JANUS ASPEN SERIES, 497, 1997-05-05

JANUS ASPEN SERIES
497, 1997-05-05

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Janus Aspen Series

Growth Portfolio
Aggressive Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Flexible Income Portfolio
Short-Term Bond Portfolio

Prospectus

[Logo] Janus

<PAGE>

Contents
- ---------------------------------------
PORTFOLIOS AT A GLANCE
Brief description of the Portfolios . 1
- ---------------------------------------
EXPENSE INFORMATION
Each Portfolio's annual
operating expenses ............... 2
Financial Highlights -
a summary of financial data ...... 3
- ---------------------------------------
PERFORMANCE TERMS
An explanation of performance terms . 5
- ---------------------------------------
THE PORTFOLIOS IN DETAIL
Investment Objectives and Policies .. 6
General Portfolio Policies ......... 10
Additional Risk Factors ............ 12
- ---------------------------------------
MANAGEMENT OF THE PORTFOLIOS
Investment Adviser and
Investment Personnel ............ 14
Management Expenses ................ 16
Portfolio Transactions ............. 16
Other Service Providers ............ 16
Other Information .................. 17
- ---------------------------------------
DISTRIBUTIONS AND TAXES
Distributions ...................... 18
Taxes .............................. 18
- ---------------------------------------
SHAREHOLDER'S GUIDE
Purchases .......................... 19
Redemptions ........................ 19
Shareholder Communications ......... 19
- ---------------------------------------
APPENDIX A
Glossary of Investment Terms ....... 20
- ---------------------------------------
APPENDIX B
Explanation of Rating Categories ... 22

Janus Aspen Series

Prospectus

May 1, 1997

This prospectus describes six mutual funds with a variety of investment
objectives, including growth of capital, current income and a combination of
growth and income (the "Portfolios"). Each 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 ("SEC") as an open-end
management investment company. The Institutional Shares of each Portfolio
(collectively, the "Shares") are offered by this prospectus 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. Janus Capital Corporation ("Janus Capital")
serves as investment adviser to each Portfolio. Janus Capital has been in the
investment advisory business for over 26 years and currently manages
approximately $50 billion in assets.

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. Certain Portfolios
may not be available in connection with a particular contract and certain
contracts may limit allocations among the Portfolios. 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 Shares that a prospective
purchaser of a variable insurance contract or plan participant should consider
before allocating purchase payments or premiums to the Portfolios. 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 Shares is contained in a
Statement of Additional Information ("SAI") filed with the SEC. The SAI dated
May 1, 1997 is incorporated by reference into this Prospectus. Copies of the SAI
are available upon request and without charge by writing or calling your
insurance company or plan sponsor.

Flexible Income Portfolio may invest all of its assets in high-yield corporate
debt securities, commonly known as "junk bonds." See "Additional Risk Factors"
on page 12 for the risks associated with investing in these securities.

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>

Portfolios At A Glance

This section is designed to provide you with a brief overview of the Portfolios
and their investment emphasis. A more detailed discussion of the Portfolios'
investment objectives and policies begins on page 6.

Growth Portfolio

Focus: A diversified portfolio that seeks long-term growth of capital by
investing primarily in common stocks, with an emphasis on companies with larger
market capitalizations.
Inception: September 1993
Manager: James P. Craig, III
Assistant Managers: David Decker
Blaine Rollins

Aggressive Growth Portfolio

Focus: A nondiversified portfolio that seeks long-term growth of capital by
investing primarily in common stocks, with an emphasis on securities issued by
medium-sized companies.
Inception: September 1993
Manager: James P. Goff

Worldwide Growth Portfolio

Focus: A diversified portfolio that seeks long-term growth of capital by
investing primarily in common stocks of foreign and domestic issuers.
Inception: September 1993
Manager: Helen Young Hayes
Assistant Manager: Laurence Chang

Balanced Portfolio

Focus: A diversified portfolio that seeks long-term growth of capital, balanced
by current income. The Portfolio normally invests 40-60% of its assets in
securities selected primarily for their growth potential and 40-60% of its
assets in securities selected primarily for their income potential.
Inception: September 1993
Manager: Blaine P. Rollins

Flexible Income Portfolio

Focus: A diversified portfolio that seeks to maximize total return from a
combination of income and capital appreciation by investing primarily in
income-producing securities.
Inception: September 1993
Managers: Ronald V. Speaker
Sandy R. Rufenacht

Short-Term Bond Portfolio

Focus: A diversified portfolio that seeks a high level of current income while
minimizing interest rate risk by investing in shorter term fixed-income
securities. Its average-weighted maturity is normally less than three years.
Inception: September 1993
Manager: Sandy R. Rufenacht

JANUS SPECTRUM

The spectrum below shows Janus Capital's assessment of the potential volatility
of the Portfolios relative to one another and should not be used to compare the
Portfolios to other mutual funds or other types of investments. A Portfolio's
position in the spectrum was determined based on a number of factors such as
selected historic volatility measurements, the types of securities in which the
Portfolios intend to invest, the degree of diversification intended and/or
permitted, and the size of the Portfolio. In addition, the spectrum is
significantly affected by the portfolio managers' investment styles. These
factors were considered as of the date of this prospectus and will be reassessed
with each new prospectus. Increased volatility results in increased fluctuations
in a Portfolio's net asset value per share. Increased volatility may be
associated with a Portfolio that undertakes more risk in order to seek greater
returns. Specific risks of certain types of instruments in which some of the
Portfolios may invest, including foreign securities, junk bonds and derivative
instruments such as futures contracts and options, are described under
"Additional Risk Factors" on page 12. The spectrum is not indicative of the
future volatility or performance of a Portfolio and relative positions of
Portfolios within the spectrum may change.

NARRATIVE DESCRIPTION - SPECTRUM

Aetna

(SPECTRUM CHART)

The spectrum illustrates the potential volatility of the Portfolios relative to
one another. The Portfolios' volatility ranges from low to high. The Portfolios
are illustrated as follows: Growth Portfolio is shown as moderate; Aggressive
Growth Portfolio is shown as high; Worldwide Growth Portfolio is shown as
moderately-high; Balanced Portfolio is shown as moderate; Flexible Income
Portfolio is shown as low-moderate; Short-Term Bond Portfolio is shown as low.

1
<PAGE>

Expense Information

The tables and example below are designed to assist participants in qualified
plans that invest in the Shares of the Portfolios in understanding the various
costs and expenses that you will bear directly or indirectly as an investor in
the Shares. Owners of variable insurance contracts that invest in the Shares
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 (applicable to each Portfolio)

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

ANNUAL OPERATING EXPENSES (after fee waivers and reductions)(1)
(expressed as a percentage of average net assets)

<TABLE>
<CAPTION>
Management Fee Other Expenses Total Operating Expenses
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio 0.65% 0.04% 0.69%
Aggressive Growth Portfolio 0.72% 0.04% 0.76%
Worldwide Growth Portfolio 0.66% 0.14% 0.80%
Balanced Portfolio 0.79% 0.15% 0.94%
Flexible Income Portfolio 0.65% 0.19% 0.84%
Short-Term Bond Portfolio 0.47% 0.19% 0.66%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fees and expenses in the table above are based on gross expenses of the
Shares before expense offset arrangements for the fiscal year ended
December 31, 1996. The information for each Portfolio other than the
Flexible Income Portfolio is net of fee waivers or reductions from Janus
Capital. Fee reductions for the Growth, Aggressive Growth, Worldwide Growth
and Balanced Portfolios 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 would have been 0.79%, 0.04% and 0.83% for Growth
Portfolio; 0.79%, 0.04% and 0.83% for Aggressive Growth Portfolio; 0.77%,
0.14% and 0.91% for Worldwide Growth Portfolio; 0.92%, 0.15% and 1.07% for
Balanced Portfolio; and 0.65%, 0.19% and 0.84% for Short-Term Bond
Portfolio, respectively. Janus Capital may modify or terminate the waivers
or reductions at any time upon at least 90 days' notice to the Trustees.

EXAMPLE
You would indirectly pay the following expenses on $1,000 investment, assuming
expense ratios remain as listed above and assuming a 5% annual return with or
without redemption of the end of each period.

1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Growth Portfolio $ 7 $ 22 $ 38 $ 86
Aggressive Growth Portfolio $ 8 $ 24 $ 42 $ 94
Worldwide Growth Portfolio $ 8 $ 26 $ 44 $ 99
Balanced Portfolio $ 10 $ 30 $ 52 $115
Flexible Income Portfolio $ 9 $ 27 $ 47 $104
Short-Term Bond Portfolio $ 7 $ 21 $ 37 $ 82
- --------------------------------------------------------------------------------
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE RETURNS
OR EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN.

2
<PAGE>

Financial Highlights

Unless otherwise noted, the information below is for fiscal periods ending on
December 31 of each year. The accounting firm of Price Waterhouse LLP has
audited the Portfolios' financial statements since their inception. Their report
is included in the Portfolios' Annual Report, which is incorporated by reference
into the SAI. A detailed explanation of the Financial Highlights can be found on
page 5.

<TABLE>
<CAPTION>
Growth Portfolio Aggressive Growth Portfolio
1996 1995 1994 1993(1) 1996 1995 1994 1993(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $13.45 $10.57 $10.32 $10.00 $17.08 $13.62 $11.80 $10.00
- -------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
2. Net investment income .17 .28 .09 .03 -- .24 .11 .01
3. Net gains or (losses) on securities
(both realized and unrealized) 2.29 2.90 .20 .32 1.36 3.47 1.82 1.80
- -------------------------------------------------------------------------------------------------------------------------------
4. Total from investment operations 2.46 3.18 .29 .35 1.36 3.71 1.93 1.81
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions:
5. Dividends
(from net investment income) (.17) (.30) (.04) (.03) -- (.25) (.11) (.01)
6. Tax return of capital distributions -- -- -- -- (.01) -- -- --
7. Distributions (from capital gains) (.23) -- -- -- (.19) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
8. Total distributions (.40) (.30) (.04) (.03) (.20) (.25) (.11) (.01)
- -------------------------------------------------------------------------------------------------------------------------------
9. Net asset value, end of period $15.51 $13.45 $10.57 $10.32 $18.24 $17.08 $13.62 $11.80
- -------------------------------------------------------------------------------------------------------------------------------
10. Total return* 18.45% 30.17% 2.76% 3.50% 7.95% 27.48% 16.33% 18.05%
- -------------------------------------------------------------------------------------------------------------------------------
11. Net assets, end of period
(in thousands) $325,789 $126,911 $43,549 $7,482 $383,693 $185,911 $41,289 $1,985
12. Ratio of gross expenses to
average net assets** 0.69%(6) 0.78%(5) N/A N/A 0.76%(6) 0.86%(5) N/A N/A
13. Ratio of net expenses to
average net assets** 0.69% 0.76% 0.88%(2)(4) 0.25%(3) 0.76% 0.84% 1.05%(2)(4) 0.25%(3)
14. Ratio of net investment income
to average net assets** 1.39% 1.24% 1.45% 2.54% (.27%) 0.58% 2.18% 0.34%
15. Portfolio turnover rate** 87% 185% 169% 162% 88% 155% 259% 31%
16. Average commission rate $0.0466 N/A N/A N/A $0.0347 N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Worldwide Growth Portfolio Balanced Portfolio
1996 1995 1994 1993(1) 1996 1995 1994 1993(1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $15.31 $12.07 $11.89 $10.00 $13.03 $10.63 $10.64 $10.00
- ----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
2. Net investment income .16 .11 .04 .02 .32 .17 .15 .08
3. Net gains or (losses) on securities
(both realized and unrealized) 4.27 3.19 .14 1.89 1.81 2.45 (.06) .64
- ----------------------------------------------------------------------------------------------------------------------------
4. Total from investment operations 4.43 3.30 .18 1.91 2.13 2.62 .09 .72
- ----------------------------------------------------------------------------------------------------------------------------
Less distributions:
5. Dividends (from net investment income) (.17) (.06) -- (.01) (.30) (.22) (.10) (.08)
6. Tax return of capital distributions -- -- -- (.01) -- -- -- --
7. Distributions (from capital gains) (.13) -- -- -- (.09) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
8. Total distributions (.30) (.06) -- (.02) (.39) (.22) (.10) (.08)
- ----------------------------------------------------------------------------------------------------------------------------
9. Net asset value, end of period $19.44 $15.31 $12.07 $11.89 $14.77 $13.03 $10.63 $10.64
- ----------------------------------------------------------------------------------------------------------------------------
10. Total return* 29.04% 27.37% 1.53% 19.10% 16.18% 24.79% 0.84% 7.20%
- ----------------------------------------------------------------------------------------------------------------------------
11. Net assets, end of period
(in thousands) $582,603 $108,563 $37,728 $4,856 $85,480 $14,021 $3,153 $537
12. Ratio of gross expenses to
average net assets** 0.80%(6) 0.90%(5) N/A N/A 0.94%(6) 1.37%(5) N/A N/A
13. Ratio of net expenses to
average net assets** 0.80% 0.87% 1.18%(2)(4) 0.25%(3) 0.92% 1.30% 1.57%(2)(4) 0.25%(3)
14. Ratio of net investment income
to average net assets** 0.83% 0.95% 0.50% 0.84% 2.92% 2.41% 1.90% 2.69%
15. Portfolio turnover rate** 62% 113% 217% 57% 103% 149% 158% 126%
16. Average commission rate $0.0345 N/A N/A N/A $0.0426 N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return not annualized for periods of less than one year.
**Annualized for periods of less than one full year.
(1) September 13, 1993 (inception) to December 31, 1993.
(2) Commissions payable by the Portfolio for transactions effected by a
broker-dealer affiliated with Janus Capital were credited against the
Portfolio's operating expenses. The effect of such directed brokerage
arrangement was de minimis.
(3) The ratio was 2.16%, 5.79%, 2.71% and 7.92%, respectively, for the Growth,
Aggressive Growth, Worldwide Growth and Balanced Portfolios, before waiver
of certain fees and/or voluntary reduction of advisor's fees to the
effective rate of the corresponding Janus retail fund.
(4) The ratio was 1.23%, 1.14%, 1.49% and 1.74%, respectively, for the Growth,
Aggressive Growth, Worldwide Growth and Balanced Portfolios, before waiver
of certain fees and/or voluntary reduction of advisor's fees to the
effective rate of the corresponding Janus retail fund.
(5) The ratio was 0.98%, 0.93%, 1.09% and 1.55%, respectively, for the Growth,
Aggressive Growth, Worldwide Growth and Balanced Portfolios, before waiver
of certain fees and/or voluntary reduction of advisor's fees to the
effective rate of the corresponding Janus retail fund.
(6) The ratio was 0.83%, 0.83%, 0.91% and 1.07%, respectively, for the Growth,
Aggressive Growth, Worldwide Growth and Balanced Portfolios, before waiver
of certain fees and/or voluntary reduction of advisor's fees to the
effective rate of the corresponding Janus retail fund.

3
<PAGE>

<TABLE>
<CAPTION>
Flexible Income Portfolio Short-Term Bond Portfolio
1996 1995 1994 1993(1) 1996 1995 1994 1993(1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Net asset value, beginning of period $11.11 $9.48 $9.97 $10.00 $10.03 $9.72 $9.93 $10.00
- --------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
2. Net investment income .74 .53 .47 .11 .42 .60 .35 .11
3. Net gains or (losses) on securities
(both realized and unrealized) .24 1.70 (.56) (.04) (.03) .31 (.26) (.08)
- --------------------------------------------------------------------------------------------------------------------------
4. Total from investment operations .98 2.23 (.09) .07 .39 .91 .09 .03
- --------------------------------------------------------------------------------------------------------------------------
Less distributions:
5. Dividends (from net investment income) (.72) (.60) (.40) (.10) (.44) (.60) (.30) (.10)
6. Tax return of capital distributions -- -- -- -- -- -- -- --
7. Distributions (from capital gains) (.13) -- -- -- (.01) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
8. Total distributions (.85) (.60) (.40) (.10) (.45) (.60) (.30) (.10)
- --------------------------------------------------------------------------------------------------------------------------
9. Net asset value, end of period $11.24 $11.11 $9.48 $9.97 $9.97 $10.03 $9.72 $9.93
- --------------------------------------------------------------------------------------------------------------------------
10. Total return* 9.19% 23.86% (0.91%) 0.70% 3.98% 9.54% 0.92% 0.30%
- --------------------------------------------------------------------------------------------------------------------------
11. Net assets, end of period (in thousands) $25,315 $10,831 $1,924 $538 $11,901 $3,187 $2,902 $502
12. Ratio of gross expenses to
average net assets** 0.84% 1.07% N/A N/A 0.66%(5) 0.70%(4) N/A N/A
13. Ratio of net expenses to
average net assets** 0.83% 1.00% 1.00%(3) 1.00%(2) 0.65% 0.65% 0.65%(3) 0.65%(2)
14. Ratio of net investment income
to average net assets** 7.31% 7.46% 5.49% 3.77% 5.44% 6.02% 5.00% 3.57%
15. Portfolio turnover rate** 250% 236% 234% 508% 416% 417% 256% 91%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Total return not annualized for periods of less than one year.
**Annualized for periods of less than one full year.
(1) September 13, 1993 (inception) to December 31, 1993.
(2) The ratio was 5.27% and 5.33%, respectively, for the Flexible Income and
Short-Term Bond Portfolios, before waiver of certain fees incurred by the
Portfolios.
(3) The ratio was 1.35% and 1.40%, respectively, for the Flexible Income and
Short-Term Bond Portfolios, before waiver of certain fees incurred by the
Portfolios.
(4) The ratio was 1.37% for the Short-Term Bond Portfolio, before waiver of
certain fees incurred by the Portfolio.
(5) The ratio was 0.84% for the Short-Term Bond Portfolio, before waiver of
certain fees incurred by the Portfolio.

4
<PAGE>

Understanding the Financial Highlights

This section is designed to help you better understand the information
summarized in the Financial Highlights tables. The tables contain important
historical operating information that may be useful in making your investment
decision or understanding how your investment has performed. The Portfolios'
Annual Report contains additional information about each Portfolio's
performance, including a comparison to an appropriate securities index. To
request a copy of the Annual Report, please call or write your insurance
company.

Net asset value ("NAV") is the value of a single Share of a Portfolio. It is
computed by adding the value of all of a Portfolio's investments and other
assets, subtracting any liabilities and dividing the result by the number of
shares outstanding. The difference between line 1 and line 9 in the Financial
Highlights tables represents the change in value of a Share of a Portfolio over
the fiscal period, but not its total return.

Net investment income is the per share amount of dividends and interest income
earned on securities held by a Portfolio, less Portfolio expenses. Dividends
(from net investment income) are the per share amount that a Portfolio paid from
net investment income.

Net gains or (losses) on securities is the per share increase or decrease in
value of the securities a Portfolio holds. A gain (or loss) is realized when
securities are sold. A gain (or loss) is unrealized when securities increase or
decrease in value but are not sold. Distributions (from capital gains) are the
per share amount that a Portfolio paid from net realized gains.

Total Return is the percentage increase or decrease in the value of an
investment over a stated period of time. A total return percentage includes both
changes in NAV and income. For the purposes of calculating total return, it is
assumed that dividends and distributions are reinvested at the NAV on the day of
the distribution. A PORTFOLIO'S TOTAL RETURN CANNOT BE COMPUTED DIRECTLY FROM
THE FINANCIAL HIGHLIGHTS TABLES.

Ratio of net expenses to average net assets is the total of a Portfolio's
operating expenses divided by its average net assets for the stated period.
Ratio of gross expenses to average net assets does not reflect reductions in
expenses through the use of brokerage commissions and uninvested cash balances
earning interest with the Portfolio's custodian.

Ratio of net investment income to average net assets is a Portfolio's net
investment income divided by its average net assets for the stated period.

Portfolio turnover rate is a measure of the amount of a Portfolio's buying and
selling activity. It is computed by dividing total purchases or sales, whichever
is less, by the average monthly market value of a Portfolio's securities.

Average commission rate is the total of a Portfolio's agency commission paid on
equity securities trades divided by the number of shares purchased and sold.
- --------------------------------------------------------------------------------
Performance Terms

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

Cumulative Total Return represents the actual rate of return on an investment
for a specified period. The Financial Highlights tables show total return for a
single fiscal period. Cumulative total return is generally quoted for more than
one year (e.g., the life of a 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 a Portfolio's return and are not
the same as actual annual results.

Yield shows the rate of income the Shares earn on investments as a percentage of
the Portfolio's share price. It is calculated by dividing a Portfolio's net
investment income for a 30-day period by the average number of Shares entitled
to receive dividends and dividing the result by the Share's NAV per share at the
end of the 30-day period. Yield does not include changes in NAV.

Yields are calculated according to standardized SEC formulas and may not equal
the income on an investor's account. Yield is usually quoted on an annualized
basis. An annualized yield represents the amount you would earn if you remained
in a Portfolio for a year and the Shares of that Portfolio continued to have the
same yield for the entire year.

The Portfolios impose no sales or other charges that would affect total return
or yield computations. Yield and total return figures of the Portfolios include
the effect of deducting each 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.

5
<PAGE>

The Portfolios in Detail

This section takes a closer look at the Portfolios' investment objectives,
policies and the securities in which they invest. Please carefully review the
"Additional Risk Factors" section of this Prospectus for a more detailed
discussion of the risks associated with certain investment techniques as well as
the Janus spectrum on page 1. Appendix A contains a more detailed description of
investment terms used throughout this Prospectus. You should carefully consider
your investment goals, time horizon and risk tolerance before choosing a
Portfolio.

Each Portfolio has an investment objective and policies that are similar to
those of a Janus retail fund, as illustrated in the chart below. Although it is
anticipated that each 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 each Portfolio and its corresponding retail
fund are expected to differ. The variable contract owner will also bear various
insurance-related costs at the insurance company level. You should review the
accompanying separate account prospectus for a summary of contract fees and
expenses.

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

Growth Portfolio......................................................Janus Fund
Aggressive Growth Portfolio................................Janus Enterprise Fund
Worldwide Growth Portfolio..................................Janus Worldwide Fund
Balanced Portfolio...........................................Janus Balanced Fund
Flexible Income Portfolio.............................Janus Flexible Income Fund
Short-Term Bond Portfolio.............................Janus Short-Term Bond Fund

Growth Portfolio, Aggressive Growth Portfolio and Worldwide Growth Portfolio are
designed for long-term investors who seek growth of capital only and who can
tolerate the greater risks associated with common stock investments.

GROWTH PORTFOLIOS

Investment Objective:..........................................Growth of Capital
Primary Holdings:..................................................Common Stocks
Shareholder's Investment Horizon:......................................Long-Term

Growth Portfolio

Aggressive Growth Portfolio

The investment objective of this Portfolio is long-term growth of capital. It is
a nondiversified portfolio that pursues its investment objective by normally
investing at least 50% of its equity assets in securities issued by medium-sized
companies. Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index (the "MidCap Index").
Companies whose capitalization falls outside this range after the Portfolio's
initial purchase continue to be considered medium-sized companies for the
purpose of this policy. As of December 30, 1996, the MidCap Index included
companies with capitalizations between approximately $192 million to $6.5
billion. The range of the MidCap Index is expected to change on a regular basis.
Subject to the above policy, the Portfolio may also invest in smaller or larger
issuers.

Worldwide Growth Portfolio

The investment objective of this Portfolio is long-term growth of capital in a
manner consistent with the preservation of capital. It is a diversified
portfolio that pursues its objective primarily through investments in common
stocks of foreign and domestic issuers. The Portfolio has the flexibility to
invest on a worldwide basis in companies and other organizations of any size,
regardless of country of organization or place of principal business activity.
Worldwide Growth Portfolio normally invests in issuers from at least five
different countries, including the United States. The Portfolio may at times
invest in fewer than five countries or even a single country.

TYPES OF INVESTMENTS

Each of these Portfolios invests primarily in common stocks of foreign and
domestic companies. However, the percentage of each Portfolio's assets invested
in common stocks will vary and each Portfolio may at times hold substantial
positions in cash equivalents or interest bearing securities. See "General
Portfolio Policies" on page 10. Each Portfolio may invest to a lesser degree in
other types of securities including preferred stocks, 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. Some securities that the Portfolios purchase may be on a when-issued,
delayed delivery or forward commitment basis. The Portfolios may invest up to
25% of their assets in mortgage- and asset-backed securities, up to 10% of

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their assets in zero coupon, pay-in-kind and step coupon securities, and without
limit in indexed/structured securities. No Growth Portfolio will invest 35% or
more of its assets in high-yield/high-risk securities.

Although Worldwide Growth Portfolio is committed to foreign investing, Growth
Portfolio and Aggressive Growth Portfolio may also invest without limit in
foreign equity and debt securities. The Portfolios 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
("PFICs"). These Portfolios 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 12 for a discussion of the risks
associated with foreign investing and derivatives.

The following questions are designed to help you better understand an investment
in Growth Portfolio, Aggressive Growth Portfolio or Worldwide Growth Portfolio.

How are common stocks selected?
Each of these Portfolios invests substantially all of its assets in common
stocks to the extent its portfolio manager believes that the relevant market
environment favors profitable investing in those securities. Portfolio managers
generally take a "bottom up" approach to building their portfolios. In other
words, they seek to identify individual companies with earnings growth potential
that may not be recognized by the market at large. Although themes may emerge in
any Portfolio, securities are generally selected without regard to any defined
industry sector or other similarly defined selection procedure. Realization of
income is not a significant investment consideration. Any income realized on
these Portfolios' investments will be incidental to its objective.
- --------------------------------------------------------------------------------
Are the same criteria used to select foreign securities?
Generally, yes. Portfolio managers seek companies that meet their 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 12.
- --------------------------------------------------------------------------------
What is the main risk of investing in a common stock fund?
The fundamental risk associated with any common stock fund is the risk that the
value of the stocks it holds might decrease. Stock values may fluctuate in
response to the activities of an individual company or in response to general
market and economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term risks than other
investment choices. Smaller or newer issuers are more likely to realize more
substantial growth as well as suffer more significant losses than larger or more
established issuers. Investments in such companies can be both more volatile and
more speculative. See "Additional Risk Factors" on page 12.
- --------------------------------------------------------------------------------
What is meant by "market capitalization"?
Market capitalization is the most commonly used measure of the size and value of
a company. It is computed by multiplying the current market price of a share of
the company's stock by the total number of its shares outstanding. As noted
previously, market capitalization is an important investment criteria for
Aggressive Growth Portfolio which may invest in small to medium sized companies
to a greater degree. Although Growth Portfolio and Worldwide Growth Portfolio do
not emphasize companies of any particular size, Portfolios with a larger asset
base are more likely to invest in larger, more-established issuers.
- --------------------------------------------------------------------------------
How does a diversified portfolio differ from a nondiversified portfolio?
Diversification is a means of reducing risk by investing a Portfolio's assets in
a broad range of stocks or other securities. A "nondiversified" portfolio has
the ability to take larger positions in a smaller number of issuers. Because the
appreciation or depreciation of a single stock may have a greater impact on the
NAV of a nondiversified portfolio, its share price can be expected to fluctuate
more than a comparable diversified portfolio. Aggressive Growth Portfolio is a
nondiversified portfolio.
- --------------------------------------------------------------------------------
How do these Portfolios try to reduce risk?
Diversification of a Portfolio's assets reduces the effect of any single holding
on its overall portfolio value. A Portfolio may also use futures, options and
other derivative instruments to protect its portfolio from movements in
securities' prices and interest rates. The Portfolios may use a variety of
currency hedging techniques, including forward currency contracts, to manage
exchange rate risk when investing directly in foreign markets. See "Additional
Risk Factors" on page 12. In addition, to the extent that a Portfolio holds a
larger cash position, it may not participate in market declines to the same
extent as if the Portfolio remained more fully invested in common stocks.

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Balanced Portfolio is designed for investors who primarily seek growth of
capital with a degree of emphasis on income. It is not designed for investors
who desire a consistent level of income.

COMBINATION PORTFOLIO

Investment Objective:.................Growth of Capital; Some Emphasis on Income
Primary Holdings:..................Common Stocks and Income-Producing Securities
Shareholder's Investment Horizon:......................................Long-Term

Balanced Portfolio

The investment objective of this Portfolio is long-term capital growth,
consistent with preservation of capital and balanced by current income. It is a
diversified Portfolio that, under normal circumstances, pursues its objective by
investing 40-60% of its assets in securities selected primarily for their growth
potential and 40-60% of its assets in securities selected primarily for their
income potential. This Portfolio normally invests at least 25% of its assets in
fixed-income senior securities, which include debt securities and preferred
stocks.

TYPES OF INVESTMENTS

Balanced Portfolio may invest in the types of investments previously described
on pages 6 and 7. The Portfolio may also invest in the types of income-producing
securities described below for Flexible Income Portfolio except that its
investments in high-yield/high-risk securities will not exceed 35% of net assets
and investments in mortgage- and asset-backed securities will not exceed 25% of
assets.

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

How are assets allocated between the growth and income components of Balanced
Portfolio?
Balanced Portfolio may invest in a combination of common stocks, preferred
stocks, convertible securities, debt securities and other fixed-income
securities. Balanced Portfolio may shift assets between the growth and income
components of its portfolio based on its 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 types of securities make up the growth component of Balanced Portfolio?
The growth component of Balanced Portfolio is expected to consist primarily of
common stocks. The selection criteria for common stocks are described on page 7.
Because income is a part of the investment objective of Balanced Portfolio, the
portfolio manager may consider dividend-paying characteristics to a greater
degree in selecting equity securities. Balanced 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 Balanced Portfolio?
The income component of Balanced 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 Balanced
Portfolio if they currently pay dividends or a portfolio manager believes they
have potential for either increasing their dividends or commencing dividends, if
none are currently paid. Investors in the Balanced Portfolio should keep in mind
that the Portfolio is not designed to produce a consistent level of income.
- --------------------------------------------------------------------------------
Flexible Income Portfolio and Short-Term Bond Portfolio are designed for those
investors who primarily seek current income.

FIXED-INCOME PORTFOLIOS

Investment Objective:
Flexible Income Portfolio.........................................Total Return
Short-Term Bond Portfolio...............................................Income
Primary Holdings:....................................Income-Producing Securities
Shareholder's Investment Horizon:
Flexible Income Portfolio...........................Intermediate- to Long-Term
Short-Term Bond Portfolio..........................Short- to Intermediate-Term

Flexible Income Portfolio

The investment objective of this Portfolio is to obtain maximum total return,
consistent with preservation of capital. The Portfolio pursues its objective
primarily through investments in income-producing securities. Total return is
expected to result from a combination of current income and capital
appreciation, although income will normally be the dominant component of total
return. As a fundamental policy, this Portfolio will invest at least 80% of its
assets in income-producing securities.

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<PAGE>

Flexible Income Portfolio may invest in a wide variety of income-producing
securities including corporate bonds and notes, government securities,
indexed/structured securities, preferred stock, income-producing common stocks,
debt securities that are convertible or exchangeable into equity securities, and
debt securities that carry with them the right to acquire equity securities as
evidenced by warrants attached to or acquired with the securities. The Portfolio
may invest to a lesser degree in common stocks, other equity securities or debt
securities that are not currently paying dividends or interest. The Portfolio
may purchase securities of any maturity and quality and the average maturity and
quality of its portfolio may vary substantially.

Flexible Income Portfolio may invest without limit in foreign securities,
including those of corporate and government issuers. The Portfolio may invest
without limit in high-yield/ high-risk securities and may have substantial
holdings of such securities. The Portfolio may invest without limit in mortgage-
and asset-backed securities and up to 10% of its assets in zero coupon,
pay-in-kind and step coupon securities. The risks of foreign securities and
high-yield securities are described under "Additional Risk Factors" on page 12.

The Portfolio may purchase defaulted debt securities if, in the opinion of Janus
Capital it appears likely that the issuer may resume interest payments or other
advantageous developments appear likely in the near term. Defaulted debt
securities may be illiquid and subject to the Portfolio's limit on illiquid
investments.

Short-Term Bond Portfolio

The investment objective of this Portfolio is to seek as high a level of current
income as is consistent with preservation of capital. The Portfolio pursues its
objective by investing primarily in short- and intermediate-term fixed-income
securities. Under normal circumstances, it is expected that this Portfolio's
dollar-weighted average portfolio effective maturity will not exceed three
years.

Effective maturity is the weighted average period over which a security's
principal is expected to be paid, and differs from stated maturity in that it
estimates the effect of expected principal prepayments and call provisions.
Targeting effective maturity provides additional flexibility in portfolio
management but, all else being equal, could result in higher volatility than a
fund targeting a stated maturity or maturity range. See the question and answer
section below for a more detailed discussion of the Portfolio's maturity policy.

Short-Term Bond Portfolio will normally invest at least 65% of its assets in
debt securities. Subject to this policy and subject to its maturity limits, the
Portfolio may invest in the types of securities previously described under
Flexible Income Portfolio except that the Portfolio will invest less than 35% of
its net assets in high-yield/ high-risk securities and its investments in
mortgage- and asset-backed securities will not exceed 25% of assets.

TYPES OF INVESTMENTS

Each Portfolio may purchase securities on a when-issued, delayed delivery or
forward commitment basis. In addition, it 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 12. When its portfolio
manager is unable to locate investment opportunities with favorable risk/reward
characteristics, the cash position of Flexible Income Portfolio may increase and
the Portfolio may have substantial holdings of cash or cash equivalent
short-term obligations. See "General Portfolio Policies" on page 10.

The following questions are designed to help you better understand an investment
in Flexible Income Portfolio or Short-Term Bond Portfolio.

How do interest rates affect the value of my investment?
A fundamental risk associated with any fund that invests in fixed-income
securities (e.g., a bond fund) is the risk that the value of the securities it
holds will rise or fall as interest rates change. Generally, a fixed-income
security will increase in value when interest rates fall and decrease in value
when interest rates rise. Longer-term securities are generally more sensitive to
interest rate changes than shorter-term securities, but they generally offer
higher yields to compensate investors for the associated risks. A bond fund's
average-weighted maturity and its duration are measures of how the portfolio may
react to interest rate changes. High-yield bond prices are generally less
directly responsive to rate changes than investment grade issues and may not
always follow this pattern.
- --------------------------------------------------------------------------------
What is meant by a Portfolio's "average-weighted effective maturity"?
The stated maturity of a bond is the date when the issuer must repay the bond's
entire principal value to an investor, such as a Portfolio. Some types of bonds,
such as mortgage-backed securities and securities with call provisions, may also
have an "effective maturity" that is shorter than the stated date. With respect
to GNMA securities and other mortgage-backed securities, effective maturity is
likely to be substantially less than the stated maturities of the mortgages in
the underlying pools. With respect to obligations with call provisions,
effective maturity is typically the next call date on which the obligation
reasonably may be expected to be called. Securities without prepayment or call
provisions generally have an effective maturity equal to their stated maturity.
Dollar-weighted effective maturity is calculated by averaging the effective
maturity of bonds held by a Portfolio with each effective maturity "weighted"
according to the percentage of net assets that it represents.

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<PAGE>

What is meant by a Portfolio's "duration"?
A bond's duration indicates the time it will take an investor to recoup his or
her investment. Unlike average maturity, duration reflects both principal and
interest payments. Generally, the higher the coupon rate on a bond, the lower
its duration will be. The duration of a bond fund is calculated by averaging the
duration of bonds held by a Portfolio with each duration "weighted" according to
the percentage of net assets that it represents. Because duration accounts for
interest payments, a Portfolio's duration is usually shorter than its average
maturity.
- --------------------------------------------------------------------------------
How do Flexible Income Portfolio and Short-Term Bond Portfolio manage interest
rate risk?
Each of these Portfolios may vary the average-weighted effective maturity of its
portfolio to reflect the portfolio manager's analysis of interest rate trends
and other factors. A Portfolio's average-weighted effective maturity will tend
to be shorter when its portfolio manager expects interest rates to rise and
longer when its portfolio manager expects interest rates to fall. A Portfolio
may also use futures, options and other derivatives to manage interest rate
risk. See "Additional Risk Factors" on page 12.
- --------------------------------------------------------------------------------
What is meant by "credit quality"?
Credit quality measures the likelihood that the issuer will meet its obligations
on a bond. One of the fundamental risks associated with all fixed-income funds
is credit risk, which is the risk that an issuer will be unable to make
principal and interest payments when due. U.S. government securities are
generally considered to be the safest type of investment in terms of credit
risk. Municipal obligations generally rank between U.S. government securities
and corporate debt securities in terms of credit safety. Corporate debt
securities, particularly those rated below investment grade, present the highest
credit risk.
- --------------------------------------------------------------------------------
How is credit quality measured?
Ratings published by nationally recognized rating agencies such as Standard &
Poor's Ratings Services ("Standard & Poor's") and Moody's Investors Services,
Inc. ("Moody's") are widely accepted measures of credit risk. The lower a bond
issue is rated by an agency, the more credit risk it is considered to represent.
Lower rated bonds generally pay higher yields to compensate investors for the
associated risk. Please refer to Appendix B for a description of rating
categories.
- --------------------------------------------------------------------------------
What is a high-yield/ high-risk security?
A high-yield security (also called a "junk" bond) is a debt security rated below
investment grade by major rating agencies (i.e., BB or lower by Standard &
Poor's or Ba or lower by Moody's) or an unrated bond of similar quality. It
presents greater risk of default (the failure to make timely interest and
principal payments) than higher quality bonds.
- --------------------------------------------------------------------------------
What risks do high-yield/ high-risk securities present?
High-yield securities are often considered to be more speculative and involve
greater risk of default or price changes due to changes in economic and industry
conditions and the issuer's creditworthiness. Their market prices tend to
fluctuate more than higher quality securities as a result of changes in these
factors.

The default rate of lower quality debt securities is likely to be higher when
issuers have difficulty meeting projected goals or obtaining additional
financing. This could occur during economic recessions or periods of high
interest rates. In addition, there may be a smaller market for lower quality
securities than for higher quality securities, making lower quality securities
more difficult to sell promptly at an acceptable price.

The junk bond market can experience sudden and sharp price swings. Because
Flexible Income Portfolio may invest a significant portion of its portfolio in
high-yield/high-risk securities, investors in the Portfolio should be willing to
tolerate a corresponding increase in the risk of significant and sudden changes
in NAV.
- --------------------------------------------------------------------------------
Primary Interest Rate
Investment Type Credit Risk Risk
- --------------------------------------------------------------------------------
Flexible Income Portfolio Corporate Bonds High High
- --------------------------------------------------------------------------------
Short-Term Bond Portfolio Corporate Bonds Moderate Low
- --------------------------------------------------------------------------------

How do Flexible Income Portfolio and Short-Term Bond Portfolio differ from each
other?
The chart above shows that the Portfolios differ substantially in terms of the
type, credit quality and interest rate risk of the securities in which they
invest.

GENERAL PORTFOLIO POLICIES

Unless otherwise stated, each of the following policies applies to all of the
Portfolios. The percentage limitations included in these policies and elsewhere
in this Prospectus apply only at the time of purchase of the security. For
example, if a 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, a Portfolio's investments may be hedged to a
greater

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<PAGE>

degree and/or its cash or similar investments may increase. In other words, the
Portfolios do 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. Partly because the portfolio managers act independently of each
other, the cash positions of the Portfolios may vary significantly. Larger
hedged positions and/or larger cash positions may serve as a means of preserving
capital in unfavorable market conditions.

Securities that the Portfolios 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 Portfolios 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. All of the Portfolios (except
Aggressive Growth Portfolio) qualify as diversified funds under the 1940 Act.
The Portfolios are subject to the following diversification requirements:

o As a fundamental policy, no Portfolio may own more than 10% of the
outstanding voting shares of any issuer.

o As a fundamental policy, with respect to 50% of the total assets of
Aggressive Growth Portfolio and 75% of the total assets of the other
Portfolios, no Portfolio will 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 a Portfolio's holdings of that issuer to amount
to more than 5% of that Portfolio's total assets.

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

o Aggressive Growth Portfolio reserves the right to become a diversified
portfolio by limiting the investments in which more than 5% of its total
net assets are invested.

Internal Revenue Service (IRS) Limitations
In addition to the diversification requirements stated above, each 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, no Portfolio will invest 25% or more of its total
assets in any particular industry (excluding U.S. government securities).

Portfolio Turnover
Each 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, 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 initial investment
decision. Changes are made in a Portfolio whenever its portfolio manager
believes such changes are desirable. Portfolio turnover rates are generally not
a factor in making buy and sell decisions.

To a limited extent, a Portfolio may purchase securities in anticipation of
relatively short-term price gains. A Portfolio may also sell one security and
simultaneously purchase the same or 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 result in taxable capital
gains. Certain tax rules may restrict the Portfolios' ability to engage in
short-term trading if a security has been held for less than three months.

Illiquid Investments
Each 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 other securities, including privately placed commercial
paper and municipal lease obligations.

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

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

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

o As a fundamental policy, each 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.

Each Portfolio intends to seek permission from the SEC to borrow money from or
lend money to each other and 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 percentage limits. There is no assurance that such
permission will be granted.

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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 many foreign securities are traded primarily in foreign markets. The
risks of foreign investing include:

o Currency Risk. A 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 a Portfolio holds a foreign security, its
value will be affected by the value of the local currency relative to the
U.S. dollar. When a 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
a Portfolio's assets from that country. The Portfolios may invest in
emerging market countries. Emerging market countries involve greater risk
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.

Investments in Smaller Companies

Smaller or newer companies may suffer more significant losses as well as realize
more substantial growth than larger or more established issuers.

Smaller or newer companies may lack depth of management, they may be unable to
generate funds necessary for growth or potential development, or they may be
developing or marketing new products or services for which markets are not yet
established and may never become established. In addition, such companies may be
insignificant factors in their industries and may be subject to intense
competition from larger or more established companies. Securities of smaller or
newer companies may have more limited trading markets than the markets for
securities of larger or more established issuers, and may be subject to wider
price fluctuations. Investments in such companies tend to be more volatile and
somewhat more speculative.

Futures, Options and Other Derivative Instruments
Each 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 Portfolios intend to use most
derivative instruments primarily to hedge against potential adverse movements in
securities prices, foreign currency markets or interest rates. To a limited
extent, the Portfolios may also use derivative instruments for non-hedging
purposes such as seeking to increase a 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 Portfolios 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 direction that a 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;

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<PAGE>

o leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than a 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 a
Portfolio worse off than if it had not entered into the position.

Although the Portfolios believe the use of derivative instruments will benefit
the Portfolios, a Portfolio's performance could be worse than if the Portfolio
had not used such instruments if the portfolio manager's judgement proves
incorrect.

When a Portfolio invests in a derivative instrument, it may be required to
segregate cash and other liquid assets or certain 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
and Moody's).

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
rated securities. Issuers of high-yield/high-risk 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/high-risk securities are 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, a 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 higher
quality 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 Portfolios must recognize
a computed amount of interest income and pay dividends to shareholders even
though it has received no cash. In some instances, the Portfolios may have to
sell securities to have sufficient cash to pay the dividends.

Please refer to Appendix B for a description of bond rating categories.

Short Sales
Each Portfolio may engage in "short sales against the box." This technique
involves selling either a security that a Portfolio owns, or a security
equivalent in kind and amount that a Portfolio has the right to obtain, for
delivery at a specified date in the future. A 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.

Special Situations
Each Portfolio may invest in "special situations" from time to time. A special
situation arises when, in the opinion of a Portfolio's 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.

See Appendix A for risks associated with certain other investments.

13
<PAGE>

Management of the Portfolios

TRUSTEES

The Trustees oversee the business affairs of the Trust and are responsible for
major decisions relating to each Portfolio's investment objective and policies.
The Trustees delegate the day-to-day management of the Portfolios to the
officers of the Trust and meet at least quarterly to review the Portfolios'
investment policies, performance, expenses and other business affairs.

INVESTMENT ADVISER

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

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 each
Portfolio's investments. Janus Capital also furnishes certain administrative,
compliance and accounting services for the Portfolios, and may be reimbursed by
the Portfolios 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 Portfolios and pays the salaries, fees and expenses of all
Portfolio officers and those Trustees who are affiliated with Janus Capital.

Participating insurance companies that purchase the Portfolios' Shares may
perform certain administrative services relating to the Portfolios and Janus
Capital or the Portfolios may pay those companies for such services.

INVESTMENT PERSONNEL

PORTFOLIO MANAGERS

James P. Craig, III is Chief Investment Officer of Janus Capital. He is also
Executive Vice President and portfolio manager of Growth Portfolio, which he has
managed since 1994. He has managed Janus Fund since 1986 and has co-managed
Janus Venture Fund since February 1997. Mr. Craig previously managed Janus
Venture Fund from its inception to December 1993, Janus Balanced Fund from
December 1993 through December 1995, and Balanced Portfolio from September 1993
through April 1996. He holds a Bachelor of Arts in Business from the University
of Alabama and a Master of Arts in Finance from the Wharton School of the
University of Pennsylvania.
- --------------------------------------------------------------------------------
James P. Goff is Executive Vice President and portfolio manager of Aggressive
Growth Portfolio. Mr. Goff joined Janus Capital in 1988 and has managed Janus
Enterprise Fund since its inception. Mr. Goff co-managed Janus Venture Fund from
December 1993 to February 1997. He holds a Bachelor of Arts in Economics from
Yale University and is a Chartered Financial Analyst.
- --------------------------------------------------------------------------------
Helen Young Hayes is Executive Vice President and portfolio manager of Worldwide
Growth Portfolio. Ms. Hayes joined Janus Capital in 1987 and has managed or
co-managed Janus Worldwide Fund, Janus Overseas Fund and International Growth
Portfolio since their inceptions. She holds a Bachelor of Arts in Economics from
Yale University and is a Chartered Financial Analyst.
- --------------------------------------------------------------------------------
Blaine P. Rollins is Executive Vice President and portfolio manager of Balanced
Portfolio, which he has managed since May 1996 and assistant portfolio manager
of Growth Portfolio. Mr. Rollins joined Janus Capital in 1990 and has managed
both Janus Balanced Fund and Janus Equity Income Fund since January 1996. He has
been an assistant portfolio manager of Janus Fund since January 1995. He gained
experience as a fixed-income trader and equity research analyst prior to
assuming management responsibility for the Portfolio. He holds a Bachelor of
Science in Finance from the University of Colorado and is a Chartered Financial
Analyst.
- --------------------------------------------------------------------------------
Sandy R. Rufenacht is Executive Vice President and portfolio manager of
Short-Term Bond Portfolio, which he has managed since May 1996. He is also the
co-manager of Flexible Income Portfolio and High-Yield Portfolio which he has
co-managed since October 24, 1996 and January 13, 1997, respectively. Mr.
Rufenacht joined Janus Capital in 1990 and has managed Janus Short-Term Bond
Fund since January 1996. He is also the co-manager of Janus Flexible Income Fund
and Janus High-Yield Fund. He holds a Bachelor of Arts in Business from the
University of Northern Colorado.

14
<PAGE>

Ronald V. Speaker is Executive Vice President and co-portfolio manager of
Flexible Income Portfolio and High-Yield Portfolio, each of which he began
managing at their inception. He managed Short-Term Bond Portfolio from its
inception through April 1996 and also co-manages Janus High-Yield Fund and the
High-Yield Portfolio of the Trust. Mr. Speaker joined Janus Capital in 1986. He
has managed Janus Flexible Income Fund since December 1991 and previously
managed both Janus Short-Term Bond Fund and Janus Federal Tax-Exempt Fund from
inception through December 1995. He holds a Bachelor of Arts in Finance from the
University of Colorado and is a Chartered Financial Analyst.

In January 1997, Mr. Speaker settled an SEC administrative action involving two
personal trades made by him in January of 1993. Without admitting or denying the
allegations, Mr. Speaker agreed to civil money penalty, disgorgement, and
interest payments totaling $37,199 and to a 90-day suspension ending on or about
April 26, 1997.

ASSISTANT PORTFOLIO MANAGERS

Laurence Chang is assistant portfolio manager of Worldwide Growth Portfolio. He
is also assistant portfolio manager of International Growth Portfolio, Janus
Overseas Fund and Janus Worldwide Fund. He received an undergraduate degree with
honors in religion and philosophy from Dartmouth College and a Master's Degree
in Political Science from Stanford University. He is a Chartered Financial
Analyst.
- --------------------------------------------------------------------------------
David Decker is an assistant portfolio manager of the Growth Portfolio. He is
also assistant portfolio manager of Janus Fund. He is Executive Vice President
and portfolio manager of Janus Special Situations Fund. Mr. Decker received a
Masters of Business Administration in Finance from the Fuqua School of Business
at Duke University and a Bachelor's Degree in Economics and Political Science
from Tufts University. He is a Chartered Financial Analyst.

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 Portfolios or
Janus Capital's other advisory clients. See the SAI for more detailed
information.

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<PAGE>

BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS

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

<TABLE>
<CAPTION>
Average Daily Net Annual Rate Expense Limit
Fee Schedule Assets of Portfolio Percentage (%) Percentage (%)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Portfolio First $ 30 Million 1.00* N/A
Aggressive Growth Portfolio Next $270 Million .75
Worldwide Growth Portfolio and Next $200 Million .70
Balanced Portfolio Over $500 Million .65
- --------------------------------------------------------------------------------------------------------
Flexible Income Portfolio First $300 Million .65 1.00
Over $300 Million .55
Short-Term Bond Portfolio First $300 Million .65 .65
Over $300 Million .55
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Janus Capital has agreed to reduce each Portfolio's advisory fee to the
extent that such fee exceeds the effective rate of the Janus retail fund
corresponding to such Portfolio. Janus Capital may terminate this fee
reduction or any of the expense limitations set forth above 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 rates
of Janus Fund, Janus Enterprise Fund, Janus Worldwide Fund and Janus
Balanced Fund were .65%, .73%, .66% and .78%, respectively, for the quarter
ended March 31, 1997.

Differences in the actual management fees incurred by the Portfolios are due
primarily to variances in the asset sizes of the corresponding retail funds. As
asset size increases, the annual rate of the management fee rate declines in
accordance with the above schedule. In addition, the Shares of each 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.

PORTFOLIO TRANSACTIONS

Purchases and sales of securities on behalf of each 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 a 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 Portfolios 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 a Portfolio i) to the Portfolio or ii) to other persons on behalf of the
Portfolio for services provided to the Portfolio for which it would be obligated
to pay. The Trustees have authorized Janus Capital to place portfolio
transactions on an agency basis with a broker-dealer affiliated with Janus
Capital. When transactions for a 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.

OTHER SERVICE PROVIDERS

The following parties provide the Portfolios 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.

16
<PAGE>

OTHER INFORMATION

Organization
The Trust is a "mutual fund" that was organized as a Delaware business trust
on May 20, 1993. A mutual fund is an investment vehicle that pools money from
numerous investors and invests the money to achieve a specified objective. The
Trust consists of eleven separate series, six of which are offered by this
Prospectus.

Each Portfolio currently offers two classes of Shares, one of which, the
Institutional Shares, are offered pursuant to this prospectus and 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 of each Portfolio are offered by 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 provided to plan participants. Because the
expenses of each class may differ, the performance of each class is expected to
differ. If you would like additional information about the Retirement Shares,
please call 1-800-525-0020.

Shareholder Meetings and Voting Rights
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 a 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.

An insurance company issuing a variable contract invested in Shares of a
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
Each Portfolio's 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. Retirement Shares of the
Portfolios (offered through a separate prospectus) are available to certain
participant directed qualified plans. Although the Portfolios currently do not
anticipate any disadvantages to policy owners arising out of the fact that each
Portfolio offers its shares to such entities, there is a possibility that a
material conflict may arise. The Trustees monitor events in order to identify
any anticipated disadvantages or material irreconcilable conflicts 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 one or more Portfolios or
substitute shares of another Portfolio. If this occurs, a Portfolio may be
forced to sell securities at disadvantageous prices. In addition, the Trustees
may refuse to sell shares of any Portfolio to any separate account or may
suspend or terminate the offering of a Portfolio's shares if such action is
required by law or regulatory authority or is in the best interests of that
Portfolio's shareholders. It is possible that a qualified plan investing in the
Retirement Shares of the Portfolios 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 Portfolios 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 any Portfolio's investment objective
by investing all of that Portfolio's assets in another investment company having
the same investment objective and substantially the same investment policies and
restrictions as those applicable to that Portfolio. It is expected that any such
investment company would be managed by Janus Capital in substantially the same
manner as the existing Portfolio. The initial shareholder(s) of each Portfolio
voted to vest the authority to convert to a master/feeder structure in the sole
discretion of the Trustees. No further approval of the shareholders of the
Portfolios 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 a 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 Portfolios believes the Trustees will
not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will be materially reduced if this option is
implemented.

The Valuation of Shares
The NAV of the Shares of a 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 a market quotation is not readily
available, at their fair value determined in good faith under procedures
established by and under the supervision of the Trustees. Short-term instruments
maturing within 60 days are valued at amortized cost, which approximates market
value.

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<PAGE>

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

To avoid taxation of the Portfolios, the Internal Revenue Code requires each
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 each 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 a Portfolio will be
automatically reinvested into additional Shares of that Portfolio.

How Distributions Affect NAV
Distributions are paid to shareholders as of the record date of the distribution
of a Portfolio, regardless of how long the shares have been held. Dividends and
capital gains awaiting distribution are included in the daily NAV of a
Portfolio's Shares. The Share price of a Portfolio drops by the amount of the
distribution, net of any subsequent market fluctuations. As an example, assume
that on December 31, the Shares of Growth Portfolio declared a dividend in the
amount of $0.25 per share. If the price of Growth 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 Portfolios 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 a 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 59 1/2, 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 Portfolios
Dividends, interest and some capital gains received by the Portfolios on foreign
securities may give rise to withholding and other taxes imposed by foreign
countries. It is expected that foreign taxes paid by the Portfolios will be
treated as expenses of the Portfolios. Tax conventions between certain countries
and the United States may reduce or eliminate such taxes.

The Portfolios do not expect to pay any federal income or excise taxes because
they intend to meet certain requirements of the Internal Revenue Code. In
addition, each 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.

18
<PAGE>

Shareholder's Guide

INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIOS 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 OF VARIABLE INSURANCE CONTRACTS AND ON HOW TO SELECT
SPECIFIC PORTFOLIOS AS INVESTMENT OPTIONS FOR A CONTRACT OR A QUALIFIED PLAN.

PURCHASES

Purchases of 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
separate account or your plan documents for information on how to invest in the
Shares of each Portfolio.

All investments in the Portfolios are credited to a participating insurance
company's separate account or a qualified plan immediately upon acceptance of
the investment by a Portfolio. Investments will be processed at the NAV next
determined after an order is received and accepted by a Portfolio.

Each Portfolio reserves the right to reject any specific purchase order.
Purchase orders may be refused if, in Janus Capital's opinion, they are of a
size that would disrupt the management of a Portfolio. Any Portfolio may
discontinue sales of its shares if management believes that a substantial
further increase may adversely affect that Portfolio's ability to achieve its
investment objective. In such event, however, it is anticipated that existing
policy owners and plan participants invested in that Portfolio would be
permitted to continue to authorize investment in such Portfolio and to reinvest
any dividends or capital gains distributions.

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 any 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 Portfolios that they have authorized for
investment. Each report will show the investments owned by each Portfolio and
the market values thereof, as well as other information about the Portfolios and
their operations. The Trust's fiscal year ends December 31.

19
<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 Portfolios may invest. The
Portfolios may invest in these instruments to the extent permitted by their
investment objective and policies. The Portfolios are not limited by this
discussion and may invest in any other types of instruments not precluded by the
policies discussed elsewhere in this Prospectus. Please refer to the SAI for a
more detailed discussion of certain instruments.

I. EQUITY AND DEBT SECURITIES

Bonds are debt securities issued by a company, municipality, government or
government agency. The issuer of a bond is required to pay the holder the amount
of the loan (or par value) 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 Portfolios 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 (e.g., BB or lower by Standard & Poor's and
Ba or lower by Moody's). Other terms commonly used to describe such securities
include "lower rated bonds," "noninvestment grade bonds" and "junk bonds."

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

Passive foreign investment companies (PFICs) are any foreign corporations which
generate certain amounts of passive income or hold certain amounts of assets for
the production of passive income. Passive income includes dividends, interest,
royalties, rents and annuities. Income tax regulations may require the
Portfolios 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 a 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, a 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 a 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 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 a 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 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

20
<PAGE>

changes in interest rates than interest-paying securities of comparable
maturity.

Tender option bonds are generally long-term securities that are coupled with an
option to tender the securities to a bank, broker-dealer or other financial
institution at periodic intervals and receive the face value of the bond. This
type of security is commonly used as a means of enhancing the security's
liquidity.

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

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

Warrants are securities, typically issued with preferred 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 Portfolios do not earn interest on such
securities until settlement and bear 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 securities.

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 Portfolios may enter into forward currency contracts to hedge against
declines in the value of non-dollar denominated securities or to reduce the
impact of currency appreciation on purchases of non-dollar denominated
securities. They may also enter into forward contracts to purchase or sell
securities or other financial indices.

Futures contracts are contracts that obligate the buyer to receive and the
seller to deliver an instrument or money at a specified price on a specified
date. The Portfolios 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
Portfolios 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. A 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).

Inverse floaters are debt instruments whose interest rate bears an inverse
relationship to the interest rate on another instrument or index. For example,
upon reset the interest rate payable on a security may go down when the
underlying index has risen. Certain inverse floaters may have an interest rate
reset mechanism that multiplies the effects of change in the underlying index.
Such mechanism may increase the volatility of the security's market value.

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

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Appendix B

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 are treated as noninvestment grade unless the portfolio
manager determines that such securities are the equivalent of investment
grade securities. Split rated securities may be treated as investment grade
so long as at least one major agency has rated the security as investment
grade.

SECURITIES HOLDINGS BY RATING CATEGORY
During the fiscal year ended December 31, 1996, the percentage of securities
holdings for the Flexible Income Portfolio by rating category based upon a
weighted monthly average was:

Bonds - S&P Rating Flexible Income Portfolio
AAA 12%
AA 0%
A 14%
BBB 13%
BB 16%
B 34%
CCC 0%
CC 0%
C 0%
Preferred Stock 1%
Cash and Options 10%
------------------------------------------------------------
TOTAL 100%
------------------------------------------------------------

No other Portfolio held 5% or more of its assets in bonds rated below investment
grade for the fiscal year ended December 31, 1996.

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