<PAGE>
JANUS ASPEN GROWTH PORTFOLIO Portfolio Manager, James P. Craig
Performance Review
The Janus Aspen Growth Portfolio gained 18.45% during the
year ended December 31, 1996, compared to a gain of 22.95% for
the S&P 500 Index. Both returns include reinvested dividends.
Though stocks were volatile for much of the year, returns
were substantial. The Portfolio was ahead of the S&P Index for
the first nine months of 1996, but fell behind in October. Softer
returns resulted from earnings misses at individual companies,
EDS (Electronic Data Systems) in particular. Also, as stocks
climbed in September (and many indexes set new records) it became
hard to find bargains, so I was content to let cash accumulate.
Large, high-quality growth stocks have fueled the Janus Aspen
Growth Portfolio's performance over the years, and they kept
returns competitive this year. The economy heated up in the first
half of the year and created uncertainty about the outlook for
inflation. The resulting market volatility made the consistent
earnings of established, fast-growing companies more attractive.
During the last six months of 1996 economic growth slowed,
however, and both inflation and interest rates remained low.
Stocks rallied into year end, pushed higher by investor demand
and a benevolent, low-interest rate environment.
Portfolio Profile 12/31/96 12/31/95
Equities 80.3% 80.9%
Foreign 14.4% 13.2%
Europe 12.0% 10.3%
Number of Stocks 124 85
Top Ten Equity Holdings 21.5% 27.8%
Cash & Fixed-Income Securities 19.7% 19.1%
Portfolio Themes
Themes that have dominated the Portfolio throughout the year
cut across industries, market sectors, and geographic regions.
They represent powerful long-term business trends. Outsourcing of
expensive and complex operations to outside specialists is one
such theme. Consolidation and restructuring in the banking
industry is another, as are stock repurchase programs. Wells
Fargo, for example, is buying back 5% to 6% of its stock every
year. Exciting product pipelines at many pharmaceutical companies
continue to provide opportunities in both the U.S. and Europe.
Finally, during the technology sell-off this summer I built
positions in several large technology companies, such as Cisco
Systems, that dominate specific markets and have more consistent
earnings streams than the rest of the technology sector.
<PAGE>
Stock Highlights
One of the more exciting stocks in the Portfolio is MFS
Communications, which is being acquired by WorldCom. Deregulation
has increased competition in the telecommunications industry.
With the acquisition of MFS, WorldCom should be able to
underprice the old monopolistic providers by offering customers
end-to-end long-distance and local telephone and internetworking
services over a modern global network.
London-based Barclays is one of the largest financial
services companies in the U.K., and is the largest issuer of
credit cards, a business that is still in its infancy in Britain.
In the past, Barclays was burdened by bad loans, but now is
controlling costs and increasing shareholder value by
repurchasing stock. Barclays is also branching out into the
higher-margin asset management business via its acquisition of
Wells Fargo Nikko Investment Advisors.
Associates First Capital, formerly Ford Motor Credit, went
public earlier this year and I have been an enthusiastic buyer.
Management is very conservative and opportunistic in taking
advantage of others mistakes in consumer and commercial
financing. Revenues and earnings should continue to grow ahead of
comparable financing companies.
German software developer SAP was sold at a profit. SAP's
growth rate began to slow from a very robust 40%. Longtime
holding EDS experienced an earnings shortfall that took everyone
by surprise. The stock was sold at a small loss.
The Current Outlook
With stock prices up, there may not be much room for
additional gains unless interest rates decline further. The
bottom line is that stocks are ahead of earnings growth, at least
in the short run. If the economy continues to grow at 2.0% to
2.5% annually, rates could move lower. But if economic growth
heats up, rates are likely to rise and stock prices would be
unsustainable at current levels. Individual stock selection
becomes even more critical in this environment, but I believe
that is what we do best at Janus.
Thank you for your investment in Janus Aspen Growth
Portfolio.
2
<PAGE>
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Growth Portfolio and the S&P
500 Index. Janus Aspen Growth Portfolio is represented by a
solid black line. The S&P 500 Index is represented by a dashed
light gray line. The "y" axis reflects the value of the
investment. The "x" axis reflects the computation periods from
inception, September 13, 1993, through December 31, 1996. The
upper right quadrant reflects the ending value of the
hypothetical investment in Janus Aspen Growth Portfolio ($16,398)
as compared to the S&P 500 Index ($17,462). There is a legend in
the upper left quadrant of the graph which indicates Janus Aspen
Growth Portfolio's one-year and since inception (September 13,
1993) average annual total returns as 18.45% and 16.22%,
respectively.
*The Portfolio's inception date Source Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN GROWTH PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Common Stock - 79.3%
Aerospace and Defense - 4.3%
35,075 AlliedSignal, Inc. $ 2,350,025
50,100 Boeing Co. 5,329,388
15,000 Textron, Inc. 1,413,750
73,250 United Technologies Corp. 4,834,500
13,927,663
Automotive - Cars and Light Trucks - 0.6%
36,100 General Motors Corp. 2,012,575
Automotive - Truck Parts and Equipment - 1.0%
3
See Notes to Schedules of Investments
<PAGE>
88,275 Federal Mogul Corp. 1,942,050
21,900 Magna International, Inc. - Class A 1,220,925
3,162,975
Beverages - Non-Alcoholic - 0.8%
16,450 Coca-Cola Femsa S.A. (ADR) 474,994
18,175 Panamerican Beverages, Inc. - Class A 851,953
44,250 PepsiCo, Inc. 1,294,312
2,621,259
Broadcast Media - 0.7%
29,075 Heritage Media Corp. - Class A* 327,094
30,000 Univision Communications, Inc.* 1,110,000
30,000 Young Broadcasting Corp. - Class A* 877,500
2,314,594
Broadcast Services and Programming - 0.1%
17,625 Grupo Televisa S.A. de C.V. (GDR)* 451,641
Building - Heavy Construction - 0.8%
40,000 Fluor Corp. 2,510,000
Casino Hotels - 0.8%
47,100 Circus Circus Enterprises, Inc.* 1,619,062
45,425 Mirage Resorts, Inc.* 982,315
2,601,377
Chemicals - Diversified - 2.7%
77,270 BASF A.G.** 2,973,428
105,287 BOC Group PLC 1,577,199
39,825 Cytec Industries, Inc.* 1,617,890
63,600 Monsanto Co. 2,472,450
8,640,967
Chemicals - Specialty - 1.3%
132 Clariant A.G.** 56,402
35,975 Minerals Technologies, Inc. 1,474,975
27,650 Praxair, Inc. 1,275,356
50,000 Witco Corp. 1,525,000
4,331,733
Commercial Banks - 0.2%
3,096 Banco Popular Espanol S.A. 608,087
Commercial Services - 0.3%
347 SGS Societe Generale de Surveillance
Holdings S.A.** 851,327
Computer Services - 2.0%
76,900 Computer Sciences Corp.* 6,315,413
6,400 SunGard Data Systems, Inc.* 252,800
6,568,213
Computer Software - 0.4%
20,000 Cadence Design Systems, Inc.* 795,000
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See Notes to Schedules of Investments
<PAGE>
7,775 Microsoft Corp.* 642,409
1,437,409
Computers - Integrated Systems - 0.7%
15,000 Gulfstream Aerospace Corp.* 363,750
40,050 Parametric Technology Co.* 2,057,569
2,421,319
Computers - Mainframe - 1.4%
30,000 IBM Corp. 4,530,000
Computers - Micro - 0.3%
36,975 Sun Microsystems, Inc.* 949,798
Consumer Products - 0.9%
156,175 Gibson Greetings, Inc.* 3,064,934
Containers - Paper and Plastic - 0.5%
41,750 Sealed Air Corp.* 1,737,844
Cosmetics and Toiletries - 1.4%
16,650 Avon Products, Inc. 951,131
40,525 Colgate-Palmolive Co. 3,738,431
4,689,562
Cruise Lines - 0.3%
30,000 Carnival Corp. - Class A 990,000
Data Processing and Management - 2.8%
228,550 First Data Corp. 8,342,075
20,000 First USA Paymentech, Inc.* 677,500
9,019,575
Diversified Operations - 4.1%
60,000 Cognizant Corp. 1,980,000
10,247 Hays PLC 98,591
11,325 National Service Industries, Inc. 423,272
32,400 Raychem Corp. 2,596,050
386,169 Rentokil Initial PLC 2,915,544
30,000 Unilever N.V. (ADR)** 5,257,500
13,270,957
Drug Delivery Systems - 0.5%
63,650 Fresenius Medical Care A.G. (ADR)*,** 1,790,156
Electronic Components - 1.1%
26,325 Intel Corp. 3,446,930
Electronic Safety Devices - 0.5%
30,675 Pittway Corp. - Class A 1,641,112
5
See Notes to Schedules of Investments
<PAGE>
Finance - Consumer Loans - 2.4%
139,600 Associates First Capital Corp. 6,159,850
197,552 Provident Financial PLC 1,707,956
7,867,806
Finance - Other Services - 0.4%
45,000 Equifax, Inc. 1,378,125
Food - Canned - 0.9%
37,900 Campbell Soup Co. 3,041,475
Food - Confectionary - 0.2%
13,625 Wrigley (Wm.) Jr., Co. 766,406
Food - Retail - 0.5%
35,000 Safeway, Inc.* 1,496,250
Food Items - Wholesale - 0.5%
58,725 J.P. Foodservice, Inc.* 1,636,959
Hotels and Motels - 0.5%
42,000 Extended Stay America, Inc.* 845,250
40,875 La Quinta Inns, Inc. 781,734
1,626,984
Human Resources - 0.8%
78,250 Robert Half International, Inc.* 2,689,844
Instruments - Scientific - 1.1%
104,225 Dionex Corp.* 3,647,875
Insurance - Life and Health - 3.2%
33,625 AFLAC, Inc. 1,437,469
30,000 Protective Life Corp. 1,196,250
25,075 UICI* 814,938
95,525 UNUM Corp. 6,901,681
10,350,338
Insurance - Multi-Line - 0.4%
20,000 Allstate Corp. 1,157,500
Insurance - Property and Casualty - 0.4%
22,900 Mercury General Corp. 1,202,250
Linen Supply and Related Items - 0.3%
15,625 Cintas Corp. 917,969
Lottery Services - 0.5%
48,450 GTECH Holdings Corp.* 1,550,400
Machinery - Farm - 0.5%
6
See Notes to Schedules of Investments
<PAGE>
59,025 AGCO Corp. 1,689,591
Medical - Drugs - 7.1%
46,850 Bristol-Myers Squibb Co. 5,094,938
46,775 Eli Lilly & Co. 3,414,575
55,762 Glaxo Wellcome PLC 905,004
2,325 Glaxo Wellcome PLC (ADR) 73,819
82,800 Johnson & Johnson 4,119,300
47,625 Pfizer, Inc. 3,946,922
297 Roche Holding A.G.** 2,306,678
26,700 SmithKline Beecham PLC (ADR) - Class A 1,815,600
20,000 Warner-Lambert Co. 1,500,000
23,176,836
Medical - HMO - 1.0%
69,925 United Healthcare Corp. 3,146,625
Medical - Wholesale Drug Distributors - 1.4%
60,300 Cardinal Health, Inc. 3,512,475
18,450 McKesson Corp. 1,033,200
4,545,675
Medical Instruments - 0.7%
22,700 Medtronic, Inc. 1,543,600
14,075 St. Jude Medical, Inc.* 599,947
2,143,547
Medical Products - 1.0%
30,000 Baxter International, Inc. 1,230,000
31,350 Boston Scientific Corp.* 1,881,000
3,111,000
Metal - Aluminum - 0.2%
10,000 Reynolds Metals Co. 563,750
Money Center Banks - 6.7%
158,525 Bank of New York Co., Inc. 5,350,219
29,150 BankAmerica Corp. 2,907,713
374,811 Barclays PLC 6,429,598
62,025 Citicorp 6,388,575
18,159 ING Groep** 653,716
21,729,821
Multimedia - 0.3%
2,950 Meredith Corp. 155,613
10,000 Walt Disney Co. (The) 696,250
851,863
Networking Products - 0.9%
32,900 Cisco Systems, Inc.* 2,093,263
28,050 Xylan Corp.* 792,413
7
See Notes to Schedules of Investments
<PAGE>
2,885,676
Non-Hazardous Waste Disposal - 0.3%
32,725 WMX Technologies, Inc 1,067,653
Office Automation and Equipment - 2.4%
44,875 Danka Business Systems PLC (ADR) 1,587,453
21,771 Oce-Van Der Grinten N.V.** 2,363,838
75,350 Xerox Corp. 3,965,294
7,916,585
Office Supplies - 1.8%
108,950 Alco Standard Corp. 5,624,544
10,000 Harland (John H.) Co. 330,000
5,954,544
Oil Companies - Exploration and Production - 0.5%
32,875 Triton Energy, Ltd.* 1,594,438
Oil Companies - Integrated - 0.2%
12,525 UNOCAL Corp. 508,828
Optical Supplies - 0.1%
5,975 Luxottica Group S.p.A. (ADR) 310,700
Pharmacy Services - 0.3%
32,750 Omnicare, Inc. 1,052,094
Publishing - Books - 1.1%
26,469 Wolters Kluwer N.V.*,** 3,515,821
Retail - Major Department Stores - 0.2%
26,000 Credit Saison Co., Ltd. 582,022
Savings/Loan/Thrifts - 0.3%
8,112 Downey Financial Corp. 159,208
21,800 Long Island Bancorp, Inc. 763,000
922,208
Super-Regional Banks - 3.3%
39,975 Wells Fargo & Co. 10,783,255
Telecommunication Equipment - 1.0%
41,250 ECI Telecommunications Limited Designs 876,563
48,300 Telfonaktiebolaget L.M. Ericsson
(ADR) - Class B 1,458,056
20,925 Lucent Technologies, Inc. 967,781
3,302,400
Telecommunication Services - 3.5%
35,150 Cincinnati Bell, Inc. 2,166,119
8
See Notes to Schedules of Investments
<PAGE>
58,900 McLeod, Inc. - Class A* 1,501,950
141,775 MFS Communications Co., Inc.* 7,726,738
11,394,807
Telephone - Long Distance - 0.4%
50,000 WorldCom, Inc.* 1,303,125
Toys - 0.1%
9,225 Mattel, Inc. 255,994
Transportation - Railroad - 0.6%
24,343 Burlington Northern Santa Fe Corp. 2,102,626
Transportation - Trucking - 0.6%
227,025 Consolidated Freightways, Inc.* 2,014,847
Wireless Telecommunications - 0.2%
30,000 AirTouch Communications, Inc.* 757,500
Total Common Stock (cost $223,038,098) 258,106,019
Preferred Stock - 1.0%
Telecommunication Services - 1.0%
42,750 Telecomunicacoes Brasileiras S.A. (ADR)
(cost $3,151,925) 3,270,375
Short-Term Corporate Notes - 4.6%
AVCO Financial Service
$5,000,000 5.28%, 2/18/97 4,964,800
Coca-Cola Co.
10,000,000 5.28%, 1/10/97 9,986,800
Total Short-Term Corporate Notes
(amortized cost $14,951,600) 14,951,600
U.S. Government Agencies - 12.6%
Federal Home Loan Mortgage Corp.
$16,300,000 6.50%, 1/2/97 16,297,057
Federal National Mortgage Association
25,000,000 6.79%, 2/5/97 24,873,368
Total U.S. Government Agencies
(amortized cost $41,170,425) 41,170,425
Total Investments (total cost
9
See Notes to Schedules of Investments
<PAGE>
$282,312,048) - 97.5% 317,498,419
Cash, Receivables and Other Assets,
net of Liabilities - 2.5% 8,290,626
Net Assets - 100% $325,789,045
Summary of Investments by Country
December 31, 1996
Country % of Investment Securities Market Value
Brazil 1.0% $ 3,270,375
Canada 0.4% 1,220,925
Germany 1.5% 4,763,583
Israel 0.3% 876,563
Italy 0.1% 310,700
Japan 0.2% 582,022
Mexico 0.6% 1,778,588
Netherlands 3.7% 11,790,874
Spain 0.2% 608,087
Sweden 0.5% 1,458,056
Switzerland 1.0% 3,214,407
United Kingdom 5.4% 17,110,764
United States++ 85.1% 270,513,475
_______________________________________________________________
Total 100.0% $317,498,419
===============================================================
++Includes Short-Term Securities (67.5% excluding Short-Term
Securities)
Forward Currency Contracts
Open at December 31, 1996
Currency Unrealized
Currency Sold and Currency Value in Gain/(Loss)
Settlement Date Units Sold $ U.S.
Dutch Guilder 2/18/97 6,900,000 $4,006,736 $92,721
Dutch Guilder 3/13/97 1,000,000 581,565 1,577
German Deutschemark 3/4/97 710,000 462,842 (4,452)
German Deutschemark 5/30/97 450,000 295,082 3,366
Swiss Franc 3/4/97 1,450,000 1,088,425 2,949
Swiss Franc 3/18/97 1,600,000 1,202,736 16,776
---------- --------
$7,637,386 $112,937
========== ========
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See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
Portfolio Manager, James P. Goff
Performance Review
Janus Aspen Aggressive Growth Portfolio registered a gain of
7.95% for the year ended December 31, 1996, compared to a return
of 19.20% for the Standard & Poor's Mid Cap 400 Index and 22.95%
for the Standard and Poor's 500 Index. All returns include
reinvested dividends.
This year the benchmark index for the Portfolio was changed
from the S&P 500 Index to the S&P Mid Cap 400 Index, which better
reflects the stocks the Portfolio holds. Starting in fiscal 1997,
the S&P 500 Index will no longer be quoted as a benchmark.
Before discussing the year, a word about my investment
strategy. My approach is three-pronged: First, I look to invest
in situations where I see rapid growth. The weighted average
growth rate of the companies in the portfolio is 25%-30%. Rapidly
growing companies generally have higher risk characteristics.
Second, I try to find companies with low risk relative to their
rate of growth. To accomplish this, I focus on companies which
tend to dominate their niche markets and serve a customer base
with predictable demand. Third, my objective is to buy these
companies at prices that are low relative to their growth
prospects and franchise value. It is not easy to find rapidly
growing companies with low-risk businesses, and even more
difficult to find them selling at low valuations. Nevertheless, I
try to find companies which best fit these parameters.
This year Janus Aspen Aggressive Growth Portfolio lagged the
S&P 400 by a significant margin. I am very disappointed with this
performance. We failed to uncover shortfalls in sales at several
companies, including Exide, General Nutrition Centers, R.P.
Scherer, and Theratech. Matrix Pharmaceutical's new drug to treat
skin cancer performed below expectations at clinical trials, and
Medaphis had problems integrating recent acquisitions. All have
since been liquidated.
I also have not pursued momentum stocks in a momentum market.
Momentum investors buy companies with the highest rates of
earnings growth regardless of valuation or the quality of the
underlying business. I am not a momentum investor. For example,
this year we accumulated a major position in nuts and bolts
supplier Fastenal, which was flat over the course of the year.
Fastenal made a large investment in its sales force in an effort
to boost its long-term growth rate from 30% to 40%. This
investment depressed results in 1996, so earnings were up only
20%. But where momentum investors see deceleration, we see
acceleration. By mid-1997, sales and earnings growth should be
11
See Notes to Schedules of Investments
<PAGE>
greater than 40%, and we believe this rate of growth is
sustainable. We may have been too early in buying this position,
which did not contribute positively to our 1996 results, but I
believe we are well-positioned for stock price appreciation in
1997 and beyond.
My focus on pursuing "truth" instead of "profits" also
affected returns. This year the Portfolio contained several
wireless communications stocks which were a drag on performance,
even though all of these companies met or exceeded our
expectations for growth. The stocks, primarily rural cellular and
paging companies, were hurt by Wall Street's perception that the
entry of new cellular or personal communications services (PCS)
providers into the large metropolitan markets would create
cutthroat competition that would depress results for the entire
industry. Our thinking has been that our stocks would not be hurt
by, and could possibly benefit from, the entry of PCS providers.
Wall Street has painted wireless stocks with a broad brush and
assumed declining returns for all. While we have been right on
the fundamentals, we misjudged how negative the psychology toward
the group would become and lost money in a rising stock market.
Finally, the Portfolio was not exposed to some of the best
performing sectors of the market, including technology and
energy. Companies in these sectors usually do not meet my
standards of being proprietary or predictable businesses. An
additional factor has been the outperformance of large companies.
The best performing stocks in every market index in 1996 were the
largest companies. By focusing on small- and mid-cap stocks, and
avoiding technology and energy, we missed the "sweet spots" of
the market.
Portfolio Profile 12/31/96 12/31/95
Equities 94.0% 94.0%
Foreign 14.7% 4.6%
Number of Stocks 59 46
Top Ten Equity Holdings 45.8% 48.0%
Cash & Fixed-Income Securities 5.6% 5.6%
Stock Highlights
Three U.K.-based companies, PizzaExpress, Rentokil, and J.D.
Wetherspoon were good performers. PizzaExpress owns a chain of
sit-down pizza parlors and is one of the best-run restaurant
operations in the world. Its 25% operating margins are among the
highest in the business. Combine the company's margins with its
high-volume sales and you get a terrific return on investment.
Rentokil has built a large, profitable business by supplying
prosaic services such as plant maintenance, pest control, and
hygiene services. J.D. Wetherspoon owns and operates pubs
12
See Notes to Schedules of Investments
<PAGE>
throughout Britain. Hotel franchiser HFS and plumbing supplier
Barnett also posted strong returns.
Current Strategy and Outlook
Despite the disappointing performance of 1996, my strategy
remains unchanged. I believe time is on my side; I want to
benefit from high long-term growth that is predictable and
sustainable; and I want to buy growth at the right price. This is
not an easy combination to find, but I believe over the long term
this strategy will produce index-beating performance. Going
forward, I will redouble my efforts to select good businesses
with strong managements and to reduce our risk of disappointments
through careful research.
Thank you for your continued investment in Janus Aspen
Aggressive Growth Portfolio.
13
See Notes to Schedules of Investments
<PAGE>
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Aggressive Growth Portfolio,
the S&P 500 Index and the S&P 400 Index. Janus Aspen Aggressive
Growth Portfolio is represented by a solid black line. The S&P
500 Index is represented by a dashed dark gray line. The S&P 400
Index is represented by a dashed light gray line. The "y" axis
reflects the value of the investment. The "x" axis reflects the
computation periods from inception, September 13, 1993, through
December 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Aspen Aggressive
Growth Portfolio ($18,899) as compared to the S&P 500 Index
($17,462) and S&P 400 Index ($15,392). There is a legend in the
upper left quadrant of the graph which indicates Janus Aspen
Aggressive Growth Portfolio's one-year and since inception
(September 13, 1993) average annual total returns as 7.95% and
21.33%, respectively.
*The Portfolio's inception date Source-Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Common Stock - 94.0%
Auto Parts - Retail and Wholesale - 1.3%
118,325 APS Holding Corp. - Class A* $ 1,834,038
102,500 O'Reilly Automotive, Inc.* 3,280,000
5,114,038
Broadcast Media - 0.9%
92,250 Univision Communications, Inc.* 3,413,250
14
See Notes to Schedules of Investments
<PAGE>
Building and Construction Products - 0.3%
76,225 Dayton Superior Corp.* 1,000,453
Building Products - Retail and Wholesale - 6.9%
578,525 Fastenal Co. 26,467,519
Cellular Telecommunications - 4.1%
227,725 CommNet Cellular, Inc.* 6,347,834
127,625 Millicom International Cellular S.A.* 4,099,953
455,646 PriCellular Corp. - Class A* 5,239,929
15,687,716
Chemicals - Specialty - 1.3%
121,325 Minerals Technologies, Inc. 4,974,325
Commercial Banks - 0.2%
11,225 Fifth Third Bancorp 705,070
675 First Empire State Corp. 194,400
899,470
Commercial Services - 4.1%
397,375 CUC International, Inc.* 9,437,656
121,950 Profit Recovery Group
International, Inc. (The)* 1,951,200
172,550 TeleTech Holdings, Inc.* 4,486,300
15,875,156
Computer Services - 0.9%
42,375 Paychex, Inc. 2,179,660
37,175 Safeguard Scientifics, Inc.* 1,180,306
3,359,966
Containers - Paper and Plastic - 1.9%
178,450 Sealed Air Corp.* 7,427,981
Data Processing and Management - 1.6%
103,550 Concord EFS, Inc.* 2,925,288
97,325 First USA Paymentech, Inc.* 3,296,884
6,222,172
Diversified Operations - 4.2%
2,136,238 Rentokil Initial PLC** 16,128,426
Drug Delivery Systems - 1.3%
120,375 DepoTech Corp.* 1,971,141
110,250 Fresenius Medical Care (ADR)* 3,100,781
5,071,922
Electric Products - 0.9%
72,925 Littelfuse, Inc.* 3,536,863
15
See Notes to Schedules of Investments
<PAGE>
Equipment Rental - 1.2%
250,525 Coinmach Laundry Corp.* 4,509,450
Film Processing - 0.7%
17,197 Grand Optical Photoservice 2,787,449
Finance - Consumer Loans - 0.6%
47,950 Associates First Capital Corp. 2,115,794
Finance - Investment Broker - 1.1%
126,250 Charles Schwab Corp. 4,040,000
Finance - Other Services - 3.8%
651,375 Insignia Financial Group,
Inc. - Class A* 14,655,938
Food Items - Wholesale - 0.5%
73,975 J.P. Foodservice, Inc. 2,062,053
Golf - 2.2%
277,400 Family Golf Centers, Inc.* 8,356,675
Hotels and Motels - 6.3%
134,050 Choice Hotels Holdings, Inc.* 2,362,631
82,750 Doubletree Corp.* 3,723,750
304,850 HFS, Inc.* 18,214,788
24,301,169
Human Resources - 0.3%
37,375 Robert Half International, Inc.* 1,284,766
Independent Power Producer - 2.0%
262,125 Trigen Energy Corp.* 7,536,094
Insurance - Life and Health - 1.4%
132,925 Protective Life Corp. 5,300,384
Medical - Drugs - 0.7%
29,425 Forest Laboratories, Inc.* 963,669
37,550 Teva Pharmaceutical
Industries, Ltd. (ADR) 1,886,888
2,850,557
Medical - Nursing Home - 1.5%
202,900 Sunrise Assisted Living, Inc.* 5,655,838
Medical Products - 1.0%
62,550 Boston Scientific Corp.* 3,753,000
Pharmacy Services - 0.9%
109,100 Omnicare, Inc. 3,504,838
16
See Notes to Schedules of Investments
<PAGE>
Resorts and Theme Parks - 1.0%
122,575 Premier Parks, Inc.* 3,937,722
Retail - Catalog Shopping - 1.1%
151,675 Barnett, Inc.* 4,133,144
Retail - Mail Order - 8.6%
411,550 Global DirectMail Corp.* 17,953,869
106,250 MSC Industrial Direct
Co., Inc. - Class A* 3,931,250
414,350 Viking Office Products, Inc.* 11,057,966
32,943,085
Retail - Pet Food and Supplies - 2.9%
413,750 Pet Food Warehouse, Inc.* 1,732,578
446,675 Petco Animal Supplies, Inc.* 9,268,506
11,001,084
Retail - Pubs - 5.2%
987,145 Wetherspoon (J.D.) PLC**,+ 19,941,916
Retail - Restaurants - 8.2%
360,830 Papa John's International, Inc.* 12,178,013
1,948,036 PizzaExpress PLC**,+ 17,592,324
91,800 Planet Hollywood International,
Inc. - Class A* 1,813,050
31,583,387
Retirement and Aged Care - 0.4%
121,325 Karrington Health, Inc.* 1,516,563
Telecommunication Services - 2.0%
15,850 Cincinnati Bell, Inc. 976,756
349,400 Omnipoint Corp.* 6,725,950
7,702,706
Transportation - Railroad - 3.7%
358,175 Wisconsin Central
Transportation Corp.* 14,192,684
Water Treatment Services - 1.9%
180,200 Culligan Water Technologies, Inc.* 7,298,100
Wireless Telecommunications - 4.9%
1,219,500 Paging Network, Inc.* 18,597,375
Total Common Stock (cost $303,592,890) 360,741,028
Short-Term Corporate Notes - 2.6%
$5,000,000 AVCO Financial Service
5.45%, 2/11/97 4,968,965
17
See Notes to Schedules of Investments
<PAGE>
5,000,000 Coca-Cola Co.
5.28%, 1/10/97 4,993,400
Total Short-Term Corporate Notes
(amortized cost $9,962,365) 9,962,365
U.S. Government Agency - 5.7%
Federal Home Loan Mortgage Corp.
21,900,000 6.50%, 1/2/97 (amortized cost
$21,896,046) 21,896,046
Warrants - 0.4%
32,850 Littelfuse, Inc. - exp. 12/31/01*
(cost $677,514) 1,297,575
Total Investments (total cost
$336,128,815) - 102.7% 393,897,014
Liabilities, net of Cash, Receivables
and Other Assets - (2.7%) (10,204,391)
Net Assets - 100% $383,692,623
Summary of Investments by Country
December 31, 1996
Country % of Investment Securities Market Value
France 0.7% $ 2,787,448
United Kingdom 13.6% 53,662,665
United States++ 85.7% 337,446,901
_______________________________________________________________
Total 100.0% $393,897,014
===============================================================
++Includes Short-Term Securities (79.6% excluding Short-Term
Securities)
Forward Currency Contracts
Open at December 31, 1996
Currency Unrealized
Currency Sold and Currency Value in Gain/(Loss)
Settlement Date Units Sold $ U.S.
British Pound 1/16/97 1,000,000 $1,711,500 ($151,500)
British Pound 1/24/97 3,200,000 5,475,520 (514,560)
British Pound 3/11/97 1,908,000 3,260,963 (123,925)
British Pound 5/27/97 4,500,000 7,672,950 (113,850)
----------- ----------
$18,120,933 ($903,835)
=========== ==========
18
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN INTERNATIONAL GROWTH PORTFOLIO
Portfolio Manager, Helen Young Hayes
Performance Review
Janus Aspen International Growth Portfolio appreciated 34.71%
during the year ended December 31, 1996, versus a gain of 6.05%
for the Morgan Stanley International EAFE Index (EAFE stands for
Europe, Australasia, and the Far East). Both returns include
reinvested net dividends.(1)
(1) Net dividends reinvested are the dividends that remain to be
reinvested after foreign tax obligations have been met. Such
obligations vary from country to country.
The Portfolio outperformed the EAFE Index by such a wide
margin because our research turned up some excellent individual
opportunities, many of which were off the beaten track.
Underfollowed stocks often present the greatest opportunities
because the future potential of their earnings is not yet
reflected in the price. When the stock is "discovered" by other
investors, gains can come quickly. We were not the first to get
there on every exceptional performer this year, but we got there
early on many of them.
The Year in Review
The performance of international markets was mixed in 1996.
Many European bourses hit new records, despite relatively slow
growth in the region. A strong U.S. dollar, which helped
exporters, ongoing regulatory reform, and more shareholder-
friendly corporate management had a positive impact on earnings
in a number of industries. But Europe still remains five to ten
years behind the U.S. in many areas and is burdened by high
unemployment. In the Far East, Japan's sluggish economy and
inability to effect economic reforms as well as slowing export
and economic growth in Southeast Asia hurt stocks. I am
cautiously optimistic about Latin America, which experienced an
economic rebound.
The Portfolio remained highly diversified and eclectic
throughout the year. But there were niche areas that helped
performance. One such area was outsourcing. Delphi Group and Hays
are contract suppliers of white-collar professional services,
from information technology to business management. Business
software was another niche area. Companies around the world are
striving to become more productive via increased investments in
information technology. Misys, Merkantildata, WM Data, and Axime
develop and implement software applications for this broad
market. High-end retailers form a third, smaller grouping.
19
<PAGE>
Wolford and Harvey Nichols are benefiting from a burgeoning
consumer demand for luxury goods.
Portfolio Profile 12/31/96 12/31/95
Equities 70.9% 96.8%
Foreign 70.8% 95.9%
Number of Stocks 183 73
Top Ten Equity Holdings 18.3% 34.9%
Cash & Fixed-Income Securities 29.1% 3.2%
Stock Highlights
A new management team at German-based Adidas has revamped the
company's product line to emphasize technical performance
athletic footwear. Adidas has already claimed significant market
share from the decline of Reebok. Adidas holds a strong position
in soccer clothing and footwear in Europe and Latin America, and
is beginning to make inroads into the women's athletic apparel
market as well.
Tomra is a Norwegian supplier of machines that collect
aluminum containers for recycling. Stationed primarily in
supermarkets, Tomra's machines provide consumers with instant
cash returns for their recyclable cans and are a much cheaper
alternative to curbside collection. Tomra has little competition
in Europe, where 50% to 60% of aluminum is currently recycled.
Norway boasts a 90%-plus aluminum can return rate. The company
also sees opportunities in Latin America and Asia.
Frontec is a Swedish producer of products for electronic
commerce. Frontec's products link companies and allow them to
purchase goods, place orders, and pay and bill customers
electronically. Frontec has been very successful in Scandinavia
and Europe and is now launching its products in the U.S.
London Clubs is a casino operator that is benefiting from the
gradual deregulation of U.K. gaming. The company has excellent
management, which intends to leverage its experience serving
foreign customers in London into selected international markets.
I took profits in German integrated business software
developer SAP, and reduced SGL Carbon, a German producer of
graphite electrodes, when both companies reached their valuation
targets. Italian medical instrument manufacturer Instrumentation
Laboratory was sold for a loss.
20
<PAGE>
Current Strategy and Outlook
The rapid growth of foreign economies continues to produce
excellent individual investment opportunities. Deregulation and
privatization are part of a positive trend toward increased
economic freedom and diversification overseas. Many foreign
companies are also becoming increasingly shareholder-friendly.
These trends should keep the wind at our back, and I expect our
research effort will continue to uncover a broad range of
attractive individual ideas.
Thank you for your continued investment in Janus Aspen
International Growth Portfolio.
21
<PAGE>
JANUS ASPEN INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO MANAGER, HELEN YOUNG HAYES
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen International Growth Portfolio
and the MCSI EAFE Index (Net). Janus Aspen International Growth
Portfolio is represented by a solid black line. The MCSI EAFE
Index (Net) is represented by a dashed light gray line. The "y"
axis reflects the value of the investment. The "x" axis reflects
the computation periods from inception, May 2, 1994, through
December 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Aspen International
Growth Portfolio ($16,126) as compared to the MCSI EAFE Index
(Net) ($11,781). There is a legend in the upper left quadrant of
the graph which indicates Janus Aspen International Growth
Portfolio's one-year and since inception (May 2, 1994) average
annual total returns as 34.71% and 19.62%, respectively.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN INTERNATIONAL GROWTH PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Common Stock - 69.5%
Apparel Manufacturers - 0.3%
1,450 Gucci Group N.V. $ 92,619
Appliances - Household - 0%
74 Moulinex S.A.*,** 1,704
Audio and Video Products - 0%
200 Sony Corp.** 13,120
22
<PAGE>
Automotive - Cars and Light Trucks - 0.5%
2,000 Honda Motor Co.** 57,217
231 Mahindra & Mahindra (GDR)+ 2,599
700 Tata Engineering and Locomotive Co., Ltd. 7,175
4,873 Tata Engineering and Locomotive Co.,
Ltd. (GDR) 49,949
1,000 Yamaha Motor Co., Ltd.** 8,989
125,929
Automotive - Medium and Heavy Duty Trucks - 0%
2,000 Isuzu Motors, Ltd.** 8,902
Automotive - Truck Parts and Equipment - 1.1%
74,543 LucasVarity PLC* 283,949
125 LucasVarity PLC (ADR)* 4,750
288,699
Brewery - 0%
1,075 Quilmes Industrial S.A. (ADR) 9,809
Broadcast Media - 0%
900 CanWest Global Communications Corp. 9,225
Broadcast Services and Programming - 0.3%
3,000 Groupe A.B.S.A. (ADR)*,** 43,125
1,725 Grupo Televisa S.A. de C.V. (GDR)* 44,203
87,328
Building - Construction Products - 0.2%
2,314 Cimpor-Cimentos de Portugal S.A. 49,801
55,000 HI Cement Corp. 18,222
68,023
Building - Heavy Construction - 0%
600 New World Infrastructure, Ltd.*, 1,753
Cable Television - 0.1%
2,275 TV Filme, Inc.* 29,006
Casino Hotels - 0.8%
98,112 Crown, Ltd.* 205,009
Casino Services - 1.4%
29,527 Aristocrat Leisure, Ltd. 76,712
59,851 London Clubs International PLC 311,493
388,205
23
<PAGE>
Cellular Telecommunications - 0.8%
3,500 Korea Mobile Telecommunications,
Inc. (GDR) 45,062
1,465 Millicom International Cellular S.A.* 47,063
1,287 Telecel-Comunicacaoes Pessoais, S.A.* 82,149
13,125 Telecom Italia Mobile S.p.A. 33,267
207,541
Chemicals - Diversified - 2.4%
8,815 BASF A.G.** 339,210
6,416 Hoechst A.G.** 302,787
641,997
Chemicals - Specialty - 0.9%
236 Clariant A.G.** 100,841
293 SGL Carbon A.G.**, 36,898
25,544 Victrex PLC 118,075
255,814
Commercial Banks - 0.9%
2,763 Banco Frances del Rio de la
Plata S.A. (ADR) 75,969
743 Credit Communal Holding/Dexia*,+ 67,782
80 Kookmin Bank (ADR)* 1,468
1,521 Nordbanken A.B.** 45,888
2,448 Sparbanken Sverige A.B. - Class A** 41,845
232,952
Commercial Services - 1.6%
18,855 BTG PLC 148,487
16,457 IBC Group PLC 83,960
85 SGS Societe Generale de Surveillance
Holdings S.A. - Class B** 208,538
440,985
Computer Services - 4.9%
1,148 Axime S.A.*,** 132,755
4,879 Cap Gemini Sogeti S.A.*,** 235,934
9,883 CMG PLC 143,000
15,559 Delphi Group PLC 197,114
6,740 Enator A.B.** 171,831
1,348 Enator A.B. Subscriptions Shares*,** 33,874
5,568 Frontec A.B. - Class B 95,990
2,989 Getronics N.V. 81,134
3,355 Misys PLC 63,813
746 Sligos S.A.** 97,770
904 WM-Data A.B. - Class B** 77,923
1,331,138
24
<PAGE>
Computer Software - 2.0%
17,204 Intentia International A.B. -
Class B*,**,+ 256,375
5,997 JBA Holdings PLC 54,928
2,512 Merkantildata A/S 46,088
3 NTT Data Communications Systems Corp.** 87,900
2,209 SEMA Group PLC 41,222
783 TT Tieto Oy - Class B** 64,815
551,328
Computers - Integrated Systems - 0.1%
325 Dassault Systemes S.A. (ADR)*,** 15,031
Data Processing and Management - 0.4%
7,875 Industri-Matematik International Corp.* 103,359
Diamonds and Precious Stones - 0%
295 De Beers Centenary A.G.** 8,454
Diversified Operations - 6.4%
1,564 Amer-Yhtymae Oy - Class A** 32,281
78 Barco N.V.* 13,469
50,019 Hays PLC 481,255
4,490 Huhtamaki Group - Series l** 209,736
1,775 Kinnevik A.B. - Class B** 48,753
3,126 Metra Oy - Class B** 173,867
94,293 Rentokil Initial PLC 711,905
700 South African Breweries, Ltd.**,+ 17,740
107 Sulzer A.G.** 61,679
1,750,685
Drug Delivery Systems - 1.9%
1,825 Elan Corp. PLC* 60,681
16,040 Fresenius Medical Care A.G. (ADR)** 451,125
511,806
Electric - Integrated - 0.9%
900 Centrais Electricas de
Santa Catarina S.A.*,**,+ 83,475
5,100 Mosenergo (ADR)+ 154,530
238,005
Electronic Components - 2.5%
21,491 Electrocomponents PLC $170,718
7,240 Philips Electronics N.V. 293,321
3,350 Philips Electronics N.V. (ADR) 134,000
1,566 Pricer A.B. - Class B*,** 38,437
1,000 UCAR International, Inc.* 37,625
674,101
25
<PAGE>
Engineering - Research and Development Services - 0.7%
7,000 Bouygues Offshore S.A. (ADR)*,** 90,125
577 VA Technologie A.G. 90,596
180,721
Entertainment - 0.2%
1,256 Endemol Entertainment Holdings B.V.*, 41,799
Film Processing - 0.1%
12 Fotolabo S.A.** 4,653
187 Grand Optical Photoservice** 30,311
34,964
Finance - Consumer Loans - 0.5%
14,392 Provident Financial PLC 124,428
Food - Catering - 0.1%
1,618 Compass Group PLC 17,174
Food - Dairy Products - 0.4%
481 Nutricia Verenidge Bedrijven N.V. 73,077
26,103 Parmalat Finanziaria S.p.A. 39,920
112,997
Food - Diversified - 0.3%
1,416 Raision Tehtaat** 88,294
Food - Retail - 0.7%
74,337 ASDA Group PLC 156,536
1,175 Santa Isabel S.A. 26,584
183,120
Footware and Related Apparel - 0.4%
1,323 Adidas A.G.** 114,222
Healthcare Safety Devices - 0.1%
7,250 London International Group PLC 20,480
Home Furnishings - 0.1%
7,000 Pagnossin S.p.A. 25,891
Hotels and Motels - 0.5%
81 Indian Hotels Co., Ltd.+ 2,050
7,300 Mandarin Oriental International, Ltd.* 10,147
7,000 Scandic Hotels A.B.*,**,+ 116,587
128,784
Human Resources - 0.9%
6,406 Michael Page Group PLC 45,513
26
<PAGE>
18,250 Select Appointments Holdings PLC (ADR)* 209,875
255,388
Industrial Automation and Robotics - 1.5%
14,637 Lagardere Groupe** 401,717
Investment Companies - 0.7%
13,396 Bure Investment A.B.** 158,528
558 Incentive A.B. - Class B** 40,354
198,882
Lasers - Systems and Components - 0.7%
15,325 Rofin-Sinar Technologies, Inc.*,** 180,069
Leisure and Recreation Services - 0%
34 Club Mediterranee S.A. 2,207
Machine Tools and Related Products - 0.1%
1,166 Sandvik A.B. - Class A** 31,345
Machinery - Construction and Mining - 0.7%
2,676 Atlas Copco A.B. - Class A** 64,508
11,987 Powerscreen International PLC 115,948
180,456
Machinery - Farm - 0.5%
6,575 New Holland N.V. (ADR)* 137,253
Machinery - Pumps - 0.6%
9,600 Pfeiffer Vacuum Technology A.G. (ADR)* 172,800
Medical - Drugs - 3.5%
1,000 Eisai Co., Ltd.** 19,706
366 Novartis A.G.*,** 418,403
55 Roche Holding A.G.** 427,163
3,662 SmithKline Beecham PLC - Class A 50,750
175 SmithKline Beecham PLC (ADR) - Class A 11,900
1,000 Takeda Chemical Industries** 21,003
948,925
Medical - Wholesale Drug Distributors - 0.4%
389 Gehe A.G.** 24,873
4,400 Grupo Casa Autrey S.A. de C.V. (ADR) 85,800
110,673
Medical Instruments - 0%
576 Althin Medical A.B. - Class B** 12,455
27
<PAGE>
Medical Products - 2.3%
1,290 Coloplast A/S - Class B 146,666
12,670 Medical Invest Svenska A.B. - Class B*,** 338,745
7,338 Nobel Biocare A.B.**,+ 128,648
614,059
Metal Processors and Fabricators - 2.6%
38,662 Assa-Abloy A.B. - Class B** 700,409
Money Center Banks - 1.7%
1,900 Bangkok Bank Co., Ltd. 18,372
4,773 Barclays PLC 81,877
1,159 CS Holding A.G.** 118,839
1,887 Deutsche Bank A.G.** 88,072
22,865 Lloyds TSB Group PLC 168,519
475,679
Mortgage Banks - 0.1%
503 Deutsche Pfandbried & Hypothekenbank
A.G.** 22,683
Motorcycle and Motor Scooter - Manufacturing - 0.1%
464 Bajaj Auto, Ltd. (GDR)+ 15,428
Multilevel Direct Selling - 0%
100 Amway Japan Pacific, Ltd.** 3,215
Office Automation and Equipment - 0.8%
2,122 Oce-Van Der Grinten N.V. 230,401
Office Furnishings - 1.4%
6,709 Koninklijke Ahrend N.V. 373,930
Oil - International Integrated - 0.2%
1,250 Tatneft (ADR)*,+ 58,750
Oil Companies - Exploration and Production - 0.1%
875 YPF Sociedad Anonima S.A. (ADR) 22,094
Oil Companies - Integrated - 0.1%
725 Lukoil Oil Co. (ADR) 33,350
Photo Equipment and Supplies - 0.8%
6,874 Leica Camera A.G.*,**,+ 214,185
Pipelines - 0.7%
10,475 Gazprom (ADR)*,+ 183,313
28
<PAGE>
Publishing - Books - 0.8%
9,316 Dorling Kindersley Holdings PLC 65,869
1,129 Wolters Kluwer N.V. 149,963
215,832
Publishing - Newspapers - 0.1%
3,174 Pearson PLC 40,727
Publishing - Periodicals - 0%
326 EMAP PLC 4,111
Real Estate Development - 0.2%
3,000 Mitsubishi Estate Co., Ltd.** 30,856
2,000 Mitsui Fudosan Co.** 20,052
50,908
Real Estate Investment and Management - 2.2%
39,604 Tornet Fastighets A.B.*,** 601,753
Recycling - 0.3%
4,433 Tomra Systems A/S 69,168
Reinsurance - 0.1%
20 Swiss Reinsurance Co.** 21,312
Retail - Apparel and Shoe - 0.2%
7,552 Harvey Nichols PLC*,+ 44,993
Retail - Diversified - 0.9%
7,067 Eurobike A.G.*,** 215,611
2,866 Kesko, Ltd.** 40,412
256,023
Retail - Home Furnishings - 0%
150 Industrie Natuzzi S.p.A. (ADR) 3,450
Retail - Major Department Stores - 0.2%
1,300 Credit Saison Co., Ltd.** 29,101
1,000 Hankyu Department Store** 9,940
1,000 Isetan Co.** 12,965
52,006
Retail - Pubs - 0.2%
2,927 Wetherspoon (J.D.) PLC 59,130
Security Services - 1.9%
2,880 Prosegur Companhia de Seguridad S.A.* 26,619
17,267 Securitas A.B. - Class B** 500,752
527,371
29
<PAGE>
Shipbuilding - 0.1%
5,000 Kawasaki Heavy Industries** 20,700
Telecommunication Equipment - 3.7%
119,000 Datacraft Asia, Ltd. 198,730
577 Nokia A.B - Class A** 33,471
4,675 Nokia Corp. (ADR) - Class A** 269,397
5,384 Tandberg A.S.A.* 168,013
6,705 Telfonaktiebolaget L.M.
Ericsson - Class B** 206,694
4,000 Telfonaktiebolaget L.M. Ericsson (ADR) -
Class B** 120,750
997,055
Telecommunication Services - 2.6%
23,473 COLT Telecom Group PLC* 118,548
2,025 CPT Telefonica del Peru S.A. (ADR) 38,222
249,682 Freepages Group PLC 183,806
27 Nippon Telegraph & Telephone Corp.** 204,892
11,823 Telecom Italia S.p.A. 30,707
3,290 Telinfo S.A.* 134,155
710,330
Telephone - Integrated - 0.1%
500 Portugal Telecom S.A. (ADR) 14,125
100 Telecom Argentina Stet S.A. (ADR) 4,038
650 Telefonica de Argentina S.A. (ADR) 16,819
34,982
Textile - Apparel - 0.2%
502 Wolford A.G. 60,756
Tobacco - 0.1%
4,000 PT Hanjaya Mandala Sampoerna 21,347
Transportation - Airlines - 0.1%
35 SwissAir A.G.*,** 28,266
Transportation - Railroad - 0%
50 Tranz Rail Holdings, Ltd. (ADR)* 884
Transportation - Services - 0.5%
11,753 Stagecoach Holdings PLC 140,998
Total Common Stock (cost $17,000,726) 18,907,169
Preferred Stock - 1.4%
30
<PAGE>
Automove - 0.1%
18 Porsche A.G.*,** 15,890
Brewery - 0.1%
51,000 Companhia Cervejaria Brahma 27,883
Drug Delivery Systems - 0.4%
354 Fresenius A.G.** 73,075
412 Fresenius Medical Care A.G.*,** 33,150
106,225
Electric - Integrated - 0%
403,000 Companhia Energetica de Minas Gerais 13,732
Telecommunication Services - 0.8%
2,725 Telecomunicacoes Brasileiras S.A. (ADR) 208,463
Total Preferred Stock (cost $327,871) 372,193
Short-Term Corporate Notes - 3.3%
AVCO Financial Service
$400,000 5.32%, 1/8/97 399,586
Bell South
500,000 5.30%, 1/2/97 499,927
Total Short-Term Corporate Notes
(amortized cost $899,513) 899,513
U.S. Government Agency - 23.9%
6,500,000 Federal Home Loan Mortgage Corp.,
5.00%, 1/2/97 (amortized
cost $6,499,097) 6,499,097
Total Investments (total cost $24,727,207)- 98.1% 26,677,972
Cash, Receivables and Other Assets, net of
Liabilities - 1.9% 514,163
Net Assets - 100% $27,192,135
Summary of Investments by Country
December 31, 1996
Country % of Investment Securities Market Value
Argentina 0.5% $ 118,919
Australia 1.1% 281,720
Austria 0.6% 151,351
Belgium 0.8% 215,405
Brazil 1.4% 362,559
Canada 0.0% 9,225
31
<PAGE>
Chile 0.1% 26,584
Denmark 0.5% 146,665
Finland 3.4% 912,272
France 3.9% 1,050,678
Germany 8.5% 2,284,650
Hong Kong 0.0% 11,900
India 0.3% 77,200
Indonesia 0.1% 21,346
Ireland 0.2% 60,681
Italy 0.8% 225,854
Japan 2.1% 548,556
Korea 0.2% 46,530
Luxembourg 0.2% 56,873
Mexico 0.5% 130,004
Netherlands 6.2% 1,657,878
New Zealand 0.0% 884
Norway 1.1% 283,268
Peru 0.1% 38,222
Philippines 0.1% 18,221
Portugal 0.5% 146,074
Russia 1.6% 429,943
Singapore 0.7% 198,730
South Africa 0.1% 26,193
Spain 0.1% 26,619
Sweden 14.8% 3,935,799
Switzerland 5.2% 1,389,693
Thailand 0.1% 18,371
United Kingdom 16.3% 4,332,849
United States++ 27.9% 7,436,256
______________________________________________________________
Total 100.0% $26,677,972
==============================================================
++Includes Short-Term Securities (0.1% excluding Short-Term
Securities)
Forward Currency Contracts
Open at December 31, 1996
Currency Unrealized
Currency Sold and Currency Value in Gain/(Loss)
Settlement Date Units Sold $ U.S.
Finnish Markka 1/16/97 12,000 $ 2,610 $ 33
Finnish Markka 1/27/97 29,000 6,313 145
French Franc 3/11/97 43,000 8,322 (97)
German Deutschemark 1/17/97 60,000 38,992 1,054
German Deutschemark 1/24/97 146,000 94,929 4,731
German Deutschemark 1/27/97 29,000 18,859 869
German Deutschemark 3/4/97 670,000 436,767 (5,772)
Japanese Yen 1/16/97 3,500,000 30,251 1,857
Japanese Yen 2/10/97 4,000,000 34,574 3,816
32
<PAGE>
Japanese Yen 3/11/97 3,670,000 31,723 1,059
Japanese Yen 6/17/97 17,500,000 151,289 6,468
South African Rand 11/3/97 63,000 12,243 (178)
Swedish Krona 1/17/97 585,000 85,530 3,200
Swedish Krona 1/27/97 464,000 67,872 2,884
Swiss Franc 1/16/97 50,000 37,344 3,034
Swiss Franc 1/27/97 35,000 26,174 3,087
Swiss Franc 3/4/97 475,000 356,553 2,686
Swiss Franc 5/12/97 36,000 27,217 1,738
__________ _______
$1,467,562 $30,614
========== =======
33
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
Portfolio Manager, Helen Young Hayes
Performance Review
Janus Aspen Worldwide Growth Portfolio gained 29.04% for the
year ended December 31, 1996, substantially outperforming the
Morgan Stanley Capital International World Index, which returned
13.48%. Both returns include net dividends reinvested.(1)
(1) Net dividends reinvested are the dividends that remain to be
reinvested after foreign tax obligations have been met. Such
obligations vary from country to country.
The Portfolio outperformed the Morgan Stanley Index by such a
wide margin because our research found a large number of
excellent individual opportunities, many of which were
underfollowed by global investors. As a result, we were often
able to establish a position early, while the stock was still
inexpensive. We also uncovered niche pockets of faster growth in
Europe, in areas such as software development, information
technology and management, and pharmaceuticals. And finally, we
bought well during the July downturn, especially in the U.S.,
where many stocks declined to attractive prices.
The Year in Review
In general, foreign markets underperformed the U.S. in 1996,
although a number of European markets closed the year at or near
new records. In the U.S., economic conditions were extremely
favorable for much of the year. Economic growth remained
moderate - despite a second quarter spike - inflation was benign,
and interest rates were low. In Europe, economic growth is still
relatively slow, and despite a number of impressive reforms,
unemployment and regulatory burdens continue to impede earnings
growth in many industries. The strong U.S. dollar gave much
needed aid to exporters, however. In the Far East, the weak
Japanese economy and slowing export and economic growth in
Southeast Asia held down returns in those markets. Latin America
experienced a rebound, especially in Mexico, and I remain
cautiously optimistic on prospects for a continued economic
recovery in 1997.
The Portfolio was widely diversified throughout the year,
with companies, not countries, determining its make-up. However,
several powerful secular trends, such as outsourcing, increased
investment in information technology systems, and the growing
demand for pharmaceuticals, linked selected positions.
Outsourcing companies contract to supply other businesses with a
wide array of specialized services, from pest control to white-
34
See Notes to Schedules of Investments
<PAGE>
collar management and information technology. Information
technology is increasing productivity globally. Many of our
holdings develop software and equipment for the fast-growing
computer and networking markets. And finally, new drugs are
delivering inexpensive treatments for a variety of serious
diseases. Our drug stocks have exciting product pipelines and
good earnings potential.
Portfolio Profile 12/31/96 12/31/95
Equities 88.1% 81.9%
Foreign 78.3% 68.9%
Number of Stocks 209 152
Top Ten Equity Holdings 19.8% 17.6%
Cash & Fixed-Income Securities 11.9% 18.1%
Stock Highlights
Rentokil performed well this year. A beneficiary of the
outsourcing trend, the company provides a variety of commercial
services, from plants and pest control to hospital waste
management and disposal. The company is extremely well-managed.
Its strong performance in recent months was driven by its
acquisition of a major competitor, whose operations it is quickly
streamlining.
Danka Business Systems, a British marketer of copier and
other office equipment, also contributed to performance. The
company is fast becoming a dominant competitor in a consolidating
industry and is also benefiting from a growing trend toward
outsourcing copier and printing operations. Costs associated with
the company's rapid growth impacted second quarter results,
however, and the stock declined. We determined that the setback
was temporary, and I was able to build a position at lower
prices. Our estimates suggest Danka should grow 25% to 30%
annually over the next three years.
Wells Fargo has the best return on equity of any major U.S.
bank. The company has kept its costs low by opening branches in
supermarkets and other high-traffic locations. It was one of the
first to utilize ATM machines and other forms of low-cost
electronic banking. Wells Fargo's acquisition of First Interstate
earlier in the year combined a number of complementary divisions
and allows for further significant cost savings.
I took profits in long-time holding, Astra, the Swedish
pharmaceutical manufacturer. After two major product launches,
earnings slowed. Sun Microsystems was sold when it met our price
targets. Toolex Alpha, a leading manufacturer of CD ROM
manufacturing equipment, and Japanese electronic component
35
See Notes to Schedules of Investments
<PAGE>
manufacturer Omron, were sold at a loss after earnings
disappointments.
Current Strategy and Outlook
Many foreign companies are enjoying good growth and
increasing sophistication and diversity. Overseas markets are
also less efficient, and therefore more congenial to individual
stock selection. Going forward, these factors make me very
positive on global investing and on our stockpicking discipline
at Janus.
Thank you for your continued investment in Janus Aspen
Worldwide Growth Portfolio.
36
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
Portfolio Manager, Helen Young Hayes
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Worldwide Growth Portfolio and
the MSCI World Index (Net). Janus Aspen Worldwide Growth
Portfolio is represented by a solid black line. The MSCI World
Index (Net) is represented by a dashed light gray line. The "y"
axis reflects the value of the investment. The "x" axis reflects
the computation periods from inception, September 13, 1993,
through December 31, 1996. The upper right quadrant reflects the
ending value of the hypothetical investment in Janus Aspen
International Growth Portfolio ($19,876) as compared to the MSCI
World Index (Net) ($14,480). There is a legend in the upper left
quadrant of the graph which indicates Janus Aspen International
Growth Portfolio's one-year and since inception (September 13,
1993) average annual total returns as 29.04% and 23.20%,
respectively.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Common Stock - 86.2%
Advertising Services - 0.3%
428,468 WPP Group PLC $1,855,849
37
See Notes to Schedules of Investments
<PAGE>
Aerospace and Defense - 0.4%
11,275 Boeing Co. 1,199,378
13,800 United Technologies Corp. 910,800
2,110,178
Apparel Manufacturers - 0.7%
63,650 Gucci Group N.V. 4,065,644
Appliances - Household - 0%
2,644 Moulinex S.A.*,** 60,896
Athletic Footwear - 0.2%
19,600 Nike, Inc. - Class B 1,171,100
Audio and Video Products - 0.2%
16,700 Sony Corp.** 1,095,532
Automotive - Cars and Light Trucks - 0.8%
83,000 Honda Motor Co.** 2,374,503
18,389 Mahindra and Mahindra (GDR)+ 206,876
6,200 Tata Engineering and Locomotive Co., Ltd. 63,550
159,444 Tata Engineering and Locomotive Co.,
Ltd. (GDR) 1,634,301
17,000 Yamaha Motor Co., Ltd.*,** 152,809
4,432,039
Automotive - Medium and Heavy Duty Trucks - 0.1%
154,000 Isuzu Motors, Ltd.** 685,480
Automotive - Truck Parts and Equipment - 0.8%
1,150,054 LucasVarity PLC* 4,380,786
4,375 LucasVarity PLC (ADR)* 166,250
4,547,036
Beverages - Non-Alcoholic - 0.4%
81,475 PepsiCo, Inc. 2,383,144
Brewery - 0.1%
84,700 Quilmes Industrial S.A. (ADR) 772,888
Broadcast Media - 0.3%
71,025 CanWest Global Communications Corp. 728,006
36,760 Central European Media
Enterprises, Ltd.*,** 1,167,130
4,400 Heritage Media Corp. - Class A* 49,500
1,944,636
Broadcast Services and Programming - 0.6%
73,500 Groupe A.B. S.A. (ADR)*,** 1,056,563
94,650 Grupo Televisa S.A. de C.V. (GDR)* 2,425,406
3,481,969
38
See Notes to Schedules of Investments
<PAGE>
Building - Construction Products - 0.3%
78,580 Cimpor-Cimentos de Portugal S.A. 1,691,167
Building - Heavy Construction - 0%
22,400 New World Infrastructure, Ltd.*,+ 65,456
Cable Television - 0.3%
120,050 TV Filme, Inc.* 1,530,638
Casino Hotels - 0.7%
1,904,113 Crown, Ltd.* 3,978,711
Casino Services - 1.3%
1,286,703 Aristocrat Leisure, Ltd.+ 3,342,874
778,183 London Clubs International PLC 4,050,038
7,392,912
Cellular Telecommunications - 0.9%
138,145 Korea Mobile Telecommunications,
Inc. (GDR) 1,778,625
71,200 Millicom International Cellular S.A.* 2,287,300
564,837 Telecom Italia Mobile S.p.A. 1,431,640
5,497,565
Chemicals - Diversified - 3.1%
229,830 BASF A.G.** 8,844,091
167,291 Hoechst A.G.** 7,894,875
34,000 Monsanto Co. 1,321,750
18,060,716
Chemicals - Specialty - 0.9%
5,397 Clariant A.G.** 2,306,101
13,896 SGL Carbon A.G.**,+ 1,749,967
224,541 Victrex PLC 1,037,918
5,093,986
Commercial Banks - 1.5%
372,724 Banca Popolare di Milano 1,892,858
81,242 Banco Frances del Rio de
la Plata S.A. (ADR) 2,234,169
23,439 Credit Communal Holding/Dexia*,+ 2,138,271
3,373 Kookmin Bank (ADR)* 61,895
54,366 Nordbanken A.B.** 1,640,186
61,128 Sparbanken Sverige A.B. - Class A** 1,044,893
9,012,272
Commercial Services - 0.8%
600,315 BTG PLC 4,727,601
39
See Notes to Schedules of Investments
<PAGE>
Computer Services - 6.2%
33,572 Axime S.A.*,** 3,882,278
64,070 Cap Gemini Sogeti S.A.*,** 3,098,229
64,431 CMG PLC** 932,269
239,314 Delphi Group PLC 3,031,821
1,750 Electronic Data Systems Corp. 75,688
56,482 Enator A.B.*,** 1,439,962
11,296 Enator A.B. Subscription Shares*,** 283,856
250,956 Frontec A.B. - Class B** 4,326,385
188,844 Getronics N.V.** 5,126,047
294,319 Misys PLC 5,598,042
21,138 Sligos S.A.** 2,770,327
4,600 SunGard Data Systems, Inc.* 181,700
60,284 WM-Data A.B. - Class B** 5,196,365
35,942,969
Computer Software - 3.1%
158,468 Ark A.S.A.** 1,118,247
259,287 JBA Holdings PLC 2,374,861
246,972 Merkantildata A/S** 4,531,241
178 NTT Data Communications Systems Corp.** 5,215,385
45,305 SEMA Group PLC 845,428
46,836 TT Tieto Oy - Class B** 3,876,967
17,962,129
Computers - Integrated Systems - 1.0%
22,725 Dassault Systemes S.A. (ADR)* 1,051,031
96,200 Parametric Technology Co.* 4,942,275
5,993,306
Computers - Mainframe - 1.0%
40,450 IBM Corp. 6,107,950
Data Processing and Management - 0.3%
800 First Data Corp. 29,200
115,625 Industri-Matematik International
Corp.*,** 1,517,578
1,546,778
Dialysis Centers - 0.3%
72,975 Vivra, Inc.* 2,015,934
Diamonds and Precious Stones - 0.1%
19,604 De Beers Centenary A.G.** 561,791
Diversified Financial Services - 0%
104,000 JCG Holdings, Ltd. 101,526
40
See Notes to Schedules of Investments
<PAGE>
Diversified Operations - 10.5%
66,891 Amer-Yhtymae Oy - Class A** 1,380,634
16,050 Barco N.V. 2,771,601
126,475 C.G. Smith, Ltd.** 618,040
243,000 First Pacific Co. 315,768
36,107 Grupo Carso S.A. de C.V. - Series Al 190,037
1,485,566 Hays PLC 14,293,284
145,686 Huhtamaki Group - Series l** 6,805,243
53,730 Kinnevik A.B. - Class B** 1,475,775
83,074 Metra Oy - Class B** 4,620,537
29,525 Raychem Corp. 2,365,691
3,117,799 Rentokil Initial PLC 23,539,133
27,841 South African Breweries, Ltd.**,+ 705,551
3,521 Sulzer A.G.** 2,029,629
61,110,923
Drug Delivery Systems - 2.1%
98,100 Elan Corp. PLC* 3,261,825
313,425 Fresenius Medical Care A.G. (ADR)*,** 8,815,078
12,076,903
Electric - Integrated - 0.6%
96,775 BSES, Ltd. (GDR) 1,983,887
28,570,000 Companhia Energetica de Minas Gerais 973,508
12,675 Mosenergo (ADR)+ 384,052
3,341,447
Electric Products - 0.4%
65,675 UCAR International, Inc.* 2,471,022
Electronic Components - 3.1%
51,350 Lernout & Hauspie Speech Products N.V.* 860,113
166,152 Philips Electronics N.V.** 6,731,474
199,911 Philips Electronics N.V. (ADR)** 7,996,440
86,423 Pricer A.B. - Class B*,** 2,121,213
2,000 Rohm Co.** 131,374
17,840,614
Entertainment - 0.2%
37,966 Endemol Entertainment Holdings
B.V.*,**,+ 1,263,482
Film Processing - 0.6%
664 Fotolabo S.A.** 257,479
18,825 Grand Optical Photoservice** 3,051,330
3,308,809
Finance - Consumer Loans - 0.7%
19,925 Associates First Capital Corp. 879,191
348,264 Provident Financial PLC 3,010,951
3,890,142
41
See Notes to Schedules of Investments
<PAGE>
Finance - Other Services - 0.1%
91,260 Grupo Financiero Inbursa, S.A. de C.V. -
Class B 311,337
Food - Catering - 0.2%
85,172 Compass Group PLC 904,050
Food - Dairy Products - 1.5%
33,929 Nutricia Verenidge Bedrijven N.V.** 5,154,742
2,397,331 Parmalat Finanziaria S.p.A. 3,666,320
8,821,062
Food - Diversified - 0.6%
58,466 Raision Tehtaat** 3,645,630
Food - Retail - 0.3%
25,175 Disco S.A. (ADR)* 704,900
13,000 Pao De Acucar S.A. 224,250
43,450 Santa Isabel S.A. 983,056
1,912,206
Footwear and Related Apparel - 1.0%
65,926 Adidas A.G.** 5,691,761
Healthcare Safety Devices - 0.2%
401,066 London International Group PLC 1,132,931
Home Furnishings - 0.6%
27,200 Hunter Douglas N.V. 1,834,009
453,683 Pagnossin S.p.A. 1,678,059
3,512,068
Hotels and Motels - 0.7%
7,575 HFS, Inc.* 452,606
13,449 Indian Hotels Co., Ltd. 340,394
563,500 Mandarin Oriental International, Ltd.* 783,265
155,741 Scandic Hotels A.B.*,**,+ 2,593,901
4,170,166
Human Resources - 0.3%
7,477 Randstad Holdings N.V.** 540,068
85,175 Select Appointments Holdings PLC (ADR)* 979,513
1,519,581
Industrial Automation and Robotics - 1.2%
259,087 Lagardere Groupe** 7,110,723
Investment Companies - 0.4%
106,928 Bure Investment A.B.** 1,265,383
42
See Notes to Schedules of Investments
<PAGE>
14,992 Incentive A.B. - Class B** 1,084,202
2,349,585
Leisure and Recreation Services - 0%
876 Club Mediterranee S.A.** 56,864
Machine Tools and Related Products - 0.1%
29,263 Sandvik A.B. - Class A** 786,651
Machinery - Construction and Mining - 0.3%
67,121 Atlas Copco A.B. - Class A** 1,618,035
Machinery - Farm - 0.5%
137,050 New Holland N.V. (ADR)*,** 2,860,919
Machinery - Pumps - 0%
8,000 Pfeiffer Vacuum Technology
A.G. (ADR)*,** 144,000
Medical - Drugs - 6.4%
37,350 Bristol-Myers Squibb Co. 4,061,813
117,200 Eisai Co., Ltd.** 2,309,559
115,520 Glaxo Wellcome PLC 1,874,862
10,689 Novartis A.G.*,** 12,219,416
2,375 Pfizer, Inc. 196,828
1,451 Roche Holding A.G.** 11,269,325
228,721 SmithKline Beecham PLC - Class A 3,169,757
12,050 SmithKline Beecham PLC (ADR) - Class A 819,400
56,000 Takeda Chemical Industries** 1,176,145
37,097,105
Medical - Wholesale Drug Distributors - 0.7%
24,048 Gehe A.G.** 1,537,636
137,050 Grupo Casa Autrey S.A. de C.V. (ADR) 2,672,475
4,210,111
Medical Instruments - 0.2%
45,901 Althin Medical A.B. - Class B** 992,498
Medical Products - 0.6%
4,600 Boston Scientific Corp.* 276,000
172,513 Nobel Biocare A.B.**, 3,024,466
3,300,466
Metal Processors and Fabricators - 1.7%
561,355 Assa-Abloy A.B. - Class B** 10,169,623
Money Center Banks - 3.2%
74,100 Bangkok Bank Co., Ltd. 716,500
209,570 Barclays PLC 3,595,014
16,675 Citicorp 1,717,525
43
See Notes to Schedules of Investments
<PAGE>
54,913 CS Holding A.G.** 5,630,528
98,522 Deutsche Bank A.G.** 4,598,333
301,230 Lloyds TSB Group PLC 2,220,115
18,478,015
Mortgage Banks - 0.1%
12,556 Deutsche Pfandbried and
Hypothekenbank A.G.** 566,222
Motorcycle and Motor Scooter Manufacturing - 0%
6,680 Bajaj Auto, Ltd. (GDR)*, 222,110
Multilevel Direct Selling - 0%
8,100 Amway Japan Pacific, Ltd.** 260,432
Networking Products - 0.4%
32,450 Cisco Systems, Inc.* 2,064,631
Office Automation and Equipment - 1.1%
109,450 Danka Business Systems PLC (ADR) 3,871,794
23,337 Oce-Van Der Grinten N.V.** 2,533,870
6,405,664
Office Furnishings - 0.8%
81,683 Koninklijke Ahrend N.V.** 4,552,652
Office Supplies - 0.8%
95,825 Alco Standard Corp. 4,946,966
Oil Companies - Exploration and Production - 0.6%
136,350 YPF Sociedad Anonima S.A. (ADR) 3,442,838
Oil Companies - Integrated - 0.3%
10,975 Lukoil Oil Co. (ADR) 504,850
30,400 Tatneft (ADR)*,+ 1,428,800
1,933,650
Pipelines - 0.2%
78,200 Gazprom (ADR)*,+ 1,368,500
Publishing - Books - 0.6%
140,282 Dorling Kindersley Holdings PLC 991,872
19,744 Wolters Kluwer N.V.** 2,622,553
3,614,425
Publishing - Newspapers - 0.1%
61,395 Pearson PLC 787,786
44
See Notes to Schedules of Investments
<PAGE>
Publishing - Periodicals - 0%
24,489 EMAP PLC 308,779
Real Estate Development - 0.3%
127,000 Mitsubishi Estate Co., Ltd.** 1,306,223
66,000 Mitsui Fudosan Co.** 661,711
1,967,934
Real Estate Investment and Management - 0.8%
316,497 Tornet Fastighets A.B.*,** 4,808,931
Recycling - 0.3%
108,535 Tomra Systems A/S** 1,693,466
Reinsurance - 0.2%
1,105 Swiss Reinsurance Co.** 1,177,513
Retail - Apparel and Shoe - 0.3%
250,000 Harvey Nichols PLC 1,489,440
Retail - Home Furnishings - 0%
9,050 Industrie Natuzzi S.p.A. (ADR) 208,150
Retail - Major Department Store - 0.7%
110,300 Credit Saison Co., Ltd.** 2,469,118
50,000 Hankyu Department Store** 496,975
65,000 Isetan Co.** 842,697
3,808,790
Retail - Diversified - 0.3%
114,492 Kesko** 1,614,385
Retail - Pubs - 0.4%
101,901 Wetherspoon (J.D.) PLC 2,058,563
Security Services - 1.3%
149,740 Prosegur Companhia de Seguridad S.A.* 1,384,025
210,288 Securitas A.B. - Class B** 6,098,466
7,482,491
Shipbuilding - 0.2%
283,000 Kawasaki Heavy Industries** 1,171,625
Super-Regional Banks - 1.7%
37,400 Wells Fargo & Co. 10,088,650
Telecommunication Equipment - 3.0%
102,400 Lucent Technologies, Inc. 4,736,000
17,172 Nokia A.B - Class A** 996,138
69,550 Nokia Corp. (ADR) - Class A** 4,007,819
84,339 Tandberg A.S.A.*,** 2,631,874
45
See Notes to Schedules of Investments
<PAGE>
41,027 Telefonaktiebolaget L.M.
Ericsson - Class B** 1,264,730
122,825 Telefonaktiebolaget L.M.
Ericsson (ADR) -
Class B ** 3,707,780
17,344,341
Telecommunication Services - 3.0%
576,527 COLT Telecom Group PLC* 2,911,692
854,131 CPT Telefonica del Peru S.A. - Class B 1,591,060
97,350 CPT Telefonica del Peru S.A. (ADR) 1,837,481
2,236,411 Freepages Group PLC* 1,646,356
60,325 MFS Communications Co., Inc.* 3,287,713
675 Nippon Telegraph and Telephone Corp.** 5,122,299
509,042 Telecom Italia S.p.A. 1,322,100
17,718,701
Telephone - Integrated - 0.4%
41,400 Portugal Telecom S.A. (ADR) 1,169,550
750 Telecom Argentina Stet S.A. (ADR) 30,281
38,950 Telefonica de Argentina S.A. (ADR) 1,007,831
2,207,662
Textile - Apparel - 0.7%
34,030 Wolford A.G. 4,118,561
Tobacco - 0.5%
255,000 PT Hanjaya Mandala Sampoerna 1,360,864
203,000 Souza Cruz S.A. 1,332,621
2,693,485
Transportation - Airlines - 0.3%
1,936 SwissAir A.G.*,** 1,563,526
Transportation - Railroad - 0%
3,000 Tranz Rail Holdings, Ltd. (ADR)* 53,063
Transportation - Services - 1.0%
497,837 Stagecoach Holdings PLC 5,972,471
Wireless Telecommunications - 0.1%
15,625 AirTouch Communications, Inc.* 394,531
2,650 Paging Network, Inc.* 40,413
434,944
Total Common Stock (cost $437,294,249) 502,139,874
46
See Notes to Schedules of Investments
<PAGE>
Preferred Stock - 1.9%
Automotive - Cars and Light Trucks - 0.1%
649 Porsche A.G.*,** 572,957
Brewery - 0.1%
1,593,000 Companhia Cervejaria Brahma 870,944
Drug Delivery Systems - 0.8%
18,509 Fresenius A.G.** 3,820,748
11,099 Fresenius Medical Care A.G.** 893,035
4,713,783
Telecommunication Services - 0.9%
2,000 Telecomunicacoes Brasileiras S.A. 154
68,425 Telecomunicacoes Brasileiras S.A. (ADR) 5,234,513
5,234,667
Total Preferred Stock (cost $9,908,274) 11,392,351
Short-Term Corporate Notes - 5.5%
AVCO Financial Service:
$ 7,000,000 5.30%, 1/22/97 6,978,358
15,000,000 5.30%, 1/29/97 14,938,167
Coca-Cola Co.
10,000,000 5.25%, 1/10/97 9,986,875
Total Short-Term Corporate Notes
(amortized cost $31,903,400) 31,903,400
U.S. Government Agency - 4.7%
27,500,000 Federal Home Loan Mortgage Corp.
6.50%, 1/2/97
(amortized cost $27,495,035) 27,495,035
Total Investments (total cost
$506,600,958) - 98.3% 572,930,660
Cash, Receivables and Other Assets,
net of Liabilities - 1.7% 9,672,233
Net Assets - 100% $582,602,893
47
See Notes to Schedules of Investments
<PAGE>
Summary of Investments by Country
December 31, 1996
Country % of Investment Securities Market Value
Argentina 1.3% $ 7,420,019
Australia 1.3% 7,321,584
Austria 0.7% 4,118,560
Belgium 1.0% 5,769,985
Brazil 1.8% 10,166,627
Canada 0.1% 728,006
Chile 0.2% 983,056
Finland 4.7% 26,947,352
France 3.9% 22,138,240
Germany 8.1% 46,295,832
Hong Kong 0.2% 1,266,015
India 0.8% 4,451,119
Indonesia 0.2% 1,360,864
Ireland 0.6% 3,261,825
Italy 2.7% 15,296,255
Japan 4.4% 25,471,866
Korea 0.3% 1,840,520
Luxembourg 0.5% 3,060,872
Mexico 1.0% 5,575,368
Netherlands 7.4% 42,148,525
New Zealand 0.0% 53,063
Norway 1.7% 9,974,827
Peru 0.6% 3,428,541
Portugal 0.5% 2,860,717
Russia 0.6% 3,686,203
South Africa 0.3% 1,885,382
Spain 0.2% 1,384,025
Sweden 9.9% 56,460,878
Switzerland 6.4% 36,453,517
Thailand 0.1% 716,500
United Kingdom 18.1% 103,646,356
United States++ 20.4% 116,758,161
______________________________________________________________
Total 100.0% $572,930,660
==============================================================
++Includes Short-Term Securities (10.0% excluding Short-Term
Securities)
48
See Notes to Schedules of Investments
<PAGE>
Forward Currency Contracts
Open at December 31, 1996
Currency Unrealized
Currency Sold and Currency Value in Gain/(Loss)
Settlement Date Units Sold $ U.S.
Finnish Markka 1/16/97 4,000,000 $ 870,000 $ 11,135
Finnish Markka 1/27/97 4,200,000 914,276 20,928
Finnish Markka 5/12/97 1,768,000 387,558 5,987
French Franc 1/16/97 5,500,000 1,061,018 13,201
German Deutschemark 1/17/97 5,000,000 3,249,285 87,830
German Deutschemark 1/24/97 4,536,000 2,949,285 147,003
German Deutschemark 1/27/97 300,000 195,097 8,985
German Deutschemark 3/4/97 11,000,000 7,170,795 (105,774)
German Deutschemark 3/11/97 2,600,000 1,695,689 (16,070)
Japanese Yen 1/16/97 1,237,000,000 10,691,674 656,273
Japanese Yen 3/11/97 100,000,000 864,390 29,089
Japanese Yen 6/17/97 250,000,000 2,161,274 92,399
South African Rand 11/3/97 4,548,000 883,810 (12,880)
Swedish Krona 1/16/97 25,000,000 3,654,917 107,282
Swedish Krona 1/27/97 45,662,000 6,679,246 280,481
Swiss Franc 1/16/97 6,000,000 4,481,291 364,101
Swiss Franc 1/27/97 2,500,000 1,869,578 220,548
Swiss Franc 3/4/97 18,000,000 13,511,485 101,778
Swiss Franc 5/12/97 1,020,000 771,150 49,234
___________ __________
$64,061,818 $2,061,530
=========== ==========
49
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN BALANCED PORTFOLIO
Portfolio Manager, Blaine P. Rollins
Performance Review
Janus Aspen Balanced Portfolio returned 16.18% for the year
ended December 31, 1996, compared to a return of 22.95% for the
S&P 500 Index and 2.90% for the Lehman Brothers Government/
Corporate Bond Index. All returns include reinvested dividends.
The Portfolio's equity positions performed well. My strategy
is to focus on companies that generate strong positive cash flow
and that use their discretionary cash wisely - often to buy back
significant portions of their own stock. However, as market
valuations continued to move higher, it became more difficult to
find solid growth opportunities trading at reasonable prices.
I assumed portfolio management responsibilities on May 1,
1996. My immediate challenge was to deal with the sharp upturn in
interest rates. During the first half of the year, the economy
picked up steam. Robust employment numbers spooked bond
investors. As a result, bonds suffered price declines across the
maturity spectrum, with long-term securities most strongly
affected. To reduce interest rate risk, the maturities of the
Portfolio's fixed-income holdings were shortened. In the second
half of the year, economic growth slowed and inflation remained
mild. Interest rates declined. Stocks rallied during the final
months of the year, but the outlook for corporate earnings
remained uncertain. If earnings slow in 1997, selectivity will be
even more critical in purchasing stocks, and fixed-income
maturities will remain short.
At year end, the Portfolio held a conservative mix of
Treasury, and investment-grade and high-yield corporate bonds.
Our high-yield positions performed extremely well. Dade
International and Intertek Finance in particular, are both
companies we plan on owning for a long time.
Portfolio Profile 12/31/96 12/31/95
Equities 53.9% 51.6%
Number of Stocks 103 52
Top Ten Equity Holdings 24.0% 22.0%
Fixed-Income Securities 32 20
U.S. Treasury Bonds 15.7% 21.7%
Investment-Grade Corp. Bonds 21.6% 18.2%
High-Yield Corporate Bonds 5.6% --
Foreign Corporate Bonds -- 2.2%
Preferred Stock 3.6% 3.2%
50
See Notes to Schedules of Investments
<PAGE>
Stock Highlights
Dionex is an example of a great cash generator. Dionex
manufactures ion chromatography systems used to identify chemical
components through color spectrum analysis. The company dominates
its industry with 70% market share. What Dionex does may seem
complex, but the way it manages its business is straightforward.
Dionex does not make unnecessary capital expenditures or
acquisitions. At present, excess cash flow is being used to buy
back shares, adding substantially to the company's earnings per
share growth and building shareholder value.
Barclays PLC contributed significantly to Portfolio returns
this year. One of Britain's largest financial services providers,
Barclays is refocusing its operations on retail banking and the
higher-margin asset management business, having recently acquired
Wells Fargo Nikko Investment Advisors. The company is poised to
benefit from its position as the largest issuer of credit cards
in the U.K. Barclays is also aggressively repurchasing its stock.
Our MFS Communications convertible debenture also performed
well. MFS is being acquired by WorldCom, and the company will be
very competitive post-merger. WorldCom should be able to
underprice competitors in end-to-end long distance, local
telephone, and internetworking services.
U.S. Satellite Broadcasting and General Motors-H/Hughes
Electronics disappointed this year. Neither company met
projections for new subscribers in their satellite TV businesses.
Kellogg was sold after the company fared poorly in cereal price
wars. Kellogg's management also chose not to aggressively
restructure the company, as some of us had expected.
Current Strategy and Outlook
The market's current high level may make finding stocks with
great upside potential more difficult. High valuations dictate a
more opportunistic approach, but I will continue to focus on
uncovering stable companies with predictable earnings growth and
strong free cash flows. On the fixed-income side, my strategy is
likely to remain conservative in case the economy strengthens or
inflationary pressures increase.
Thank you for your continued investment in Janus Aspen
Balanced Portfolio.
51
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN BALANCED PORTFOLIO
Portfolio Manager, Blaine P. Rollins
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Balanced Portfolio, the Lehman
Brothers Government/Corporate Bond Index and the S&P 500 Index.
Janus Aspen Balanced Portfolio is represented by a solid black
line. The Lehman Brothers Government/Corporate Bond Index is
represented by a dashed dark gray line. The S&P 500 Index is
represented by a dashed light gray line. The "y" axis reflects
the value of the investment. The "x" axis reflects the
computation periods from inception, September 13, 1993, through
December 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Aspen Balanced
Portfolio ($15,674) as compared to the Lehman Brothers
Government/Corporate Bond Index ($11,846) and S&P 500 Index
($17,462). There is a legend in the upper left quadrant of the
graph which indicates Janus Aspen Balanced Portfolio's one-year
and since inception (September 13, 1993) average annual total
returns as 16.18% and 14.63%, respectively.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN BALANCED PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Common Stock - 50.3%
Aerospace and Defense - 1.3%
2,925 Boeing Co. $ 311,147
2,475 Lockheed Martin Corp. 226,463
5,950 Thiokol Corp. 266,263
5,000 United Technologies Corp. 330,000
1,133,873
52
See Notes to Schedules of Investments
<PAGE>
Automotive - Truck Parts and Equipment - 0.4%
14,975 Federal Mogul Corp. 329,450
Broadcast Media - 1.5%
12,875 Heritage Media Corp. - Class A* 144,844
38,675 Young Broadcasting Corp. - Class A* 1,131,244
1,276,088
Building - Heavy Construction - 0.4%
6,050 Fluor Corp. 379,638
Casino Hotels - 0.2%
6,325 Circus Circus Enterprises, Inc.* 217,422
Casino Services - 0.5%
74,438 London Clubs International PLC 387,411
Chemicals - Diversified - 1.4%
19,959 BASF A.G.** 768,043
25,945 BOC Group PLC 388,656
1,156,699
Chemicals - Specialty - 0.2%
3,650 Minerals Technologies, Inc. 149,650
Commercial Banks - 0.7%
1,232 Banco Popular Espanol S.A. 241,978
7,150 Cascade Bancorp* 150,150
4,825 Chester Bancorp, Inc. 63,328
3,925 First Savings Bancorp, Inc. 73,594
6,775 Sterling Bancorp 99,931
628,981
Commercial Services - 0.3%
114 SGS Societe Generale de Surveillance
Holdings S.A.** 279,687
Computer Services - 0.8%
7,975 Computer Sciences Corp.* 654,947
Computers - Integrated Systems - 0.4%
14,000 Gulfstream Aerospace Corp.* 339,500
Containers - Paper and Plastic - 0.6%
12,400 Sealed Air Corp.* 516,150
Cosmetics and Toiletries - 0.8%
4,200 Avon Products, Inc. 239,925
53
See Notes to Schedules of Investments
<PAGE>
5,000 Colgate-Palmolive Co. 461,250
701,175
Data Processing and Management - 0.9%
10,710 First Data Corp. 390,915
10,975 First USA Paymentech, Inc.* 371,778
762,693
Diversified Operations - 1.3%
23,871 Hays PLC 229,673
4,625 Raychem Corp. 370,578
26,552 Rentokil Initial PLC 200,465
1,750 Unilever N.V. (ADR)** 306,688
1,107,404
Electronic Components - 0.2%
1,475 Intel Corp. 193,133
Electronic Safety Devices - 0.1%
1,275 Pittway Corp. - Class A 68,213
Finance - Consumer Loans - 2.5%
42,900 Associates First Capital Corp. 1,892,963
30,028 Provident Financial PLC* 259,610
2,152,573
Finance - Investment Brokers - 0.4%
11,900 Charles Schwab Corp. 380,800
Finance - Other Services - 0.9%
14,150 Equifax, Inc. 433,344
15,000 Insignia Financial Group,
Inc. - Class A* 337,500
770,844
Financial Guarantee Insurance - 0.6%
5,050 CMAC Investment Corp. 185,588
3,825 MGIC Investment Corp. 290,700
476,288
Food - Canned - 0.7%
7,900 Campbell Soup Co. 633,975
Food - Confectionary - 0.3%
4,250 Wrigley (Wm.) Jr., Co. 239,063
Gas - Distribution - 0.8%
29,925 Southern Union Co. 658,350
54
See Notes to Schedules of Investments
<PAGE>
Hotels and Motels - 0.3%
13,200 Extended Stay America, Inc. 265,650
Human Resources - 2.2%
11,050 Labor Ready, Inc.* 149,175
1,849 Michael Page Group PLC 13,137
48,900 Robert Half International, Inc.* 1,680,938
1,843,250
Instruments - Scientific - 2.9%
70,275 Dionex Corp.* 2,459,625
Insurance - Life and Health - 4.9%
8,650 AFLAC, Inc. 369,788
11,880 Delphi Financial Group, Inc. - Class A 350,460
5,225 Liberty Corp. 205,081
11,975 Protective Life Corp. 477,503
26,500 UICI* 861,250
26,100 UNUM Corp. 1,885,725
4,149,807
Insurance - Multi-Line - 0.3%
4,500 Allstate Corp. 260,438
Insurance - Property and Casualty - 1.3%
5,250 Foremost Corp. of America 315,000
8,850 LaSalle Re Holdings, Ltd. 258,863
9,875 Mercury General Corp. 518,438
1,092,301
Machinery - Farm - 0.3%
9,375 AGCO Corp. 268,359
Machinery - Pumps - 0.3%
13,125 Pfeiffer Vacuum Technology
A.G. (ADR)*,** 236,250
Medical - Drugs - 2.4%
15,311 Glaxo Wellcome PLC 248,494
820 Novartis A.G.*,** 937,405
8,325 SmithKline Beecham PLC (ADR) - Class A 566,100
4,125 Warner-Lambert Co. 309,375
2,061,374
Medical - HMO - 0.8%
14,725 United Healthcare Corp. 662,625
Medical - Wholesale Drug Distributors - 0.2%
2,775 Cardinal Health, Inc. 161,644
55
See Notes to Schedules of Investments
<PAGE>
Medical Instruments - 0.2%
2,850 Medtronics, Inc. 193,800
Metal - Aluminum - 0.2%
3,700 Reynolds Metals Co. 208,588
Money Center Banks - 4.0%
16,075 Bank of New York Co., Inc. 542,531
3,725 BankAmerica Corp. 371,569
98,713 Barclays PLC 1,693,346
5,275 Citicorp 543,325
8,596 ING Groep N.V.** 309,452
3,460,223
Mortgage Banks - 0.1%
1,102 Deutsche Pfandbried &
Hypothekenbank A.G.** 49,696
Multimedia - 0.1%
950 Meredith Corp 50,113
Office Supplies - 0.6%
4,525 Alco Standard Corp. 233,603
8,725 Harland (John H.) Co. 287,925
521,528
Optical Supplies - 0.2%
3,600 Luxottica Group S.p.A. (ADR) 187,200
Printing - Commercial - 0.2%
9,550 World Color Press, Inc.* 183,838
Publishing - Books - 0.1%
494 Wolters Kluwer N.V.** 65,617
Real Estate Investment Trusts - 2.3%
18,000 AMLI Residential Properties Trust 420,750
48,425 Innkeepers USA Trust 671,897
22,725 Redwood Trust, Inc. 846,506
1,939,153
Savings/Loan/Thrifts - 3.8%
6,000 Bank United Corp. - Class A* 160,500
12,950 BostonFed Bancorp, Inc. 191,013
5,975 Calumet Bancorp, Inc.* 198,669
6,413 Downey Financial Corp. 125,845
12,725 First Defiance Financial Corp. 157,472
6,875 First Savings Bank of Washington
Bancorp, Inc. 126,328
10,675 Flushing Financial Corp. 193,484
12,450 GA Financial, Inc. 188,306
56
See Notes to Schedules of Investments
<PAGE>
39,925 Home BanCorp of Elgin, Inc.* 538,988
14,950 Klamath First Bancorp, Inc. 235,463
6,775 Long Island Bancorp, Inc. 237,125
6,775 Ocean Financial Corp.* 172,763
20,300 Reliance Bancorp, Inc. 395,850
11,050 South Street Financial Corp.* 154,700
9,700 Standard Financial, Inc. 190,363
3,266,869
Super - Regional Banks - 2.4%
7,716 Wells Fargo & Co. 2,081,391
Telecommunication Equipment - 0.2%
4,300 Lucent Technologies, Inc. 198,875
Telecommunication Services - 0.7%
9,500 Cincinnati Bell, Inc. 585,438
204 MFS Communications Co., Inc.* 11,132
596,570
Textile - Apparel - 0.5%
3,291 Wolford A.G.** 398,301
Transportation - Trucking - 0.6%
56,450 Consolidated Freightways Corp. 500,994
Total Common Stock (cost $38,804,839) 42,958,086
Corporate Bonds - 21.6%
Aerospace and Defense - 1.4%
$1,200,000 Lockheed Martin Corp., 6.55% company
guaranteed unsecured notes,
due 5/15/99 1,206,000
Beverages - Non-Alcoholic - 0.4%
300,000 PepsiCo, Inc., 5.875% notes, due 6/1/00 295,500
Broadcast Media - 1.1%
1,000,000 Young Broadcasting, Inc., 9.00% senior
subordinated notes, due 1/15/06 972,500
Casino Hotels - 0.6%
540,000 Circus Circus Enterprises, Inc., 6.45%
senior notes, due 2/1/06 510,975
Computers - Mainframe - 2.3%
2,000,000 IBM Corp., 6.375% global notes,
due 6/15/00 1,995,000
57
See Notes to Schedules of Investments
<PAGE>
Engineering - Research and Development - 2.4%
2,000,000 Intertek Finance PLC, 10.25% senior
subordinated notes, due 11/1/06+ 2,070,000
Finance - Consumer Loans - 2.4%
2,000,000 Associates Corp. N.A., 6.75% senior
notes, due 7/15/01 2,010,000
Finance - Credit Card - 2.4%
2,000,000 Dean Witter Discover & Co.,
6.00% notes, due 3/1/98 2,000,000
Finance - Investment Brokers - 0.1%
100,000 Merrill Lynch & Co., Inc.,
6.375% notes, due 3/30/99 100,250
Finance - Leasing Companies - 0.4%
300,000 Ryder TRS, Inc., 10.00%
senior subordinated
notes, due 12/1/06+ 311,250
Industrial Audio and Video Products - 0.2%
200,000 Unifrax Investment Corp., 10.50% senior
notes, due 11/1/03 206,750
Medical Labs and Testing Services - 0.5%
425,000 Dade International, Inc., 11.125% senior
subordinated notes, due 5/1/06 459,000
Multimedia - 2.3%
2,000,000 Walt Disney Co. (The), 6.375%
senior notes,
due 3/30/01 1,987,500
Oil and Gas Drilling - 0.1%
100,000 Consolidated Natural Gas Co., 5.875%
debentures, due 10/1/98 99,500
Publishing - Newspapers - 0.6%
500,000 Dow Jones & Co., Inc., 5.75% notes,
due 12/1/00 488,125
Retail - Major Department Stores - 1.2%
1,000,000 Sears Roebuck Acceptance, 6.50% notes,
due 6/15/00 1,001,250
Savings/Loan/Thrifts - 0.3%
250,000 First Nationwide Holdings, Inc., 9.125%
58
See Notes to Schedules of Investments
<PAGE>
senior subordinated notes,
due 1/15/03 253,125
Shipbuilding - 0.6%
Newport News Shipbuilding, Inc.:
250,000 8.625% senior subordinated notes,
due 12/1/06 257,500
250,000 9.25% senior notes, due 12/1/06 255,625
513,125
Transportation - Railroad - 2.3%
2,000,000 Union Pacific Corp., 6.25% notes,
due 3/15/99 1,995,000
Total Corporate Bonds (cost $18,317,598) 18,474,850
Preferred Stock - 3.6%
Finance - Other Services - 0.7%
11,484 Insignia Financial Group, Inc., 6.50%+ 600,039
Insurance Brokers - 0.7%
23,000 Hartford Capital l - Series A, 7.70% 572,125
Multimedia - 0.2%
3,964 Times Mirror Co., 4.25% 198,696
Office Supplies - 0.5%
4,500 Alco Standard Corp., 5.04% 429,750
Real Estate Investment Trusts - 0.4%
14,775 Walden Residential Properties,
Inc., 9.20%, Series S 354,600
Telecommunication Services - 1.1%
8,970 Cincinnati Bell, Inc., 6.25% 533,715
4,300 MFS Communications Co., Inc., 8.00% 392,375
926,090
Total Preferred Stock (cost $2,858,792) 3,081,300
U.S. Government Obligations - 15.7%
U.S. Treasury Notes and Bonds:
$2,800,000 6.125%, due 5/15/98 2,813,748
4,030,000 5.50%, due 11/15/98 4,002,878
3,000,000 6.125%, due 11/15/98 3,014,730
59
See Notes to Schedules of Investments
<PAGE>
3,100,000 6.375%, due 11/15/99 3,127,032
500,000 5.875%, due 11/15/05 482,075
Total U.S. Government Obligations
(amortized cost $13,447,422) 13,440,463
Short-Term Corporate Note - 2.3%
2,000,000 Bell South 5.30%, 1/2/97
(amortized cost $1,999,706) 1,999,706
U.S. Government Agencies - 8.5%
740,000 Federal Home Loan Bank Corp.
6.79%, 2/11/97 735,626
6,500,000 Federal Home Loan Mortgage Corp.
6.50%, 1/2/97 6,498,826
Total U.S. Government Agencies
(amortized cost $7,234,452) 7,234,452
Warrants - 0%
14,775 Walden Residential - exp. 1/1/02*
(cost $7,388) 17,730
Total Investments (total cost
$82,670,197) -102.0% 87,206,587
Liabilities, net of Cash, Receivables
and Other Assets - (2.0%) (1,726,574)
Net Assets - 100% $85,480,013
60
See Notes to Schedules of Investments
<PAGE>
Summary of Investments by Country
December 31, 1996
GRAPHIC
Country % of Investment Securities Market Value
Austria 0.4% $ 398,301
Germany 1.2% 1,053,989
Italy 0.2% 187,200
Netherlands 0.8% 681,757
Spain 0.3% 241,978
Switzerland 1.4% 1,217,092
United Kingdom 4.6% 3,986,892
United States++ 91.1% 79,439,378
_______________________________________________________________
Total 100.0% $87,206,587
===============================================================
++Includes Short-Term Securities (82.1% excluding Short-Term
Securities)
Forward Currency Contracts
Open at December 31, 1996
Currency Unrealized
Currency Sold and Currency Value in Gain/(Loss)
Settlement Date Units Sold $ U.S.
Dutch Guilder 2/18/97 80,000 $ 46,455 $ 1,075
Dutch Guilder 3/13/97 115,000 66,880 (590)
German Deutschemark 3/4/97 720,000 469,361 (4,902)
German Deutschemark 5/30/97 110,000 72,131 823
Swiss Franc 1/8/97 725,000 541,004 42,966
Swiss Franc 3/4/97 550,000 412,851 1,119
__________ _______
$1,608,682 $40,491
========== =======
61
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Portfolio Managers, Ronald V. Speaker and Sandy R. Rufenacht
A New Co-Manager for the Portfolio
Please welcome Sandy Rufenacht as co-manager of Janus Aspen
Flexible Income Portfolio. Sandy has worked as an analyst on the
Portfolio since its inception. We have collaborated closely on
many investment decisions. Sandy has an excellent understanding
of the fixed-income markets - from high-yield bonds to Treasury
obligations. He is experienced in detailed financial, as well as
fundamental, credit analysis. As a portfolio manager, Sandy's
insight and dedication will continue to be a great asset to
Portfolio performance.
Performance Review
The Janus Aspen Flexible Income Portfolio outperformed the
Lehman Brothers Government/Corporate Bond Index for the year
ended December 31, 1996. The Portfolio returned 9.19%, compared
to a gain of 2.90% for the Lehman Index. Both returns include
reinvested dividends.
Janus Aspen Flexible Income Portfolio's diversity was the
primary factor contributing to its good performance. Although the
Portfolio struggled in the first months of 1996, when interest
rates moved higher, its weighting in high-yield/high-risk (junk)
bonds, as well as in preferred and convertible securities,
produced a better total return than the Lehman Index by year end.
Fixed-income yields were volatile in 1996, and tracked very
closely the dramatic changes in the rate of economic growth,
which peaked at mid-year and then declined in the second half.
The benchmark 30-year Treasury bond began the period yielding
5.95%, surged to 7.19% six months later (on July 5), and finished
the year in mid-range, at 6.64%. In retrospect, 1996 was marked
by moderate growth and low inflation, but this stable picture
masks a very strong second quarter and substantial interest rate
fluctuations.
The prices of governments and investment-grade corporates
rose and fell dramatically with interest rates. But prices in the
high-yield sector behaved considerably better. The weak economy
of 1995 had pushed the high-yield sector to very inexpensive
levels compared to other areas of the fixed-income market. As the
economy began to strengthen, the sector rallied. High-yield
securities often respond more to a healthy economy and a good
stock market than to interest rate movements.
The robust equity market also increased investors' appetites
for convertible and preferred stocks. These securities performed
62
See Notes to Schedules of Investments
<PAGE>
especially well in the second half of the year, when the Dow
Jones Industrial Average broke 6000.
Portfolio Strategy
Portfolio strategy had the net effect of reducing interest
rate risk and raising credit risk. The addition of lower-rated
bonds explains the Portfolio's greater yield at year end.
Weighted average maturity and duration also dropped as Treasury
and investment-grade corporate bonds, especially in the 30-year
area, were reduced.
Portfolio Profile 12/31/96 12/31/95
Investment-Grade
Corporate Bonds 48.5% 39.1%
High-Yield/High-Risk Bonds 27.0% 36.0%
U.S. Government Bonds 11.9% 11.7%
Foreign Non-Dollar Bonds -- 4.7%
Convertible Bond 1.0% --
Preferred Stock 1.3% --
Cash & Cash Equivalents 10.3% 8.5%
Weighted Avg. Maturity 8.38 Yrs. 13.1 Yrs.
Average Modified Duration* 5.5 Yrs. 7.0 Yrs.
30-Day Avg. Yield 7.39% 6.92%
Average Rating BBB BBB+
_____________________________
*A theoretical measure of price volatility.
The Portfolio
For much of the year, our holdings in U.S. Treasury issues
had maturities of approximately ten years. Among the Portfolio's
investment-grade corporate holdings, high-quality banks and
financial institutions were widely represented. Bank of Boston,
First Union, Chase Manhattan, and BankAmerica remained
significant positions, as did General Motors, Columbia/HCA
Healthcare, and Time Warner, Inc.
In the high-yield sector, the ability to pick the right bonds
is critical, because hands-on, "tire-kicking" research can add
significant value. Early in 1996, the focus was on media,
telecommunications, and entertainment. As the year progressed,
the Portfolio diversified into food and supermarket chains,
cellular communications, financial institutions, and consumer
products. GranCare (rehabilitation facilities), Cort (furniture
rental), and Six Flags (theme parks) indicate the variety in
current high-yield holdings. Bank holding company First
Nationwide, which owns savings and loans, is a major player in an
industry that has performed exceptionally well, and Gulf Canada
Resources (oil) has benefited from rising natural resources
63
See Notes to Schedules of Investments
<PAGE>
prices. A small position in the preferred stock of Chevy Chase
Savings Bank also aided returns.
Going Forward
The volatility in interest rates over the last 12 months
proved to be a good time to relearn the virtues of portfolio
flexibility. Flexibility and diversification can provide a good
defense when interest rates rise and a good offense when they
decline. The economy now appears to be slowing, but if growth
should pick up again and inflation gains speed, a flexible
strategy gives us the ability to make adjustments quickly.
Thank you for your continued investment in Janus Aspen
Flexible Income Portfolio.
64
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<PAGE>
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Portfolio Managers, Ronald V. Speaker and Sandy R. Rufenacht
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Flexible Income Portfolio and
the Lehman Brothers Government/Corporate Bond Index. Janus Aspen
Flexible Income Portfolio is represented by a solid black line.
The Lehman Brothers Government/Corporate bond Index is
represented by a dashed dark gray line. The "y" axis reflects
the value of the investment. The "x" axis reflects the
computation periods from inception, September 13, 1993, through
December 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Aspen Flexible
Income Portfolio ($13,496) as compared to the Lehman Brothers
Government/Corporate Bond Index ($11,849). There is a legend in
the upper left quadrant of the graph which indicates Janus Aspen
Flexible Income Portfolio's one-year and since inception
(September 13, 1993) average annual total returns as 9.19% and
9.54%, respectively.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Corporate Bonds - 75.5%
Automotive - Cars and Light Trucks - 5.4%
$600,000 Ford Motor Co., 7.25%
notes, due 10/1/08 $ 606,000
750,000 General Motors Corp., 7.10%
notes, due 3/15/06 754,687
1,360,687
65
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<PAGE>
Broadcast Media - 2.0%
50,000 Allbritton Communications, 11.50%
senior subordinated debentures,
due 8/15/04 53,000
450,000 Sinclair Broadcast Group, Inc., 10.00%,
senior subordinated notes, due 9/30/05 460,125
513,125
Broadcast Services and Programming - 1.1%
250,000 Grupo Televisa S.A., 11.875%
senior notes, due 5/15/06 276,250
Building and Construction Products - 1.7%
USG Corp.:
205,000 9.25% senior notes, due 9/15/01 216,275
200,000 8.50% senior notes, due 8/1/05 209,750
426,025
Cable Television - 0.6%
150,000 Pegasus Media & Communications, Inc.,
12.50% notes, due 7/1/05 162,000
Casino Hotels - 1.1%
250,000 California Hotel Financial, 11.00%
senior subordinated notes, due 12/1/02 264,375
Commercial Banks - 6.1%
500,000 First National Bank of Boston, 7.375%
subordinated notes, due 9/15/06 508,750
1,000,000 Hubco, Inc., 8.20%
subordinated debentures, due 9/15/06 1,032,500
1,541,250
Commercial Services - 1.9%
445,000 NeoData Services, Inc., 12.00%
senior notes, due 5/1/03 466,694
Diversified Financial Services - 2.0%
500,000 Wilshire Financial Services
Group, Inc., 13.00%
notes, due 1/1/04 502,500
Electric - Integrated - 2.1%
500,000 El Paso Electric Co., 9.40%
first mortgage bonds, due 5/1/11 531,250
Engineering - Research and Development Services - 2.1%
500,000 Intertek Finance PLC, 10.25%
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<PAGE>
senior subordinated notes,
due 11/1/06+ 517,500
Finance - Auto Loan - 1.0%
250,000 First Merchant Acceptance Corp., 9.50%
subordinated notes, due 12/15/06 248,750
Financial - Commodity Trading - 2.0%
500,000 First National Bank of Omaha, 7.32%
subordinated notes, due 12/1/10 493,750
Food - Diversified - 0.8%
200,000 Ralston-Ralston Purina Group, 7.875%
debentures, due 6/15/25 204,750
Food - Retail - 3.1%
485,000 Grand Union Co., 12.00%
senior notes, due 9/1/04 515,312
250,000 Smiths Food & Drug Centers, 11.25%
senior subordinated notes, due 5/15/07 276,875
792,187
Home Furnishings - 3.7%
449,000 Cort Furniture Rental, 12.00%
senior notes, due 9/1/00 502,319
390,000 Lifestyle Furnishings, Inc., 10.875%
senior subordinated guaranteed notes,
due 8/1/06 422,175
924,494
Human Resources - 0.3%
67,000 Primeco, Inc., 12.75%
senior subordinated notes, due 3/1/05 76,883
Industrial Audio and Video Products - 1.0%
250,000 Unifrax Investment Corp., 10.50%
senior notes, due 11/1/03 258,437
Insurance - Life and Health - 0.9%
242,000 Delphi Financial Group, Inc., 8.00%
senior notes, due 10/1/03 239,883
Leisure and Recreation Services - 2.8%
750,000 Six Flags Theme Parks, 12.25%
senior subordinated notes, due 6/15/05 704,063
Medical - Hospitals - 2.4%
400,000 Columbia/HCA Healthcare Corp., 7.25%
notes, due 5/20/08 407,500
200,000 Tenet Healthcare Corp., 8.625%
senior notes, due 12/1/03 211,250
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<PAGE>
618,750
Medical - Nursing Home - 3.3%
765,000 GranCare, Inc., 9.375%
senior subordinated notes, due 9/15/05 832,894
Medical Products - 1.0%
250,000 Imed Corp., 9.75%
senior subordinated notes, due 12/1/06 255,000
Money Center Banks - 3.9%
500,000 BankAmerica Corp., 7.125%
subordinated notes, due 5/1/06 501,875
500,000 Chase Manhattan Corp., 6.75%
subordinated notes, due 8/15/08 484,375
986,250
Motion Pictures and Services - 0.9%
247,941 United Artists Theatres
Circuit, Inc., 9.30%
pass-thru certificates, due 7/1/15 230,585
Multimedia - 2.9%
250,000 News America Holdings, Inc., 7.70%
unsecured senior debentures,
due 10/30/25 236,250
500,000 Time Warner, Inc., 7.75%
notes, due 6/15/05 502,500
738,750
Non-Hazardous Waste Disposal - 1.0%
250,000 Allied Waste North America, 10.25%
senior subordinated notes, due 12/1/06 263,125
Oil Companies - Exploration and Production - 1.1%
250,000 Gulf Canada Resources, Ltd., 9.25%
senior subordinated debentures,
due 1/15/04 263,750
Retail - Apparel and Shoe - 1.0%
250,000 Loehmann's, Inc., 11.875%
senior notes, due 5/15/03 261,875
Retail - Leisure Products - 0.6%
150,000 Selmer Co., Inc., 11.00%
senior subordinated notes, due 5/15/05 160,687
Savings/Loan/Thrifts - 6.6%
610,000 Anchor Bancorp, Inc., 8.9375%
senior notes, due 7/9/03 630,587
735,000 First Nationwide Escrow Corp., 10.625%
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<PAGE>
senior subordinated notes, due 10/1/03 791,962
250,000 Standard Federal Bancorp, 7.75%
subordinated notes, due 7/17/06 260,000
1,682,549
Steel - Producers - 2.0%
500,000 Weirton Steel Corp., 11.375%
senior notes, due 7/1/04 508,750
Super - Regional Banks - 2.0%
500,000 First Union Corp., 7.00%
subordinated notes, due 3/15/06 497,500
Telecommunication Services - 1.6%
250,000 Omnipoint Corp., 11.625%
senior notes, due 8/15/06 260,625
150,000 Phonetel Technologies, Inc., 12.00%
senior notes, due 12/15/06 155,250
415,875
Textile - Products - 1.3%
300,000 Polysindo International
Finance Co. B.V., 11.375%
guaranteed notes, 6/15/06 323,625
Tobacco - 1.7%
400,000 Consolidated Cigar Acquisition
Corp., 10.50%
senior subordinated
notes, due 3/1/03 419,500
Wire and Cable Products - 0.5%
125,000 Alpine Group, Inc., 12.25%
senior notes, due 7/15/03 136,875
Total Corporate Bonds (cost $18,445,979) 19,101,193
Convertible Corporate Bond - 1.0%
Electronic Components - 1.0%
250,000 Lernout & Hauspie Speech Products, 8.00%
subordinated notes, due 11/15/01
(cost $250,000) 251,563
U.S. Government Obligation - 11.9%
3,000,000 U.S. Treasury Notes
6.50%, due 10/15/06
(cost $3,038,274) 3,015,000
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<PAGE>
Common Stock - 0%
Cable Television - 0%
15 Pegasus Media & Communications,
Inc.*,+
(cost $0) 5,250
Preferred Stock - 1.3%
Commercial Banks - 1.3%
10,000 Chevy Chase Savings, 13.00%
non-cumulative (cost $313,375) 325,000
U.S. Government Agency - 7.9%
$2,000,000 Federal National Mortgage Association,
6.50%, 1/2/97 (amortized cost
$1,999,639) 1,999,639
Total Investments (total cost $24,047,267) - 97.6% 24,697,645
Cash, Receivables and Other Assets, net of
Liabilities - 2.4% 617,532
___________
Net Assets - 100% $25,315,177
===========
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<PAGE>
JANUS ASPEN HIGH-YIELD PORTFOLIO
Portfolio Managers, Ronald V. Speaker and Sandy R. Rufenacht
Performance Review
Since opening on May 1, 1996, Janus Aspen High-Yield
Portfolio has produced a total return of 12.40%, compared to a
total return of 9.17% for the Lehman Brothers High-Yield Index
during the same eight months. Both returns include reinvested
dividends.
The Portfolio outperformed its benchmark index due to an
over-weighting in certain market sectors early in the period and
strong performance from individual bond selections. Selectivity,
backed up by intensive research, can add value in the high-
yield/high-risk market. Research not only provides a better
understanding of a company's balance sheet, but can also uncover
earnings potential and other factors that make a high-yield bond
attractive. During the year, we were able to uncover a number of
companies that were candidates for rating upgrades - sometimes to
investment-grade. Other companies were acquisition candidates,
often by a better-rated company, and many possessed earnings
potential that was unappreciated by the rest of the analyst
community. We also avoided zero coupon bonds, which do not have a
regular income component and are therefore more vulnerable to
price fluctuations. We wanted to keep the Portfolio's yield high
and duration low.
The First Eight Months
This year high-yield securities were one of the best
performing fixed-income asset classes. While the price of
investment-grade debt fluctuated with the rise and fall of
interest rates, high-yield bonds rallied for most of the year.
The rate of economic growth rose in the first half, sparking
fears of future inflation, and then declined into year end,
relieving inflationary concerns. Investment-grade yields followed
this pattern almost exactly, rising into mid-year and declining
in the last six months.
High-yield bonds followed a different path. The slow economy
in 1995 had helped make the sector less expensive than other
areas of the bond market. In a soft economy, companies with
weaker balance sheets have less chance to improve their financial
condition. When the economy began to rebound in early 1996, and
interest rates started climbing, high-yield securities launched a
rally that gained momentum throughout the year. Investors became
more confident about taking on credit risk. Generous yields and
shorter maturities cushioned price fluctuations, while a healthy
stock market created good demand for equities, allowing companies
to deleverage more easily by issuing stock to pay off their debt.
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See Notes to Schedules of Investments
<PAGE>
The high-yield rally was also fueled by a sophisticated and
segmented calendar of new offerings. We saw several companies
with bright business prospects and participated in their new debt
offerings. The list included familiar names such as Rayovac
(batteries) and U.S. Can.
Cash inflows into the high-yield market from mutual funds,
pension plans, and insurance companies were also very robust, and
included many new entrants. Investors were searching for better
income in a yield environment that was still relatively low.
Portfolio Strategy
The Portfolio focused on gaming securities early on. These
bonds carried good yields, and the industry was in a cycle of
rapid growth. Customer traffic was surging and large hotel chains
were entering the business and precipitating a wave of
consolidations. As assets grew, the Portfolio became more
diversified, with positions in supermarkets, wireless cable
providers, and telecommunications. Holdings included Wilshire
Financial Services, German reinsurer Veritas Holdings, and
telecommunications companies Phonetel, NextLink, Peoples
Telephone, and Omnipoint.
Active portfolio management is critical in the high-yield
sector. Prices can sometimes get ahead of themselves and bonds
become overvalued. We stuck to our discipline, taking profits
when a holding exceeded our valuation target. All things
considered, it was not a year to simply collect coupons.
Portfolio Profile 12/31/96
Weighted Avg. Maturity 8.0 Yrs.
Avg. Modified Duration* 5.11 Yrs.
30-day Avg. Yield 8.93%
Avg. Rating B
_______________________
*A theoretical measure of price volatility.
The Portfolio's New Co-Manager
Please welcome Sandy Rufenacht as co-manager of Janus Aspen
High-Yield Portfolio. Sandy has worked on the Portfolio since its
inception. He has a thorough understanding of the high-yield
market and a detailed, hands-on approach to credit research. As a
portfolio manager, his experience, insight, and dedication will
continue to be a great asset to performance.
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<PAGE>
Going Forward
As long as the economy remains healthy and interest rates are
at relatively low levels, high-yield bonds should continue to
provide interesting opportunities. Over time, we believe there
could be more global participation in the high-yield sector, as
foreign companies tap this growing source of capital in the U.S.
The high-yield universe contains many attractive issues with
excellent yields. But individual security selection is crucial.
We plan to spend plenty of time on the road in 1997, meeting with
management teams and analyzing companies first hand.
Thank you for your investment in Janus Aspen High-Yield
Portfolio.
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See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN HIGH-YIELD PORTFOLIO
Portfolio Managers, Ronald V. Speaker and Sandy R. Rufenacht
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen High-Yield Portfolio and the
Lehman Brothers High-Yield Bond Index. Janus Aspen High-Yield
Portfolio is represented by a solid black line. The Lehman
Brothers High-Yield Bond Index is represented by a dashed dark
gray line. The "y" axis reflects the value of the investment.
The "x" axis reflects the computation periods from inception,
May 1, 1996, through December 31, 1996. The upper right quadrant
reflects the ending value of the hypothetical investment in Janus
Aspen High-Yield Portfolio ($11,240) as compared to the Lehman
Brothers High-Yield Bond Index ($10,917). There is a legend in
the upper left quadrant of the graph which indicates Janus Aspen
High-Yield Portfolio since inception (May 1, 1996) total return
as 12.40%.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN HIGH-YIELD PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Corporate Bonds - 93.1%
Automotive - Medium and Heavy Duty Trucks - 3.3%
$25,000 Blue Bird Body Co., 10.75% senior
subordinated notes, due 11/15/06 $26,062
Automotive - Truck Parts and Equipment - 3.3%
25,000 Hawk Corp., 10.25% senior notes,
due 12/1/03 25,688
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<PAGE>
Batteries and Battery Systems - 3.3%
25,000 Rayovac Corp., 10.25% senior subordinated
notes, due 11/1/06 25,750
Broadcast Media - 4.0%
20,000 Allbritton Communications, 11.50% senior
subordinated debentures, due 8/15/04 21,200
10,000 Sinclair Broadcast Group, Inc., 10.00%,
senior subordinated notes, due 9/30/05 10,225
31,425
Building - Residential and Commercial - 1.4%
10,000 Fortress Group, Inc., 13.75% senior notes,
due 5/15/03 10,600
Building and Construction - 1.3%
10,000 M.D.C. Holdings, Inc., 11.125% notes,
due 12/15/03 10,050
Building and Construction Products - 2.6%
20,000 Atrium Companies, Inc., 10.50% senior
subordinated notes, due 11/15/06 20,250
Casino Hotels - 1.4%
10,000 California Hotel Financial, 11.00% senior
subordinated notes, due 12/1/02 10,575
Containers - Metal and Glass - 2.0%
15,000 U.S. Can Corp., 10.125% senior
subordinated notes, due 10/15/06 15,750
Diversified Financial Services - 3.8%
30,000 Wilshire Financial Services Group, Inc.,
13.00% notes, due 1/1/04 30,150
Engineering - Research and Development Services - 3.3%
25,000 Intertek Finance PLC, 10.25% senior
subordinated notes, due 11/1/06 25,875
Food - Retail - 2.0%
15,000 Grand Union Co., 12.00% senior notes,
due 9/1/04 15,937
Funeral Services - 2.1%
15,000 Prime Succession Acquisition Co., 10.75%
senior subordinated notes, due 8/15/04 16,237
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<PAGE>
Home Furnishings - 4.2%
20,000 Cort Furniture Rental,
12.00% senior notes,
due 9/1/00 22,375
10,000 Lifestyle Furnishings, Inc.,
10.875% senior
subordinated company
guaranteed notes,
due 8/1/06 10,825
33,200
Industrial Audio and Video Products - 2.6%
20,000 Unifrax Investment Corp.,
10.50% senior
notes, due 11/1/03 20,675
Leisure and Recreation Services - 2.0%
15,000 Cobblestone Golf Group, Inc.,
11.50% senior
notes, due 6/1/03 15,637
Machine Tools and Related Products - 2.0%
15,000 International Knife & Saw,
Inc., 11.375%
senior subordinated notes,
due 11/15/06 15,562
Machinery - General Industrial - 2.6%
20,000 Spinnaker Industries, Inc.,
10.75% senior
notes, due 10/15/06 20,650
Manufacturing - 2.7%
20,000 Plastic Specialties & Technologies, Inc.,
11.25% senior secured notes,
due 12/1/03+ 21,100
Non-Hazardous Waste Disposal - 3.4%
25,000 Allied Waste North America,
10.25% senior
subordinated notes, due 12/1/06 26,312
Reinsurance - 6.5%
50,000 Veritas Holdings GmbH, 9.625% senior notes,
due 12/15/03 50,500
Retail - Drug Store - 1.9%
15,000 Duane Reade Corp., 12.00% senior notes,
due 9/15/02 15,188
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<PAGE>
Retail - Jewelry - 1.9%
15,000 Scholastic Brands, Inc., 11.00% senior
subordinated notes, due 1/15/07 15,263
Retail - Music Store - 2.0%
15,000 Guitar Center Management Co., 11.00%
senior notes, due 7/1/06 15,938
Savings/Loan/Thrifts - 2.1%
15,000 First Nationwide Escrow Corp., 10.625%
senior subordinated notes, due 10/1/03 16,163
Steel - Producers - 3.9%
20,000 WCI Steel, Inc., 10.00% senior notes,
due 12/1/04 20,250
10,000 Weirton Steel Corp., 11.375% senior notes,
due 7/1/04 10,175
30,425
Telecommunication Services - 13.9%
10,000 NEXTLINK Communications, L.L.C.,
12.50% senior notes, due 4/15/06 10,700
15,000 Omnipoint Corp., 11.625% senior notes,
due 8/15/06 15,638
10,000 Peoples Telephone Co., Inc.,
12.25% senior notes, due 7/15/02 10,525
50,000 Phonetel Technologies, Inc.,
12.00% senior
notes, due 12/15/06 51,750
20,000 RSL Communications, Ltd., 12.25% units,
due 11/15/06 20,100
108,713
Textile - Products - 1.4%
10,000 Polysindo International
Finance Co. B.V.,
11.375% company guaranteed secured
notes, 6/15/06 10,788
Tobacco - 1.3%
10,000 Consolidated Cigar Acquisition Corp.,
10.50% senior subordinated notes,
due 3/1/03 10,488
Wire and Cable Products - 4.9%
10,000 Alpine Group, Inc.,
12.25% senior notes,
due 7/15/03 10,950
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<PAGE>
25,000 International Wire Group,
11.75% senior
subordinated notes, due 6/1/05 27,063
38,013
Total Corporate Bonds (cost $705,698) 728,964
Convertible Bonds - 2.0%
Commercial Banks - 2.0%
15,000 Banamex, 11.00% junior
subordinated notes,
due 7/15/03 (cost $14,014) 15,263
Preferred Stock - 2.5%
Commercial Banks - 2.5%
600 Chevy Chase Savings, 13.00%
Non-Cumulative (cost $18,600) 19,500
Total Investments (total cost $738,312) - 97.6% 763,727
Cash, Receivables and Other Assets, net
of Liabilities - 2.4% 18,838
--------
Net Assets - 100% $782,565
========
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<PAGE>
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
Portfolio Manager, Sandy R. Rufenacht
Performance Review
The Janus Aspen Short-Term Bond Portfolio had a total return
of 3.98% during the year ended December 31, 1996, versus a gain
of 5.14% for the Lehman Brothers 1-3 Year Government/Corporate
Bond Index. Both results include reinvested dividends.
The Portfolio lagged the Lehman Index because it struggled
early in the year, when interest rates were volatile. As measured
by the yield on the benchmark 3-year Treasury note, short-term
rates swung from a low of 4.88% on February 13, to a high of
6.61% just four months later, on June 12. Rates responded to the
rapid changes in economic growth, which accelerated in the first
two calendar quarters of 1996 and then tapered off as the period
ended.
Portfolio Profile 12/31/96 12/31/95
Investment-Grade Corp. Bonds 56.4% 51.1%
High-Yield/High-Risk (Junk) Bonds -- 1.0%
U.S. Government Securities 42.0% 46.5%
Cash & Cash Equivalents 1.6% 1.4%
Weighted Avg. Maturity 1.97 Yrs. 2.6 Yrs.
Avg. Modified Duration* 1.76 Yrs. 2.3 Yrs.
30-day Avg. Yield 5.37% 5.13%
Avg. Rating AA AA+
_________________________
*A theoretical measure of price volatility.
Portfolio Strategy
Since assuming management responsibilities for the Portfolio
on May 1, 1996, my strategy has been to keep the majority of
assets in securities that closely mirror the Lehman Index.
However, the portfolio was somewhat more heavily weighted in
investment-grade corporate bonds, which were represented by
familiar names such as IBM, Lockheed Martin, and Union Pacific.
The U.S. Treasury position was a single 3-year note.
With interest rates relatively low, attractive short-term
obligations have been harder to find because companies have
tended to issue more long-term debt in order to lock in lower
rates.
In the coming year, I may increase the percentage of high-
yield holdings in the Portfolio. The high-yield market has become
much more sophisticated and segmented. Information flow is good
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See Notes to Schedules of Investments
<PAGE>
and detailed analysis of the companies issuing these bonds can
add value to performance.
But high-yield bonds still need to be chosen carefully. I
intend to focus on the debt of companies we know well, both
through Janus' equity research effort and from our own first-hand
analysis. I will also look for "cushion" bonds - lower-rated
bonds that are either going through a ratings upgrade or that are
likely to be called or refinanced in the near future. Although
cushion bonds provide less capital appreciation, the Portfolio
can collect a better coupon with a higher degree of safety.
Going Forward
The U.S. economy currently appears to be stable. Moderate
growth and continued low inflation should provide a good climate
for bonds. I intend to remain flexible, however, in order to
respond quickly should this scenario alter. My intention is to
maintain a stable net asset value and competitive yield within
the context of short-term obligations.
Thank you for your continued investment in Janus Aspen Short-
Term Bond Portfolio.
80
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<PAGE>
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
Portfolio Manager, Sandy R. Rufenacht
Performance Overview
GRAPHIC
A graphic comparison of the change in value of a hypothetical
$10,000 investment in Janus Aspen Short-Term Bond Portfolio, the
Lehman Brothers 1-3 year Government/Corporate Bond Index. Janus
Aspen Short-Term Bond Portfolio is represented by a solid black
line. The Lehman Brothers 1-3 year Government/Corporate Bond
Index is represented by a dashed dark gray line. The "y" axis
reflects the value of the investment. The "x" axis reflects the
computation periods from inception, September 13, 1993 through
December 31, 1996. The upper right quadrant reflects the ending
value of the hypothetical investment in Janus Aspen Short-Term
Bond Portfolio ($11,529) as compared to the Lehman Brothers 1-3
year Government/Corporate Bond Index ($11,848). There is a
legend in the upper left quadrant of the graph which indicates
Janus Aspen Short-Term Bond Portfolio's one-year and since
inception (September 13, 1993) average annual total returns as
3.98% and 4.42%, respectively.
*The Portfolio's inception date Source - Lipper Analytical
Services, Inc. 1996. All returns reflect reinvested dividends.
Past performance is not predictive of future performance.
Investment return and principal value may fluctuate so that
shares, when redeemed, may be worth more or less than their
original cost. The returns do not reflect deductions at the
separate account or contract level for any charges that may be
incurred under a contract. The Portfolio's securities may differ
significantly from the securities in the Index. The Index is
unmanaged. The Adviser voluntarily waives a portion of the
Portfolio's expenses. Without such waiver, the Portfolio's total
return would have been lower.
JANUS ASPEN SHORT-TERM BOND PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Corporate Bonds - 56.4%
Aerospace and Defense - 4.2%
$500,000 Lockheed Martin Corp., 6.55%
company guaranteed unsecured notes,
due 5/15/99 $502,500
81
See Notes to Schedules of Investments
<PAGE>
Commercial Banks - 1.2%
150,000 Provident Bank (The), 6.125%
senior notes, due 12/15/00 147,375
Computers - Mainframe - 4.2%
500,000 IBM Corp., 6.375%
global notes, due 6/15/00 498,750
Computers - Mini - 4.2%
500,000 Hewlett-Packard Co., 6.50%
senior unsubordinated
notes, due 12/30/99 505,000
Diversified Financial Services - 3.4%
400,000 Chrysler Financial Corp., 6.625%
notes, due 8/15/00 400,000
Diversified Operations - 2.1%
250,000 Grand Metropolitan
Investment Corp., 6.50%
company guaranteed notes,
due 9/15/99 251,250
Electric - Integrated - 0.4%
50,000 Ohio Power Co., 6.75%
first mortgage bonds, due 3/1/98 50,187
Finance - Credit Card - 6.3%
250,000 Capital One Bank, 6.73%
deposit notes, due 6/4/98 251,250
500,000 Dean Witter Discovery & Co., 6.25%
notes, due 3/15/00 495,625
746,875
Finance - Investment Banker and Broker - 2.1%
250,000 Merrill Lynch & Co., Inc., 6.50%
unsecured notes, due 4/1/01 247,813
Finance - Leasing Company - 2.1%
250,000 Pitney Bowes Credit Corp., 6.25%
notes, due 6/1/98 250,625
Food - Dairy Products - 4.1%
500,000 Associates Corp. N.A., 6.00%
senior notes, due 6/15/00 492,500
Insurance - Multi-Line - 3.4%
250,000 International Lease Finance Corp., 6.625%
notes, due 4/1/99 251,875
150,000 Travelers Group, Inc., 5.75%
notes, due 4/15/98 149,250
82
See Notes to Schedules of Investments
<PAGE>
401,125
Multimedia - 4.2%
500,000 Walt Disney Co. (The), 6.375%
senior notes, due 3/30/01 496,875
Retail - Apparel and Shoe - 3.3%
400,000 TJX Companies, Inc., 6.625%
notes, due 6/15/00 397,500
Retail - Discount - 1.1%
125,000 Wal-Mart Stores, Inc., 5.50%
notes, due 9/15/97 124,838
Retail - Major Department Store - 1.7%
200,000 Sears, Roebuck and Co., 6.00%
debentures, 5/1/00 196,750
Savings/Loan/Thrifts - 2.1%
250,000 Great Western Financial Corp., 6.125%
notes, due 6/15/98 250,000
Super - Regional Banks - 2.1%
250,000 Norwest Corp., 6.25%
senior notes, due 4/15/99 250,313
Transportation - Railroad - 4.2%
500,000 Union Pacific Corp., 6.25%
notes, due 3/15/99 498,750
Total Corporate Bonds (cost $6,704,418) 6,709,026
U.S. Government Obligation - 42.0%
4,985,000 U.S. Treasury Notes, 6.00%
due 11/30/97 (cost $5,005,307) 4,996,415
Total Investments (total cost $11,709,725) - 98.4% 11,705,441
Cash, Receivable and Other Assets, net
of Liabilities - 1.6% 196,029
Net Assets - 100% $11,901,470
83
See Notes to Schedules of Investments
<PAGE>
JANUS ASPEN MONEY MARKET PORTFOLIO
Portfolio Manager, Sharon S. Pichler
The Year in Review
During the year ended December 31, 1996, interest rates moved
dramatically in response to changes in economic growth and to
investors' fears about the outlook for inflation. The yield on
the one-year Treasury started the year at 5.13%, hit a low of
4.78% on February 13, then climbed quickly to a high of 5.96% on
July 8. It finished the year at 5.49%. This mirrored the rate of
economic growth, which rose sharply in the first six months,
peaked in the second quarter, and then slowed during the second
half of the year.
In December 1995, the only question on bond investors' minds
was how much lower the Federal Reserve Board would push rates in
order to restart a sluggish economy. Normally, the Janus Aspen
Money Market Portfolio's weighted average maturity would have
been getting longer under such a scenario in an attempt to lock
in better yields for longer periods. However, the yield curve was
so flat, the yield differential between one-year and overnight
paper so small, that there was no incentive to do so. One-year
obligations were not paying enough to assume the extra interest
rate risk. Many money market portfolio managers took the risk
anyway, and paid the price (in lower yields) later, when the
decline in interest rates came to a screeching halt and yields
then moved sharply higher.
The Portfolio's flexibility stood it in good stead. Betting
assets on interest rate forecasts, which are usually based on
less reliable models than predictions about the weather, is
almost never a good long-term strategy. The Portfolio remained in
short-term paper, much of it overnight obligations, where yields
were competitive.
Overall, the year served to reinforce the need for discipline
and detailed underlying credit research to support our strategy.
It is well worth the effort to look hard for exceptional
opportunities no matter what the interest rate environment. Our
research team is willing to take a base hit, rather than swing
for the fences and risk a strikeout.
Portfolio Strategy
For much of the year the Janus Aspen Money Market Portfolio
remained very short. As a result, we were able to take advantage
of higher short-term rates without locking the Portfolio into
yields that would underperform if interest rates moved higher.
This approach gave the Portfolio a weighted average maturity of
just 13 days as of December 31, 1996.
84
<PAGE>
JANUS ASPEN MONEY MARKET PORTFOLIO December 31, 1996
Shares or
Principal Amount Market Value
Repurchase Agreements - 24.6%
HSBC Securities, Inc., 7.00%,
$1,500,000 dated 12/31/96, maturing 1/2/97, to be
repurchased at $1,500,583, collateralized
by $1,495,000 in Federal National Mortgage
Association Floating Rate Note 5.40%, 7/16/97
with a value of $1,532,103 (cost
$1,500,000)*** $1,500,000
Short-Term Corporate Notes - 58.6%
Allied Signal
250,000 5.95%, 1/23/97 249,091
Bell Atlantic
250,000 5.75%, 1/21/97 249,201
Bell South
250,000 5.80%, 1/14/97 249,476
Bridgestone Firestone
250,000 6.05%, 1/10/97 249,622
Coca-Cola Co.
187,000 6.00%, 1/27/97 186,190
Countrywide Funding Corp.
300,000 5.63%, 1/7/97 299,719
CSC Enterprises
250,000 5.50%, 1/14/97 249,504
Dean Witter Discover & Co.
250,000 6.00%, 1/6/97 249,792
Ford Motor Credit Corp.
300,000 5.62%, 1/8/97 299,672
General Electric Capital Corp.
250,000 5.44%, 1/16/97 249,433
Georgia Power Co.
300,000 5.55%, 2/3/97 298,474
IBM Corp.
200,000 5.39%, 1/8/97 199,790
Merrill Lynch and Co., Inc.:
150,000 5.60%, 1/13/97 149,720
153,000 5.40%, 1/29/97 152,357
Orix America, Inc.
250,000 5.65%, 3/17/97 247,057
Total Short-Term Corporate Notes (amortized
cost $3,579,098) 3,579,098
85
<PAGE>
U.S. Government Agency - 16.9%
Federal Home Loan Mortgage Corp.
1,030,000 6.50%, 1/2/97 (amortized
cost $1,029,814) 1,029,814
Total Investments (total amortized
cost $6,108,912) - 100.1% 6,108,912
Liabilities, net of Cash, Receivables
and Other Assets - (0.1%) (2,751)
Net Assets - 100% $6,106,161
86
See Notes to Schedules of Investments
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
(ADR) - American Depository Receipt
(GDR) - Global Depository Receipt
Adjustable Rate Preferred Stock Dividend Rates are as of 12/31/96
*Non-Income producing security
**A portion of this security has been segregated by the custodian
to cover segregation requirements on open foreign currency
contracts.
***Repurchase Agreements held by the Portfolio are fully
collateralized and such collateral is in the possession of the
Portfolio's custodian. The collateral is evaluated daily to
ensure its market value equals or exceeds the current market
value of the repurchase agreements including accrued interest.
+Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
#The Investment Company Act of 1940 defines affiliates as those
companies in which a fund holds 5% or more of the outstanding
voting securities. Following is a summary of the transactions
with each such affiliate for the period ended December 31, 1996:
Janus Aspen
Worldwide Realized Dividend Market
Growth Purchases Sales Gain/ Income Value at
Portfolio Shares Cost Shares Cost (Loss) 12/31/96
Instrumentation
Laboratory
S.p.A.
(ADR) 391,950 $4,703,400 391,950 $4,703,400 ($844,864) -- --
87
See Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
Janus Janus Janus Janus Janus Janus Janus
For the fiscal year Janus Aspen Aspen Aspen Janus Aspen Aspen Aspen Aspen
or period ended Aspen Aggressive International Worldwide Aspen Flexible High-Yield Short- Money
December 31, 1996 Growth Growth Growth Growth Balanced Income Port- Term Bond Market
(all numbers in thousands) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio folio(1) Portfolio Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest $2,408 $882 $93 $1,827 $1,323 $1,446 $29 $436 $202
Dividends 2,126 601 52 3,491 355 9 -- -- --
Foreign Tax Withheld (50) (65) (6) (370) (7) -- -- -- --
Total Investment Income 4,484 1,418 139 4,948 1,671 1,455 29 436 202
Expenses:
Advisory fees 1,393 2,066 55 2,014 345 114 2 47 8
Transfer agent fees
and expenses 5 6 -- 6 -- 1 -- -- 1
System fees 9 15 4 11 10 7 2 5 4
Custodian fees 76 109 78 390 44 20 6 8 8
Insurance fees 2 4 1 2 1 1 -- 1 1
Audit fees 9 17 6 12 7 9 4 3 7
Other expenses 4 2 1 5 (1) (2) 5 (3) --
Total Expenses 1,498 2,219 145 2,440 406 150 19 61 29
Less: Expense offsets (10) (12) -- (13) (5) (2) -- (1) --
Net expenses 1,488 2,207 145 2,427 401 148 19 60 29
Less: Excess expense
reimbursement -- -- (52) -- -- -- (16) (13) (10)
Net expenses after reimbursement 1,488 2,207 93 2,427 401 148 3 47 19
Net investment income/(loss) 2,996 (789) 46 2,521 1,270 1,307 26 389 183
Net Realized and Unrealized
Gain/(Loss) on Investments:
Net realized gain/(loss)
from securities transactions 9,959 (10,886) 228 8,993 1,792 360 6 4 --
Net realized gain/(loss)
from foreign currency 197 (1,027) 33 1,826 (24) 2 -- -- --
Net realized gain/(loss) from
futures contracts -- (180) -- 483 -- (38) -- -- --
Change in net unrealized
appreciation or (depreciation)
of investments 20,898 27,841 1,663 54,851 3,680 277 26 (28)
Net gain/(loss) on investments 31,054 15,748 1,924 66,153 5,448 601 32 (24)
Net increase in net assets
resulting from operations 34,050 14,959 1,970 68,674 6,718 1,908 58 365 183
(1) For the period May 1, 1996 (inception) to December 31, 1996
</TABLE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
88
See Notes to Financial Statements
<PAGE>
STATEMENTS OF OPERATIONS
Janus Janus Janus Janus Janus Janus Janus
As of December 31, 1996 Janus Aspen Aspen Aspen Janus Aspen Aspen Aspen Aspen
(all numbers in thousands Aspen Aggressive International Worldwide Aspen Flexible High-Yield Short- Money
except net asset value Growth Growth Growth Growth Balanced Income Port- Term Bond Market
per share) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio folio(1) Portfolio Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at cost $282,312 $336,129 $24,727 $506,601 $82,670 $24,047 $738 $11,710 $6,109
Investments at value $317,498 $393,897 $26,678 $572,931 $87,207 $24,698 $764 $11,705 $6,109
Cash 3,717 206 159 -- -- 96 11 102 3
Receivables:
Investments sold 4,166 2,905 158 6,987 728 -- 11 -- --
Fund shares sold 947 1,174 231 2,855 588 95 5 3 --
Interest -- -- -- -- 418 450 14 113 --
Dividends 157 56 8 287 48 -- -- -- --
From advisor -- -- 9 -- -- -- 2 4 3
Other assets 1 1 -- 1 -- -- -- -- --
Foreign currency contracts 113 -- 31 2,062 40 -- -- -- --
Total Assets 326,599 398,239 27,274 585,123 89,029 25,339 807 11,927 6,115
Liabilities:
Payables:
Investments purchased 505 13,232 45 1,174 3,347 -- 15 -- --
Fund shares repurchased 108 137 -- 55 73 -- -- 13 --
Advisory fee 173 224 14 304 53 14 1 7 1
Due to custodian -- -- -- 845 56 -- -- -- --
Accrued expenses 24 49 23 142 20 10 8 6 8
Foreign currency contracts -- 904 -- -- -- -- -- -- --
Total Liabilities 810 14,546 82 2,520 3,549 24 24 26 9
Net Assets $325,789 $383,693 $27,192 $582,603 $85,480 $25,315 $783 $11,901 $6,106
Shares Outstanding, $.001
Par Value (unlimited
shares authorized) 21,003 21,040 1,730 29,968 5,789 2,252 72 1,193 6,106
Net Asset Value Per Share $15.51 $18.24 $15.72 $19.44 $14.77 $11.24 $10.83 $9.97 $1.00
</TABLE>
89
See Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
Janus Janus Janus Janus
For the fiscal year Janus Aspen Aspen Aspen Janus Aspen
ended December 31 Aspen Aggressive International Worldwide Aspen Flexible
(all numbers in Growth Growth Growth Growth Balanced Income
thousands) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income/(loss) $2,996 $957 $(789) $622 $46 $(14) $2,521 $564 $1,270 $138 $1,307 $414
Net realized
gain/(loss)
from investment
transactions 10,156 5,455 (12,093) 3,639 261 122 11,302 1,712 1,768 323 324 360
Change in
unrealized net
appreciation/
(depreciation)
of investments 20,898 13,625 27,841 26,665 1,663 303 54,851 13,136 3,680 903 277 407
Net increase/
(decrease)
in net assets
resulting
from
operations 34,050 20,037 14,959 30,926 1,970 411 68,674 15,412 6,718 1,364 1,908 1,181
Dividends and
Distributions:
Net investment
income (3,002) (2,611) -- (2,143) (76) (3) (4,109) (388) (1,165) (150) (1,255) (439)
Net realized
gain from
investment
transactions (3,331) -- (3,020) (7) (83) -- (2,028) (8) (278) -- (272) --
Tax return of
capital -- -- (220) -- -- -- -- -- -- -- -- --
Net decrease in
net assets
from dividends
and distribu-
ions (6,333) (2,611) (3,240) (2,150) (159) (3) (6,137) (396) (1,443) (150) (1,527) (439)
Capital Share
Transactions:
Shares sold 183,993 70,676 210,533 132,658 26,943 3,857 431,848 62,833 72,698 11,288 20,543 11,580
90
See Notes to Financial Statements
<PAGE>
Reinvested
dividends
and distribu-
tions 6,333 2,611 3,240 2,150 159 3 6,137 396 1,443 150 1,527 439
Shares
repurchased (19,165) (7,351) (27,710) (18,962) (3,329) (4,013) (26,482) (7,410) (7,957) (1,784) (7,967) (3,854)
Net increase/
(decrease)
in net assets
from capital
share
transactions 171,161 65,936 186,063 115,846 23,773 (153) 411,503 55,819 66,184 9,654 14,103 8,165
Net increase/
(decrease)
in net assets 198,878 83,362 197,782 144,622 25,584 255 474,040 70,835 71,459 10,868 14,484 8,907
Net Assets:
Beginning of
period 126,911 43,549 185,911 41,289 1,608 1,353 108,563 37,728 14,021 3,153 10,831 1,924
End of Period $325,789 $126,911 $383,693 $185,911 $27,192 $1,608 $582,603 $108,563 $85,480 $14,021 $25,315 10,831
Net Assets
consist of:
Capital (par
value and
paid-in
surplus)* 280,430 109,269 337,407 154,058 24,992 1,219 $504,741 $93,238 $79,031 $12,847 $24,297 $10,193
Undistributed
net investment
income/
(distribution
in excess)* 123 -- 2 -- 12 9 1,586 445 114 -- 46 --
Undistributed net
realized gain/
(loss)
from invest-
ents* 9,937 3,241 (10,580) 2,829 207 62 7,886 1,341 1,758 277 322 265
Unrealized
appreciation/
(depreciation) of
investments and
foreign
currency 35,299 14,401 56,864 29,024 1,981 318 68,390 13,539 4,577 897 650 373
$325,789 $126,911 $383,693 $185,911 $27,192 $1,608 $582,603 $108,563 $85,480 $14,021 $25,315 $10,831
Transactions in
Fund Shares:
Shares sold 12,447 5,726 11,507 8,985 1,817 360 24,029 4,494 5,179 916 1,853 1,097
Reinvested
distributions 426 198 176 139 11 -- 328 26 101 12 139 41
Total 12,873 5,924 11,683 9,124 1,828 360 24,357 4,520 5,280 928 1,992 1,138
91
See Notes to Financial Statements
<PAGE>
Shares
repurchased (1,306) (608) (1,528) (1,270) (233) (364) (1,479) (555) (567) (148) (715) (366)
Net increase/
(decrease) 11,567 5,316 10,155 7,854 1,595 (4) 22,878 3,965 4,713 780 1,277 772
Shares outstanding
beginning of
period 9,436 4,120 10,885 3,031 135 139 7,090 3,125 1,076 296 975 203
Shares outstanding
end of period 21,003 9,436 21,040 10,885 1,730 135 29,968 7,090 5,789 1,076 2,252 975
Purchases and Sales of
Investment Securities:
(excluding Short-Term
Securities)
Purchases of
Securities $279,406 $178,852 $411,187 $270,419 $19,784 $3,144 $532,495 $108,274 $95,054 $13,600 $44,707 $17,361
Proceeds from Sales
of Securities 151,544 119,370 242,452 149,381 3,941 3,166 170,371 56,240 39,718 6,223 34,221 10,758
Purchases of Long-Term
U.S. Government
Obligations -- -- -- -- -- -- -- -- 4,833 4,520 7,738 2,561
Proceeds from
Sales of Long-Term
U.S. Government
Obligations -- -- -- -- -- -- -- -- 2,154 1,551 6,051 1,481
*See Note 3 in Notes to Financial Statements
</TABLE>
92
See Notes to Financial Statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
Janus Janus Janus
Aspen Aspen Aspen
High-Yield Short-Term Money Market
Portfolio Bond Portfolio Portfolio
1996(1) 1996 1995 1996 1995(2)
Operations:
Net investment
income/(loss) $26 $389 $164 $183 $55
Net realized
gain/(loss)
from investment
transactions 6 4 36 -- --
Change in
unrealized net
appreciation/
(depreciation)
of investments 26 (28) 54 -- --
Net increase/
(decrease)
in net assets
resulting
from
operations 58 365 254 183 55
Dividends and
Distributions:
Net investment
income (24) (370) (162) (183) (55)
Net realized
gain from
investment
transactions -- (6) __ __ __
Tax return of
capital -- -- -- -- --
Net decrease in
net assets
from dividends
and distribu-
ions (24) (376) (162) (183) (55)
Capital Share
Transactions:
Shares sold 1,491 13,981 7,515 28,902 12,036
Reinvested
dividends
and distribu-
tions 24 376 162 184 55
93
See Notes to Financial Statements
<PAGE>
Shares
repurchased (766) (5,632) (7,484) (24,715) (10,356)
Net increase/
(decrease)
in net assets
from capital
share
transactions 749 8,725 193 4,371 1,735
Net increase/
(decrease)
in net assets 783 8,714 285 4,371 1,735
Net Assets:
Beginning of
period -- 3,187 2,902 1,735 --
End of Period $783 $11,901 $3,187 $6,106 $1,735
Net Assets
consist of:
Capital (par
value and
paid-in
surplus)* $749 $11,866 $3,142 $6,106 $1,735
Undistributed
net
investment
income/
(distribution
in excess)* 2 36 16 -- --
Undistributed net
realized gain/
(loss)
from invest-
ents* 6 3 5 -- --
Unrealized
appreciation/
(depreciation) of
investments and
foreign
currency 26 (4) 24 -- --
$783 $11,901 $3,187 $6,106 $1,735
Transactions in
Fund Shares:
Shares sold 140 1,398 752 28,902 12,036
Reinvested
distributions 2 38 16 184 55
Total 142 1,436 768 29,086 12,091
Shares
repurchased (70) (561) (748) (24,715) (10,356)
94
See Notes to Financial Statements
<PAGE>
Net increase/
(decrease) 72 875 20 4,371 1,735
Shares outstanding
beginning of
period -- 318 298 1,735 --
Shares outstanding
end of period 72 1,193 318 6,106 1,735
Purchases and Sales of
Investment Securities:
(excluding Short-Term
Securities)
Purchases of
Securities $1,595 $13,059 $3,003 -- --
Proceeds from Sales
of Securities 871 8,202 2,762 -- --
Purchases of Long-Term
U.S. Government
Obligations -- 24,287 8,359 -- --
Proceeds from Sales
of Long-Term U.S.
Government
Obligations -- 21,010 8,284 -- --
(1) Period May 1, 1996 (inception) to December 31, 1996
(2) Period May 1, 1995 (inception) to December 31, 1995
*See Note 3 in Notes to Financial Statements
95
See Notes to Financial Statements
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding Janus Aspen Janus Aspen
throughout each fiscal Growth Aggressive
year or period Portfolio Growth Portfolio
ended December 31
1996 1995 1994 1993(1) 1996 1995 1994 1993(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
Net investment
income/(loss) .17 .28 .09 .03 -- .24 .11 .01
Net gains or (losses)
on securities (both
realized and
unrealized) 2.29 2.90 .20 .32 1.36 3.47 1.82 1.80
Total from investment
operations 2.46 3.18 .29 .35 1.36 3.71 1.93 1.81
Less distributions
Dividends (from
net investment
income) (.17) (.30) (.04) (.03) -- (.25) (.11) (.01)
Distributions (from
capital gains) (.23) -- -- -- (.19) -- -- --
Tax return of capital
distributions -- -- -- -- (.01) -- -- --
Total distribu-
tions (.40) (.30) (.04) (.03) (.20) (.25) (.11) (.01)
Net asset value,
end of period $15.51 $13.45 $10.57 $10.32 $18.24 $17.08 $13.62 $11.80
Total return** 18.45% 30.17% 2.76% 3.50% 7.95% 27.48% 16.33% 18.05%
Net assets, end
of period (in
thousands) $325,789 $126,911 $43,549 $7,482 $383,693 $185,911 $41,289 $1,985
Average net
assets for
the period
(in thousands) 216,125 77,344 26,464 3,191 290,629 107,582 14,152 1,091
Ratio of gross
expenses to
average net
assets* 0.69%(5) 0.78%(6) N/A N/A 0.76%(5) 0.86%(6) N/A N/A
96
See Notes to Financial Statements
<PAGE>
Ratio of net
expenses to
average net
assets* 0.69% 0.76% 0.88%(7) 0.25%(8) 0.76% 0.84% 1.05%(7) 0.25%(8)
Ratio of net
investment
income to
average net
assets* 1.39% 1.24% 1.45% 2.54% (0.27%) 0.58% 2.18% 0.34%
Portfolio turnover
rate* 87% 185% 169% 162% 88% 155% 259% 31%
Average commission
per share $0.0466 N/A N/A N/A $0.0347 N/A N/A N/A
*Annualized for periods of less than one full year.
**Total return not annualized for periods of less than 1 full year.
(1) Period September 13, 1993 (inception) to December 31, 1993.
(2) Period May 2, 1994 (inception) to December 31, 1994.
(3) Period May 1, 1996 (inception) to December 31, 1996.
(4) Period May 1, 1995 (inception) to December 31, 1995
(5) The ratio was 0.83%, 0.83%, 2.21%, 0.91%, 1.07%, 6.29%, 0.84%, and 0.78%, respectively for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, High-Yield, Short-Term Bond
and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's fee to
the effective rate of the corresponding Janus Retail Fund.
(6) The ratio was 0.98%, 0.93%, 3.57%, 1.09%, 1.55%, 1.07%, 1.37% and 1.07%, respectively, for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income, Short-Term
Bond and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's
fee to the effective rate of the corresponding Janus Retail Fund.
(7) The ratio was 1.23%, 1.14%, 4.67%, 1.49%, 1.74%, 1.35% and 1.40%, respectively, for the Growth,
Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income and Short-Term Bond
Portfolios, before waiver of certain fees and/or voluntary reduction of advisor's fee to the effective
rate of the corresponding Janus Retail Fund.
(8) The ratio was 2.16%, 5.79%, 2.71%, 7.92%, 5.27% and 5.33%, respectively, for the Growth, Aggressive
Growth, Worldwide Growth, Balanced, Flexible Income, and Short-Term Bond Portfolios, before waiver of
certain fees and/or voluntary reduction of advisor's fee to the effective rate of the corresponding
Janus Retail Fund.
</TABLE>
97
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Janus Aspen Janus Aspen
International Worldwide
Growth Portfolio Growth Portfolio
1996 1995 1994(2) 1996 1995 1994 1993(1)
Net asset value,
beginning of
period $11.95 $9.72 $10.00 $15.31 $12.07 $11.89 $10.00
Income from
investment
operations
Net investment
income/(loss) .05 .09 (.09) .16 .11 .04 .02
Net gains or (losses)
on securities (both
realized and
unrealized) 4.06 2.16 (.19) 4.27 3.19 .14 1.89
Total from investment
operations 4.11 2.25 (.28) 4.43 3.30 .18 1.91
Less distributions
Dividends (from
net investment
income) (.11) (.02) -- (.17) (.06) -- (.01)
Distributions (from
capital gains) (.23) -- -- (.13) -- -- (.01)
Tax return of
capital
distributions -- -- -- -- -- -- --
Total
distributions (.34) (.02) -- (.30) (.06) -- (.02)
Net asset value,
end of
period $15.72 $11.95 $9.72 $19.44 $15.31 $12.07 $11.89
Total return** 34.71% 23.15% (2.80%) 29.04% 27.37% 1.53% 19.10%
Net assets, end
of period (in
thousands) $27,192 $1,608 $1,353 $582,603 $108,563 $37,728 $4,856
Average net
assets for
the period
(in thousands) 7,437 1,792 1,421 304,111 59,440 22,896 2,200
Ratio of gross
expenses to
average net
assets* 1.26%(5) 2.69%(6) N/A 0.80%(5) 0.90%(6) N/A N/A
98
See Notes to Financial Statements
<PAGE>
Ratio of net
expenses to
average net
assets* 1.25% 2.50%2.50%(7) 0.80% 0.87% 1.18%(7) 0.25%(8)
Ratio of net
investment
income to
average net
assets* 0.62% (0.80%) (1.30%) 0.83% 0.95% 0.50% 0.84%
Portfolio turnover
rate* 65% 211% 275% 62% 113% 217% 57%
Average commission
per share $0.0305 N/A N/A $0.0345 N/A N/A N/A
*Annualized for periods of less than one full year.
**Total return not annualized for periods of less than 1 full year.
(1) Period September 13, 1993 (inception) to December 31, 1993.
(2) Period May 2, 1994 (inception) to December 31, 1994.
(3) Period May 1, 1996 (inception) to December 31, 1996.
(4) Period May 1, 1995 (inception) to December 31, 1995
(5) The ratio was 0.83%, 0.83%, 2.21%, 0.91%, 1.07%, 6.29%, 0.84%, and 0.78%,
respectively for the Growth, Aggressive Growth, International Growth,
Worldwide Growth, Balanced, High-Yield, Short-Term Bond and Money Market
Portfolios before waiver of certain fees and/or voluntary reduction of
advisor's fee to the effective rate of the corresponding Janus Retail Fund.
(6) The ratio was 0.98%, 0.93%, 3.57%, 1.09%, 1.55%, 1.07%, 1.37% and 1.07%,
respectively, for the Growth, Aggressive Growth, International Growth,
Worldwide Growth, Balanced, Flexible Income, Short-Term Bond and Money Market
Portfolios before waiver of certain fees and/or voluntary reduction of
advisor's fee to the effective rate of the corresponding Janus Retail Fund.
(7) The ratio was 1.23%, 1.14%, 4.67%, 1.49%, 1.74%, 1.35% and 1.40%,
respectively, for the Growth, Aggressive Growth, International Growth,
Worldwide Growth, Balanced, Flexible Income and Short-Term Bond Portfolios,
before waiver of certain fees and/or voluntary reduction of advisor's fee to
the effective rate of the corresponding Janus Retail Fund.
(8) The ratio was 2.16%, 5.79%, 2.71%, 7.92%, 5.27% and 5.33%, respectively,
for the Growth, Aggressive Growth, Worldwide Growth, Balanced, Flexible
Income, and Short-Term Bond Portfolios, before waiver of certain fees and/or
voluntary reduction of advisor's fee to the effective rate of the
corresponding Janus Retail Fund.
99
See Notes to Financial Statements
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
For a share outstanding Janus Aspen Janus Aspen
throughout each fiscal Balanced Flexible
year or period ended Portfolio Income Portfolio
December 31
1996 1995 1994 1993(1) 1996 1995 1994 1993(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $13.03 $10.63 $10.64 $10.00 $11.11 $9.48 $9.97 $10.00
Income from
investment operations
Net investment
income/(loss) .32 .17 .15 .08 .74 .53 .47 .11
Net gains or
(losses) on
securities (both
realized and
unrealized) 1.81 2.45 (.06) .64 .24 1.70 (.56) (.04)
Total from
investment
operations 2.13 2.62 .09 .72 .98 2.23 (.09) .07
Less Distributions
Dividends (from
net investment
income) (.30) (.22) (.10) (.08) (.72) (.60) (.40) (.10)
Distributions
(from capital
gains) (.09) -- -- -- (.13) -- -- --
Total
distributions (.39) (.22) (.10) (.08) (.85) (.60) (.40) (.10)
Net asset value,
end of period $14.77 $13.03 $10.63 $10.64 $11.24 $11.11 $9.48 $9.97
Total return** 16.18% 24.79% 0.84% 7.20% 9.19% 23.86% (0.91%) 0.70%
Net assets, end
of period (in
thousands) $85,480 $14,021 $3,153 $537 $25,315 $10,831 $1,924 $538
Average net
assets for
the period (in
thousands) 43,414 5,739 2,336 521 17,889 5,556 1,636 497
Ratio of gross
expenses to
average net
assets* 0.94%(5) 1.37%(6) N/A N/A 0.84% 1.07%(6) N/A N/A
100
See Notes to Financial Statements
<PAGE>
Ratio of net
expenses to
average net
assets* 0.92% 1.30% 1.57%(7) 0.25%(8) 0.83% 1.00% 1.00%(7) 1.00%(8)
Ratio of net
investment
income to
average net
assets* 2.92% 2.41% 1.90% 2.69% 7.31% 7.46% 5.49% 3.77%
Portfolio
turnover rate* 103% 149% 158% 126% 250% 236% 234% 508%
Average commission
per share $0.0426 N/A N/A N/A N/A N/A N/A N/A
*Annualized for periods of less than one full year.
**Total return not annualized for periods of less than 1 full year.
(1) Period September 13, 1993 (inception) to December 31, 1993.
(2) Period May 2, 1994 (inception) to December 31, 1994.
(3) Period May 1, 1996 (inception) to December 31, 1996.
(4) Period May 1, 1995 (inception) to December 31, 1995
(5) The ratio was 0.83%, 0.83%, 2.21%, 0.91%, 1.07%, 6.29%, 0.84%, and 0.78%, respectively for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, High-Yield, Short-Term Bond
and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's fee to
the effective rate of the corresponding Janus Retail Fund.
(6) The ratio was 0.98%, 0.93%, 3.57%, 1.09%, 1.55%, 1.07%, 1.37% and 1.07%, respectively, for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income, Short-Term
Bond and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's
fee to the effective rate of the corresponding Janus Retail Fund.
(7) The ratio was 1.23%, 1.14%, 4.67%, 1.49%, 1.74%, 1.35% and 1.40%, respectively, for the Growth,
Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income and Short-Term Bond
Portfolios, before waiver of certain fees and/or voluntary reduction of advisor's fee to the effective
rate of the corresponding Janus Retail Fund.
(8) The ratio was 2.16%, 5.79%, 2.71%, 7.92%, 5.27% and 5.33%, respectively, for the Growth, Aggressive
Growth, Worldwide Growth, Balanced, Flexible Income, and Short-Term Bond Portfolios, before waiver of
certain fees and/or voluntary reduction of advisor's fee to the effective rate of the corresponding
Janus Retail Fund.
</TABLE>
101
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
For a share
outstanding
throughout each Janus Aspen Janus Aspen Janus Aspen
fiscal year High-Yield Short-Term Money Market
ended Portfolio Bond Portfolio Portfolio
December 31
1996(3) 1996 1995 1994 1993(1) 1996 1995(4)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $10.00 $10.03 $9.72 $9.93 $10.00 $1.00 $1.00
Income from
investment operations
Net investment
income/(loss) .43 .42 .60 .35 .11 .05 .04
Net gains or
(losses) on
securities (both
realized and
unrealized) .80 (.03) .31 (.26) (.08) -- --
Total from
investment
operations 1.23 .39 .91 .09 .03 .05 .04
Less distributions
Dividends (from
net investment
income) (.40) (.44) (.60) (.30) (.10) (.05) (.04)
Distributions
(from capital
gains) -- (.01) -- -- -- -- --
Total
distributions (.40) (.45) (.60) (.30) (.10) (.05) (.04)
Net asset value,
end of period $10.83 $9.97 $10.03 $9.72 $9.93 $1.00 $1.00
Total return** 12.40% 3.98% 9.54% 0.92% 0.30% 5.05% 3.63%
Net assets, end
of period (in
thousands) $783 $11,901 $3,187 $2,902 $502 $6,016 $1,735
Average net
assets for
the period (in
thousands) 459 7,168 2,727 1,774 492 3,715 1,543
102
See Notes to Financial Statements
<PAGE>
Ratio of gross
expenses to
average net
assets* 1.01%(5) 0.66%(5) 0.70%(6) N/A N/A 0.50%(5) 0.50%(6)
Ratio of net
expenses to
average net
assets* 1.00% 0.65% 0.65% 0.65%(7) 0.65%(8) 0.50% 0.50%
Ratio of net
investment
income to
average net
assets* 5.74% 5.44% 6.02% 5.00% 3.57% 4.93% 5.30%
Portfolio
turnover rate* 301% 416% 417% 256% 91% N/A N/A
Average commission
per share N/A N/A N/A N/A N/A N/A N/A
*Annualized for periods of less than one full year.
**Total return not annualized for periods of less than 1 full year.
(1) Period September 13, 1993 (inception) to December 31, 1993.
(2) Period May 2, 1994 (inception) to December 31, 1994.
(3) Period May 1, 1996 (inception) to December 31, 1996.
(4) Period May 1, 1995 (inception) to December 31, 1995
(5) The ratio was 0.83%, 0.83%, 2.21%, 0.91%, 1.07%, 6.29%, 0.84%, and 0.78%, respectively for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, High-Yield, Short-Term Bond
and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's fee to
the effective rate of the corresponding Janus Retail Fund.
(6) The ratio was 0.98%, 0.93%, 3.57%, 1.09%, 1.55%, 1.07%, 1.37% and 1.07%, respectively, for the
Growth, Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income, Short-Term
Bond and Money Market Portfolios before waiver of certain fees and/or voluntary reduction of advisor's
fee to the effective rate of the corresponding Janus Retail Fund.
(7) The ratio was 1.23%, 1.14%, 4.67%, 1.49%, 1.74%, 1.35% and 1.40%, respectively, for the Growth,
Aggressive Growth, International Growth, Worldwide Growth, Balanced, Flexible Income and Short-Term Bond
Portfolios, before waiver of certain fees and/or voluntary reduction of advisor's fee to the effective
rate of the corresponding Janus Retail Fund.
(8) The ratio was 2.16%, 5.79%, 2.71%, 7.92%, 5.27% and 5.33%, respectively, for the Growth, Aggressive
Growth, Worldwide Growth, Balanced, Flexible Income, and Short-Term Bond Portfolios, before waiver of
certain fees and/or voluntary reduction of advisor's fee to the effective rate of the corresponding
Janus Retail Fund.
</TABLE>
103
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Organization and
Significant Accounting Policies
Janus Aspen Series (the "Trust") was organized as a Delaware
Trust on May 20, 1993 and is registered under the Investment
Company Act of 1940 (the "1940 Act") as a no-load, open-end
management investment company. The Trust offers nine portfolios
or series of shares with differing investment objectives and
policies. Five portfolios invest primarily in equity securities:
Janus Aspen Growth Portfolio, Janus Aspen Aggressive Growth
Portfolio, Janus Aspen International Growth Portfolio, Janus
Aspen Worldwide Growth Portfolio, and Janus Aspen Balanced
Portfolio. Three Portfolios invest primarily in income producing
securities: Janus Aspen Flexible Income Portfolio, Janus Aspen
High-Yield Portfolio and Janus Aspen Short-Term Bond Portfolio.
Janus Money Market Portfolio invests in short-term money market
securities. Each Portfolio is diversified as defined in the 1940
Act, with the exception of the Aggressive Growth Portfolio which
is non-diversified.
Shares of the Trust are issued and redeemed only in
connection with investment in and payments under variable annuity
contracts and variable life insurance contracts (collectively
"variable insurance contracts"), as well as certain qualified
retirement plans.
Effective May 1, 1996, the Trust issued a new series of
shares, the Janus Aspen High-Yield Portfolio, a diversified
portfolio investing primarily in income producing securities.
Janus Capital Corp. (the Trust's investment advisor "Janus
Capital") invested $10,000 of initial seed capital. Organization
costs for the Portfolio were borne by Janus Capital.
The following accounting policies have been consistently
followed by the Portfolios and are in conformity with accounting
principles generally accepted in the investment company industry.
Investment Valuation
Securities are valued at the closing price for securities traded
on a principal exchange (U.S. or foreign) and on the NASDAQ
National Market. Securities traded on over-the-counter markets
and listed securities for which no sales are reported are valued
at the latest bid price (or yield equivalent thereof) obtained
from one or more dealers making a market for such securities or
by a pricing service approved by the Trustees. Short-term
investments maturing within 60 days and all money market
securities in the Money Market Portfolio are valued at amortized
cost, which approximates market value. Foreign securities are
104
<PAGE>
converted to U.S. dollars using exchange rates at the close of
the New York Stock Exchange. When market quotations are not
readily available, securities are valued at fair value as
determined in good faith under procedures established by the
Trustees.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date
purchased or sold. Dividend income is recorded on the ex-dividend
date. Certain dividends from foreign securities will be recorded
as soon as the Trust is informed of the dividend if such
information is obtained subsequent to the ex-dividend date.
Interest income is recorded on the accrual basis and includes
amortization of discounts and premiums. Gains and losses are
determined on the identified cost basis, which is the same basis
used for federal income tax purposes.
Forward Currency Transactions
and Futures Contracts
The Portfolios enter into forward currency contracts in order
to hedge their exposure to changes in foreign currency exchange
rates on their foreign portfolio holdings and to lock in the U.S.
dollar cost of firm purchase and sales commitments denominated in
foreign currencies. A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the
difference between the U.S. dollar cost of the original contract
and the value of the foreign currency in U.S. dollars upon
closing such contract is included in net realized gain or loss on
foreign currency transactions. Forward currency contracts held by
the Portfolios are fully collateralized by other securities which
are denoted in the accompanying schedules of investments. Such
collateral is in the possession of the Portfolio's custodian. The
collateral is evaluated daily to ensure its market value equals
or exceeds the current market value of the corresponding forward
currency contracts.
Currency gain and loss is also calculated on payables and
receivables that are denominated in foreign currencies. The
payables and receivables are generally related to security
transactions and income.
Futures contracts are marked to market daily and the
resultant variation margin is recorded as an unrealized gain or
loss. When a contract is closed, a realized gain or loss is
recorded equal to the difference between the opening and closing
value of the contract. Generally, open forward and futures
contracts are marked to market (i.e., treated as realized and
105
<PAGE>
subject to distribution) for federal income tax purposes at
fiscal year-end.
Foreign denominated assets and forward currency contracts may
involve more risks than domestic transactions, including:
currency risk, political and economic risk, regulatory risk, and
market risk. Risks may arise from the potential inability of a
counterparty to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies
relative to the U.S. dollar.
The Portfolios may enter into futures contracts and options
on securities, financial indices and foreign currencies; forward
contracts; and interest rate swaps and swap-related products. The
Portfolios intend to use such derivative instruments primarily to
hedge or protect from adverse movements in securities prices,
currency rates or interest rates. The use of futures contracts
and options may involve risks such as the possibility of illiquid
markets or imperfect correlation between the value of the
contracts and the underlying securities, or that the counterparty
will fail to perform its obligations.
Additional Investment Risk
A portion of the Flexible Income and High-Yield Portfolios
may be invested in lower rated debt securities that have a higher
risk of default or loss of value due to changes in the economy or
in their respective industry.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Dividend Distributions and Expenses
Each Portfolio, except the Money Market Portfolio, makes
semiannual distributions of substantially all of its investment
income and an annual distribution of its net realized capital
gains, if any. The Money Market Portfolio makes daily
distributions of its income. All dividends and capital gains
distributions from a Portfolio will be automatically reinvested
into additional shares of that Portfolio.
Each Portfolio bears expenses incurred specifically on its
behalf as well as a portion of general expenses.
106
<PAGE>
Federal Income Taxes
No provision for income taxes is included in the accompanying
financial statements as the Portfolios intend to distribute to
shareholders all taxable investment income and realized gains and
otherwise comply with the Internal Revenue Code applicable to
regulated investment companies.
2. Investment Advisory Agreement and
Other Transactions with Affiliates
Investment advisory fees for each of the five equity
Portfolios are payable to Janus Capital based upon annual rates
of 1% of the first $30 million of average net assets, .75% of the
next $270 million of average net assets, .70% of the next $200
million of average net assets and .65% of the average net assets
in excess of $500 million. However, Janus Capital has voluntarily
agreed to reduce each equity Portfolio's advisory fee to the
extent that such fee exceeds the effective rate of the Janus
retail fund corresponding to such Portfolio. 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). Janus Aspen Growth Portfolio, Janus Aspen
Aggressive Growth Portfolio, Janus Aspen International Growth
Portfolio, Janus Aspen Worldwide Growth Portfolio and Janus Aspen
Balanced Portfolio advisory fees are reduced to the effective
rates of Janus Fund, Janus Enterprise Fund, Janus Overseas Fund,
Janus Worldwide Fund and Janus Balanced Fund, respectively. The
effective rate for each Portfolio for the period ended December
31, 1996 was .65%, .72%, .73%, .66% and .79%, respectively. The
Flexible Income and Short-Term Bond Portfolios are each subject
to advisory fees payable to Janus Capital based upon annual rates
of .65% of the first $300 million of average net assets plus .55%
of average net assets in excess of $300 million. The High-Yield
Portfolio's advisory fee rate is payable at rates of .75% of the
first $300 million of average net assets plus .65% of average net
assets in excess of $300 million. The Money Market Portfolio's
advisory fee rate is .25% of average net assets.
As discussed in the prospectus, Janus Capital has agreed to
reduce its fee to a Portfolio to the extent that the Portfolio's
normal operating expenses (exclusive of brokerage commissions,
interest and taxes) exceed 2.5% of the first $30 million, 2% of
the next $70 million and 1.5% of the balance of a Portfolio's
average net assets for a fiscal year. Janus Capital has also
agreed to reduce its fee to the extent that normal operating
expenses exceed 1% of the average net assets of the Flexible
Income and High-Yield Portfolios, .65% of the average net assets
of the Short-Term Bond Portfolio and .50% of the average net
assets of the Money Market Portfolio for a fiscal year.
107
<PAGE>
Effective June 3, 1996 through at least April 30, 1997, Janus
Capital has agreed to reduce its fee to the extent that normal
operating expenses exceeded 1.25% of average net assets of the
International Growth Portfolio.
Janus Capital may terminate any of these fee waivers or
reductions on at least 90 days' notice to the Trustees.
Officers and certain Trustees of the Trust are also officers
and/or directors of Janus Capital; however, they receive no
compensation from the Trust.
DST Systems Inc. (DST), an affiliate of Janus Capital through
a degree of common ownership, provides accounting systems to the
Portfolios. DST Securities Inc., a wholly owned subsidiary of
DST, provides brokerage services on certain portfolio
transactions. Brokerage commissions paid to DST Securities Inc.
serve to reduce fees and expenses. Brokerage commissions paid,
fees reduced, and the net fees paid to DST for the period ended
December 31, 1996 are noted below:
DST
Securities
Inc. Fund DST
Commissions Expense Systems
Paid* Reduction* Costs
Janus Aspen Growth Portfolio $4,645 $3,484 $10,669
Janus Aspen Aggressive Growth Portfolio 1,929 1,447 12,735
Janus Aspen International Growth Portfolio 67 51 4,160
Janus Aspen Worldwide Growth Portfolio 6,189 4,642 7,875
Janus Aspen Balanced Portfolio 2,565 1,924 5,138
Janus Aspen Flexible Income Portfolio -- -- 6,896
Janus Aspen High-Yield Portfolio -- -- 1.510
Janus Aspen Short-Term Bond Portfolio -- -- 4,743
Janus Money Market Portfolio -- -- 3,834
*The difference between commissions paid to DST Securities, Inc. and expenses
reduced constituted commissions paid to an unaffiliated clearing broker.
3. Federal Income Tax
Gains and losses on certain forward currency contracts and
foreign currency gains and losses on debt instruments are treated
as ordinary income for federal income tax purposes pursuant to
Section 988 of the Internal Revenue Code. Listed below are such
gains or losses for the period ended December 31, 1996. Net
capital loss carryovers noted below, if any, as of December 31,
1996, are available to offset future realized capital gains and
thereby reduce future taxable gains distributions. In 1996, Janus
Aspen Aggressive Growth Portfolio incurred "post-October" losses
108
<PAGE>
of $670,425 in the period from November 1 through December 31.
These losses will be deferred for tax purposes and recognized in
1997. The aggregate cost of investments and the composition of
unrealized appreciation and depreciation of investments for
federal income tax purposes as of December 31, 1996 are also
noted below.
<TABLE>
at 12/31/96 at December 31, 1996
Net
Currency Capital Federal Net
Gains/ Loss Tax Unrealized Unrealized Appreciation/
(Losses) Carryovers Cost Appreciation (Depreciation) (Depreciation)
<S> <C> <C> <C> <C> <C> <C>
Janus Aspen Growth Portfolio 129,012 -- $282,374,365 $38,402,064 $ (3,278,010) $35,124,054
Janus Aspen Aggressive
Growth Portfolio (1,703,537) (10,344,419) 336,598,392 72,585,950 (15,287,328) 57,298,622
Janus Aspen International
Growth Portfolio 32,885 -- 24,735,685 2,343,751 (401,464) 1,942,287
Janus Aspen Worldwide
Growth Portfolio 2,728,331 -- 506,848,207 78,604,001 (12,521,548) 66,082,453
Janus Aspen
Balanced Portfolio 9,233 -- 82,705,586 5,317,762 (816,761) 4,501,001
Janus Aspen Flexible
Income Portfolio (5,691) -- 24,047,267 738,540 (88,162) 650,378
Janus Aspen High-
Yield Portfolio -- -- 738,312 25,424 (9) 25,415
Janus Aspen Short-
Term Bond Portfolio -- -- 11,711,388 23,283 (29,230) (5,947)
Janus Aspen Money
Market Portfolio -- -- 6,108,912 -- -- --
</TABLE>
109
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Net investment income distributions and capital gains
distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. These differences are due to differing treatments for
items such as deferral of wash sales, foreign currency
transactions, net operating losses and capital loss
carryforwards. Permanent items identified in the period ended
December 31, 1996 have been reclassified among the components of
net assets as follows:
Undistributed Undistributed
Net Investment Net Realized Paid-In
Income Gains and Losses Capital
Janus Aspen Growth Portfolio $129,012 $ (129,012) --
Janus Aspen Aggressive
Growth Portfolio 791,456 1,923,124 (2,714,580)
Janus Aspen International
Growth Portfolio 32,885 (32,885) --
Janus Aspen Worldwide
Growth Portfolio 2,728,331 (2,728,331) --
Janus Aspen Balanced Portfolio 9,233 (9,233) --
Janus Aspen Flexible
Income Portfolio (5,691) 5,691 --
Janus Aspen High-Yield Portfolio -- -- --
Janus Aspen Short-Term
Bond Portfolio -- -- --
Janus Aspen Money
Market Portfolio -- -- --
4. Expenses
The Portfolios' expenses may be reduced through expense
reduction arrangements. Those arrangements include the use of
broker commissions paid to DST Securities, Inc. and uninvested
cash balances earning interest with the Portfolios' custodian.
The Statements of Operations reflect the total expenses before
any offset, the amount of the offset and the net expenses. The
expense ratios listed in the Financial Highlights reflect
expenses prior to any expense offset (gross expense ratio) and
after expense offsets (net expense ratio).
110
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of Janus Aspen Series
In our opinion, the accompanying statements of assets and
liabilities, including the schedules of investments, and the
related statements of operations and of changes in net assets and
the financial highlights present fairly, in all material
respects, the financial position of Janus Aspen Growth Portfolio,
Janus Aspen Aggressive Growth Portfolio, Janus Aspen
International Growth Portfolio, Janus Aspen Worldwide Growth
Portfolio, Janus Aspen Balanced Portfolio, Janus Aspen Flexible
Income Portfolio, Janus Aspen High-Yield Portfolio, Janus Aspen
Short-Term Bond Portfolio and Janus Aspen Money Market Portfolio
(constituting Janus Aspen Series, hereafter referred to as the
"Funds"), at December 31, 1996, and the results of each of their
operations, the changes in each of their net assets and the
financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the
Funds' management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits,
which included confirmation of securities at December 31, 1996 by
correspondence with the custodian and brokers and the application
of alternative auditing procedures for unsettled security
transactions, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Denver, Colorado
January 29, 1997
111
00178001.AV4
