P.O. Box 419226, Kansas City, Missouri
64141-6226, is the Portfolio's custodian. The custodian holds the Portfolio's
assets in safekeeping and collects and remits the income thereon, subject to the
instructions of the Portfolio.
Janus Service Corporation ("Janus Service"), P.O. Box 173375, Denver,
Colorado 80217-3375, a wholly-owned subsidiary of Janus Capital, is the
Portfolio's transfer agent. In addition, Janus Service provides certain other
administrative, recordkeeping and shareholder relations services to the
Portfolio. Janus Service is not compensated for its services, except for
out-of-pocket costs.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of portfolio business for the Portfolio and
negotiation of its commission rates are made by Janus Capital whose policy is to
obtain the "best execution" (prompt and reliable execution at the most favorable
security price) of all portfolio transactions. The Advisory Agreement
specifically provides that in placing portfolio transactions for the Portfolio,
Janus Capital may agree to pay brokerage commissions for effecting a securities
transaction in an amount higher than another broker or dealer would have charged
for effecting that transaction as authorized, under certain circumstances, by
the Exchange Act.
In selecting brokers and dealers and in negotiating commissions, Janus
Capital considers a number of factors, including but not limited to: Janus
Capital's knowledge of currently available negotiated commission rates or prices
of securities currently available and other current transaction costs; the
nature of the security being traded; the size and type of the transaction; the
nature and character of the markets for the security to be purchased or sold;
the desired timing of the trade; the activity existing and expected in the
market for the particular security; confidentiality; the quality of the
execution, clearance and settlement services; financial stability of the broker
or dealer; the existence of actual or apparent operational problems of any
broker or dealer; and research products or services provided. In recognition of
the value of the foregoing factors, Janus Capital may place portfolio
transactions with a broker or dealer with whom it has negotiated a commission
that is in excess of the commission another broker or dealer would have charged
for effecting that transaction if Janus Capital determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research provided by such broker or dealer viewed in terms of
either that particular transaction or of the overall responsibilities of Janus
Capital. Research may include furnishing advice, either directly or through
publications or writings, as to the value of securities, the advisability of
purchasing or selling specific securities and the availability of securities or
purchasers or sellers of securities; furnishing seminars, information, analyses
and reports concerning issuers, industries, securities, trading markets and
methods, legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research analysts,
corporate management personnel, industry experts, economists and government
officials; comparative performance evaluation and technical measurement services
and quotation services, and products and other services (such as third party
publications, reports and analyses, and computer and electronic access,
equipment, software, information and accessories that deliver, process or
otherwise utilize information, including the research described above) that
assist Janus Capital in carrying out its responsibilities. Research received
from brokers or dealers is supplemental to Janus Capital's own research efforts.
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For the semiannual period ended June 30, 1995, the Portfolio did not incur
any brokerage commissions.
Janus Capital may use research products and services in servicing other
accounts in addition to the Portfolio. If Janus Capital determines that any
research product or service has a mixed use, such that it also serves functions
that do not assist in the investment decision-making process, Janus Capital may
allocate the costs of such service or product accordingly. Only that portion of
the product or service that Janus Capital determines will assist it in the
investment decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus Capital.
The Advisory Agreement also authorizes Janus Capital to consider sales of
Portfolio shares or shares of other Janus funds by a broker-dealer or the
recommendation of a broker-dealer to its customers that they purchase such
shares as a factor in the selection of broker-dealers to execute Portfolio
transactions. Janus Capital may also consider payments made by brokers effecting
transactions for a Portfolio i) to the Portfolio or ii) to other persons on
behalf of the Portfolio for services provided to the Portfolio for which it
would be obligated to pay. In placing portfolio business with such
broker-dealers, Janus Capital will seek the best execution of each transaction.
When the Funds purchase or sell a security in the over-the-counter market,
the transaction takes place directly with a principal market-maker, without the
use of a broker, except in those circumstances where in the opinion of Janus
Capital better prices and executions will be achieved through the use of a
broker.
OFFICERS AND TRUSTEES
The following are the names of the Trustees and officers of Janus Aspen
Series, a Delaware business trust of which the Portfolio is a series, together
with a brief description of their principal occupations during the last five
years.
Thomas H. Bailey*# - Trustee, Chairman and President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Trustee, Chairman and President of Janus Investment Fund+. Chairman,
Director and President of Janus Capital. Chairman of IDEX Management, Inc.,
Largo, Florida (50% subsidiary of Janus Capital and investment adviser to a
group of mutual funds) ("IDEX").
James P. Craig*# - Trustee and Executive Vice President
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Trustee and Executive Vice President of Janus Investment Fund+. Vice
President and Director of Janus Capital. Portfolio Manager of Janus Fund
and Janus Balanced Fund series of Janus Investment Fund.
Sharon S. Pichler* - Executive Vice President and Portfolio Manager
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Executive Vice President of Janus Money Market Fund, Janus Tax-Exempt Money
Market Fund and Janus Government Money Market Fund series of Janus
Investment Fund. Vice President of Janus Capital. Formerly, Assistant Vice
President and portfolio manager at USAA Investment Management Co.
(1990-1994) and teaching associate at The University of Texas at San
Antonio (1984-1990).
David C. Tucker* - Vice President and General Counsel
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Vice President and General Counsel of Janus Investment Fund+. Vice
President, Secretary and General Counsel of Janus Capital. Vice President,
General Counsel and Director of Janus Service and Janus Distributors.
--------------------------------------------------------------------------------
* Interested person of the Trust and of Janus Capital.
# Member of the Executive Committee.
+ Includes comparable office with various Janus funds that were reorganized into
Janus Investment Fund on August 7, 1992.
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Steven R. Goodbarn* - Treasurer and Chief Financial Officer
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Treasurer and Chief Financial Officer of Janus Investment Fund+. Vice
President of Finance, Chief Financial Officer and Treasurer of Janus
Service, Janus Distributors and Janus Capital. Director of IDEX. Formerly
(1979 to 1992), with the accounting firm of Price Waterhouse, Denver,
Colorado, and Kansas City, Missouri.
Kelley Abbott Howes* - Secretary
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Secretary of Janus Investment Fund. Associate Counsel of Janus Capital.
Formerly (1990 to 1994), with The Boston Company Advisors, Inc., Boston,
Massachusetts (mutual fund administration and advisory services).
John W. Shepardson# - Trustee
910 16th Street, Suite 222
Denver, CO 80202
Trustee of Janus Investment Fund+. Historian.
William D. Stewart# - Trustee
5330 Sterling Drive
Boulder, CO 80302
Trustee of Janus Investment Fund+. President of HPS Corporation, Boulder,
Colorado (manufacturer of vacuum fittings and valves).
Gary O. Loo - Trustee
102 N. Cascade Avenue, Suite 500
Colorado Springs, CO 80903
Trustee of Janus Investment Fund+. President and a Director of High Valley
Group, Inc., Colorado Springs, Colorado (investments) since 1987.
Dennis B. Mullen - Trustee
1601 114th Avenue, SE
Alderwood Building, Suite 130
Bellevue, WA 98004
Trustee of Janus Investment Fund+. President and Chief Executive Officer of
BC Northwest, L.P., a franchise of Boston Markets, Inc., Bellevue,
Washington (restaurant chain). Formerly (1982 to 1993), Chairman, President
and Chief Executive Officer of Famous Restaurants, Inc., Scottsdale,
Arizona (restaurant chain).
Martin H. Waldinger - Trustee
4940 Sandshore Court
San Diego, CA 92130
Trustee of Janus Investment Fund+. Private Consultant and Director of Run
Technologies, Inc., a software development firm, San Carlos, California.
Formerly (1989 to 1993), President and Chief Executive Officer of
Bridgecliff Management Services, Campbell, California (a condominium
association management company).
The Trustees are responsible for major decisions relating to the
Portfolio's objective, policies and techniques. The Trustees also supervise the
operation of the Portfolio by its officers and review the investment decisions
of the officers although they do not actively participate on a regular basis in
making such decisions.
The Executive Committee of the Trustees shall have and may exercise all the
powers and authority of the Board except for matters requiring action by the
whole Board pursuant to the Trust's Bylaws or Trust Instrument, Delaware Law or
the 1940 Act.
--------------------------------------------------------------------------------
* An interested person of the Trust and of Janus Capital.
# Member of the Executive Committee.
+ Includes comparable office with various Janus funds that were reorganized into
Janus Investment Fund on August 7, 1992.
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The following table shows the aggregate compensation paid to each Trustee
by the Portfolio and all funds advised and sponsored by Janus Capital
(collectively, the "Janus Funds") for the periods indicated. None of the
Trustees receive pension or retirement benefits from the Portfolio or the Janus
Funds.
Aggregate Compensation Total Compensation
from the Portfolio for from the Janus Funds
fiscal year ended for calendar year ended
Name of Person, Position December 31, 1994** December 31, 1994***
------------------------ ------------------- --------------------
Thomas H. Bailey, Chairman* $0 $ 0
James P. Craig, Trustee*+ $0 $ 0
John W. Shepardson, Trustee $0 $39,250
William D. Stewart, Trustee $0 $39,250
Gary O. Loo, Trustee $0 $39,250
Dennis B. Mullen, Trustee $0 $39,250
Martin H. Waldinger, Trustee $0 $39,250
--------------------------------------------------------------------------------
* An interested person of the Portfolio and of Janus Capital. Compensated by
Janus Capital and not the Portfolio.
** The Portfolio had not commenced operations as of December 31, 1994.
*** As of December 31, 1994, Janus Funds consisted of two registered investment
companies comprised of a total of 20 funds.
+ Mr. Craig became a Trustee as of June 30, 1995.
PURCHASE OF SHARES
Shares of the Portfolio can be purchased only by i) the separate accounts
of participating insurance companies for the purpose of funding variable
insurance contracts and ii) certain qualified retirement plans. Shares of the
Portfolio are purchased at the NAV per share as determined at the close of
regular trading session of the New York Stock Exchange next occurring after a
purchase order is received and accepted by the Portfolio or its authorized
agent. The prospectus for your insurance company's separate account or your plan
documents contain detailed information about investing in the Portfolio.
REDEMPTION OF SHARES
Redemptions, like purchases, may only be effected through the separate
accounts of participating insurance companies or qualified retirement plans.
Shares normally will be redeemed for cash, although each Fund retains the right
to redeem its shares in kind under unusual circumstances, in order to protect
the interests of remaining shareholders, by delivery of securities selected from
its assets at its discretion. However, the Funds are governed by Rule 18f-1
under the 1940 Act, which requires each Fund to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the net asset value of that Fund during any
90-day period for any one shareholder. Should redemptions by any shareholder
exceed such limitation, their Fund will have the option of redeeming the excess
in cash or in kind. If shares are redeemed in kind, the redeeming shareholder
might incur brokerage costs in converting the assets to cash. The method of
valuing securities used to make redemptions in kind will be the same as the
method of valuing portfolio securities described under "Determination of Net
Asset Value" and such valuation will be made as of the same time the redemption
price is determined.
The right to require the Funds to redeem its shares may be suspended, or
the date of payment may be postponed, whenever (1) trading on the NYSE is
restricted, as determined by the Securities and Exchange Commission, or the NYSE
is closed except for holidays and weekends, (2) the Securities and Exchange
Commission permits such suspension and so orders, or (3) an emergency exists as
determined by the Securities and Exchange Commission so that disposal of
securities or determination of NAV is not reasonably practicable.
DIVIDENDS AND TAX STATUS
Dividends representing substantially all of the net investment income and
any net realized gains on sales of securities are declared daily, Saturdays,
Sundays and holidays included, and distributed on the last business day of each
month. The Portfolio intends to qualify as a "regulated investment company" by
satisfying certain requirements prescribed by Subchapter M of the Internal
Revenue Code of 1986. In addition, the Portfolio intends to comply with the
diversification requirements of Internal Revenue Code Section 817(h) related to
the tax-deferred status of insurance company separate accounts.
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All income dividends and capital gains distributions, if any, on the
Portfolio's shares are reinvested automatically in additional shares of the
Portfolio at the NAV determined on the first business day following the record
date.
Because shares of the Portfolio can only be purchased through variable
insurance contracts or qualified plans, it is anticipated that any income
dividends or capital gains distributions will be exempt from current taxation if
left to accumulate within such contracts or plans. See the prospectus for the
separate account of the related insurance company or the plan documents for
additional information.
PRINCIPAL SHAREHOLDERS
The officers and Trustees of the Portfolio cannot directly own shares of
the Portfolio without purchasing an insurance contract through one of the
participating insurance companies. As a result, such officers and Trustees as a
group own less than 1% of the outstanding shares of the Portfolio. As of July
31, 1995, all of the outstanding shares of the Portfolio were owned by certain
insurance company separate accounts and by Janus Capital, which provided seed
capital for the Portfolio. The percentage ownership of each entity is as
follows:
Record Owners as of July 31, 1995
----------------------------------------
Portfolio Name Western Reserve Janus Capital
Money Market Portfolio 99.08% *
* Owned less than 5%.
The shares held by the separate accounts of each insurance company,
including shares for which no voting instructions have been received, will be
voted by each insurance company in proportion to instructions received from
contract owners.
MISCELLANEOUS INFORMATION
THE TRUST
The Portfolio is an open-end management investment company registered under
the 1940 Act as a series of the Trust, which was organized as a Delaware
business trust on May 20, 1993. The Trust Instrument permits the Trustees to
issue an unlimited number of shares of beneficial interest from an unlimited
number of series of shares. As of the date of this SAI, the Trust consists of 8
series of shares, known as "portfolios." The other 7 series of the Trust are
offered by a separate prospectus. Additional series may be created from time to
time.
SHARES OF THE TRUST
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 per share for each series of the
Trust. Shares of each series of the Trust are fully paid and nonassessable when
issued. All shares of the Portfolio participate equally in dividends and other
distributions by the Portfolio, and in residual assets of the Portfolio in the
event of liquidation. Shares of the Portfolio have no preemptive, conversion or
subscription rights.
VOTING RIGHTS
A participating insurance company issuing a variable insurance contract
will vote shares in the separate account as required by law and interpretations
thereof, as may be amended or changed from time to time. In accordance with
current law and interpretations, a participating insurance company is required
to request voting instructions from policy owners and must vote shares in the
separate account, including shares for which no instructions have been received,
in proportion to the voting instructions received. Additional information may be
found in the participating insurance company's separate account prospectus.
The Portfolio's Trustees are responsible for major decisions relating to
the Portfolio's policies and objectives; the Trustees oversee the operation of
the Portfolio by its officers.
The present Trustees were elected by the initial trustee of the Trust on
May 25, 1993, and were approved by the initial shareholder on May 25, 1993 with
the exception of Mr. Craig who was appointed by the Trustees as of June 30,
1995. Under the Trust Instrument, each Trustee will continue in office until the
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termination of the Trust or his earlier death, resignation, bankruptcy,
incapacity or removal. Vacancies will be filled by a majority of the remaining
Trustees, subject to the 1940 Act. Therefore, no annual or regular meetings of
shareholders normally will be held, unless otherwise required by the Trust
Instrument or the 1940 Act. Subject to the foregoing, shareholders have the
power to vote to elect or remove Trustees, to terminate or reorganize the
Portfolio, to amend the Trust Instrument, to bring certain derivative actions
and on any other matters on which a shareholder vote is required by the 1940
Act, the Trust Instrument, the Trust's Bylaws or the Trustees.
Each share of each series of the Trust has one vote (and fractional votes
for fractional shares). Shares of all series of the Trust have noncumulative
voting rights, which means that the holders of more than 50% of the shares of
all series of the Trust voting for the election of Trustees can elect 100% of
the Trustees if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any Trustees. Each series of the
Trust will vote separately only with respect to those matters that affect only
that series.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado
80202, independent accountants for the Portfolio, audit the Portfolio's annual
financial statements and prepare its tax returns.
REGISTRATION STATEMENT
The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities to which this SAI relates. If further
information is desired with respect to the Portfolio or such securities,
reference is made to the Registration Statement and the exhibits filed as a part
thereof.
FINANCIAL STATEMENTS
The following unaudited financial statements for the period ended June 30,
1995 are hereby incorporated into this SAI by reference to the Portfolio's
Semiannual Report dated June 30, 1995. A copy of such report accompanies this
SAI.
DOCUMENTS INCORPORATED BY REFERENCE TO THE SEMIANNUAL REPORT
Schedule of Investments as of June 30, 1995
Statement of Operations for the period May 1, 1995 to June 30, 1995
Statement of Assets and Liabilities as of June 30, 1995
Statement of Changes in Net Assets for the period May 1, 1995 to June 30,
1995
Financial Highlights for the period May 1, 1995 to June 30, 1995
Notes to Financial Statements
The portions of such Semiannual Report that are not specifically listed
above are not incorporated by reference into this SAI and are not part of the
Registration Statement.
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APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
MOODY'S AND STANDARD & POOR'S
MUNICIPAL AND CORPORATE BONDS AND MUNICIPAL LOANS
The two highest ratings of Standard & Poor's Ratings Services ("S&P") for
municipal and corporate bonds are AAA and AA. Bonds rated AAA have the highest
rating assigned by S&P to a debt obligation. Capacity to pay interest and repay
principal is extremely strong. Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest rated issues only in a
small degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within that rating category.
The two highest ratings of Moody's Investors Service, Inc. ("Moody's") for
municipal and corporate bonds are Aaa and Aa. Bonds rated Aaa are judged by
Moody's to be of the best quality. Bonds rated Aa are judged to be of high
quality by all standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Moody's states that Aa bonds are rated
lower than the best bonds because margins of protection or other elements make
long-term risks appear somewhat larger than Aaa securities. The generic rating
Aa may be modified by the addition of the numerals 1, 2 or 3. The modifier 1
indicates that the security ranks in the higher end of the Aa rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of such rating category.
SHORT TERM MUNICIPAL LOANS
S&P's highest rating for short-term municipal loans is SP-1. S&P states
that short-term municipal securities bearing the SP-1 designation have a strong
capacity to pay principal and interest. Those issues rated SP-1 which are
determined to possess a very strong capacity to pay debt service will be given a
plus (+) designation. Issues rated SP-2 have satisfactory capacity to pay
principal and interest with some vulnerability to adverse financial and economic
changes over the term of the notes.
Moody's highest rating for short-term municipal loans is MIG-1/VMIG-1.
Moody's states that short-term municipal securities rated MIG-1/VMIG-1 are of
the best quality, enjoying strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2 designation are
of high quality, with margins of protection ample although not so large as in
the MIG-1/VMIG-1 group.
OTHER SHORT-TERM DEBT SECURITIES
Prime-1 and Prime-2 are the two highest ratings assigned by Moody's for
other short-term debt securities and commercial paper, and A-1 and A-2 are the
two highest ratings for commercial paper assigned by S&P. Moody's uses the
numbers 1, 2 and 3 to denote relative strength within its highest classification
of Prime, while S&P uses the numbers 1, 2 and 3 to denote relative strength
within its highest classification of A. Issuers rated Prime-1 by Moody's have a
superior ability for repayment of senior short-term debt obligations and have
many of the following characteristics: leading market positions in
well-established industries, high rates of return on funds employed,
conservative capitalization structure with moderate reliance on debt and ample
asset protection, broad margins in earnings coverage of fixed financial charges
and high internal cash generation, and well established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 by Moody's have a strong ability for repayment of senior short-term debt
obligations and display many of the same characteristics displayed by issuers
rated Prime-1, but to a lesser degree. Issuers rated A-1 by S&P carry a strong
degree of safety regarding timely repayment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus (+) designation.
Issuers rated A-2 by S&P carry a satisfactory degree of safety regarding timely
repayment.
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FITCH
F-1+ Exceptionally strong credit quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely
payment.
F-1 Very strong credit quality. Issues assigned this rating reflect an
assurance for timely payment only slightly less in degree than issues
rated F-1+.
F-2 Good credit quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is
not as great as the F-1+ and F-1 ratings.
DUFF & PHELPS INC.
Duff 1+ Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or ready access to alternative sources
of funds, is clearly outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are
minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
Duff 2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk
factors are small.
THOMSON BANKWATCH, INC.
TBW-1 The highest category; indicates a very high degree of likelihood that
principal and interest will be paid on a timely basis.
TBW-2 The second highest category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated TBW-1.
TBW-3 The lowest investment grade category; indicates that while more
susceptible to adverse developments (both internal and external) than
obligations with higher ratings, capacity to service principal and
interest in a timely fashion is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as non-investment
grade and therefore speculative.
IBCA, INC.
A1+ Obligations supported by the highest capacity for timely repayment.
Where issues possess a particularly strong credit feature, a rating of
A1+ is assigned.
A2 Obligations supported by a good capacity for timely repayment.
A3 Obligations supported by a satisfactory capacity for timely repayment.
B Obligations for which there is an uncertainty as to the capacity to
ensure timely repayment.
C Obligations for which there is a high risk of default or which are
currently in default.
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APPENDIX B
DESCRIPTION OF MUNICIPAL SECURITIES
Municipal Notes generally are used to provide for short-term capital needs
and usually have maturities of one year or less. They include the following:
1. Project Notes, which carry a U.S. government guarantee, are issued by
public bodies (called "local issuing agencies") created under the laws of a
state, territory, or U.S. possession. They have maturities that range up to one
year from the date of issuance. Project Notes are backed by an agreement between
the local issuing agency and the Federal Department of Housing and Urban
Development. These Notes provide financing for a wide range of financial
assistance programs for housing, redevelopment, and related needs (such as
low-income housing programs and renewal programs).
2. Tax Anticipation Notes are issued to finance working capital needs of
municipalities. Generally, they are issued in anticipation of various seasonal
tax revenues, such as income, sales, use and business taxes, and are payable
from these specific future taxes.
3. Revenue Anticipation Notes are issued in expectation of receipt of other
types of revenues, such as Federal revenues available under the Federal Revenue
Sharing Programs.
4. Bond Anticipation Notes are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds then
provide the money for the repayment of the Notes.
5. Construction Loan Notes are sold to provide construction financing.
After successful completion and acceptance, many projects receive permanent
financing through the Federal Housing Administration under the Federal National
Mortgage Association ("Fannie Mae") or the Government National Mortgage
Association ("Ginnie Mae").
6. Tax-Exempt Commercial Paper is a short-term obligation with a stated
maturity of 365 days or less. It is issued by agencies of state and local
governments to finance seasonal working capital needs or as short-term financing
in anticipation of longer term financing.
Municipal Bonds, which meet longer term capital needs and generally have
maturities of more than one year when issued, have three principal
classifications:
1. General Obligation Bonds are issued by such entities as states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind General Obligation Bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.
2. Revenue Bonds in recent years have come to include an increasingly wide
variety of types of municipal obligations. As with other kinds of municipal
obligations, the issuers of revenue bonds may consist of virtually any form of
state or local governmental entity, including states, state agencies, cities,
counties, authorities of various kinds, such as public housing or redevelopment
authorities, and special districts, such as water, sewer or sanitary districts.
Generally, revenue bonds are secured by the revenues or net revenues derived
from a particular facility, group of facilities, or, in some cases, the proceeds
of a special excise or other specific revenue source. Revenue bonds are issued
to finance a wide variety of capital projects including electric, gas, water and
sewer systems; highways, bridges, and tunnels; port and airport facilities;
colleges and universities; and hospitals. Many of these bonds provide additional
security in the form of a debt service reserve fund to be used to make principal
and interest payments. Various forms of credit enhancement, such as a bank
letter of credit or municipal bond insurance, may also be employed in revenue
bond issues. Housing authorities have a wide range of security, including
partially or fully insured mortgages, rent subsidized and/or collateralized
mortgages, and/or the net revenues from housing or other public projects. Some
authorities provide further security in the form of a state's ability (without
obligation) to make up deficiencies in the debt service reserve fund.
In recent years, revenue bonds have been issued in large volumes for
projects that are privately owned and operated (see 3 below).
3. Private Activity Bonds are considered municipal bonds if the interest
paid thereon is exempt from Federal income tax and are issued by or on behalf of
public authorities to raise money to finance various
18
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privately operated facilities for business and manufacturing, housing and
health. These bonds are also used to finance public facilities such as airports,
mass transit systems and ports. The payment of the principal and interest on
such bonds is dependent solely on the ability of the facility's user to meet its
financial obligations and the pledge, if any, of real and personal property as
security for such payment.
While, at one time, the pertinent provisions of the Internal Revenue Code
permitted private activity bonds to bear tax-exempt interest in connection with
virtually any type of commercial or industrial project (subject to various
restrictions as to authorized costs, size limitations, state per capita volume
restrictions, and other matters), the types of qualifying projects under the
Code have become increasingly limited, particularly since the enactment of the
Tax Reform Act of 1986. Under current provisions of the Code, tax-exempt
financing remains available, under prescribed conditions, for certain privately
owned and operated rental multi-family housing facilities, nonprofit hospital
and nursing home projects, airports, docks and wharves, mass commuting
facilities and solid waste disposal projects, among others, and for the
refunding (that is, the tax-exempt refinancing) of various kinds of other
private commercial projects originally financed with tax-exempt bonds. In future
years, the types of projects qualifying under the Code for tax-exempt financing
are expected to become increasingly limited.
Because of terminology formerly used in the Internal Revenue Code,
virtually any form of private activity bond may still be referred to as an
"industrial development bond," but more and more frequently revenue bonds have
become classified according to the particular type of facility being financed,
such as hospital revenue bonds, nursing home revenue bonds, multi-family housing
revenues bonds, single family housing revenue bonds, industrial development
revenue bonds, solid waste resource recovery revenue bonds, and so on.
Other Municipal Obligations, incurred for a variety of financing purposes,
include: municipal leases, which may take the form of a lease or an installment
purchase or conditional sale contract, are issued by state and local governments
and authorities to acquire a wide variety of equipment and facilities such as
fire and sanitation vehicles, telecommunications equipment and other capital
assets. Municipal leases frequently have special risks not normally associated
with general obligation or revenue bonds. Leases and installment purchase or
conditional sale contracts (which normally provide for title to the leased asset
to pass eventually to the government issuer) have evolved as a means for
governmental issuers to acquire property and equipment without meeting the
constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations of many state constitutions and statutes are deemed to
be inapplicable because of the inclusion in many leases or contracts of
"non-appropriation" clauses that provide that the governmental issuer has no
obligation to make future payments under the lease or contract unless money is
appropriated for such purpose by the appropriate legislative body on a yearly or
other periodic basis. To reduce this risk, the Fund will only purchase municipal
leases subject to a non-appropriation clause when the payment of principal and
accrued interest is backed by an unconditional irrevocable letter of credit, or
guarantee of a bank or other entity that meets the criteria described in the
Prospectus.
Tax-exempt bonds are also categorized according to whether the interest is
or is not includible in the calculation of alternative minimum taxes imposed on
individuals, according to whether the costs of acquiring or carrying the bonds
are or are not deductible in part by banks and other financial institutions, and
according to other criteria relevant for Federal income tax purposes. Due to the
increasing complexity of Internal Revenue Code and related requirements
governing the issuance of tax-exempt bonds, industry practice has uniformly
required, as a condition to the issuance of such bonds, but particularly for
revenue bonds, an opinion of nationally recognized bond counsel as to the
tax-exempt status of interest on the bonds.
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JANUS ASPEN SERIES
PART C - OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
List all financial statements and exhibits filed as part of the
Registration Statement.
(a)(1) Financial Statements Included in the Prospectus:
Financial Highlights for the following Portfolio:
Money Market Portfolio
(a)(2) Financial Statements Incorporated by Reference into the Statement
of Additional Information:
The Financial Statements included in the Semiannual Report dated
June 30, 1995, for the following Portfolio, are incorporated by
reference into the Statement of Additional Information:
Money Market Portfolio
(b) Exhibits:
Exhibit 1 Trust Instrument dated May 19, 1993, is
incorporated herein by reference to
Registrant's Registration Statement on
Form N-1A filed with the Securities and
Exchange Commission on May 20, 1993.
Exhibit 2 Bylaws are incorporated herein by
reference to Registrant's Registration
Statement on Form N-1A filed with the
Securities and Exchange Commission on May
20, 1993.
Exhibit 3 Not Applicable
Exhibit 4 Not Applicable
Exhibit 5 (a) Form of Investment Advisory Agreement is
incorporated herein by reference to
Registrant's Registration Statement on
Form N-1A filed with the Securities and
Exchange Commission on May 20, 1993.
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(b) Form of Investment Advisory Agreement for
International Growth Portfolio is
incorporated herein by reference to
Exhibit 5(b) to Post-Effective Amendment
No. 1.
(c) Form of Investment Advisory Agreement for
Money Market Portfolio is incorporated
herein by reference to Exhibit 5(c) to
Post-Effective Amendment No. 5.
Exhibit 6 Not Applicable
Exhibit 7 Not Applicable
Exhibit 8 (a) Form of Custody Agreement between Janus
Aspen Series and Investors Fiduciary
Trust Company is incorporated herein by
reference to Exhibit 8(a) to
Pre-Effective Amendment No. 2.
(b) Form of Custodian Contract between Janus
Aspen Series and State Street Bank and
Trust Company is incorporated herein by
reference to Exhibit 8(b) to
Pre-Effective Amendment No. 2.
(c) Letter Agreement dated April 4, 1994
regarding State Street Custodian
Agreement is incorporated herein by
reference to Exhibit 8(c) to
Post-Effective Amendment No. 4.
(d) Form of Custodian Agreement between Janus
Aspen Series and United Missouri Bank,
N.A. is incorporated herein by reference
to Exhibit 8(d) to Post-Effective
Amendment No. 5.
Exhibit 9 (a) Transfer Agency Agreement with Janus
Service Corporation is incorporated
herein by reference to Registrant's
Registration Statement on Form N-1A filed
with the Securities and Exchange
Commission on May 20, 1993.
(b) Form of Model Participation Agreement is
incorporated herein by reference to
Exhibit 9(b) to Pre-Effective Amendment
No. 2.
C-2
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Exhibit 10 (a) Opinion and Consent of Fund Counsel with
respect to shares of Growth Portfolio,
Aggressive Growth Portfolio, Worldwide
Growth Portfolio, Balanced Portfolio,
Flexible Income Portfolio and Short-Term
Bond Portfolio is incorporated herein by
reference to Exhibit 10 to Pre- Effective
Amendment No. 2.
(b) Opinion and Consent of Fund Counsel with
respect to shares of International Growth
Portfolio is incorporated herein by
reference to Exhibit 10(b) to
Post-Effective Amendment No. 1.
(c) Opinion and Consent of Fund Counsel with
respect to shares of Money Market
Portfolio is incorporated herein by
reference to Exhibit 10(c) to
Post-Effective Amendment No. 5.
Exhibit 11 Consent of Price Waterhouse is filed
herein as Exhibit 11.
Exhibit 12 Not Applicable
Exhibit 13 Not Applicable
Exhibit 14 Not Applicable
Exhibit 15 Not Applicable
Exhibit 16 Computation of Current Yield and
Effective Yield is filed herein as
Exhibit 16.
Exhibit 17 Powers of Attorney dated June 30, 1995,
are filed herein as Exhibit 17.
Exhibit 27 Financial Data Schedule for Money Market
Portfolio is filed herein as Exhibit 27.
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None
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ITEM 26. Number of Holders of Securities
The number of record holders of shares of the Registrant as of July
31, 1995, was as follows:
Number of
Title of Class Record Holders
-------------- --------------
Growth Portfolio 9
Aggressive Growth Portfolio 7
Worldwide Growth Portfolio 7
Balanced Portfolio 5
Flexible Income Portfolio 5
Short-Term Bond Portfolio 3
International Growth Portfolio 2
Money Market Portfolio 2
The number of record holders reflects the number of insurance
companies investing in each Portfolio. Janus Capital Corporation is
also included as a record holder for the International Growth
Portfolio and Money Market Portfolio.
ITEM 27. Indemnification
Article IX of Janus Aspen Series' Trust Instrument provides for
indemnification of certain persons acting on behalf of the Portfolios. In
general, Trustees and officers will be indemnified against liability and against
all expenses of litigation incurred by them in connection with any claim,
action, suit or proceeding (or settlement of the same) in which they become
involved by virtue of their office in connection with the Portfolios, unless
their conduct is determined to constitute willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties, or unless it has been
determined that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Portfolios. A determination that
a person covered by the indemnification provisions is entitled to
indemnification may be made by the court or other body before which the
proceeding is brought, or by either a vote of a majority of a quorum of Trustees
who are neither "interested persons" of the Trust nor parties to the proceeding
or by an independent legal counsel in a written opinion. The Portfolios also may
advance money for these expenses, provided that the Trustee or officer
undertakes to repay the Portfolios if his conduct is later determined to
preclude indemnification, and that either he provide security for the
undertaking, the Trust be insured against losses resulting from lawful advances
or a majority of a quorum of disinterested Trustees, or independent counsel in a
written opinion, determines that he ultimately will be found to be entitled to
indemnification. The Trust also maintains a liability insurance policy covering
its Trustees and officers.
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ITEM 28. Business and Other Connections of Investment Adviser
The only business of Janus Capital Corporation is to serve as the
investment adviser of the Registrant and as investment adviser or subadviser to
several other mutual funds, and for individual, charitable, corporate, private
and retirement accounts. The only businesses, professions, vocations or
employments of a substantial nature of Thomas H. Bailey, James P. Craig, Sharon
S. Pichler, David C. Tucker and Steven R. Goodbarn, officers and/or directors of
Janus Capital Corporation, are described under "Officers and Trustees" in the
currently effective Statements of Additional Information included in this
Registration Statement. Mr. Michael E. Herman, a director of Janus Capital
Corporation, is Chairman of the Finance Committee (1990 to present) and former
President (1985 to 1990) of Ewing Marion Kauffman Foundation, 4900 Oak, Kansas
City, Missouri 64112. Prior to that, he was Executive Vice President and Chief
Financial Officer of Marion Laboratories, Inc., 9300 Ward Parkway, Kansas City,
Missouri 64114. Mr. Michael N. Stolper, a director of Janus Capital Corporation,
is President of Stolper & Company, Inc., 525 "B" Street, Suite 1080, San Diego,
California 92101, an investment performance consultant. Mr. Thomas A. McDonnell,
a director of Janus Capital Corporation, is President, Chief Executive Officer
and a Director of DST Systems, Inc., 1055 Broadway, 9th Floor, Kansas City,
Missouri 64105, provider of data processing and recordkeeping services for
various mutual funds, and is Executive Vice President and a director of Kansas
City Southern Industries, Inc., 114 W. 11th Street, Kansas City, Missouri 64105,
a publicly traded holding company whose primary subsidiaries are engaged in
transportation and financial services.
ITEM 29. Principal Underwriters
Not applicable.
ITEM 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by Janus Capital Corporation and Janus Service
Corporation, both of which are located at 100 Fillmore Street, Suite 300,
Denver, Colorado 80206-4923 and by Investors Fiduciary Trust Company, 127 W.
10th Street, Kansas City, Missouri 64105 and State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts 02101 and United Missouri Bank,
N.A., P.O. Box 419226, Kansas City, Missouri 64141.
C-5
<PAGE>
ITEM 31. Management Services
The Registrant has no management-related service contract which is not
discussed in Part A or Part B of this form.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements of effectiveness of this Amendment to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Denver, and State of
Colorado, on the 25th day of August, 1995.
JANUS ASPEN SERIES
By: /s/ Thomas H. Bailey
Thomas H. Bailey, President
Janus Aspen Series is organized under a Trust Instrument dated May 19,
1993. The obligations of the Registrant hereunder are not binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Registrant personally, but bind only the trust property of the Registrant, as
provided in the Trust Instrument. The execution of this Amendment to the
Registration Statement has been authorized by the Trustees of the Registrant and
this Amendment to the Registration Statement has been signed by an authorized
officer of the Registrant, acting as such, and neither such authorization by
such Trustees nor such execution by such officer shall be deemed to have been
made by any of them personally, but shall bind only the trust property of the
Registrant as provided in its Trust Instrument.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Thomas H. Bailey President August 25, 1995
Thomas H. Bailey (Principal Executive
Officer) and Trustee
/s/ Steven R. Goodbarn Treasurer and Chief August 25, 1995
Steven R. Goodbarn Financial Officer
(Principal Financial
and Accounting Officer)
/s/ James P. Craig Trustee August 25, 1995
James P. Craig
<PAGE>
Gary O. Loo* Trustee August 25, 1995
Gary O. Loo
Dennis B. Mullen* Trustee August 25, 1995
Dennis B. Mullen
John W. Shepardson Trustee August 25, 1995
John W. Shepardson
William D. Stewart Trustee August 25, 1995
William D. Stewart
Martin H. Waldinger Trustee August 25, 1995
Martin H. Waldinger
/s/ Steven R. Goodbarn
*By Steven R. Goodbarn
Attorney-in-Fact
<PAGE>
INDEX OF EXHIBITS
Exhibit Number Exhibit Title
-------------- -------------
Exhibit 11 Consent of Price Waterhouse
Exhibit 16 Computation of Current Yield and
Effective Yield
Exhibit 17 Powers of Attorney
Exhibit 27 Financial Data Schedule
EXHIBIT 11
Consent of Independent Accountants
We hereby consent to the reference to us under the heading "Independent
Accountants" in the Statement of additional Information constituting part of
this Post-Effective Amendment No. 6 to the Registration Statement on Form N-1A
of Janus Aspen Series.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Denver, Colorado
August 24, 1995
EXHIBIT 16
SCHEDULE FOR COMPUTATION OF YIELD CALCULATION
This example illustrates the yield quotation for the seven-day period ended June
30, 1995:
Value of a hypothetical pre-existing account with exactly one $1.000000000
share at the beginning of the base period
Value of same account (excluding capital changes) at end of .001033329
the seven-day base period*
Net change in account value .001033329
Base Period Return:
Net change in account value divided by the beginning
account value ($.000768518 / $1.000000000) .001033329
Annualized Current Net Yield [.000768518 x (365/7)] 5.39%
Effective Yield** [(.000768518 + 1) 365/7] - 1 5.53%
* This value includes the value of additional shares purchased with dividends
from the original share, and dividends declared on both the original share
and any such additional shares.
** This value may change to include shares purchased with dividends reinvested
on a less frequent basis.
EXHIBIT 17
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Steven R. Goodbarn and David C. Tucker and each of them, severally,
his true and lawful attorneys and agents in his name, place and stead on his
behalf (a) to sign and cause to be filed amendments to the registration
statement of the Trust under the Securities Act of 1933, the Investment Company
Act of 1940 and the laws and regulations of the various states if applicable,
and all consents and exhibits thereto; (b) to withdraw such registration
statement or any amendments or exhibits and make requests for acceleration in
connection therewith; (c) to take all other action of whatever kind or nature in
connection with such registration statement, and all amendments thereto, which
said attorneys may deem advisable; and (d) to make, file, execute, amend and
withdraw documents of every kind, and to take other action of whatever kind they
may elect, for the purpose of complying with all laws relating to the sale of
securities of the Trust, hereby ratifying and confirming all actions of any of
said attorneys hereunder, provided that this Power of Attorney is ratified to be
effective by the Trustees with respect to each filing or withdrawal of such
registration statement and all amendments, consents, and exhibits thereto. Said
attorneys may act jointly or severally, and the action of one shall bind the
undersigned as fully as if two or more had acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ Thomas H. Bailey Chairman (Principal June 30, 1995
Thomas H. Bailey Executive Officer),
President and Trustee
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ Gary O. Loo Trustee June 30, 1995
Gary O. Loo
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ Dennis B. Mullen Trustee June 30, 1995
Dennis B. Mullen
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ John W. Shepardson Trustee June 30, 1995
John W. Shepardson
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ William D. Stewart Trustee June 30, 1995
William D. Stewart
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ Martin H. Waldinger Trustee June 30, 1995
Martin H. Waldinger
<PAGE>
JANUS ASPEN SERIES (the "Trust")
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby makes, constitutes
and appoints Thomas H. Bailey, Steven R. Goodbarn and David C. Tucker and each
of them, severally, his true and lawful attorneys and agents in his name, place
and stead on his behalf (a) to sign and cause to be filed amendments to the
registration statement of the Trust under the Securities Act of 1933, the
Investment Company Act of 1940 and the laws and regulations of the various
states if applicable, and all consents and exhibits thereto; (b) to withdraw
such registration statement or any amendments or exhibits and make requests for
acceleration in connection therewith; (c) to take all other action of whatever
kind or nature in connection with such registration statement, and all
amendments thereto, which said attorneys may deem advisable; and (d) to make,
file, execute, amend and withdraw documents of every kind, and to take other
action of whatever kind they may elect, for the purpose of complying with all
laws relating to the sale of securities of the Trust, hereby ratifying and
confirming all actions of any of said attorneys hereunder, provided that this
Power of Attorney is ratified to be effective by the Trustees with respect to
each filing or withdrawal of such registration statement and all amendments,
consents, and exhibits thereto. Said attorneys may act jointly or severally, and
the action of one shall bind the undersigned as fully as if two or more had
acted together.
IN WITNESS WHEREOF, the undersigned has hereby set his hand as of this 30th
day of June, 1995.
Signature Title Date
--------- ----- ----
/s/ James P. Craig Trustee June 30, 1995
James P. Craig
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary information extracted from the Fund's semiannual
report dated June 30, 1995 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<SERIES>
<NUMBER> 008
<NAME> JANUS ASPEN MONEY MARKET PORTFOLIO
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 824
<INVESTMENTS-AT-VALUE> 824
<RECEIVABLES> 93
<ASSETS-OTHER> 23
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 940
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2
<TOTAL-LIABILITIES> 2
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 938
<SHARES-COMMON-STOCK> 938
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 938
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8
<OTHER-INCOME> 0
<EXPENSES-NET> (1)
<NET-INVESTMENT-INCOME> 7
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 7
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,194
<NUMBER-OF-SHARES-REDEEMED> (2,263)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 938
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 737
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.010)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.500
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
