JANUS ASPEN SERIES, POS AMI, 1997-08-11

JANUS ASPEN SERIES
POS AMI, 1997-08-11

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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. 12 /X/
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 /__/

Amendment No. 14 /X/

(Check appropriate box or boxes.)

JANUS ASPEN SERIES
(Exact Name of Registrant as Specified in Charter)

100 Fillmore Street, Denver, Colorado 80206-4928
Address of Principal Executive Offices (Zip Code)

Registrant's Telephone No., including Area Code: 303-333-3863

Stephen L. Stieneker - 100 Fillmore Street, Denver, Colorado 80206-4928
(Name and Address of Agent for Service)

Approximate Date of Proposed Offering: November 1, 1997

It is proposed that this filing will become effective (check appropriate line):

___ immediately upon filing pursuant to paragraph (b) of Rule 485.
___ on (date) pursuant to paragraph (b) of Rule 485.
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
___ on (date) pursuant to paragraph (a)(1) of Rule 485.
___ 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
X on November 1, 1997, pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following line:

___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

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 21, 1997, for the fiscal year ended December 31, 1996,
with respect to all of its series in existence as of December 31, 1996.

<PAGE>

JANUS ASPEN SERIES
GROWTH AND INCOME PORTFOLIO - INSTITUTIONAL SHARES
AND RETIREMENT SHARES
Between the Prospectuses and Statements of
Additional Information and Form N-1A Item
(Cross Reference Sheet for Other Series of Janus
Aspen Series are included in a previous post-
effective amendment relating to those series)

Form N-1A Item
Part A Caption in Prospectus

1. Cover Page Cover Page

2. Synopsis Cover Page

3. Condensed Financial An Explanation of Performance Terms
Information

4. General Description of The Portfolio's Investment Objective and
Registrant Registrant Policies; General Portfolio
Policies; Other Information; Appendix A
- Glossary of Investment Terms

5. Management of the Fund Investment Adviser and Portfolio
Manager; Other Information

5A. Management's Discussion Not Applicable
of Fund Performance

6. Capital Stock and Other Distributions; Taxes; Shareholder's
Securities Guide

7. Purchase of Securities Shareholder's Guide
Being 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 Objective; Portfolio
Policies Policies, Investment Restrictions; Types
of Securities and Investment Techniques

14. Management of the Fund Investment Adviser; Officers and
Trustees

15. Control Persons and Not Applicable
Principal Holders of
Securities

16. Investment Advisory and Investment Adviser; Custodian, Transfer
Other Services Agent 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
Securities Information

19. Purchase, Redemption and Shares of the Trust
Pricing of Securities Being
Offered

20. Tax Status Income Dividends, Capital Gains
Distributions and Tax Status

21. Underwriters Not Applicable

22. Calculation of Performance Performance Information
Data

23. Financial Statements Not Applicable

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any state which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.

Contents

- - ---------------------------------------
THE PORTFOLIO AT A GLANCE
Brief description of the Portfolio .. 1
- - ---------------------------------------
EXPENSE INFORMATION
................................. 1
- - ---------------------------------------
THE PORTFOLIO IN DETAIL
The Portfolio's Investment
Objective and Policies ........... 2
General Portfolio Policies .......... 3
Additional Risk Factors ............. 4
- - ---------------------------------------
MANAGEMENT OF THE PORTFOLIO
Investment Adviser and
Portfolio Manager ................ 6
Portfolio Transactions .............. 6
Management Expenses ................. 7
Other Service Providers ............. 7
Other Information ................... 7
- - ---------------------------------------
DISTRIBUTIONS AND TAXES
Distributions ....................... 9
Taxes ............................... 9
- - ---------------------------------------
PERFORMANCE TERMS
An Explanation of
Performance Terms ................ 9
- - ---------------------------------------
SHAREHOLDER'S GUIDE
Purchases .......................... 10
Redemptions ........................ 10
Shareholder Communications ......... 10
- - ---------------------------------------
APPENDIX A
Glossary of Investment Terms ....... 11

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 11, 1997

Janus Aspen Series
Growth and Income Portfolio

Prospectus

____________, 1997

Growth and Income Portfolio (the "Portfolio") is a no-load, diversified mutual
fund that seeks long-term growth of capital with a limited emphasis on income.
Although the Portfolio normally invests at least 25% of its assets in securities
that have income potential, it emphasizes equity securities selected for their
growth potential. The Portfolio is a series of Janus Aspen Series (the "Trust")
and currently offers two classes of Shares. The Institutional Shares are sold
under the name "Janus Aspen Series." The Trust is registered with the Securities
and Exchange Commission as an open-end management investment company. The
Portfolio is recently organized and has a limited operating history.

The Institutional Shares (the "Shares") of the Portfolio offered by this
Prospectus 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 or plan participant 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 ___________, 1997, 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 or plan sponsor.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON 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.

<PAGE>

Portfolio At A Glance

This section is designed to provide you with a brief overview of the Portfolio
and its investment emphasis. A more detailed discussion of the Portfolio's
investment objective and policies begins on page 2.

INVESTMENT OBJECTIVE:

The investment objective of the Portfolio is long-term capital growth and
current income.

PRIMARY HOLDINGS:

A diversified portfolio that emphasizes equity securities selected for their
growth potential, although the Portfolio will normally invest at least 25% of
its assets in securities that have income potential.

SHAREHOLDER'S INVESTMENT HORIZON:

The Portfolio is designed for long-term investors who seek growth of capital
with a limited emphasis on income. The Portfolio is not designed for investors
who desire a consistent level of income nor is it a short-term trading vehicle
and should not be relied upon for short-term financial needs.

FUND ADVISER:

Janus Capital Corporation ("Janus Capital") serves as the Portfolio's investment
adviser. Janus Capital has been in the investment advisory business for over 27
years and currently manages approximately $65 billion in assets.

FUND MANAGER:

Thomas F. Marsico

FUND INCEPTION:

November 1997

Expense Information

The tables and example below are designed to assist participants in qualified
plans that invest in the Portfolio in understanding the various costs and
expenses that you will bear directly or indirectly as an investor in the
Portfolio. Owners of variable insurance contracts that invest in the Portfolio
should refer to the variable insurance contract prospectus for a description of
costs and expenses, as the tables and example do not reflect deductions at the
separate account level or contract level for any charges that may be incurred
under a contract.

SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees None
Exchange fee None

ANNUAL PORTFOLIO OPERATING EXPENSES (after fee waivers and reductions)(1)
(expressed as a percentage of average net assets)
- - --------------------------------------------------------------------------------
Management Fee(1) 0.68%
Other Expenses(1) 0.30%
- - --------------------------------------------------------------------------------
Total Portfolio Operating Expenses(1) 0.98%
- - --------------------------------------------------------------------------------
(1) The fees and expenses in the table above are based on the estimated gross
expenses before estimated expense offset arrangements that the Shares of
the Portfolio expect to incur in their initial fiscal year, net of fee
reductions or waivers from Janus Capital. Fee reductions reduce the
management fee to the level of the corresponding Janus retail fund. Other
waivers, if applicable, are first applied against the management fee and
then against other expenses. Without such waivers or reductions, the
Management Fee, Other Expenses and Total Portfolio Operating Expenses are
estimated to be 0.75%, 0.30% and 1.05%, respectively. Janus Capital may
modify or terminate the waivers or reductions at any time upon at least 90
days' notice to the Trustees.

EXAMPLE
- - --------------------------------------------------------------------------------
1 Year 3 Years
- - --------------------------------------------------------------------------------
Assume you invest $1,000, the Shares of the
Portfolio returns 5% annually and its expense
ratio remains as listed above. The example
shows the operating expenses that you would
indirectly bear as an investor in the Shares
of the Portfolio. $10 $31
- - --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 1
<PAGE>

The Portfolio in Detail

This section takes a closer look at the Portfolio's investment objectives,
policies and the securities in which it invests. Please carefully review the
"Additional Risk Factors" section of this Prospectus for a more detailed
discussion of the risks associated with certain investment techniques and refer
to Appendix A for a more detailed description of the Portfolio's investments
(and certain of the risks associated with those investments). You should
carefully consider your own investment goals, time horizon and risk tolerance
before investing in the Portfolio.

The Portfolio's investment objectives and policies are similar to those of Janus
Growth and Income Fund, a Janus retail fund. Although it is anticipated that the
Portfolio and its corresponding retail fund will hold similar securities,
differences in asset size and cash flow needs as well as the relative weightings
of securities selections may result in differences in investment performance.
Expenses of the Portfolio and its corresponding retail fund are expected to
differ.

Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Portfolio's investment objectives, are
not fundamental and may be changed by the Portfolio's Trustees without a
shareholder vote. You will be notified of any such changes that are material. If
there is a material change in the Portfolio's objectives or policies, you should
consider whether the Portfolio remains an appropriate investment for your
variable insurance contract or qualified retirement plan.
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE

The investment objective of the Portfolio is long-term capital growth and
current income. It is a diversified portfolio that, under normal circumstances,
pursues its objective by investing up to 75% of its assets in equity securities
selected primarily for their growth potential and at least 25% of its assets in
securities that have income potential. The Portfolio normally emphasizes the
growth component. However, in unusual circumstances, the Portfolio may reduce
the growth component of its portfolio to 25% of its assets.

TYPES OF INVESTMENTS

The Portfolio invests primarily in common stocks of domestic and foreign
companies. The Portfolio may invest to a lesser degree in other types of
securities including preferred stock, warrants, convertible securities and debt
securities when its portfolio manager perceives an opportunity for capital
growth from such securities or to receive a return on idle cash. The Portfolio
may purchase securities on a when-issued, delayed delivery or forward commitment
basis. The Portfolio may invest up to 25% of its assets in mortgage- and
asset-backed securities, up to 10% of its assets in zero coupon, pay-in-kind and
step coupon securities, and without limit in indexed/structured securities. The
Portfolio will invest less than 35% of its assets in high-yield/high-risk
securities.

The Portfolio may invest without limit in foreign equity and debt securities.
The Portfolio may invest directly in foreign securities denominated in a foreign
currency and not publicly traded in the United States.

Other ways of investing in foreign securities include depositary receipts or
shares, and passive foreign investment companies. The Portfolio may use futures,
options and other derivatives for hedging purposes or for non-hedging purposes
such as seeking to enhance return. See "Additional Risk Factors" on page 4 for a
discussion of the risks associated with foreign investing and derivatives.

See Appendix A for a further description of the Portfolio's investments.

The following questions are designed to help you better understand an investment
in the Portfolio.

How are assets allocated between the growth and income component of the Fund's
portfolio?
The Portfolio may invest in a combination of common stocks, preferred stocks,
convertible securities, debt securities and other fixed-income securities. The
Portfolio may shift assets between the growth and income components of its
portfolio based on the portfolio manager's analysis of relevant market,
financial and economic conditions. If the portfolio manager believes that growth
securities will provide better returns than the yields then available or
expected on income-producing securities, then the Portfolio will place a greater
emphasis on the growth component.
- - --------------------------------------------------------------------------------
What type of securities make up the growth component of the Fund?
The Portfolio places a stronger emphasis on the growth component and normally
invests up to 75% of its assets in such securities. The growth component of the
Portfolio is expected to consist primarily of common stocks. The portfolio
manager will invest in common stocks to the extent he believes that the relevant
market environment favors profitable investing in those securities. The
portfolio manager generally takes a "bottom up" approach to building the
portfolio. In other words, he seeks to identify individual companies with
earnings growth potential that may not be recognized by the market at large.
Although themes may emerge in the Fund, securities are generally selected
without regard to any defined industry sector or other similarly defined
selection procedure.

Because income is a part of the investment objective of the Portfolio, the
portfolio manager may also consider dividend-paying characteristics in selecting
equity securities for the Portfolio. The Portfolio may also find opportunities
for capital growth from debt securities because of anticipated changes in
interest rates, credit standing, currency relationships or other factors.
- - --------------------------------------------------------------------------------
What types of securities make up the income component of the Portfolio?
The income component of the Portfolio will consist of securities that the
portfolio manager believes have income potential. Such securities may include
equity securities, convertible securities and all types of debt securities.
Equity securities may be included in the income component of the Portfolio if
they currently pay dividends or the portfolio manager believes they have the
potential for either increasing their dividends or commencing dividends, if none
are currently paid. Investors in the Portfolio

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 2
<PAGE>

should keep in mind that the Portfolio is not designed to produce a consistent
level of income.
- - --------------------------------------------------------------------------------
Are the same criteria used to select foreign securities?
Generally, yes. The portfolio manager seeks companies that meet his selection
criteria, regardless of country of organization or place of principal business
activity. Foreign securities are generally selected on a stock-by-stock basis
without regard to any defined allocation among countries or geographic regions.
However, certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries, regions or
geographic areas may warrant greater consideration in selecting foreign
securities. See "Additional Risk Factors" on page 4.
- - --------------------------------------------------------------------------------
How does the Portfolio try to reduce risk?
Diversification of the Portfolio's assets reduces the effect of any single
holding on its overall portfolio value. The Portfolio may use futures, options
and other derivative instruments to protect the portfolio from movements in
securities prices and interest rates. The Portfolio may also use a variety of
currency hedging techniques, including forward currency contracts, to manage
exchange rate risk. See "Additional Risk Factors" on page 4. In addition, to the
extent that the Portfolio holds a larger cash position, it might not participate
in market declines to the same extent as if it had remained more fully invested
in common stocks.

GENERAL PORTFOLIO POLICIES

The Portfolio will follow the general policies listed below in investing its
portfolio assets. The percentage limitations included in these policies and
elsewhere in this Prospectus apply at the time of purchase of the security. For
example, if the Portfolio exceeds a limit as a result of market fluctuations or
the sale of other securities, it will not be required to dispose of any
securities.

Cash Position
When a Portfolio's manager believes that market conditions are not favorable for
profitable investing or when the portfolio manager is otherwise unable to locate
favorable investment opportunities, the Portfolio's investments may be hedged to
a greater degree and/or its cash or similar investments may increase. In other
words, the Portfolio does not always stay fully invested in stocks and bonds.
Cash or similar investments are a residual - they represent the assets that
remain after a portfolio manager has committed available assets to desirable
investment opportunities. Larger hedged positions and/or larger cash positions
may serve as a means of preserving capital in unfavorable market conditions.

Securities that the Portfolio may invest in as means of receiving a return on
idle cash include high-grade commercial paper, certificates of deposit,
repurchase agreements or other short-term debt obligations. The Portfolio may
also invest in money market funds (including funds managed by Janus Capital).
When a Portfolio's investments in cash or similar investments increase, a
Portfolio may not participate in stock or bond market advances or declines to
the same extent that it would if the Portfolio remained more fully invested in
stocks or bonds.

Diversification
The Investment Company Act of 1940 (the "1940 Act") classifies investment
companies as either diversified or nondiversified. The Portfolio qualifies as a
diversified fund under the 1940 Act and is subject to the following
requirements:

o As a fundamental policy, the Portfolio may not own more than 10% of the
outstanding voting shares of any issuer.

o As a fundamental policy, with respect to 75% of its total assets, the
Portfolio will not purchase a security of any issuer (other than cash items
and U.S. government securities, as defined in the 1940 Act) if such
purchase would cause the Portfolio's holdings of that issuer to amount to
more than 5% of the Portfolio's total assets.

o The Portfolio will invest no more than 25% of its total assets in a single
issuer (other than U.S. government securities).

Internal Revenue Service (IRS) Limitations
In addition to the diversification requirements stated above, the Portfolio
intends to comply with the diversification requirements currently imposed by the
IRS on separate accounts of insurance companies as a condition of maintaining
the tax-deferred status of variable contracts. More specific information may be
contained in the participating insurance company's separate account prospectus.

Industry Concentration
As a fundamental policy, the Portfolio will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

Portfolio Turnover
The Portfolio generally intends to purchase securities for long-term investment
rather than short-term gains. However, short-term transactions may result from
liquidity needs, securities having reached a price or yield objective,
anticipated changes in interest rates or the credit standing of an issuer, or by
reason of economic or other developments not foreseen at the time of the
investment decision. Changes are made in the Portfolio whenever its portfolio
manager believes such changes are desirable. The portfolio turnover rate is
generally not a factor in making buy and sell decisions. The Portfolio's
turnover rate is not expected to exceed 200%.

To a limited extent, the Portfolio may purchase securities in anticipation of
relatively short-term price gains. The Portfolio may also sell one security and
simultaneously purchase the same or a comparable security to take advantage of
short-term differentials in bond yields or securities prices. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 3
<PAGE>

result in taxable capital gains. Certain tax rules may restrict the Portfolio's
ability to engage in short-term trading if the security has been held for less
than three months.

Illiquid Investments
The Portfolio may invest up to 15% of its net assets in illiquid investments,
including restricted securities or private placements that are not deemed to be
liquid by Janus Capital. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business. Some
securities cannot be sold to the U.S. public because of their terms or because
of SEC regulations. Janus Capital will follow guidelines established by the
Trustees of the Trust ("Trustees") in making liquidity determinations for Rule
144A securities and certain other securities, including privately placed
commercial paper.

Borrowing and Lending
The Portfolio may borrow money and lend securities or other assets, as follows:

o The Portfolio may borrow money for temporary or emergency purposes in
amounts up to 25% of its total assets.

o The Portfolio may mortgage or pledge securities as security for borrowings
in amounts up to 15% of its net assets.

o As a fundamental policy, the Portfolio may lend securities or other assets
if, as a result, no more than 25% of its total assets would be lent to
other parties.

The Portfolio is seeking permission from the SEC to borrow money from or lend
money to other funds that permit such transactions and for which Janus Capital
serves as investment adviser. All such borrowing and lending will be subject to
the above limits. There is no assurance that such permission will be granted.

ADDITIONAL RISK FACTORS

Special Situations
The Portfolio may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Portfolio's portfolio manager, the
securities of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments creating a
special situation might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention.

Foreign Securities

Investments in foreign securities, including those of foreign governments, may
involve greater risks than investing in comparable domestic securities.

Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

o Currency Risk. The Portfolio may buy the local currency when it buys a
foreign currency denominated security and sell the local currency when it
sells the security. As long as the Portfolio holds a foreign security, its
value will be affected by the value of the local currency relative to the
U.S. dollar. When the Portfolio sells a foreign denominated security, its
value may be worth less in U.S. dollars even though the security increases
in value in its home country. U.S. dollar denominated securities of foreign
issuers may also be affected by currency risk.

o Political and Economic Risk. Foreign investments may be subject to
heightened political and economic risks, particularly in underdeveloped or
developing countries which may have relatively unstable governments and
economies based on only a few industries. In some countries, there is the
risk that the government may take over the assets or operations of a
company or that the government may impose taxes or limits on the removal of
the Portfolio's assets from that country. The Portfolio may invest in
emerging market countries. Emerging market countries involve greater risks
such as immature economic structures, national policies restricting
investments by foreigners, and different legal systems.

o Regulatory Risk. There may be less government supervision of foreign
markets. Foreign issuers may not be subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to
domestic issuers. There may be less publicly available information about
foreign issuers than domestic issuers.

o Market Risk. Foreign securities markets, particularly those of
underdeveloped or developing countries, may be less liquid and more
volatile than domestic markets. Certain markets may require payment for
securities before delivery and delays may be encountered in settling
securities transactions. In some foreign markets, there may not be
protection against failure by other parties to complete transactions. There
may be limited legal recourse against an issuer in the event of a default
on a debt instrument.

o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.

Foreign securities purchased indirectly (e.g., depositary receipts) are subject
to many of the above risks, including currency risk, because their values depend
on the performance of a foreign security denominated in its home currency.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 4
<PAGE>

invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively, "derivative instruments"). The Portfolio intends to use most
derivative instruments primarily to hedge the value of its portfolio holdings
against potential adverse movements in securities prices, foreign currency
markets or interest rates. To a limited extent, the Portfolio may also use
derivative instruments for non-hedging purposes such as seeking to increase the
Portfolio's income or otherwise seeking to enhance return. Please refer to
Appendix A to this Prospectus and the SAI for a more detailed discussion of
these instruments.

The use of derivative instruments exposes the Portfolio to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;

o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;

o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;

o inability to close out certain hedged positions to avoid adverse tax
consequences;

o the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired;

o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Portfolio's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and

o particularly in the case of privately negotiated instruments, the risk that
the counterparty will fail to perform its obligations, which could leave
the Portfolio worse off than if it had not entered into the position.

Although the portfolio manager believes the use of derivative instruments will
benefit the Portfolio, the Portfolio's performance could be worse than if it had
not used such instruments if the portfolio manager's judgment proves incorrect.

When the Portfolio invests in a derivative instrument, it may be required to
segregate cash and other liquid assets or portfolio securities with its
custodian to "cover" the Portfolio's position. Assets segregated or set aside
generally may not be disposed of so long as the Portfolio maintains the
positions requiring segregation or cover. Segregating assets could diminish the
Portfolio's return due to the opportunity losses of foregoing other potential
investments with the segregated assets.

High-Yield/High-Risk Securities
High-yield/high-risk securities (or "junk" bonds) are debt securities rated
below investment grade by the primary rating agencies (such as, Standard &
Poor's Ratings Services and Moody's Investors Service, Inc.).

The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
quality securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investments.

Issuers of high-yield securities may be more vulnerable to real or perceived
economic changes (for instance, an economic downturn or prolonged period of
rising interest rates), political changes or adverse developments specific to
the issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing, particularly if the
issuer is highly leveraged. In the event of a default, the Portfolio would
experience a reduction of its income and could expect a decline in the market
value of the defaulted securities.

The market for lower quality securities is generally less liquid than the market
for higher quality securities. Adverse publicity and investor perceptions as
well as new or proposed laws may also have a greater negative impact on the
market for lower quality securities. Unrated debt, while not necessarily of
lower quality than rated securities, may not have as broad a market as rated
securities. Sovereign debt of foreign governments is generally rated by country.
Because these ratings do not take into account individual factors relevant to
each issue and may not be updated regularly, Janus Capital may treat such
securities as unrated debt.

The market prices of high-yield/high-risk securities structured as zero coupon
or pay-in-kind securities are generally affected to a greater extent by interest
rate changes and tend to be more volatile than securities which pay interest
periodically. In addition, zero coupon, pay-in-kind and delayed interest bonds
often do not pay interest until maturity. However, the Portfolio must recognize
a computed amount of interest income and pay dividends to shareholders even
though it has received no cash. In some instances, the Portfolio may have to
sell securities to have sufficient cash to pay the dividends.

Please refer to the SAI for a description of bond rating categories.

Short Sales
The Portfolio may engage in "short sales against the box." This technique
involves selling either a security that the Portfolio owns, or a security
equivalent in kind and amount to the security sold short that the Portfolio has
the right to obtain, for delivery at a specified date in the future. The
Portfolio will enter into a short sale against the box to hedge against
anticipated declines in the market price of portfolio securities or to defer an
unrealized gain. If the value of the securities sold short increases prior to
the scheduled delivery date, the Portfolio loses the opportunity to participate
in the gain.

See Appendix A for risks associated with certain other investments.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 5
<PAGE>

Management of the Portfolio

TRUSTEES

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 at least quarterly to review the Portfolio's investment
policies, performance, expenses and other business affairs.

INVESTMENT ADVISER

Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is the
investment adviser to the Portfolio and is responsible for the day-to-day
management of its investment portfolio and other business affairs.

Janus Capital has served as investment adviser to Janus Fund since its inception
in 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. ("KCSI") owns approximately 83% of the
outstanding voting stock of Janus Capital, most of which it acquired in 1984.
KCSI is a publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services. Thomas H.
Bailey, 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.

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 may be reimbursed by
the Portfolio for its costs in providing those services.

In addition, Janus Capital employees serve as officers of the Trust and Janus
Capital provides office space for the 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,
registration fees and expenses, and independent Trustees' fees and expenses and
certain other expenses. Participating insurance companies that purchase the
Portfolio's shares may perform certain administrative services relating to the
Portfolio and Janus Capital or the Portfolio may pay those companies for such
services.

PORTFOLIO MANAGER

Thomas F. Marsico is Executive Vice President and portfolio manager of the
Portfolio which he has managed since its inception. He has also managed Janus
Growth and Income Fund since May 1991, Janus Twenty Fund since March 1988 and
co-managed Janus Venture Fund since February 1997. He holds a Bachelor of Arts
in Biology from the University of Colorado and Master of Business Administration
in Finance from the University of Denver.

Personal Investing
Janus Capital does not permit portfolio managers to purchase and sell securities
for their own accounts, except under the limited exceptions contained in 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 or
Janus Capital's other advisory clients. See the SAI for more detailed
information.

PORTFOLIO TRANSACTIONS

Purchases and sales of securities on behalf of the Portfolio are executed by
broker-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 consider sales of shares
of the Portfolio or other Janus funds by a broker-dealer or the recommendation
of a broker-dealer to its customers that they purchase a Portfolio's 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 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 Portfolio's Trustees have authorized Janus Capital to place
portfolio transactions on an agency basis with a broker-dealer affiliated with
Janus Capital. When transactions for the Portfolio are effected with that
broker-dealer, the commissions payable by the Portfolio are credited against
certain Portfolio operating expenses. The SAI further explains the selection of
broker-dealers.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 6
<PAGE>

BREAKDOWN OF MANAGEMENT EXPENSES

The Portfolio pays Janus Capital a management fee which is calculated daily. The
advisory agreement with the Portfolio spells out the management fee and other
expenses that the Portfolio must pay. The Portfolio is subject to the following
management fee schedule (expressed as an annual rate):

Average Daily Net Annual Rate
Fee Schedule Assets of Portfolio Percentage (%)
------------------------------------------------------------------
First $300 Million 0.75*
Next $200 Million 0.70
Over $500 Million 0.65
------------------------------------------------------------------
* Janus Capital has agreed to reduce the Portfolio's advisory fee to the
extent that such fee exceeds the effective rate of Janus Growth and Income
Fund, the Janus retail fund corresponding to the Portfolio. Janus Capital
may terminate this fee reduction at any time upon at least 90 days' notice
to the Trustees. The effective rate is the advisory fee calculated by the
corresponding retail fund as of the last day of each calendar quarter
(expressed as an annual rate). The effective rate of Janus Growth and
Income Fund was ____% for the quarter ended September 30, 1997. In
addition, Janus Capital has agreed to limit the expenses of the Portfolio's
Shares to an annual rate of 1.25% of average net assets through at least
October 31, 1998.

As asset size increases, the annual rate of the management fee declines in
accordance with the above schedule. In addition, the Shares of the Portfolio
incur expenses not assumed by Janus Capital, including transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses.

OTHER SERVICE PROVIDERS

The following parties provide the Portfolio with administrative and other
services.

Custodian
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

Janus Service Corporation is a wholly-owned subsidiary of Janus Capital.

OTHER INFORMATION

Organization
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 Portfolio currently offers two classes of shares, one of which, the
Institutional Shares, are offered pursuant to this prospectus. The Institutional
Shares of the Portfolio, as well as other Janus Aspen Series - Institutional
Shares are sold under the name Janus Aspen Series. The Shares offered by this
Prospectus are available only in connection with investment in and payments
under variable contracts and life insurance contracts, as well as certain
qualified retirement plans. Retirement Shares are offered by a separate
prospectus and are available only to participant directed qualified plans using
plan service providers that are compensated for providing distribution and/or
recordkeeping and other administrative services to plan participants. Because
the expenses of each class may differ, the performance in each class is expected
to differ. If you would like additional information about the Retirement Shares,
please call 1-800-525-0020.

Shareholder Meetings
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 for any other purpose requiring a
shareholder vote under the 1940 Act. Separate votes are taken by each class or
Portfolio only if a matter affects or requires the vote of only that class or
Portfolio or the interest of the class or Portfolio in the matter differs from
the interest of the other class or Portfolios of the Trust. As a shareholder,
you are entitled to one vote for each share that you own.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 7
<PAGE>

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. Although the Portfolio
currently does not anticipate any disadvantages to policy owners arising out of
the fact that the Portfolio offers its shares to such entities, there is a
possibility that disadvantages could occur or that a material conflict may
arise. The Trustees monitor events in order to identify any anticipated
disadvantages or material irreconcilable conflicts that may arise and to
determine what action, if any, should be taken in response. If a material
disadvantage or conflict occurs, the Trustees may require one or more insurance
company separate accounts or plans to withdraw its investments in the Portfolio
or substitute shares of another Portfolio. 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
Portfolio's shareholders. It is possible that a qualified plan investing in the
Retirement Shares of the Portfolio could lose its qualified plan status under
the Internal Revenue Code, which could have adverse tax consequences on
insurance company separate accounts investing in the Shares. Janus Capital
intends to monitor such qualified plans and the Portfolio may discontinue sales
to a qualified plan and require plan participants with existing investments in
the Retirement Shares to redeem those investments if a plan loses (or in the
opinion of Janus Capital is at risk of losing) its qualified plan status.

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 Portfolio. The shareholders of the Trust of record on April 30,
1992, and the initial shareholder(s) of the Portfolio, have voted to vest
authority to use this investment 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 that 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 (the "NYSE")
(normally 4:00 p.m., New York time) each day that the NYSE 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.

Securities are valued at market value or, if market information is not readily
available, at their fair value determined in good faith under procedures
established by and under the supervision of the Trustees. Short-term instruments
maturing within 60 days are valued at amortized cost, which approximates market
value.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 8
<PAGE>

Distributions and Taxes
- - --------------------------------------------------------------------------------
DISTRIBUTIONS

To avoid taxation of the Portfolio, the Internal Revenue Code requires the
Portfolio to distribute net income and any net gains realized by its investments
annually. Income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as ordinary income dividends. Net
realized long-term gains, if any, are paid to shareholders as capital gains
distributions. Each class of the Portfolio makes semiannual distributions in
June and December of substantially all of its investment income and an annual
distribution in June of its net realized capital gains, if any. All dividends
and capital gains distributions from the Shares of the Portfolio will be
automatically reinvested into additional Shares of the Portfolio.

How Distributions Affect the Portfolio's NAV
Distributions are paid to shareholders as of the record date of the distribution
of the Portfolio, regardless of how long the Shares have been held. Dividends
and capital gains awaiting distribution are included in the daily NAV of the
Portfolio's Shares. The Share price drops by the amount of the distribution, net
of any subsequent market fluctuations. As an example, assume that on December
31, the Shares of the Portfolio declared a dividend in the amount of $0.25 per
share. If the price of the Portfolio's Shares was $10.00 on December 30, the
Share price on December 31 would be $9.75, barring market fluctuations.
- - --------------------------------------------------------------------------------
TAXES

Taxes on Distributions
Because Shares of the Portfolio may be purchased only through variable insurance
contracts and qualified plans, it is anticipated that any income dividends or
capital gains distributions made by the Shares of 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 591/2, a 10% penalty tax.
The tax status of your investment in the Shares depends on the features of the
variable insurance contracts purchased from a participating insurance company.
Further information may be found in the prospectus of the separate account
offering such contract.

Taxation of the Portfolio
Dividends, interest and some capital gains received by the Portfolio on foreign
securities may give rise to withholding and other taxes imposed by foreign
countries. It is expected that foreign taxes paid by the Portfolio will be
treated as expenses of the Portfolio. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes.

The Portfolio does not expect to pay any federal income or excise taxes because
it intends to meet certain requirements of the Internal Revenue Code. In
addition, the Portfolio intends to qualify under the Internal Revenue Code with
respect to the diversification requirements related to the tax-deferred status
of insurance company separate accounts.
- - --------------------------------------------------------------------------------
Performance Terms

This section will help you understand various terms that are commonly used to
describe the Portfolio's performance. You may see references to these terms in
our newsletters, advertisements (or those published by participating insurance
companies) and in media articles. Newsletters and advertisements may include
comparisons of the Portfolio's performance to the performance of other mutual
funds, mutual fund averages or recognized stock market indices. The Portfolio
generally measures performance in terms of total return.

Cumulative total return represents the actual rate of return on an investment
for a specified period. Cumulative total return is generally quoted for more
than one year (e.g., the life of the Portfolio). A cumulative total return does
not show interim fluctuations in the value of an investment.

Average annual total return represents the average annual percentage change of
an investment over a specified period. It is calculated by taking the cumulative
total return for the stated period and determining what constant annual return
would have produced the same cumulative return. Average annual returns for more
than one year tend to smooth out variations in the Portfolio's return and are
not the same as actual annual results.

The Portfolio imposes no sales or other charges that would affect total return
computations. Total return figures of the Portfolio include the effect of
deducting the Portfolio's expenses, but may not include charges and expenses
attributable to any particular insurance product. Portfolio performance figures
are based upon historical results and are not intended to indicate future
performance. Investment returns and net asset value will fluctuate so that
Shares, when redeemed, may be worth more or less than their original cost.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 9
<PAGE>

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 Shares of 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

Shareholders will receive annual and semiannual reports including the financial
statements of the Shares 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 GROWTH AND INCOME PORTFOLIO PROSPECTUS 10
<PAGE>

Appendix A

GLOSSARY OF INVESTMENT TERMS

This glossary provides a more detailed description of some of the types of
securities and other instruments in which the Portfolio may invest. The
Portfolio may invest in these instruments to the extent permitted by its
investment objective and policies. The Portfolio is not limited by this
discussion and may invest in any other types of instruments not precluded by the
policies discussed elsewhere in this Prospectus. Please refer to the SAI for a
more detailed discussion of certain instruments.

I. EQUITY AND DEBT SECURITIES

Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) at a specified maturity and to make scheduled
interest payments.

Commercial paper is a short-term debt obligation with a maturity ranging from 1
to 270 days issued by banks, corporations and other borrowers to investors
seeking to invest idle cash. For example, the Portfolio may purchase commercial
paper issued under Section 4(2) of the Securities Act of 1933.

Common stock represents a share of ownership in a company and usually carries
voting rights and earns dividends. Unlike preferred stock, dividends on common
stock are not fixed but are declared at the discretion of the issuer's board of
directors.

Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.

Depositary receipts are receipts for shares of a foreign-based corporation that
entitle the holder to dividends and capital gains on the underlying security.
Receipts include those issued by domestic banks (American Depositary Receipts),
foreign banks (Global or European Depositary Receipts) and broker-dealers
(depositary shares).

Fixed-income securities are securities that pay a specified rate of return. The
term generally includes short- and long-term government, corporate and municipal
obligations that pay a specified rate of interest or coupons for a specified
period of time and preferred stock, which pays fixed dividends. Coupon and
dividend rates may be fixed for the life of the issue or, in the case of
adjustable and floating rate securities, for a shorter period.

High-yield/High-risk securities are securities that are rated below investment
grade by the primary rating agencies ( BB or lower by Standard &Poor's and Ba or
lower by Moody's). Other terms commonly used to describe such securities include
"lower rated bonds," "noninvestment grade bonds" and "junk bonds."

Mortgage- and asset-backed securities are shares in a pool of mortgages or other
debt. These securities are generally pass-through securities, which means that
principal and interest payments on the underlying securities (less servicing
fees) are passed through to shareholders on a pro rata basis. These securities
involve prepayment risk, which is the risk that the underlying mortgages or
other debt may be refinanced or paid off prior to their maturities during
periods of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate. Potential
market gains on a security subject to prepayment risk may be more limited than
potential market gains on a comparable security that is not subject to
prepayment risk.

Passive foreign investment companies (PFICs) are any foreign corporations which
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the Portfolio
to recognize income associated with the PFIC prior to the actual receipt of any
such income.

Pay-in-kind bonds are debt securities that normally give the issuer an option to
pay cash at a coupon payment date or give the holder of the security a similar
bond with the same coupon rate and a face value equal to the amount of the
coupon payment that would have been made.

Preferred stock is a class of stock that generally pays dividends at a specified
rate and has preference over common stock in the payment of dividends and
liquidation. Preferred stock generally does not carry voting rights.

Repurchase agreements involve the purchase of a security by the Portfolio and a
simultaneous agreement by the seller (generally a bank or dealer) to repurchase
the security from the Portfolio at a specified date or upon demand. This
technique offers a method of earning income on idle cash. These securities
involve the risk that the seller will fail to repurchase the security, as
agreed. In that case, the Portfolio will bear the risk of market value
fluctuations until the security can be sold and may encounter delays and incur
costs in liquidating the security.

Reverse repurchase agreements involve the sale of a security by the Portfolio to
another party (generally a bank or dealer) in return for cash and an agreement
by the Portfolio to buy the security back at a specified price and time. This
technique will be used primarily to provide cash to satisfy unusually high
redemption requests, or for other temporary or emergency purposes.

Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

Standby commitments are obligations purchased by the Portfolio from a dealer
that give the Portfolio the option to sell a security to the dealer at a
specified price.

Step coupon bonds are debt securities that trade at a discount from their face
value and pay coupon interest. The discount

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 11
<PAGE>

from the face value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived credit
quality of the issuer.

Strip bonds are debt securities that are stripped of their interest (usually by
a financial intermediary) after the securities are issued. The market value of
these securities generally fluctuates more in response to changes in interest
rates than interest-paying securities of comparable maturity.

U.S. government securities include direct obligations of the U.S. government
that are supported by its full faith and credit. Treasury bills have initial
maturities of less than one year, Treasury notes have initial maturities of one
to ten years and Treasury bonds may be issued with any maturity but generally
have maturities of at least ten years. U.S. government securities also include
indirect obligations of the U.S. government that are issued by federal agencies
and government sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S. government.
Some agency securities are supported by the right of the issuer to borrow from
the Treasury, others are supported by the discretionary authority of the U.S.
government to purchase the agency's obligations and others are supported only by
the credit of the sponsoring agency.

Variable and floating rate securities have variable or floating rates of
interest and, under certain limited circumstances, may have varying principal
amounts. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates.

Warrants are securities, typically issued with preferred stock or bonds, that
give the holder the right to buy a proportionate amount of common stock at a
specified price, usually at a price that is higher than the market price at the
time of issuance of the warrant. The right may last for a period of years or
indefinitely.

When-issued, delayed delivery and forward transactions generally involve the
purchase of a security with payment and delivery at some time in the future -
i.e., beyond normal settlement. The Portfolio does not earn interest on such
securities until settlement and bears the risk of market value fluctuations
between the purchase and settlement dates. New issues of stocks and bonds,
private placements and U.S. government securities may be sold in this manner.

Zero coupon bonds are debt securities that do not pay interest at regular
intervals, but are issued at a discount from face value. The discount
approximates the total amount of interest the security will accrue from the date
of issuance to maturity. The market value of these securities generally
fluctuates more in response to changes in interest rates than interest-paying
securities of comparable maturity.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

Forward contracts are contracts to purchase or sell a specified amount of
property for an agreed upon price at a specified time. Forward contracts are not
currently exchange traded and are typically negotiated on an individual basis.
The Portfolio may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose value is tied to, a
currency other than the U.S. dollar or to reduce the impact of currency
appreciation on purchases of such securities. The Portfolio may also enter into
forward contracts to purchase or sell securities or other financial indices.

Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Portfolio may buy and sell futures contracts on foreign currencies,
securities and financial indices including interest rates or an index of U.S.
government, foreign government, equity or fixed-income securities. The Portfolio
may also buy options on futures contracts. An option on a futures contract gives
the buyer the right, but not the obligation, to buy or sell a futures contract
at a specified price on or before a specified date. Futures contracts and
options on futures are standardized and traded on designated exchanges.

Indexed/structured securities are typically short- to intermediate-term debt
securities whose value at maturity or interest rate is linked to currencies,
interest rates, equity securities, indices, commodity prices or other financial
indicators. Such securities may be positively or negatively indexed (i.e., their
value may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return characteristics
similar to direct investments in the underlying instruments and may be more
volatile than the underlying instruments. The Portfolio bears the market risk of
an investment in the underlying instruments, as well as the credit risk of the
issuer.

Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

Options are the right, but not the obligation, to buy or sell a specified amount
of securities or other assets on or before a fixed date at a predetermined
price. The Portfolio may purchase and write put and call options on securities,
securities indices and foreign currencies.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS 12
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100 Fillmore Street
Denver, Colorado 80206-4928
[Logo] JANUS (800) 525-3713 Recycled Paper

<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any state which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.

Contents

- - ---------------------------------------
THE PORTFOLIO AT A GLANCE
Brief description of the Portfolio .. 1
- - ---------------------------------------
EXPENSE INFORMATION
................................. 1
- - ---------------------------------------
THE PORTFOLIO IN DETAIL
The Portfolio's Investment
Objective and Policies ........... 2
General Portfolio Policies .......... 3
Additional Risk Factors ............. 4
- - ---------------------------------------
MANAGEMENT OF THE PORTFOLIO
Investment Adviser and
Portfolio Manager ................ 6
Portfolio Transactions .............. 6
Management Expenses ................. 7
Other Service Providers ............. 7
Participant Administration Fee
and Distribution Fee ............. 7
Other Information ................... 7
- - ---------------------------------------
DISTRIBUTIONS AND TAXES
Distributions ....................... 9
Taxes ............................... 9
- - ---------------------------------------
PERFORMANCE TERMS
An Explanation of
Performance Terms ................ 9
- - ---------------------------------------
SHAREHOLDER'S GUIDE
Purchases .......................... 10
Redemptions ........................ 10
Shareholder Communications ......... 10
- - ---------------------------------------
APPENDIX A
Glossary of Investment Terms ....... 11

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 11, 1997

Janus Aspen Series
Growth and Income Portfolio
Retirement Shares

Prospectus

__________, 1997

Growth and Income Portfolio (the "Portfolio") is a no-load, diversified mutual
fund that seeks long-term growth of capital with a limited emphasis on income.
Although the Portfolio normally invests at least 25% of its assets in securities
that have income potential, it emphasizes equity securities selected for their
growth potential. The Portfolio is a series of Janus Aspen Series (the "Trust"),
an open-end management investment company. The Portfolio is recently organized
and has a limited operating history.

The Retirement Shares of the Portfolio (the "Shares") offered by this Prospectus
are issued in connection with certain participant directed qualified retirement
plans. The Trust sells and redeems its Shares at net asset value without any
sales charges, commissions or redemption fees.

This Prospectus contains information about the Shares that a prospective plan
participant should consider before investing and should be read carefully and
retained for future reference. Additional information about the Portfolio is
contained in the Statement of Additional Information ("SAI") dated __________,
1997, 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 plan sponsor.

The Shares offered by this Prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank, and are not insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
government agency.

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC NOR HAS THE SEC PASSED ON 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.

<PAGE>

Portfolio At A Glance

INVESTMENT OBJECTIVE:

The investment objective of the Portfolio is long-term capital growth and
current income.

PRIMARY HOLDINGS:

SHAREHOLDER'S INVESTMENT HORIZON:

FUND ADVISER:

FUND MANAGER:

Thomas F. Marsico

FUND INCEPTION:

November 1997

Expense Information

The tables and example below are designed to assist participants in qualified
plans that invest in the Shares of the Portfolio in understanding the various
costs and expenses that you will bear directly or indirectly as an investor in
the Shares.

SHAREHOLDER TRANSACTION EXPENSES

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales charges on redemptions None
Redemption fees None
Exchange fee None

ANNUAL OPERATING EXPENSES (after fee waivers and reductions)(1)
(expressed as a percentage of average net assets)
- - --------------------------------------------------------------------------------
Management Fee(1) 0.68%
12b-1 Fee(2) 0.25%
Other Expenses(1,3) 0.55%
- - --------------------------------------------------------------------------------
Total Operating Expenses(1) 1.48%
- - --------------------------------------------------------------------------------
(1) The fees and expenses in the table above are based on the estimated gross
expenses before estimated expense offset arrangements that the Shares of
the Portfolio expect to incur their initial fiscal year, net of fee
reductions or waivers from Janus Capital. Fee reductions reduce the
management fee to the level of the corresponding Janus retail fund. Other
waivers, if applicable, are first applied against the management fee and
then against other expenses. Without such waivers or reductions, the
Management Fee, Other Expenses and Total Operating Expenses are estimated
to be 0.75%, 0.55% and 1.55%, respectively. Janus Capital may modify or
terminate the waivers or reductions at any time upon at least 90 days'
notice to the Trustees.
(2) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association of
Securities Dealers, Inc.
(3) Includes compensation to service providers who provide recordkeeping,
subaccounting and other administrative services to plan participants who
invest in the Shares. See "Participant Administration Fee" for more
details.

EXAMPLE
- - --------------------------------------------------------------------------------
1 Year 3 Years
- - --------------------------------------------------------------------------------
Assume you invest $1,000, the Shares of the
Portfolio returns 5% annually and its expense
ratio remains as listed above. The example
shows the operating expenses that you would
indirectly bear as an investor in the Shares
of the Portfolio. $15 $47
- - --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 1
<PAGE>

The Portfolio in Detail

Policies that are noted as "fundamental" cannot be changed without a shareholder
vote. All other policies, including the Portfolio's investment objectives, are
not fundamental and may be changed by the Portfolio's Trustees without a
shareholder vote. You will be notified of any such changes that are material. If
there is a material change in the Portfolio's objectives or policies, you should
consider whether the Portfolio remains an appropriate investment for your
qualified retirement plan.
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE

TYPES OF INVESTMENTS

See Appendix A for a further description of the Portfolio's investments.

The following questions are designed to help you better understand an investment
in the Portfolio.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 2
<PAGE>

in mind that the Portfolio is not designed to produce a consistent level of
income.
- - --------------------------------------------------------------------------------
Are the same criteria used to select foreign securities?
Generally, yes. The portfolio manager seeks companies that meet his selection
criteria, regardless of country of organization or place of principal business
activity. Foreign securities are generally selected on a stock-by-stock basis
without regard to any defined allocation among countries or geographic regions.
However, certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries, regions or
geographic areas may warrant greater consideration in selecting foreign
securities. See "Additional Risk Factors" on page 4.
- - --------------------------------------------------------------------------------
How does the Portfolio try to reduce risk?
Diversification of the Portfolio's assets reduces the effect of any single
holding on its overall portfolio value. The Portfolio may use futures, options
and other derivative instruments to protect the portfolio from movements in
securities prices and interest rates. The Portfolio may also use a variety of
currency hedging techniques, including forward currency contracts, to manage
exchange rate risk. See "Additional Risk Factors" on page 4. In addition, to the
extent that the Portfolio holds a larger cash position, it might not participate
in market declines to the same extent as if it had remained more fully invested
in common stocks.

GENERAL PORTFOLIO POLICIES

o As a fundamental policy, the Portfolio may not own more than 10% of the
outstanding voting shares of any issuer.

o The Portfolio will invest no more than 25% of its total assets in a single
issuer (other than U.S. government securities).

Internal Revenue Service (IRS) Limitations
In addition to the diversification requirements stated above, because a class of
shares of the Portfolio is sold in connection with variable annuity contracts
and variable life insurance contracts, the Portfolio intends to comply with the
diversification requirements currently imposed by the IRS on separate accounts
of insurance companies as a condition of maintaining the tax-deferred status of
variable contracts.

Industry Concentration
As a fundamental policy, the Portfolio will not invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 3
<PAGE>

Borrowing and Lending
The Portfolio may borrow money and lend securities or other assets, as follows:

o The Portfolio may borrow money for temporary or emergency purposes in
amounts up to 25% of its total assets.

o The Portfolio may mortgage or pledge securities as security for borrowings
in amounts up to 15% of its net assets.

o As a fundamental policy, the Portfolio may lend securities or other assets
if, as a result, no more than 25% of its total assets would be lent to
other parties.

ADDITIONAL RISK FACTORS

Foreign Securities

Investments in foreign securities, including those of foreign governments, may
involve greater risks than investing in comparable domestic securities.

Securities of some foreign companies and governments may be traded in the United
States, but most foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

o Transaction Costs. Transaction costs of buying and selling foreign
securities, including brokerage, tax and custody costs, are generally
higher than those involved in domestic transactions.

Futures, Options and Other Derivative Instruments
The Portfolio may enter into futures contracts on securities, financial indices
and foreign currencies and options on such contracts ("futures contracts") and
may invest in options on securities, financial indices and foreign currencies
("options"), forward contracts and interest rate swaps and swap-related products
(collectively, "derivative instruments"). The Portfolio intends to use most
derivative instruments primarily to hedge the value of its portfolio

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 4
<PAGE>

holdings against potential adverse movements in securities prices, foreign
currency markets or interest rates. To a limited extent, the Portfolio may also
use derivative instruments for non-hedging purposes such as seeking to increase
the Portfolio's income or otherwise seeking to enhance return. Please refer to
Appendix A to this Prospectus and the SAI for a more detailed discussion of
these instruments.

The use of derivative instruments exposes the Portfolio to additional investment
risks and transaction costs. Risks inherent in the use of derivative instruments
include:

o the risk that interest rates, securities prices and currency markets will
not move in the directions that the portfolio manager anticipates;

o imperfect correlation between the price of derivative instruments and
movements in the prices of the securities, interest rates or currencies
being hedged;

o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities;

o inability to close out certain hedged positions to avoid adverse tax
consequences;

Please refer to the SAI for a description of bond rating categories.

See Appendix A for risks associated with certain other investments.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 5
<PAGE>

Management of the Portfolio

TRUSTEES

INVESTMENT ADVISER

The Portfolio pays all of its expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and auditing fees,
registration fees and expenses, and independent Trustees' fees and expenses and
certain other expenses. Service providers to qualified plans that purchase the
Shares receive fees for providing recordkeeping, subaccounting and other
administrative services, as described under "Participant Administration Fee and
Distribution Fee" on page 7.

PORTFOLIO MANAGER

PORTFOLIO TRANSACTIONS

Purchases and sales of securities on behalf of the Portfolio are executed by
broker-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 consider sales of shares
of the Portfolio or other Janus funds by a broker-dealer or the recommendation
of a broker-dealer to its customers that they purchase a Portfolio's 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 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 Portfolio's Trustees have authorized Janus Capital to place
portfolio transactions on an agency basis with a broker-dealer affiliated with
Janus Capital. When transactions for the Portfolio are effected with that
broker-dealer, the commissions payable by the Portfolio are credited against
certain Portfolio operating expenses serving to reduce those expenses. The SAI
further explains the selection of broker-dealers.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 6
<PAGE>

BREAKDOWN OF MANAGEMENT EXPENSES

* Janus Capital has agreed to reduce the Portfolio's advisory fee to the
extent that such fee exceeds the effective rate of Janus Growth and Income
Fund, the Janus retail fund corresponding to the Portfolio. Janus Capital
may terminate this fee reduction at any time upon at least 90 days' notice
to the Trustees. The effective rate is the advisory fee calculated by the
corresponding retail fund as of the last day of each calendar quarter
(expressed as an annual rate). The effective rate of Janus Growth and
Income Fund was ____% for the quarter ended September 30, 1997. In
addition, Janus Capital has agreed to limit the expenses of the Portfolio's
Shares to an annual rate of 1.25% of average net assets through at least
October 31, 1998. The participant administration fee and distribution fee
described below are not included in the expense limit.

As asset size increases, the annual rate of the management fee declines in
accordance with the above schedule. In addition, the Shares of the Portfolio
incur expenses not assumed by Janus Capital, including the participant
administration fee and distribution fee described below, transfer agent and
custodian fees and expenses, legal and auditing fees, printing and mailing costs
of sending reports and other information to existing shareholders, and
independent Trustees' fees and expenses.

OTHER SERVICE PROVIDERS

The following parties provide the Portfolio with administrative and other
services.

Custodian
State Street Bank and Trust Company
P.O. Box 0351
Boston, Massachusetts 02117-0351

Transfer Agent
Janus Service Corporation
P.O. Box 173375
Denver, Colorado 80217-3375

Distributor
Janus Distributors, Inc.
100 Fillmore Street
Denver, CO 80206-4928

Janus Service Corporation and Janus Distributors, Inc. are wholly-owned
subsidiaries of Janus Capital.

PARTICIPANT ADMINISTRATION FEE AND DISTRIBUTION FEE

Participant Administration Fee
Janus Service Corporation ("Janus Service"), the Trust's transfer agent,
receives a participant administration fee at an annual rate of up to .25% of the
average daily net assets of the Shares of the Portfolio for providing or
procuring recordkeeping, subaccounting and other administrative services to plan
participants who invest in the Shares. Janus Service expects to use this fee to
compensate qualified plan service providers for providing these services.

Distribution Fee
Under a distribution and service plan ("Plan") adopted in accordance with Rule
12b-1 under the 1940 Act, the Shares may pay Janus Distributors, Inc. ("JDI"),
the distributor of the Shares, a fee at an annual rate of up to 0.25% of the
average daily net assets of the Shares of the Portfolio. Under the terms of the
Plan, the Trust is authorized to make payments to JDI for remittance to
qualified plan service providers as compensation for distribution and
shareholder servicing performed by such service providers. The Plan permits the
compensation of such service providers at an annual rate of up to .25% of the
average daily net assets of the Shares of the Portfolio for activities which are
primarily intended to result in sales of the Shares, including but not limited
to preparing, printing and distributing prospectuses, SAIs, shareholder reports
and educational materials to prospective and existing plan participants;
responding to inquiries by qualified plan participants; receiving and answering
correspondence; and similar activities.

OTHER INFORMATION

Organization
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 Portfolio currently offers two classes of shares. The Shares offered by this
Prospectus are available only to participant directed qualified plans using plan
service providers that are compensated for providing distribution and/or
recordkeeping and other administrative services provided

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 7
<PAGE>

to plan participants. Institutional Shares of the Portfolio are available only
to variable insurance contracts owners and other qualified retirement plans.
Because the expenses of each class may differ, the performance in each class is
expected to differ. If you would like additional information about the
Institutional Shares, please call 1-800-525-0020.

Shareholder Meetings
The Trust does not intend to hold annual shareholder meetings. However, special
meetings may be called for a specific class or 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 for any other purpose
requiring a shareholder vote under the 1940 Act. Separate votes are taken by
each class or Portfolio only if a matter affects or requires the vote of only
that class or Portfolio or the interest of the class or Portfolio in the matter
differs from the interest of the other class or Portfolios of the Trust. As a
shareholder, you are entitled to one vote for each share that you own.

Conflicts of Interest
The Shares offered by this prospectus are available to certain participant
directed qualified plans. Institutional Shares of the Portfolio (offered by a
separate prospectus) are available only to variable annuity and variable life
separate accounts of insurance companies that are unaffiliated with Janus
Capital as well as certain qualified retirement plans. Although the Portfolio
does not currently anticipate any disadvantages to policy owners or plan
participants will develop arising out of the fact that the Portfolio offers its
shares to such entities, there is a possibility that disadvantages could occur
or a material conflict may arise. The Trustees monitor events in order to
identify any anticipated disadvantages or material irreconcilable conflicts that
may arise and to determine what action, if any, should be taken in response to
such conflicts. If a material disadvantage or conflict occurs, the Trustees may
require one or more insurance company separate accounts or plans to withdraw its
investments in the Portfolio or substitute shares of another Portfolio. If this
occurs, 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 qualified plans 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.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 8
<PAGE>

Distributions and Taxes
- - --------------------------------------------------------------------------------
DISTRIBUTIONS

Taxes on Distributions
Because Shares of the Portfolio may be purchased only through qualified plans,
it is anticipated that any income dividends or capital gains distributions made
by the Shares of the Portfolio will be exempt from current taxation if left to
accumulate within the qualified plan. Generally, withdrawals from qualified
plans may be subject to ordinary income tax and, if made before age 591/2, a 10%
penalty tax. The tax status of your investment in the Shares depends on the
features of your qualified plan. For further information, contact your plan
sponsor.

The Portfolio does not expect to pay any federal income or excise taxes because
it intends to meet certain requirements of the Internal Revenue Code. In
addition, because a class of shares of the Portfolio is sold in connection with
variable annuity contracts and variable life insurance contracts, the Portfolio
intends to qualify under the Internal Revenue Code with respect to the
diversification requirements related to the tax-deferred status of insurance
company separate accounts.
- - --------------------------------------------------------------------------------
Performance Terms

Portfolio performance figures are based upon historical results and are not
intended to indicate future performance. Investment returns and net asset value
will fluctuate so that Shares, when redeemed, may be worth more or less than
their original cost.

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 9
<PAGE>

Shareholder's Guide

INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIO DIRECTLY. SHARES
MAY BE PURCHASED OR REDEEMED ONLY THROUGH QUALIFIED RETIREMENT PLANS. REFER TO
YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON HOW TO SELECT THE PORTFOLIO AS AN
INVESTMENT OPTION FOR A QUALIFIED PLAN.

PURCHASES

Purchases of Shares may be made only by qualified plans. Refer to your plan
documents for information on how to invest in the Shares of the Portfolio.

All investments in the Portfolio are credited to 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 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. The Portfolio may discontinue sales to a qualified plan and
require plan participants with existing investments in the Shares to redeem
those investments if the plan loses (or in the opinion of Janus Capital is at
risk of losing) its qualified plan status under the Internal Revenue Code.

REDEMPTIONS

Redemptions, like purchases, may be effected only through qualified plans.
Please refer to the appropriate 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 qualified plan the business day following receipt of the redemption order,
but in no event later than seven days after receipt of such order.

SHAREHOLDER COMMUNICATIONS

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 10
<PAGE>

Appendix A

GLOSSARY OF INVESTMENT TERMS

I. EQUITY AND DEBT SECURITIES

Convertible securities are preferred stocks or bonds that pay a fixed dividend
or interest payment and are convertible into common stock at a specified price
or conversion ratio.

Repurchase agreements involve the purchase of a security by the Portfolio and
a simultaneous agreement by the seller (generally a bank or dealer) to
repurchase the security from the Portfolio at a specified date or upon demand.
This technique offers a method of earning income on idle cash. These securities
involve the risk that the seller will fail to repurchase the security, as
agreed. In that case, the Portfolio will bear the risk of market value
fluctuations until the security can be sold and may encounter delays and incur
costs in liquidating the security.

Rule 144A securities are securities that are not registered for sale to the
general public under the Securities Act of 1933, but that may be resold to
certain institutional investors.

Standby commitments are obligations purchased by the Portfolio from a dealer
that give the Portfolio the option to sell a security to the dealer at a
specified price.

Step coupon bonds are debt securities that trade at a discount from their face
value and pay coupon interest. The discount

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 11
<PAGE>

from the face value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived credit
quality of the issuer.

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

Interest rate swaps involve the exchange by two parties of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments).

JANUS ASPEN SERIES GROWTH AND INCOME PORTFOLIO PROSPECTUS - RETIREMENT SHARES 12
<PAGE>

This page intentionally left blank.

<PAGE>

100 Fillmore Street
Denver, Colorado 80206-4928
(800) 525-3713

[Logo] JANUS Shares distributed by Janus Distributors, Inc.
Member NASD. Recycled Paper
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Statement of Additional Information shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be any
sales of these securities in any state which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state.

SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 11, 1997

Janus Aspen Series
Growth and Income Portfolio

- - --------------------------------------------------------------------------------
Statement of Additional Information
___________, 1997
- - --------------------------------------------------------------------------------

This Statement of Additional Information ("SAI") expands upon and
supplements the information contained in the current Prospectus for the
Institutional Shares (the "Shares") of Growth and Income Portfolio (the
"Portfolio") a separate series of Janus Aspen Series, a Delaware business trust
(the "Trust"). The Shares are sold under the name "Janus Aspen Series." 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").

The 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 also offers
a second class of shares to certain participant directed qualified plans.

This SAI is not a Prospectus and should be read in conjunction with the
Prospectus dated __________, 1997, 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.

[LOGO] JANUS

<PAGE>

Growth and Income Portfolio
Statement of Additional Information
Table of Contents
Page
- - --------------------------------------------------------------------------------

Investment Policies, Restrictions and Techniques ............................. 3

Investment Objective ....................................................... 3

Portfolio Policies ......................................................... 3

Investment Restrictions .................................................... 3

Types of Securities and Investment Techniques .............................. 4

Illiquid Investments ..................................................... 4

Zero Coupon, Pay-In-Kind and Step Coupon Securities ...................... 4

Pass-Through Securities .................................................. 5

Investment Company Securities ............................................ 6

Depositary Receipts ...................................................... 6

Other Income-Producing Securities ........................................ 6

Repurchase and Reverse Repurchase Agreements ............................. 6

High-Yield/High-Risk Securities .......................................... 7

Futures, Options and Other Derivative Instruments ........................ 7

Investment Adviser .......................................................... 14

Custodian, Transfer Agent and Certain Affiliations .......................... 15

Portfolio Transactions and Brokerage ........................................ 16

Officers and Trustees ....................................................... 17

Shares of the Trust ......................................................... 18

Net Asset Value Determination ............................................. 18

Purchases ................................................................. 19

Redemptions ............................................................... 19

Income Dividends, Capital Gains Distributions and Tax Status ................ 19

Miscellaneous Information ................................................... 20

Shares of the Trust ....................................................... 20

Voting Rights ............................................................. 20

Independent Accountants ................................................... 21

Registration Statement .................................................... 21

Performance Information ..................................................... 21

Appendix A .................................................................. 22

Explanation of Rating Categories .......................................... 22
- - --------------------------------------------------------------------------------

2
<PAGE>

Investment Policies, Restrictions and Techniques

Investment Objective

As stated in the Prospectus, the Portfolio's investment objective is
long-term capital growth and current income. There can be no assurance that the
Portfolio will achieve its objective. The investment objective of the Portfolio
is not fundamental and may be changed by the Trustees without shareholder
approval.

Portfolio Policies

The Prospectus discusses the types of securities in which the Portfolio
will invest, portfolio policies of the Portfolio and the investment techniques
of the Portfolio. The Prospectus includes a discussion of portfolio turnover
rates.

Portfolio turnover (total long-term purchases or sales, whichever is less,
divided by the average monthly value of the Portfolio's long-term portfolio
securities) is anticipated to not exceed 200%.

Investment Restrictions

As indicated in the Prospectus, the Portfolio is subject to certain
fundamental policies and restrictions that may not 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 or class of shares if a matter affects just the Portfolio or class of
shares), 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 or class of shares) are present or represented by proxy. As
fundamental policies, the Portfolio may not:

(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to seventy-five percent (75%) of the value of its total assets,
purchase the securities of any one issuer (except cash items and "government
securities" as defined under the Investment Company Act of 1940, as amended (the
"1940 Act")), if immediately after and as a result of such purchase, the value
of the holdings of the Portfolio in the securities of such issuer exceeds 5% of
the value of the Portfolio's total assets.

(2) Invest 25% or more of the value of its total assets in any particular
industry (other than U.S. government securities).

(3) Invest directly in real estate or interests in real estate; however,
the Portfolio may own debt or equity securities issued by companies engaged in
those businesses.

(4) Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this limitation
shall not prevent the Portfolio from purchasing or selling options, futures,
swaps and forward contracts or from investing in securities or other instruments
backed by physical commodities).

(5) 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).

(6) Act as an underwriter of securities issued by others, except to the
extent that the Portfolio may be deemed an underwriter in connection with the
disposition of portfolio securities of the Portfolio.

As a fundamental policy, the Portfolio may, notwithstanding any other
investment policy or limitation (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
limitations as the Portfolio.

The Trustees have adopted additional investment restrictions for the
Portfolio. These restrictions are operating policies of the Portfolio and may be
changed by the Trustees without shareholder approval. The additional investment
restrictions adopted by the Trustees to date include the following:

(a) The Portfolio will not (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within the
meaning of Commodity Futures Trading Commission ("CFTC") regulations if the
aggregate initial margin and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions will exceed 5% of the fair market value of the
Portfolio's net assets, after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into; and (ii) enter into
any futures contracts if the aggregate amount of the Portfolio's commitments
under outstanding futures contracts positions would exceed the market value of
its total assets.

(b) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short without the payment of any additional
consideration therefor, and provided that transactions in futures, options,
swaps and forward contracts are not deemed to constitute selling securities
short.

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(c) The Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin payments
and other deposits in connection with transactions in futures, options, swaps
and forward contracts shall not be deemed to constitute purchasing securities on
margin.

(d) The Portfolio may not mortgage or pledge any securities owned or held
by the Portfolio in amounts that exceed, in the aggregate, 15% of the
Portfolio's net asset value, provided that this limitation does not apply to
reverse repurchase agreements, deposits of assets to margin, guarantee positions
in futures, options, swaps or forward contracts, or the segregation of assets in
connection with such contracts.

(e) The Portfolio may borrow money for temporary or emergency purposes (not
for leveraging or investment) 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, the Portfolio will reduce its
borrowings within three business days to the extent necessary to comply with the
25% limitation. This policy shall not prohibit reverse repurchase agreements,
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts.

(f) The Portfolio does not currently intend to purchase any security or
enter into a repurchase agreement, if as a result, more than 15% of its net
assets would be invested in repurchase agreements not entitling the holder to
payment of principal and interest within seven days and in securities that are
illiquid by virtue of legal or contractual restrictions on resale or the absence
of a readily available market. 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 securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 ("Rule 144A Securities"),
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.

(g) 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. To the extent that Bloomberg L.P. 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 ("SEC").

The Portfolio is seeking permission from the SEC to borrow money from or
lend money to other funds that permit such transactions and for which Janus
Capital serves as investment adviser. All such borrowing and lending will be
subject to the above limits. There is no assurance that such permission will be
granted.

Types of Securities and Investment Techniques

Illiquid Investments

The Portfolio may invest up to 15% of its net assets in illiquid
investments (i.e., securities that are not readily marketable). The Trustees of
the Portfolio have authorized Janus Capital to make liquidity determinations
with respect to its securities, including Rule 144A Securities and commercial
paper. Under the guidelines established by the Trustees, Janus Capital will
consider the following factors: 1) the frequency of trades and quoted prices for
the obligation; 2) the number of dealers willing to purchase or sell the
security and the number of other potential purchasers; 3) the willingness of
dealers to undertake to make a market in the security; and 4) the nature of the
security and the nature of marketplace trades, including the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer. In the case of commercial paper, Janus Capital will also consider
whether the paper is traded flat or in default as to principal and interest and
any ratings of the paper by a nationally recognized statistical rating
organization ("NRSRO"). A foreign security that may be freely traded on or
through the facilities of an offshore exchange or other established offshore
securities market is not deemed to be a restricted security subject to these
procedures.

Zero Coupon, Pay-In-Kind and Step Coupon Securities

The Portfolio may invest up to 10% of its assets in zero coupon,
pay-in-kind and step coupon securities. Zero coupon bonds are issued and traded
at a discount from their face value. They do not entitle the holder to any
periodic payment of interest prior to maturity. Step coupon bonds trade at a
discount from their face value and pay coupon interest. The coupon rate is low
for an initial period and then increases to a higher coupon rate thereafter. The
discount from the face amount or par value depends on the time remaining until
cash payments begin, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer. Pay-in-kind bonds normally give the
issuer an option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value equal to the
amount of the coupon payment that would have been made.

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Current federal income tax law requires holders of zero coupon securities
and step coupon securities to report the portion of the original issue discount
on such securities that accrues during a given year as interest income, even
though the holders receive no cash payments of interest during the year. In
order to qualify as a "regulated investment company" under the Internal Revenue
Code of 1986 and the regulations thereunder (the "Code"), the Portfolio must
distribute its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds. Because the Portfolio will
not receive cash payments on a current basis in respect of accrued
original-issue discount on zero coupon bonds or step coupon bonds during the
period before interest payments begin, in some years the Portfolio may have to
distribute cash obtained from other sources in order to satisfy the distribution
requirements under the Code. The Portfolio might obtain such cash from selling
other portfolio holdings which might cause the Portfolio to incur capital gains
or losses on the sale. In some circumstances, such sales might be necessary in
order to satisfy cash distribution requirements even though investment
considerations might otherwise make it undesirable for the Portfolio to sell the
securities at the time.

Generally, the market prices of zero coupon, step coupon and pay-in-kind
securities are more volatile than the prices of securities that pay interest
periodically and in cash and are likely to respond to changes in interest rates
to a greater degree than other types of debt securities having similar
maturities and credit quality.

Pass-Through Securities

The Portfolio may invest in various types of pass-through securities, such
as mortgage-backed securities, asset-backed securities and participation
interests. A pass-through security is a share or certificate of interest in a
pool of debt obligations that have been repackaged by an intermediary, such as a
bank or broker-dealer. The purchaser of a pass-through security receives an
undivided interest in the underlying pool of securities. The issuers of the
underlying securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the Portfolio. The most common
type of pass-through securities are mortgage-backed securities. Government
National Mortgage Association ("GNMA") Certificates are mortgage-backed
securities that evidence an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from bonds in that principal is paid back monthly by the
borrowers over the term of the loan rather than returned in a lump sum at
maturity. The Portfolio will generally purchase "modified pass-through" GNMA
Certificates, which entitle the holder to receive a share of all interest and
principal payments paid and owned on the mortgage pool, net of fees paid to the
"issuer" and GNMA, regardless of whether or not the mortgagor actually makes the
payment. GNMA Certificates are backed as to the timely payment of principal and
interest by the full faith and credit of the U.S. government.

The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semiannually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest but it is not guaranteed by the full faith and credit of the U.S.
government.

The Federal National Mortgage Association ("FNMA") issues guaranteed
mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates
resemble GNMA Certificates in that each FNMA Certificate represents a pro rata
share of all interest and principal payments made and owned on the underlying
pool. This type of security is guaranteed by FNMA as to timely payment of
principal and interest but it is not guaranteed by the full faith and credit of
the U.S. government.

Except for GMCs, each of the mortgage-backed securities described above is
characterized by monthly payments to the holder, reflecting the monthly payments
made by the borrowers who received the underlying mortgage loans. The payments
to the security holders (such as the Portfolio), like the payments on the
underlying loans, represent both principal and interest. Although the underlying
mortgage loans are for specified periods of time, such as 20 or 30 years, the
borrowers can, and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the principal that is
part of the regular monthly payments. A portfolio manager will consider
estimated prepayment rates in calculating the average weighted maturity of the
Portfolio. A borrower is more likely to prepay a mortgage that bears a
relatively high rate of interest. This means that in times of declining interest
rates, higher yielding mortgage-backed securities held by the Portfolio might be
converted to cash and the Portfolio will be forced to accept lower interest
rates when that cash is used to purchase additional securities in the
mortgage-backed securities sector or in other investment sectors. Additionally,
prepayments during such periods will limit the Portfolio's ability to
participate in as large a market gain as may be experienced with a comparable
security not subject to prepayment.

Asset-backed securities represent interests in pools of consumer loans and
are backed by paper or accounts receivables originated by banks, credit card
companies or other providers of credit. Generally, the originating bank or
credit provider is neither the obligor or guarantor of the security and interest
and principal payments ultimately depend upon payment of the underlying loans by
individuals. Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales agreements
that may be created when a municipality enters into an installment purchase
contract

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<PAGE>

or lease with a vendor. Such securities may be secured by the assets purchased
or leased by the municipality; however, if the municipality stops making
payments, there generally will be no recourse against the vendor. The market for
tax-exempt asset-backed securities is still relatively new. These obligations
are likely to involve unscheduled prepayments of principal.

Investment Company Securities

From time to time, the Portfolio may invest in securities of other
investment companies, subject to the provisions of Section 12(d)(1) of the 1940
Act. The Portfolio may invest in securities of money market funds managed by
Janus Capital subject to the terms of an exemptive order obtained by Janus
Capital and the Janus funds which currently provides that the Portfolio will
limit its aggregate investment in a Janus money market fund to the greater of
(i) 5% of the investing Portfolio's total assets or (ii) $2.5 million. The Janus
funds have filed an amended and restated exemptive order that would permit the
Portfolio to invest in Janus Money Market funds in excess of the limitations of
Section 12(d)(1) of the 1940 Act. There is no assurance that such amendment will
be granted.

Depositary Receipts

The Portfolio may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), which are receipts issued by an American bank or trust
company evidencing ownership of underlying securities issued by a foreign
issuer. ADRs, in registered form, are designed for use in U.S. securities
markets. Unsponsored ADRs may be created without the participation of the
foreign issuer. Holders of these ADRs generally bear all the costs of the ADR
facility, whereas foreign issuers typically bear certain costs in a sponsored
ADR. The bank or trust company depositary of an unsponsored ADR may be under no
obligation to distribute shareholder communications received from the foreign
issuer or to pass through voting rights. The Portfolio may also invest in
European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and
in other similar instruments representing securities of foreign companies. EDRs
are receipts issued by a European financial institution evidencing an
arrangement similar to that of ADRs. EDRs, in bearer form, are designed for use
in European securities markets.

Other Income-Producing Securities

Other types of income producing securities that the Portfolio may purchase
include, but are not limited to, the following types of securities:

Variable and floating rate obligations. These types of securities have
variable or floating rates of interest and, under certain limited circumstances,
may have varying principal amounts. Variable and floating rate securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate (the "underlying index"). See also "Inverse Floaters."

Standby commitments. These instruments, which are similar to a put, give
the Portfolio the option to obligate a broker, dealer or bank to repurchase a
security held by the Portfolio at a specified price.

Tender option bonds. Tender option bonds are relatively long-term bonds
that are coupled with the agreement of a third party (such as a broker, dealer
or bank) to grant the holders of such securities the option to tender the
securities to the institution at periodic intervals.

Inverse floaters. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. Certain variable
rate securities (including certain mortgage-backed securities) pay interest at a
rate that varied inversely to prevailing short-term interest rates (sometimes
referred to as inverse floaters). For example, upon reset the interest rate
payable on a security may go down when the underlying index has risen. The
Portfolio will not invest more than 5% of its assets in inverse floaters.

The Portfolio will purchase standby commitments, tender option bonds and
instruments with demand features primarily for the purpose of increasing the
liquidity of its portfolio.

Repurchase and Reverse Repurchase Agreements

In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security to the seller at an agreed upon
price on an agreed upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed upon incremental amount that is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value (at least equal to the amount of the agreed upon
resale price and marked to market daily) of the underlying security or
"collateral." The Portfolio may engage in a repurchase agreement with respect to
any security in which it is authorized to invest. A risk associated with
repurchase agreements is the failure of the seller to repurchase the securities
as agreed, which may cause the Portfolio to suffer a loss if the market value of
such securities declines before they can be liquidated on the open market. In
the event of bankruptcy or insolvency of the seller, the Portfolio may encounter
delays

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<PAGE>

and incur costs in liquidating the underlying security. Repurchase agreements
that mature in more than seven days will be subject to the 15% limit on illiquid
investments. While it is not possible to eliminate all risks from these
transactions, it is the policy of the Portfolio to limit repurchase agreements
to those parties whose creditworthiness has been reviewed and found satisfactory
by Janus Capital.

The Portfolio may use reverse repurchase agreements to provide cash to
satisfy unusually heavy redemption requests or for other temporary or emergency
purposes without the necessity of selling portfolio securities. In a reverse
repurchase agreement, the Portfolio sells a portfolio security to another party,
such as a bank or broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase agreement
is outstanding, the Portfolio will maintain cash and appropriate liquid assets
in a segregated custodial account to cover its obligation under the agreement.
The Portfolio will enter into reverse repurchase agreements only with parties
that Janus Capital deems creditworthy. Using reverse repurchase agreements to
earn additional income involves the risk that the interest earned on the
invested proceeds is less than the expense of the reverse repurchase agreement
transaction. This technique may also have a leveraging effect on the Fund's
portfolio, although the Fund's intent to segregate assets in the amount of the
reverse repurchase agreement minimizes this effect.

High-Yield/High-Risk Securities

The Portfolio intends to invest less than 35% of its net assets in debt
securities that are rated below investment grade (e.g., securities rated BB or
lower by Standard & Poor's Ratings Services ("Standard & Poor's") or Ba or lower
by Moody's Investors Service, Inc. ("Moody's")). Lower rated bonds involve a
higher degree of credit risk, which is the risk that the issuer will not make
interest or principal payments when due. In the event of an unanticipated
default, the Portfolio would experience a reduction in its income, and could
expect a decline in the market value of the securities so affected.

The Portfolio may also invest in unrated debt securities of foreign and
domestic issuers. Unrated debt, while not necessarily of lower quality than
rated securities, may not have as broad a market. Sovereign debt of foreign
governments is generally rated by country. Because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly, Janus Capital may treat such securities as unrated debt. Because of
the size and perceived demand of the issue, among other factors, certain
municipalities may not incur the costs of obtaining a rating. The Fund's
portfolio manager will analyze the credit worthiness of the issuer, as well as
any financial institution or other party responsible for payments on the
security, in determining whether to purchase unrated municipal bonds. Unrated
debt securities will be included in the 35% limit of the Portfolio unless its
portfolio manager deems such securities to be the equivalent of investment grade
securities.

Subject to the above limits, the Portfolio may purchase defaulted
securities only when its portfolio manager believes, based upon their analysis
of the financial condition, results of operations and economic outlook of an
issuer, that there is potential for resumption of income payments and that the
securities offer an unusual opportunity for capital appreciation.
Notwithstanding the portfolio manager's belief as to the resumption of income,
however, the purchase of any security on which payment of interest or dividends
is suspended involves a high degree of risk. Such risk includes, among other
things, the following:

Financial and Market Risks. Investments in securities that are in default
involve a high degree of financial and market risks that can result in
substantial or, at times, even total losses. Issuers of defaulted securities may
have substantial capital needs and may become involved in bankruptcy or
reorganization proceedings. Among the problems involved in investments in such
issuers is the fact that it may be difficult to obtain information about the
condition of such issuers. The market prices of such securities also are subject
to abrupt and erratic movements and above average price volatility, and the
spread between the bid and asked prices of such securities may be greater than
normally expected.

Disposition of Portfolio Securities. Although the Portfolio generally will
purchase securities for which its portfolio manager expects an active market to
be maintained, defaulted securities may be less actively traded than other
securities and it may be difficult to dispose of substantial holdings of such
securities at prevailing market prices. The Portfolio will limit holdings of any
such securities to amounts that the portfolio manager believes could be readily
sold, and holdings of such securities would, in any event, be limited so as not
to limit the Portfolio's ability to readily dispose of securities to meet
redemptions.

Other. Defaulted securities require active monitoring and may, at times,
require participation in bankruptcy or receivership proceedings on behalf of the
Portfolio.

Futures, Options and Other Derivative Instruments

Futures Contracts. The Portfolio may enter into contracts for the purchase
or sale for future delivery of fixed-income securities, foreign currencies or
contracts based on financial indices, including indices of U.S. government
securities, foreign government securities, equity or fixed-income securities.
U.S. futures contracts are traded on exchanges which have been designated
"contract markets" by the CFTC and must be executed through a futures commission
merchant ("FCM"), or brokerage firm, which is a member of the relevant contract
market. Through their clearing corporations, the exchanges guarantee performance
of the contracts as between the clearing members of the exchange.

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<PAGE>

The buyer or seller of a futures contract is not required to deliver or pay
for the underlying instrument unless the contract is held until the delivery
date. However, both the buyer and seller are required to deposit "initial
margin" for the benefit of the FCM when the contract is entered into. Initial
margin deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or
certain other liquid assets by the Portfolio's custodian for the benefit of the
FCM. Initial margin payments are similar to good faith deposits or performance
bonds. Unlike margin extended by a securities broker, initial margin payments do
not constitute purchasing securities on margin for purposes of the Portfolio's
investment limitations. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments for the
benefit of the FCM to settle the change in value on a daily basis. The party
that has a gain may be entitled to receive all or a portion of this amount. In
the event of the bankruptcy of the FCM that holds margin on behalf of the
Portfolio, the Portfolio may be entitled to return of margin owed to the
Portfolio only in proportion to the amount received by the FCM's other
customers. Janus Capital will attempt to minimize the risk by careful monitoring
of the creditworthiness of the FCMs with which the Portfolio does business and
by depositing margin payments in a segregated account with the Portfolio's
custodian.

The Portfolio intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator" adopted by
the CFTC and the National Futures Association, which regulate trading in the
futures markets. The Portfolio will use futures contracts and related options
primarily for bona fide hedging purposes within the meaning of CFTC regulations.
To the extent that the Portfolio holds positions in futures contracts and
related options that do not fall within the definition of bona fide hedging
transactions, the aggregate initial margin and premiums required to establish
such positions will not exceed 5% of the fair market value of the Portfolio's
net assets, after taking into account unrealized profits and unrealized losses
on any such contracts it has entered into.

Although the Portfolio will segregate cash and liquid assets in an amount
sufficient to cover its open futures obligations, the segregated assets would be
available to the Portfolio immediately upon closing out the futures position,
while settlement of securities transactions could take several days. However,
because the Portfolio's cash that may otherwise be invested would be held
uninvested or invested in other liquid assets so long as the futures position
remains open, the Portfolio's return could be diminished due to the opportunity
losses of foregoing other potential investments.

The Portfolio's primary purpose in entering into futures contracts is to
protect the Portfolio from fluctuations in the value of securities or interest
rates without actually buying or selling the underlying debt or equity security.
For example, if the Portfolio anticipates an increase in the price of stocks,
and it intends to purchase stocks at a later time, the Portfolio could enter
into a futures contract to purchase a stock index as a temporary substitute for
stock purchases. If an increase in the market occurs that influences the stock
index as anticipated, the value of the futures contracts will increase, thereby
serving as a hedge against the Portfolio not participating in a market advance.
This technique is sometimes known as an anticipatory hedge. To the extent the
Portfolio enters into futures contracts for this purpose, the segregated assets
maintained to cover the Portfolio's obligations with respect to the futures
contracts will consist of other liquid assets from its portfolio in an amount
equal to the difference between the contract price and the aggregate value of
the initial and variation margin payments made by the Fund with respect to the
futures contracts. Conversely, if the Portfolio holds stocks and seeks to
protect itself from a decrease in stock prices, the Fund might sell stock index
futures contracts, thereby hoping to offset the potential decline in the value
of its portfolio securities by a corresponding increase in the value of the
futures contract position. The Portfolio could protect against a decline in
stock prices by selling portfolio securities and investing in money market
instruments, but the use of futures contracts enables it to maintain a defensive
position without having to sell portfolio securities.

If the Portfolio owns Treasury bonds and the portfolio manager expects
interest rates to increase, the Portfolio may take a short position in interest
rate futures contracts. Taking such a position would have much the same effect
as the Portfolio selling Treasury bonds in its portfolio. If interest rates
increase as anticipated, the value of the Treasury bonds would decline, but the
value of the Portfolio's interest rate futures contract will increase, thereby
keeping the net asset value of the Portfolio from declining as much as it may
have otherwise. If, on the other hand, a portfolio manager expects interest
rates to decline, the Portfolio may take a long position in interest rate
futures contracts in anticipation of later closing out the futures position and
purchasing the bonds. Although the Portfolio can accomplish similar results by
buying securities with long maturities and selling securities with short
maturities, given the greater liquidity of the futures market than the cash
market, it may be possible to accomplish the same result more easily and more
quickly by using futures contracts as an investment tool to reduce risk.

The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery of the instrument underlying a futures contract. To the extent
participants decide to make or take delivery, liquidity in the futures market
could be reduced and prices in the futures market distorted. Third, from the
point of view of speculators, the margin deposit requirements in the futures
market are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may
cause temporary price distortions. Due to the possibility of the foregoing
distortions, a correct forecast of general price trends by a portfolio manager
still may not result in a successful use of futures.

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<PAGE>

Futures contracts entail risks. Although the Portfolio believes that use of
such contracts will benefit the Portfolio, the Portfolio's overall performance
could be worse than if the Portfolio had not entered into futures contracts if
the portfolio manager's investment judgement proves incorrect. For example, if
the Portfolio has hedged against the effects of a possible decrease in prices of
securities held in its portfolio and prices increase instead, the Portfolio will
lose part or all of the benefit of the increased value of these securities
because of offsetting losses in its futures positions. In addition, if the
Portfolio has insufficient cash, it may have to sell securities from its
portfolio to meet daily variation margin requirements. Those sales may be, but
will not necessarily be, at increased prices which reflect the rising market and
may occur at a time when the sales are disadvantageous to the Portfolio.

The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to
the Portfolio will not match exactly the Portfolio's current or potential
investments. The Portfolio may buy and sell futures contracts based on
underlying instruments with different characteristics from the securities in
which it typically invests - for example, by hedging investments in portfolio
securities with a futures contract based on a broad index of securities - which
involves a risk that the futures position will not correlate precisely with the
performance of the Portfolio's investments.

Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with the
Portfolio's investments. Futures prices are affected by factors such as current
and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the contract.
Those factors may affect securities prices differently from futures prices.
Imperfect correlations between the Portfolio's investments and its futures
positions also may result from differing levels of demand in the futures markets
and the securities markets, from structural differences in how futures and
securities are traded, and from imposition of daily price fluctuation limits for
futures contracts. The Portfolio may buy or sell futures contracts with a
greater or lesser value than the securities it wishes to hedge or is considering
purchasing in order to attempt to compensate for differences in historical
volatility between the futures contract and the securities, although this may
not be successful in all cases. If price changes in the Portfolio's futures
positions are poorly correlated with its other investments, its futures
positions may fail to produce desired gains or result in losses that are not
offset by the gains in the Portfolio's other investments.

Because futures contracts are generally settled within a day from the date
they are closed out, compared with a settlement period of three days for some
types of securities, the futures markets can provide superior liquidity to the
securities markets. Nevertheless, there is no assurance that a liquid secondary
market will exist for any particular futures contract at any particular time. In
addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached, it may be impossible for the Portfolio to
enter into new positions or close out existing positions. If the secondary
market for a futures contract is not liquid because of price fluctuation limits
or otherwise, the Portfolio may not be able to promptly liquidate unfavorable
futures positions and potentially could be required to continue to hold a
futures position until the delivery date, regardless of changes in its value. As
a result, the Portfolio's access to other assets held to cover its futures
positions also could be impaired.

Options on Futures Contracts. The Portfolio may buy and write put and call
options on futures contracts. An option on a future gives the Portfolio the
right (but not the obligation) to buy or sell a futures contract at a specified
price on or before a specified date. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call option on an
individual security. Depending on the pricing of the option compared to either
the price of the futures contract upon which it is based or the price of the
underlying instrument, ownership of the option may or may not be less risky than
ownership of the futures contract or the underlying instrument. As with the
purchase of futures contracts, when the Portfolio is not fully invested it may
buy a call option on a futures contract to hedge against a market advance.

The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures' price at the expiration of the option is below the exercise price, the
Portfolio will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures' price at expiration of the option is higher than the exercise
price, the Portfolio will retain the full amount of the option premium which
provides a partial hedge against any increase in the price of securities which
the Portfolio is considering buying. If a call or put option the Portfolio has
written is exercised, the Portfolio will incur a loss which will be reduced by
the amount of the premium it received. Depending on the degree of correlation
between the change in the value of its portfolio securities and changes in the
value of the futures positions, the Portfolio's losses from existing options on
futures may to some extent be reduced or increased by changes in the value of
portfolio securities.

The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, the Portfolio may buy a put option on a futures contract to hedge its
portfolio against the risk of falling prices or rising interest rates.

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<PAGE>

The amount of risk the Portfolio assumes when it buys an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.

Forward Contracts. A forward contract is an agreement between two parties
in which one party is obligated to deliver a stated amount of a stated asset at
a specified time in the future and the other party is obligated to pay a
specified amount for the assets at the time of delivery. The Portfolio may enter
into forward contracts to purchase and sell government securities, equity or
income securities, foreign currencies or other financial instruments. Forward
contracts generally are traded in an interbank market conducted directly between
traders (usually large commercial banks) and their customers. Unlike futures
contracts, which are standardized contracts, forward contracts can be
specifically drawn to meet the needs of the parties that enter into them. The
parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated exchange.

The following discussion summarizes the Portfolio's principal uses of
forward foreign currency exchange contracts ("forward currency contracts"). The
Portfolio may enter into forward currency contracts with stated contract values
of up to the value of the Portfolio's assets. A forward currency contract is an
obligation to buy or sell an amount of a specified currency for an agreed price
(which may be in U.S. dollars or a foreign currency). The Portfolio will
exchange foreign currencies for U.S. dollars and for other foreign currencies in
the normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price for securities it has agreed to buy
or sell ("transaction hedge"). The Portfolio also may hedge some or all of its
investments denominated in a foreign currency or exposed to foreign currency
fluctuations against a decline in the value of that currency relative to the
U.S. dollar by entering into forward currency contracts to sell an amount of
that currency (or a proxy currency whose performance is expected to replicate or
exceed the performance of that currency relative to the U.S. dollar)
approximating the value of some or all of its portfolio securities denominated
in that currency ("position hedge") or by participating in options or futures
contracts with respect to the currency. The Portfolio also may enter into a
forward currency contract with respect to a currency where the Portfolio is
considering the purchase or sale of investments denominated in that currency but
has not yet selected the specific investments ("anticipatory hedge"). In any of
these circumstances the Portfolio may, alternatively, enter into a forward
currency contract to purchase or sell one foreign currency for a second currency
that is expected to perform more favorably relative to the U.S. dollar if the
portfolio manager believes there is a reasonable degree of correlation between
movements in the two currencies ("cross-hedge").

These types of hedging minimize the effect of currency appreciation as well
as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on the Portfolio's
foreign currency denominated portfolio securities. The matching of the increase
in value of a forward contract and the decline in the U.S. dollar equivalent
value of the foreign currency denominated asset that is the subject of the hedge
generally will not be precise. Shifting the Portfolio's currency exposure from
one foreign currency to another removes the Portfolio's opportunity to profit
from increases in the value of the original currency and involves a risk of
increased losses to the Portfolio if its portfolio manager's projection of
future exchange rates is inaccurate. Proxy hedges and cross-hedges may result in
losses if the currency used to hedge does not perform similarly to the currency
in which hedged securities are denominated. Unforeseen changes in currency
prices may result in poorer overall performance for the Portfolio than if it had
not entered into such contracts.

The Portfolio will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or whose value is tied
to, the currency underlying the forward contract or the currency being hedged.
To the extent that the Portfolio is not able to cover its forward currency
positions with underlying portfolio securities, the Portfolio's custodian will
segregate cash or other liquid assets having a value equal to the aggregate
amount of the Portfolio's commitments under forward contracts entered into with
respect to position hedges, cross-hedges and anticipatory hedges. If the value
of the securities used to cover a position or the value of segregated assets
declines, the Portfolio will find alternative cover or segregate additional cash
or liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of the Portfolio's commitments
with respect to such contracts. As an alternative to segregating assets, the
Portfolio may buy call options permitting the Portfolio to buy the amount of
foreign currency being hedged by a forward sale contract or the Portfolio may
buy put options permitting it to sell the amount of foreign currency subject to
a forward buy contract.

While forward contracts are not currently regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contacts. In such event,
the Portfolio's ability to utilize forward contracts may be restricted. In
addition, the Portfolio may not always be able to enter into forward contracts
at attractive prices and may be limited in its ability to use these contracts to
hedge Portfolio assets.

Options on Foreign Currencies. The Portfolio may buy and write options on
foreign currencies in a manner similar to that in which futures or forward
contracts on foreign currencies will be utilized. For example, a decline in the
U.S. dollar value of a foreign currency in which portfolio securities are
denominated will reduce the U.S. dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the Portfolio may buy put
options on the foreign currency. If the value of the currency declines, the
Portfolio will have the right to sell such currency for a fixed amount in U.S.
dollars, thereby offsetting, in whole or in part, the adverse effect on its
portfolio.

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<PAGE>

Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Portfolio may buy call options on the foreign
currency. The purchase of such options could offset, at least partially, the
effects of the adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Portfolio from purchases of
foreign currency options will be reduced by the amount of the premium and
related transaction costs. In addition, if currency exchange rates do not move
in the direction or to the extent desired, the Portfolio could sustain losses on
transactions in foreign currency options that would require the Portfolio to
forego a portion or all of the benefits of advantageous changes in those rates.

The Portfolio may also write options on foreign currencies. For example, to
hedge against a potential decline in the U.S. dollar value of foreign currency
denominated securities due to adverse fluctuations in exchange rates, the
Portfolio could, instead of purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised and the decline in value of portfolio securities will be offset
by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, the Portfolio
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the Portfolio to hedge the
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium. If exchange rates do not move
in the expected direction, the option may be exercised and the Portfolio would
be required to buy or sell the underlying currency at a loss which may not be
offset by the amount of the premium. Through the writing of options on foreign
currencies, the Portfolio also may lose all or a portion of the benefits which
might otherwise have been obtained from favorable movements in exchange rates.

The Portfolio may write covered call options on foreign currencies. A call
option written on a foreign currency by the Portfolio is "covered" if the
Portfolio owns the foreign currency underlying the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other foreign currencies held
in its portfolio. A call option is also covered if the Portfolio has a call on
the same foreign currency in the same principal amount as the call written if
the exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the call
written, if the difference is maintained by the Portfolio in cash or other
liquid assets in a segregated account with the Portfolio's custodian.

The Portfolio also may write call options on foreign currencies for
cross-hedging purposes. A call option on a foreign currency is for cross-hedging
purposes if it is designed to provide a hedge against a decline due to an
adverse change in the exchange rate in the U.S. dollar value of a security which
the Portfolio owns or has the right to acquire and which is denominated in the
currency underlying the option. Call options on foreign currencies which are
entered into for cross-hedging purposes are not covered. However, in such
circumstances, the Portfolio will collateralize the option by segregating cash
or other liquid assets in an amount not less than the value of the underlying
foreign currency in U.S. dollars marked-to-market daily.

Options on Securities. In an effort to increase current income and to
reduce fluctuations in net asset value, the Portfolio may write covered put and
call options and buy put and call options on securities that are traded on
United States and foreign securities exchanges and over-the-counter. The
Portfolio may write and buy options on the same types of securities that the
Portfolio may purchase directly.

A put option written by the Portfolio is "covered" if the Portfolio (i)
segregates cash not available for investment or other liquid assets with a value
equal to the exercise price of the put with the Portfolio's custodian or (ii)
holds a put on the same security and in the same principal amount as the put
written and the exercise price of the put held is equal to or greater than the
exercise price of the put written. The premium paid by the buyer of an option
will reflect, among other things, the relationship of the exercise price to the
market price and the volatility of the underlying security, the remaining term
of the option, supply and demand and interest rates.

A call option written by the Portfolio is "covered" if the Portfolio owns
the underlying security covered by the call or has an absolute and immediate
right to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by the Portfolio's
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also deemed to be covered if the Portfolio holds a
call on the same security and in the same principal amount as the call written
and the exercise price of the call held (i) is equal to or less than the
exercise price of the call written or (ii) is greater than the exercise price of
the call written if the difference is maintained by the Portfolio in cash and
other liquid assets in a segregated account with its custodian.

The Portfolio also may write call options that are not covered for
cross-hedging purposes. The Portfolio collateralizes its obligation under a
written call option for cross-hedging purposes by segregating cash or other
liquid assets in an amount not less than the market value of the underlying
security, marked to market daily. The Portfolio would write a call option for
cross-hedging purposes, instead of writing a covered call option, when the
premium to be received from the cross-hedge transaction would exceed that which
would be received from writing a covered call option and its portfolio manager
believes that writing the option would achieve the desired hedge.

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<PAGE>

The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or bought, in the case of
a put option, since with regard to certain options, the writer may be assigned
an exercise notice at any time prior to the termination of the obligation.
Whether or not an option expires unexercised, the writer retains the amount of
the premium. This amount, of course, may, in the case of a covered call option,
be offset by a decline in the market value of the underlying security during the
option period. If a call option is exercised, the writer experiences a profit or
loss from the sale of the underlying security. If a put option is exercised, the
writer must fulfill the obligation to buy the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.

The writer of an option that wishes to terminate its obligation may effect
a "closing purchase transaction." This is accomplished by buying an option of
the same series as the option previously written. The effect of the purchase is
that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. Likewise, an investor who is the holder
of an option may liquidate its position by effecting a "closing sale
transaction." This is accomplished by selling an option of the same series as
the option previously bought. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.

In the case of a written call option, effecting a closing transaction will
permit the Portfolio to write another call option on the underlying security
with either a different exercise price or expiration date or both. In the case
of a written put option, such transaction will permit the Portfolio to write
another put option to the extent that the exercise price is secured by other
liquid assets. Effecting a closing transaction also will permit the Portfolio to
use the cash or proceeds from the concurrent sale of any securities subject to
the option for other investments. If the Portfolio desires to sell a particular
security from its portfolio on which it has written a call option, the Portfolio
will effect a closing transaction prior to or concurrent with the sale of the
security.

The Portfolio will realize a profit from a closing transaction if the price
of the purchase transaction is less than the premium received from writing the
option or the price received from a sale transaction is more than the premium
paid to buy the option. The Portfolio will realize a loss from a closing
transaction if the price of the purchase transaction is more than the premium
received from writing the option or the price received from a sale transaction
is less than the premium paid to buy the option. Because increases in the market
of a call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Portfolio.

An option position may be closed out only where a secondary market for an
option of the same series exists. If a secondary market does not exist, the
Portfolio may not be able to effect closing transactions in particular options
and the Portfolio would have to exercise the options in order to realize any
profit. If the Portfolio is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise. The absence
of a liquid secondary market may be due to the following: (i) insufficient
trading interest in certain options, (ii) restrictions imposed by a national
securities exchange ("Exchange") on which the option is traded on opening or
closing transactions or both, (iii) trading halts, suspensions or other
restrictions imposed with respect to particular classes or series of options or
underlying securities, (iv) unusual or unforeseen circumstances that interrupt
normal operations on an Exchange, (v) the facilities of an Exchange or of the
Options Clearing Corporation ("OCC") may not at all times be adequate to handle
current trading volume, or (vi) one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that Exchange (or in that class or series of options)
would cease to exist, although outstanding options on that Exchange that had
been issued by the OCC as a result of trades on that Exchange would continue to
be exercisable in accordance with their terms.

The Portfolio may write options in connection with buy-and-write
transactions. In other words, the Portfolio may buy a security and then write a
call option against that security. The exercise price of such call will depend
upon the expected price movement of the underlying security. The exercise price
of a call option may be below ("in-the-money"), equal to ("at-the-money") or
above ("out-of-the-money") the current value of the underlying security at the
time the option is written. Buy-and-write transactions using in-the-money call
options may be used when it is expected that the price of the underlying
security will remain flat or decline moderately during the option period.
Buy-and-write transactions using at-the-money call options may be used when it
is expected that the price of the underlying security will remain fixed or
advance moderately during the option period. Buy-and-write transactions using
out-of-the-money call options may be used when it is expected that the premiums
received from writing the call option plus the appreciation in the market price
of the underlying security up to the exercise price will be greater than the
appreciation in the price of the underlying security alone. If the call options
are exercised in such transactions, the Portfolio's maximum gain will be the
premium received by it for writing the option, adjusted upwards or downwards by
the difference between the Portfolio's purchase price of the security and the
exercise price. If the options are not exercised and the price of the underlying
security declines, the amount of such decline will be offset by the amount of
premium received.

The writing of covered put options is similar in terms of risk and return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Portfolio's gain will be limited to the
premium received. If the market price of the underlying security declines or
otherwise is

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<PAGE>

below the exercise price, the Portfolio may elect to close the position or take
delivery of the security at the exercise price and the Portfolio's return will
be the premium received from the put options minus the amount by which the
market price of the security is below the exercise price.

The Portfolio may buy put options to hedge against a decline in the value
of its portfolio. By using put options in this way, the Portfolio will reduce
any profit it might otherwise have realized in the underlying security by the
amount of the premium paid for the put option and by transaction costs.

The Portfolio may buy call options to hedge against an increase in the
price of securities that it may buy in the future. The premium paid for the call
option plus any transaction costs will reduce the benefit, if any, realized by
the Portfolio upon exercise of the option, and, unless the price of the
underlying security rises sufficiently, the option may expire worthless to the
Portfolio.

Eurodollar Instruments. The Portfolio may make investments in Eurodollar
instruments. Eurodollar instruments are U.S. dollar-denominated futures
contracts or options thereon which are linked to the London Interbank Offered
Rate ("LIBOR"), although foreign currency-denominated instruments are available
from time to time. Eurodollar futures contracts enable purchasers to obtain a
fixed rate for the lending of portfolios and sellers to obtain a fixed rate for
borrowings. The Portfolio might use Eurodollar futures contracts and options
thereon to hedge against changes in LIBOR, to which many interest rate swaps and
fixed-income instruments are linked.

Swaps and Swap-Related Products. The Portfolio may enter into interest rate
swaps, caps and floors on either an asset-based or liability-based basis,
depending upon whether it is hedging its assets or its liabilities, and will
usually enter into interest rate swaps on a net basis (i.e., the two payment
streams are netted out, with the Portfolio receiving or paying, as the case may
be, only the net amount of the two payments). The net amount of the excess, if
any, of the Portfolio's obligations over its entitlement with respect to each
interest rate swap will be calculated on a daily basis and an amount of cash or
other liquid assets having an aggregate net asset value at least equal to the
accrued excess will be maintained in a segregated account by the Portfolio's
custodian. If the Portfolio enters into an interest rate swap on other than a
net basis, it would maintain a segregated account in the full amount accrued on
a daily basis of its obligations with respect to the swap. The Portfolio will
not enter into any interest rate swap, cap or floor transaction unless the
unsecured senior debt or the claims-paying ability of the other party thereto is
rated in one of the three highest rating categories of at least one NRSRO at the
time of entering into such transaction. Janus Capital will monitor the
creditworthiness of all counterparties on an ongoing basis. If there is a
default by the other party to such a transaction, the Portfolio will have
contractual remedies pursuant to the agreements related to the transaction.

The swap market has grown substantially in recent years with a large number
of banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. Janus Capital has determined that, as
a result, the swap market has become relatively liquid. Caps and floors are more
recent innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps. To the extent the
Portfolio sells (i.e., writes) caps and floors, it will segregate cash or other
liquid assets having an aggregate net asset value at least equal to the full
amount, accrued on a daily basis, of its obligations with respect to any caps or
floors.

There is no limit on the amount of interest rate swap transactions that may
be entered into by the Portfolio. These transactions may in some instances
involve the delivery of securities or other underlying assets by the Portfolio
or its counterparty to collateralize obligations under the swap. Under the
documentation currently used in those markets, the risk of loss with respect to
interest rate swaps is limited to the net amount of the payments that the
Portfolio is contractually obligated to make. If the other party to an interest
rate swap that is not collateralized defaults, the Portfolio would risk the loss
of the net amount of the payments that it contractually is entitled to receive.
The Portfolio may buy and sell (i.e., write) caps and floors without limitation,
subject to the segregation requirement described above.

Additional Risks of Options on Foreign Currencies, Forward Contracts and
Foreign Instruments. Unlike transactions entered into by the Portfolio in
futures contracts, options on foreign currencies and forward contracts are not
traded on contract markets regulated by the CFTC or (with the exception of
certain foreign currency options) by the SEC. To the contrary, such instruments
are traded through financial institutions acting as market-makers, although
foreign currency options are also traded on certain Exchanges, such as the
Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to
SEC regulation. Similarly, options on currencies may be traded over-the-counter.
In an over-the-counter trading environment, many of the protections afforded to
Exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Although the buyer of an option
cannot lose more than the amount of the premium plus related transaction costs,
this entire amount could be lost. Moreover, an option writer and a buyer or
seller of futures or forward contracts could lose amounts substantially in
excess of any premium received or initial margin or collateral posted due to the
potential additional margin and collateral requirements associated with such
positions.

Options on foreign currencies traded on Exchanges are within the
jurisdiction of the SEC, as are other securities traded on Exchanges. As a
result, many of the protections provided to traders on organized Exchanges will
be available with respect to such transactions. In particular, all foreign
currency option positions entered into on an Exchange are cleared and guaranteed
by the

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<PAGE>

OCC, thereby reducing the risk of counterparty default. Further, a liquid
secondary market in options traded on an Exchange may be more readily available
than in the over-the-counter market, potentially permitting the Portfolio to
liquidate open positions at a profit prior to exercise or expiration, or to
limit losses in the event of adverse market movements.

The purchase and sale of exchange-traded foreign currency options, however,
is subject to the risks of the availability of a liquid secondary market
described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects of other
political and economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the OCC, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions on exercise.

In addition, options on U.S. government securities, futures contracts,
options on futures contracts, forward contracts and options on foreign
currencies may be traded on foreign exchanges and over-the-counter in foreign
countries. Such transactions are subject to the risk of governmental actions
affecting trading in or the prices of foreign currencies or securities. The
value of such positions also could be adversely affected by (i) other complex
foreign political and economic factors, (ii) lesser availability than in the
United States of data on which to make trading decisions, (iii) delays in the
Portfolio's ability to act upon economic events occurring in foreign markets
during non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the
United States, and (v) low trading volume.

Investment Adviser

As stated in the Prospectus, the Portfolio has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928.
The Advisory Agreement provides that Janus Capital will furnish continuous
advice and recommendations concerning the Portfolio's investments, provide
office space for the Portfolio and pay the salaries, fees and expenses of all
Portfolio officers and of those Trustees who are affiliated with Janus Capital.
Janus Capital also may make payments to selected broker-dealer firms or
institutions which were instrumental in the acquisition of shareholders for the
Portfolio or other Janus Funds or which performed recordkeeping or other
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 and transfer 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 recordkeeping, for which the Portfolio may reimburse Janus
Capital for its costs.

The Portfolio has the agreed to compensate Janus Capital for its services
by the monthly payment of a fee at the annual rate of 0.75% of the first $300
million of the average daily net assets of the Portfolio, 0.70% of the next $200
million of the average daily net assets of the Portfolio and 0.65% of the
average daily net assets of the Portfolio in excess of $500 million. The
advisory fee is calculated and payable daily. Janus Capital has voluntarily
agreed to cap the advisory fee of the Portfolio at the effective rate of Janus
Growth and Income Fund (the "retail fund"). The effective rate of the retail
fund is the advisory fee calculated by such fund on the last day of each
calendar quarter. If the assets of the corresponding retail fund exceed the
assets of the Portfolio as of the last day of any calendar quarter, then the
advisory fee payable by the Portfolio for the following calendar quarter will be
a flat rate equal to such effective rate. The effective rate (annualized) of
Janus Growth and Income Fund was ____% for the quarter ended September 30, 1997.

In addition, 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 an annual rate of 1.25% of the average daily net assets of the Portfolio
through at least October 31, 1998. Mortality risk, expense risk and other
charges imposed by participating insurance companies are excluded from the above
expense limitation.

Janus Capital may terminate the fee reduction or expense limitation
described above at any time upon at least 90 days' notice to the Trustees.

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<PAGE>

not parties to the Advisory Agreement or interested persons of any such party,
and by either a majority of the outstanding voting shares of the Portfolio 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. Pursuant to an exemptive order granted by the SEC,
the Portfolio and other portfolios advised by Janus Capital may also transfer
daily uninvested cash balances into one or more joint trading accounts. Assets
in the joint trading accounts are invested in money market instruments and the
proceeds are allocated to the participating portfolios on a pro rata basis.

Each account managed by Janus Capital has its own investment objective and
policies and is managed accordingly 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 does not permit the
Portfolio's portfolio manager to purchase and sell securities for his own
accounts except under the limited circumstances contained in Janus Capital's
policy regarding personal investing by directors/Trustees, officers and
employees of Janus Capital and the Trust. The policy requires investment
personnel and officers of Janus Capital, inside directors/Trustees of Janus
Capital and the Trust and other designated persons deemed to have access to
current trading information to pre-clear all transactions in 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 Trust 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
approximately 12% of its voting stock and, by agreement with KCSI, selects a
majority of Janus Capital's Board.

Custodian, Transfer Agent and Certain Affiliations

State Street Bank and Trust Company ("State Street"), P.O. Box 0351,
Boston, Massachusetts 02117-0351 is the custodian of the domestic securities and
cash of the Portfolio. State Street and the foreign subcustodians it selects,
have custody of the assets of the Portfolio held outside the U.S. and cash
incidental thereto. The custodian and subcustodians hold the Portfolio's assets
in safekeeping and collect and remit the income thereon, subject to the
instructions of the Portfolio.

The Portfolio pays DST Systems, Inc. ("DST"), a subsidiary of KCSI, license
fees for the use of DST's portfolio and fund accounting system a monthly base
fee of $250 to $1,250 per month based on the number of Janus funds utilizing the
system and an asset charge of $1 per million (not to exceed $500 per month).

The Trustees have authorized the Portfolio to use another affiliate of DST
as introducing broker for certain Portfolio transactions as a means to reduce
Portfolio expenses through credits against the charges of DST and its affiliates
with regard to commissions earned by such affiliate. See "Portfolio Transactions
and Brokerage."

15
<PAGE>

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 Portfolio may trade foreign
securities in foreign countries because the best available market for these
securities is often on foreign exchanges. In transactions on foreign stock
exchanges, brokers' commissions are frequently fixed and are often higher than
in the United States, where commissions are negotiated.

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; rebates of commissions by a broker to the portfolio or to a
third party service provider to the portfolio to pay portfolio expenses; 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. Most brokers and dealers
used by Janus Capital provide research and other services described above.

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.

Janus Capital does not enter into agreements with any brokers regarding the
placement of securities transactions because of the research services they
provide. It does, however, have an internal procedure for allocating
transactions in a manner consistent with its execution policy to brokers that it
has identified as providing superior executions and research, research-related
products or services which benefit its advisory clients, including the
Portfolio. Research products and services incidental to effecting securities
transactions furnished by brokers or dealers may be used in servicing any or all
of Janus Capital's clients and such research may not necessarily be used by
Janus Capital in connection with the accounts which paid commissions to the
broker-dealer providing such research products and services.

Janus Capital may consider sales of Portfolio shares by a broker-dealer or
the recommendation of a broker-dealer to its customers that they purchase
Portfolio 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 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. In placing portfolio business with such
broker-dealers, Janus Capital will seek the best execution of each transaction.

When the Portfolio purchases or sells 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.

The Portfolio's Trustees have authorized Janus Capital to place
transactions with DST Securities, Inc. ("DSTS"), a wholly-owned broker-dealer
subsidiary of DST. Janus Capital may do so if it reasonably believes that the
quality of the transaction and the associated commission are fair and reasonable
and if, overall, the associated transaction costs, net of any credits described
above under "Custodian, Transfer Agent and Certain Affiliations," are lower than
those that would otherwise be incurred.

16
<PAGE>

Officers and Trustees

The following are the names of the Trustees and officers of the Trust,
together with a brief description of their principal occupations during the last
five years.

Thomas H. Bailey*# - Trustee, Chairman and President
100 Fillmore Street
Denver, CO 80206-4928
Trustee, Chairman and President of Janus Investment Fund+. Chairman, Chief
Executive Officer, Director and President of Janus Capital. Chairman and
Director of IDEX Management, Inc., Largo, Florida (50% subsidiary of Janus
Capital and investment adviser to a group of mutual funds) ("IDEX").

James P. Craig, III*# - Trustee and Executive Vice President
100 Fillmore Street
Denver, CO 80206-4928
Executive Vice President and Trustee of Janus Investment Fund+. Chief
Investment Officer, Vice President, and Director of Janus Capital.

Thomas F. Marsico* - Executive Vice President and Portfolio Manager
100 Fillmore Street
Denver, CO 80206-4928
Executive Vice President and Portfolio Manager of Janus Investment Fund+.
Vice President of Janus Capital.

Steven R. Goodbarn* - Vice President and Chief Financial Officer
100 Fillmore Street
Denver, CO 80206-4928
Vice President and Chief Financial Officer of Janus Investment Fund+. Vice
President of Finance, Treasurer and Chief Financial Officer of Janus
Service, Janus Distributors and Janus Capital. Director of IDEX and Janus
Distributors. Director, Treasurer and Vice President of Finance of Janus
Capital International Ltd. Formerly (1992-1996), Treasurer of Janus
Investment Fund and Janus Aspen Series.

Glenn P. O'Flaherty* - Treasurer and Chief Accounting Officer
100 Fillmore Street
Denver, CO 80206-4928
Treasurer and Chief Accounting Officer of Janus Investment Fund. Director
of Fund Accounting of Janus Capital.

Kelley Abbott Howes* - Secretary
100 Fillmore Street
Denver, CO 80206-4928
Secretary of Janus Investment Fund. Director and President, Janus
Distributors, Inc. Associate Counsel of Janus Capital. Formerly (1990 to
1994) with The Boston Company Advisors, Inc., Boston, Massachusetts (mutual
fund administration services).

William D. Stewart# - Trustee
5330 Sterling Drive
Boulder, CO 80302
Trustee of Janus Investment Fund+. President of HPS Division of MKS
Instruments, 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).

- - --------------------------------------------------------------------------------
* 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.

17
<PAGE>

Dennis B. Mullen - Trustee
14103 Denver West Parkway
Golden, CO 80401
Trustee of Janus Investment Fund+. Chief Financial Officer of Boston Market
Concepts, Golden, Colorado (restaurant chain). Formerly (1993-1997),
President and Chief Officer of BC Northwest L.P., a franchise of Boston
Chicken, Inc., Bellevue, Washington (restaurant chain); (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).

James T. Rothe - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
Trustee of Janus Investment Fund+. Professor of Business, University of
Colorado, Colorado Springs, Colorado. Principal, Phillips-Smith Retail
Group, Colorado Springs, Colorado (a venture capital firm). Formerly
(1986-1994), Dean of the College of Business, University of Colorado,
Colorado Springs, Colorado.

- - --------------------------------------------------------------------------------
+ Includes comparable office with various Janus funds that were reorganized into
Janus Investment Fund on August 7, 1992.

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 their 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.

The following table shows the aggregate compensation paid to each Trustee
by the Portfolio described in this SAI and all funds advised and sponsored by
Janus Capital (collectively, the "Janus Funds") for the periods indicated. None
of the Trustees receive any pension or retirement benefits from the Portfolio or
the Janus Funds.

Aggregate Compensation Total Compensation from the
from the Portfolio for fiscal year Janus Funds for calendar year
Name of Person, Position ended December 31, 1996** ended December 31, 1996***
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman* $0 $0
James P. Craig, Trustee* $0 $0
John W. Shepardson, Trustee+ $0 $73,000
William D. Stewart, Trustee $0 $70,000
Gary O. Loo, Trustee $0 $70,000
Dennis B. Mullen, Trustee $0 $67,000
Martin H. Waldinger, Trustee $0 $73,000
James T. Rothe, Trustee++ $0 $0
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
*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, 1996.
***As of December 31, 1996, Janus Funds consisted of two registered investment
companies comprised of a total of 29 funds.
+ Mr. Shepardson retired on March 31, 1997.
++ Mr. Rothe began serving as Trustee on January 1, 1997.

Shares of the Trust

Net Asset Value Determination

As stated in the Prospectus, the net asset value ("NAV") of Portfolio
Shares is determined once each day on which the NYSE is open, at the close of
its regular trading session (normally 4:00 p.m., New York time, Monday through
Friday). The NAV of Portfolio Shares is not determined on days the NYSE is
closed (generally, New Year's Day, Martin Luther King Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
The per share NAV of the Portfolio's Shares is determined by dividing the total
value of the Portfolio's securities and other assets, less liabilities,
attributable to the Shares of the Portfolio, by the total number of Shares
outstanding. In determining NAV, securities listed on an exchange, the

18
<PAGE>

NASDAQ National Market and foreign markets are valued at the closing prices on
such markets, or if such price is lacking for the trading period immediately
preceding the time of determination, such securities are valued at their current
bid price. Municipal securities held by the Portfolio are traded primarily in
the over-the-counter market. Valuations of such securities are furnished by one
or more pricing services employed by the Portfolio and are based upon a
computerized matrix system or appraisals obtained by a pricing service, in each
case in reliance upon information concerning market transactions and quotations
from recognized municipal securities dealers. Other securities that are traded
on the over-the-counter market are valued at their closing bid prices. Foreign
securities and currencies are converted to U.S. dollars using the exchange rate
in effect at the close of the NYSE. The Portfolio will determine the market
value of individual securities held by it, by using prices provided by one or
more professional pricing services which may provide market prices to other
funds, or, as needed, by obtaining market quotations from independent
broker-dealers. Short-term securities maturing within 60 days are valued on the
amortized cost basis. Securities for which quotations are not readily available,
and other assets, are valued at fair values determined in good faith under
procedures established by and under the supervision of the Trustees.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of business
on each business day in New York (i.e., a day on which the NYSE is open). In
addition, European or Far Eastern securities trading generally or in a
particular country or countries may not take place on all business days in New
York. Furthermore, trading takes place in Japanese markets on certain Saturdays
and in various foreign markets on days which are not business days in New York
and on which the Portfolio's NAV is not calculated. The Portfolio calculates its
NAV per share, and therefore effects sales, redemptions and repurchases of its
shares, as of the close of the NYSE once on each day on which the NYSE is open.
Such calculation may not take place contemporaneously with the determination of
the prices of the foreign portfolio securities used in such calculation.

Purchases

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 the
regular trading session NYSE 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.

Redemptions

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 the Portfolio 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 Portfolio is governed
by Rule 18f-1 under the 1940 Act, which requires the Portfolio to redeem shares
solely in cash up to the lesser of $250,000 or 1% of the NAV of the Portfolio
during any 90-day period for any one shareholder. Should redemptions by any
shareholder exceed such limitation, the Portfolio 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 "Shares
of the Trust - Net Asset Value Determination" and such valuation will be made as
of the same time the redemption price is determined. The shareholder has the
ability to request a valuation review of in-kind redemptions by a Trustee at
their next regularly scheduled meeting.

The right to require the Portfolio 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 SEC, or the NYSE is closed except for holidays
and weekends, (2) the SEC permits such suspension and so orders, or (3) an
emergency exists as determined by the SEC so that disposal of securities or
determination of NAV is not reasonably practicable.

Income Dividends, Capital Gains Distributions and Tax Status

It is a policy of the Shares of the Portfolio to make semiannual
distributions in June and December of substantially all of its investment income
and an annual distribution in June of its net realized capital gains, if any. It
is also a policy of the Portfolio to qualify as regulated investment company by
satisfying certain requirements prescribed by Subchapter M of the Code. In
addition, the Portfolio intends to comply with the diversification requirements
of Code Section 817(h) related to the tax-deferred status of insurance company
separate accounts.

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.

19
<PAGE>

The Portfolio may purchase the securities of certain foreign corporations
considered to be passive foreign investment companies by the IRS. In order to
avoid taxes and interest that must be paid by the Portfolio if these investments
are profitable, the Portfolio may make various elections permitted by the tax
laws. However, these elections could require that the Portfolio recognize
taxable income, which in turn must be distributed, before the securities are
sold and before cash is received to pay the distributions.

Some foreign securities purchased by the Portfolio may be subject to
foreign taxes which could reduce the yield on such securities. The amount of
such foreign taxes is expected to be insignificant. The Portfolio may from year
to year make the election permitted under section 853 of the Code to pass
through such taxes to shareholders as a foreign tax credit. If such an election
is not made, any foreign taxes paid or accrued will represent an expense to the
Portfolio which will reduce its investment company taxable income.

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.

Miscellaneous Information

The Trust is an open-end management investment company registered under the
1940 Act and organized as a Delaware business trust, which was created 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. As of the
date of this SAI, the Trust is offering twelve series of shares, known as
"portfolios," in two classes. Additional series and/or classes 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 $.001 per share for each series of the
Trust. Shares of the Portfolio are fully paid and nonassessable when issued. The
Shares of the Portfolio participate equally in dividends and other distributions
by the Shares of the Portfolio, and in residual assets of the Portfolio in the
event of liquidation. The Shares of the Portfolio have no preemptive, conversion
or subscription rights.

The Portfolio currently offers two classes of shares. The Shares discussed
in this SAI are offered only in connection with investment in and payments under
variable contracts and life insurance contracts, as well as certain qualified
retirement plans. A second class of shares, Retirement Shares, are offered only
to certain participant directed qualified plans whose service providers require
a fee from Trust assets for providing certain services to plan participants.

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 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 and review the investment decisions of the officers.

The present Trustees were elected by the initial trustee of the Trust on
May 25, 1993, with the exception of Mr. Craig and Mr. Rothe who were appointed
by the Trustees as of June 30, 1995 and January 1, 1997, respectively. Under the
Trust Instrument, each Trustee will continue in office until the termination of
the Trust or his earlier death, retirement, 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 portfolio of the Trust has one vote (and fractional
votes for fractional shares). Shares of all portfolios of the Trust have
noncumulative voting rights, which means that the holders of more than 50% of
the shares of all portfolios 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
portfolio or class of the Trust will vote separately only with respect to those
matters that affect only that portfolio or class or if the interest of a
portfolio or class in a matter differs from the interests of other portfolios or
classes of the Trust.

20
<PAGE>

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 SEC, 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.

Performance Information

The Prospectus contains a brief description of how performance is
calculated.

Quotations of average annual total return for the Portfolio will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Portfolio over periods of 1, 5, and 10 years (up
to the life of the Portfolio). These are the annual total rates of return that
would equate the initial amount invested to the ending redeemable value. These
rates of return are calculated pursuant to the following formula: P(1 + T)n =
ERV (where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Portfolio
expenses on an annual basis, and assume that all dividends and distributions are
reinvested when paid.

Yield quotations of the Portfolio's Shares are based on the investment
income per share earned during a particular 30-day period (including dividends,
if any, and interest), less expenses accrued during the period ("net investment
income"), and are computed by dividing net investment income by the net asset
value per share on the last day of the period, according to the following
formula:

YIELD = 2 [(a-b + 1)6 - 1]
---
cd

where a = dividend and interest income
b = expenses accrued for the period
c = average daily number of shares outstanding during the period that
were entitled to receive dividends
d = maximum net asset value per share on the last day of the period

From time to time in advertisements or sales material, the Portfolio may
discuss its performance ratings or other information as published by recognized
mutual fund statistical rating services, including, but not limited to, Lipper
Analytical Services, Inc., Ibbotson Associates, Micropal or Morningstar, Inc. or
by publications of general interest such as Forbes, Money, The Wall Street
Journal, Mutual Funds Magazine, Kiplinger's, or Smart Money. The Portfolio may
also compare its performance to that of other selected mutual funds, mutual fund
averages or recognized stock market indicators, including, but not limited to,
the Standard & Poor's 500 Composite Stock Price Index, the Russell 2000 Index
and the NASDAQ composite. In addition, the Portfolio may compare its total
return to the yield on U.S. Treasury obligations and to the percentage change in
the Consumer Price Index. Such performance ratings or comparisons may be made
with funds that may have different investment restrictions, objectives, policies
or techniques than the Portfolio and such other funds or market indicators may
be comprised of securities that differ significantly from the Portfolio's
investments.

21
<PAGE>

Appendix A

Explanation of Rating Categories

The following is a description of credit ratings issued by two of the major
credit ratings agencies. Credit ratings evaluate only the safety of principal
and interest payments, not the market value risk of lower quality securities.
Credit rating agencies may fail to change credit ratings to reflect subsequent
events on a timely basis. Although the adviser considers security ratings when
making investment decisions, it also performs its own investment analysis and
does not rely solely on the ratings assigned by credit agencies.

Standard & Poor's Ratings Services

Bond Rating Explanation
- - --------------------------------------------------------------------------------
Investment Grade

AAA Highest rating; extremely strong capacity to pay principal
and interest.
AA High quality; very strong capacity to pay principal and
interest.
A Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.

Non-Investment Grade

BB, B, Predominantly speculative with respect to the issuer's
CCC, CC, C capacity to meet required interest and principal payments.
BB - lowest degree of speculation; C - the highest degree of
speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D In default.
- - --------------------------------------------------------------------------------
Moody's Investors Service, Inc.

Investment Grade

Aaa Highest quality, smallest degree of investment risk.
Aa High quality; together with Aaa bonds, they compose the
high-grade bond group.
A Upper-medium grade obligations; many favorable investment
attributes.
Baa Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.

Non-Investment Grade

Ba More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca Speculative in a high degree; could be in default or have
other marked shortcomings.
C Lowest-rated; extremely poor prospects of ever attaining
investment standing.
- - --------------------------------------------------------------------------------
Unrated securities will be treated as noninvestment grade securities unless
the portfolio manager determines that such securities are the equivalent of
investment grade securities. Securities that have received ratings from more
than one agency are considered investment grade if at least one agency has rated
the security investment grade.

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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Statement of Additional Information shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be any
sales of these securities in any state which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state.

SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 11, 1997

Janus Aspen Series
Growth and Income Portfolio
Retirement Shares

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Statement of Additional Information
__________, 1997
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This Statement of Additional Information ("SAI") expands upon and
supplements the information contained in the current Prospectus for the
Retirement Shares (the "Shares") of Growth and Income Portfolio (the
"Portfolio"), 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").

The Shares of the Portfolio may be purchased only by certain participant
directed qualified plans. The Portfolio also offers a second class of shares to
the separate accounts of insurance companies for the purpose of funding variable
life insurance contracts and variable annuity contracts (collectively, "variable
insurance contracts") and certain other qualified retirement plans.

This SAI is not a Prospectus and should be read in conjunction with the
Prospectus dated __________, 1997, which is incorporated by reference into this
SAI and may be obtained from your plan sponsor. This SAI contains additional and
more detailed information about the Portfolio's operations and activities than
the Prospectus.

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Growth and Income Portfolio
Retirement Shares
Statement of Additional Information
Table of Contents

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