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[JANUS LOGO]
[JANUS LOGO]
Janus Aspen Series
PROSPECTUS
MAY 1, 1999
High-Yield Portfolio
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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[JANUS LOGO]
Janus Aspen Series consists of eleven mutual funds (the
"Portfolios"), one of which is described in this prospectus.
Each Portfolio currently offers two classes of shares. The
Institutional Shares, (the "Shares"), are sold under the name of
"Janus Aspen Series" and are offered by this prospectus in
connection with investment in and payments under variable
annuity contracts and variable life insurance contracts, as well
as certain qualified retirement plans.
Janus Aspen Series sells and redeems its Shares at net asset
value without sales charges, commissions or redemption fees.
Each variable insurance contract involves fees and expenses that
are not described in this Prospectus. See the accompanying
contract prospectus for information regarding contract fees and
expenses and any restrictions on purchases or allocations.
This prospectus contains information that a prospective
purchaser of a variable insurance contract or plan participant
should consider in conjunction with the accompanying separate
account prospectus of the specific insurance company product
before allocating purchase payments or premiums to the
Portfolio.
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Table of contents
<TABLE>
<S> <C>
RISK/RETURN SUMMARY
High-Yield Portfolio..................................... 2
Fees and expenses........................................ 4
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
High-Yield Portfolio..................................... 5
General portfolio policies............................... 6
Risks for High-Yield Portfolio........................... 8
MANAGEMENT OF THE PORTFOLIOS
Investment adviser....................................... 11
Management expenses and expense limits................... 11
Investment personnel..................................... 12
OTHER INFORMATION........................................... 13
DISTRIBUTIONS AND TAXES
Distributions............................................ 14
Taxes.................................................... 14
SHAREHOLDER'S GUIDE
Purchases................................................ 15
Redemptions.............................................. 15
Shareholder communications............................... 16
FINANCIAL HIGHLIGHTS........................................ 17
GLOSSARY
Glossary of investment terms............................. 18
RATING CATEGORIES
Explanation of rating categories......................... 22
</TABLE>
Table of contents 1
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Risk return summary
HIGH-YIELD PORTFOLIO
High-Yield Portfolio is designed for long-term investors who primarily
seek current income.
1. WHAT IS THE INVESTMENT OBJECTIVE OF HIGH-YIELD PORTFOLIO?
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- HIGH-YIELD PORTFOLIO seeks to obtain high current income. Capital
appreciation is a secondary objective when consistent with its
primary objective.
The Trustees may change this objective without a shareholder vote and
the Portfolio will notify you of any changes that are material. If
there is a material change to the Portfolio's objective or policies,
you should consider whether it remains an appropriate investment for
you. There is no guarantee that the Portfolio will meet its objective.
2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF HIGH-YIELD PORTFOLIO?
In addition to considering economic factors such as the effect of
interest rates on the Portfolio's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for income-producing securities that meet his
investment criteria one at a time. If the portfolio manager is unable
to find such investments, the Portfolio's assets may be in cash or
similar investments.
High-Yield Portfolio normally invests at least 65% of its assets in
high-yield/high-risk fixed-income securities, and may at times invest
all of its assets in these securities.
3. WHAT ARE THE MAIN RISKS OF INVESTING IN HIGH-YIELD PORTFOLIO?
Although High-Yield Portfolio may be less volatile than funds that
invest most of their assets in common stocks, the Portfolio's returns
and yields will vary, and you could lose money.
The Portfolio invests in a variety of fixed-income securities. A
fundamental risk is that the value of these securities will fall if
interest rates rise. Generally, the value of a fixed-income portfolio
will decrease when interest rates rise, which means the Portfolio's
NAV will likewise decrease. Another fundamental risk associated with
fixed-income funds is credit risk, which is the risk that an issuer
will be unable to make principal and interest payments when due.
High-Yield Portfolio may invest an unlimited amount of its assets in
high-yield/high-risk securities, also known as "junk" bonds which may
be sensitive to economic changes, political changes, or adverse
developments specific to the company that issued the bond. These
securities generally have a greater credit risk than other types of
fixed-income securities. Because of these factors, the performance and
NAV of High-Yield Portfolio may vary significantly, depending upon its
holdings of junk bonds.
An investment in this Portfolio is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
2 Janus Aspen Series
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The following information provides some indication of the risks of
investing in High-Yield Portfolio by showing how High-Yield
Portfolio's performance has varied over time. The bar chart depicts
the change in performance from year-to-year during the period
indicated, but does not include charges and expenses attributable to
any insurance product which would lower the performance illustrated.
The Portfolio does not impose any sales or other charges that would
affect total return computations. Total return figures include the
effect of the Portfolio's expenses. The table compares the average
annual returns for the Shares of the Portfolio for the periods
indicated to a broad-based securities market index.
HIGH-YIELD PORTFOLIO - INSTITUTIONAL SHARES
ANNUAL RETURNS FOR PERIODS ENDED 12/31
A BAR CHART showing Total Annual Returns for High-Yield
Portfolio - Institutional Shares from 1997 through 1998:
1997 1998
---- ----
15.98% 1.26%
Each percentage is represented by a bar of proportionate size
with the actual return printed above the bar.
Best Quarter 1st-1998 5.52% Worst Quarter 3rd-1998 (6.07%)
Average annual total return for periods ended 12/31/98
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<TABLE>
<CAPTION>
Since Inception
1 year (5/1/96)
<S> <C> <C>
High-Yield Portfolio - Institutional Shares 1.26% 10.97%
Lehman Brothers High-Yield Bond Index* 1.60% 7.15%
------------------------------
</TABLE>
* Lehman Brothers High-Yield Bond Index is composed of fixed-rate,
publicly issued, noninvestment grade debt.
High-Yield Portfolio's past performance does not necessarily indicate
how it will perform in the future.
Risk return summary 3
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FEES AND EXPENSES
SHAREHOLDER FEES, such as sales loads, redemption fees or exchange
fees, are charged directly to an investor's account. All Janus funds
are no-load investments, so you will not pay any shareholder fees when
you buy or sell shares of the Portfolio. However, each variable
insurance contract involves fees and expenses not described in this
prospectus. See the accompanying contract prospectus for information
regarding contract fees and expenses and any restrictions on purchases
or allocations.
ANNUAL FUND OPERATING EXPENSES are paid out of the Portfolio's assets
and include fees for portfolio management, maintenance of shareholder
accounts, shareholder servicing, accounting and other services. You do
not pay these fees directly but, as the example on the next page
shows, these costs are borne indirectly by all shareholders.
This table and example are designed to assist participants in
qualified plans that invest in the Shares of the Portfolio in
understanding the fees and expenses that you may pay as an investor in
the Shares. The information shown is based upon gross expenses
(without the effect of expense offset arrangements) for the fiscal
year ended December 31, 1998. OWNERS OF VARIABLE INSURANCE CONTRACTS
THAT INVEST IN THE SHARES SHOULD REFER TO THE VARIABLE INSURANCE
CONTRACT PROSPECTUS FOR A DESCRIPTION OF FEES AND EXPENSES, AS THE
TABLE AND EXAMPLE DO NOT REFLECT DEDUCTIONS AT THE SEPARATE ACCOUNT
LEVEL OR CONTRACT LEVEL FOR ANY CHARGES THAT MAY BE INCURRED UNDER A
CONTRACT.
<TABLE>
<CAPTION>
Total Annual Fund Total Annual Fund
Operating Expenses Operating Expenses
Management Other Without Waivers Total With Waivers
Fee Expenses or Reductions* Waivers and Reductions or Reductions*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
High-Yield Portfolio 0.75% 1.36% 2.11% 1.11% 1.00%
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</TABLE>
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* All expenses are stated both with and without contractual waivers and
fee reductions by Janus Capital. Other waivers, if applicable, are first
applied against the Management Fee and then against Other Expenses.
Janus Capital has agreed to continue the waivers and fee reductions
until at least the next annual renewal of the advisory agreement.
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EXAMPLE:
THE FOLLOWING EXAMPLE IS BASED ON EXPENSES WITHOUT WAIVERS OR
REDUCTIONS. This example is intended to help you compare the cost of
investing in the Portfolio with the cost of investing in other mutual
funds. The example assumes that you invest $10,000 in the Portfolio for
the time periods indicated then redeem all of your shares at the end of
those periods. The example also assumes that your investment has a 5%
return each year, and that the Portfolio's operating expenses remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
High-Yield Portfolio $214 $661 $1,134 $2,441
</TABLE>
4 Janus Aspen Series
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Investment objective, principal investment
strategies and risks
High-Yield Portfolio has a similar investment objective and similar
principal investment strategies to Janus High-Yield Fund. Although it
is anticipated that the Portfolio and Janus High-Yield Fund will hold
similar securities, differences in asset size, cash flow needs and
other factors may result in differences in investment performance. The
expenses of the Portfolio and Janus High-Yield Fund are expected to
differ. The variable contract owner will also bear various insurance
related costs at the insurance company level. You should review the
accompanying separate account prospectus for a summary of fees and
expenses.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
This section takes a closer look at the investment objective of
High-Yield Portfolio, its principal investment strategies and certain
risks of investing in High-Yield Portfolio. Strategies and policies
that are noted as "fundamental" cannot be changed without a
shareholder vote.
Please carefully review the "Risks" section of this Prospectus on
pages 8-10 for a discussion of risks associated with certain
investment techniques. We've also included a Glossary with
descriptions of investment terms used throughout this Prospectus.
In addition to considering economic factors such as the effect of
interest rates on the Portfolio's investments, the portfolio manager
applies a "bottom up" approach in choosing investments. In other
words, he looks mostly for income-producing securities that meet his
investment criteria one at a time. If the portfolio manager is unable
to find such investments, much of the Portfolio's assets may be in
cash or similar investments.
High-Yield Portfolio seeks to obtain high current income. Capital
appreciation is a secondary objective when consistent with its primary
objective. It pursues its objectives by normally investing 65% of its
assets in high-yield/high-risk fixed-income securities, and may at
times invest all of its assets in these securities.
The following questions and answers are designed to help you better understand
High-Yield Portfolio's principal investment strategies.
1. HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
Generally, a fixed-income security will increase in value when
interest rates fall and decrease in value when interest rates rise.
Longer-term securities are generally more sensitive to interest rate
changes than shorter-term securities, but they generally offer higher
yields to compensate investors for the associated risks. High-yield
bond prices are generally less directly responsive to interest rate
changes than investment grade issues and may not always follow this
pattern. A bond fund's average-weighted effective maturity and its
duration are measures of how the fund may react to interest rate
changes.
2. HOW DOES HIGH-YIELD PORTFOLIO MANAGE INTEREST RATE RISK?
High-Yield Portfolio may vary the average-weighted effective maturity
of its assets to reflect the portfolio manager's analysis of interest
rate trends and other factors. The Portfolio's average-weighted
effective maturity will tend to be shorter when the portfolio manager
expects interest rates to rise and longer when the portfolio manager
expects interest rates to fall. The Portfolio may also use futures,
options and other derivatives to manage interest rate risks.
3. WHAT IS MEANT BY THE PORTFOLIO'S "AVERAGE-WEIGHTED EFFECTIVE MATURITY"?
The stated maturity of a bond is the date when the issuer must repay
the bond's entire principal value to an investor. Some types of bonds
may also have an "effective maturity" that is shorter than the stated
date
Investment objective, principal investment strategies and risks 5
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due to prepayment or call provisions. Securities without prepayment or
call provisions generally have an effective maturity equal to their
stated maturity. Dollar-weighted effective maturity is calculated by
averaging the effective maturity of bonds held by the Portfolio with
each effective maturity "weighted" according to the percentage of net
assets that it represents.
4. WHAT IS MEANT BY THE PORTFOLIO'S "DURATION"?
A bond's duration indicates the time it will take an investor to
recoup his investment. Unlike average maturity, duration reflects both
principal and interest payments. Generally, the higher the coupon rate
on a bond, the lower its duration will be. The duration of a bond
portfolio is calculated by averaging the duration of bonds held by a
fund with each duration "weighted" according to the percentage of net
assets that it represents. Because duration accounts for interest
payments, the Portfolio's duration is usually shorter than its average
maturity.
5. WHAT IS A HIGH-YIELD/HIGH-RISK SECURITY?
A high-yield/high-risk security (also called a "junk" bond) is a debt
security rated below investment grade by major rating agencies (i.e.,
BB or lower by Standard & Poor's or Ba or lower by Moody's) or an
unrated bond of similar quality. It presents greater risk of default
(the failure to make timely interest and principal payments) than
higher quality bonds.
GENERAL PORTFOLIO POLICIES
Unless otherwise stated, the percentage limitations included in these
policies and elsewhere in this Prospectus apply at the time of
purchase of the security. So, for example, if the Portfolio exceeds a
limit as a result of market fluctuations or the sale of other
securities, it will not be required to dispose of any securities.
CASH POSITION
When the portfolio manager believes that market conditions are
unfavorable for profitable investing, or when he is otherwise unable
to locate attractive investment opportunities, the Portfolio's cash or
similar investments may increase. In other words, the Portfolio does
not always stay fully invested in stocks and bonds. Cash or similar
investments generally are a residual - they represent the assets that
remain after the portfolio manager has committed available assets to
desirable investment opportunities. However, the portfolio manager may
also temporarily increase the Portfolio's cash position to protect its
assets or maintain liquidity.
When the Portfolio's investments in cash or similar investments
increase, it may not participate in market advances or declines to the
same extent that it would if the Portfolio remained more fully
invested in stocks or bonds.
OTHER TYPES OF INVESTMENTS
High-Yield Portfolio invests primarily in fixed-income securities
which may include corporate bonds and notes, government securities,
preferred stock, high-yield/high-risk fixed-income securities and
municipal obligations. The Portfolio may also invest to a lesser
degree in other types of securities. These securities (which are
described in the Glossary) may include:
- common stocks
- mortgage- and asset-backed securities
- zero coupon, pay-in-kind and step coupon securities
6 Janus Aspen Series
<PAGE>
- options, futures, forwards and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return
- securities purchased on a when-issued, delayed delivery or forward
commitment basis
ILLIQUID INVESTMENTS
The Portfolio may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business.
For example, some securities are not registered under U.S. securities
laws and cannot be sold to the U.S. public because of SEC regulations
(these are known as "restricted securities"). Under procedures adopted
by the Portfolio's Trustees, certain restricted securities may be
deemed liquid, and will not be counted toward this 15% limit.
FOREIGN SECURITIES
The Portfolio may invest without limit in foreign equity and debt
securities. The Portfolio may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities include
depositary receipts or shares, and passive foreign investment
companies.
SPECIAL SITUATIONS
The Portfolio may invest in special situations. A special situation
arises when, in the opinion of the Portfolio's manager, the securities
of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a new
product or process, a technological breakthrough, a management change
or other extraordinary corporate event, or differences in market
supply of and demand for the security. The Portfolio's performance
could suffer if the anticipated development in a "special situation"
investment does not occur or does not attract the expected attention.
PORTFOLIO TURNOVER
The Portfolio generally intends to purchase securities for long-term
investment although, to a limited extent, the Portfolio may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason of
economic or other developments not foreseen at the time of the
investment decision. The Portfolio may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or securities
prices. Changes are made in the Portfolio's holdings whenever the
portfolio manager believes such changes are desirable. Portfolio
turnover rates are generally not a factor in making buy and sell
decisions.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also
result in taxable capital gains. Higher costs associated with
increased portfolio turnover may offset gains in the Portfolio's
performance.
Investment objective, principal investment strategies and risks 7
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RISKS FOR HIGH-YIELD PORTFOLIO
Because the Portfolio invests substantially all of its assets in
fixed-income securities, it is subject to risks such as credit or
default risks, and decreased value due to interest rate increases. The
Portfolio's performance may also be affected by risks to certain types
of investments, such as foreign securities and derivative instruments.
The following questions and answers are designed to help you better understand
some of the risks of investing in the High-Yield Portfolio.
1. WHAT IS MEANT BY "CREDIT QUALITY" AND WHAT ARE THE RISKS ASSOCIATED WITH IT?
Credit quality measures the likelihood that the issuer will meet its
obligations on a bond. One of the fundamental risks associated with
all fixed-income funds is credit risk, which is the risk that an
issuer will be unable to make principal and interest payments when
due. U.S. government securities are generally considered to be the
safest type of investment in terms of credit risk. Municipal
obligations generally rank between U.S. government securities and
corporate debt securities in terms of credit safety. Corporate debt
securities, particularly those rated below investment grade, present
the highest credit risk.
2. HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized statistical rating agencies
such as Standard & Poor's Ratings Service and Moody's Investors
Service, Inc. are widely accepted measures of credit risk. The lower a
bond issue is rated by an agency, the more credit risk it is
considered to represent. Lower rated bonds generally pay higher yields
to compensate investors for the associated risk. Please refer to
"Explanation of Rating Categories" on page 22 for a description of
rating categories.
8 Janus Aspen Series
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3. HOW COULD THE PORTFOLIO'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?
The Portfolio may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets.
Investments in foreign securities, including those of foreign
governments, may involve greater risks than investing in domestic
securities because the Portfolio's performance may depend on issues
other than the performance of a particular company. These issues
include:
- CURRENCY RISK. As long as the Portfolio holds a foreign security,
its value will be affected by the value of the local currency
relative to the U.S. dollar. When the Portfolio sells a foreign
denominated security, its value may be worth less in U.S. dollars
even if the security increases in value in its home country. U.S.
dollar denominated securities of foreign issuers may also be
affected by currency risk.
- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to
heightened political and economic risks, particularly in emerging
markets which may have relatively unstable governments, immature
economic structures, national policies restricting investments by
foreigners, different legal systems, and economies based on only a
few industries. In some countries, there is the risk that the
government may take over the assets or operations of a company or
that the government may impose taxes or limits on the removal of the
Portfolio's assets from that country.
- REGULATORY RISK. There may be less government supervision of foreign
markets. As a result, foreign issuers may not be subject to the
uniform accounting, auditing and financial reporting standards and
practices applicable to domestic issuers and there may be less
publicly available information about foreign issuers.
- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile than
domestic markets. Certain markets may require payment for securities
before delivery and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection
against failure by other parties to complete transactions.
- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.
4. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
SECURITIES?
High-yield/high-risk securities (or "junk" bonds) are securities rated
below investment grade by the primary rating agencies such as Standard
& Poor's and Moody's. The value of lower quality securities generally
is more dependent on credit risk, or the ability of the issuer to meet
interest and principal payments, than investment grade debt
securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings and are
more vulnerable to real or perceived economic changes, political
changes or adverse developments specific to the issuer.
The junk bond market can experience sudden and sharp price swings.
Because High-Yield Portfolio may invest a significant portion of its
assets in high-yield/high-risk securities, investors should be willing
to tolerate a corresponding increase in the risk of significant and
sudden changes in NAV.
Please refer to "Explanation of Rating Categories" on page 22 for a
description of bond rating categories.
Investment objective, principal investment strategies and risks 9
<PAGE>
5. HOW DOES THE PORTFOLIO TRY TO REDUCE RISK?
The Portfolio may use futures, options and other derivative
instruments to "hedge" or protect its portfolio from adverse movements
in securities prices and interest rates. The Portfolio may also use a
variety of currency hedging techniques, including forward currency
contracts, to manage exchange rate risk. The portfolio manager
believes the use of these instruments will benefit the Portfolio.
However, the Portfolio's performance could be worse than if the
Portfolio had not used such instruments if the portfolio manager's
judgement proves incorrect. Risks associated with the use of
derivative instruments are described in the SAI.
6. I'VE HEARD A LOT ABOUT HOW THE CHANGE TO THE YEAR 2000 COULD AFFECT COMPUTER
SYSTEMS. DOES THIS CREATE ANY SPECIAL RISKS?
The portfolio manager carefully researches each potential investment
before making an investment decision and, among other things,
considers Year 2000 readiness when selecting portfolio holdings.
However, there is no guarantee that the information the portfolio
manager receives regarding a company's Year 2000 readiness is
completely accurate. If a company has not satisfactorily addressed
Year 2000 issues, the Portfolio's performance could suffer.
10 Janus Aspen Series
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Management of the portfolio
INVESTMENT ADVISER
Janus Capital, 100 Fillmore Street, Denver, Colorado 80206-4928, is
the investment adviser to the Portfolio and is responsible for the
day-to-day management of the investment portfolio and other business
affairs of the Portfolio.
Janus Capital began serving as investment adviser to Janus Fund in
1970 and currently serves as investment adviser to all of the Janus
retail funds, acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisory services for
institutional accounts.
Janus Capital furnishes continuous advice and recommendations
concerning the Portfolio's investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for the
Portfolio, and may be reimbursed by the Portfolio for its costs in
providing those services. In addition, Janus Capital employees serve
as officers of the Trust and Janus Capital provides office space for
the Portfolio and pays the salaries, fees and expenses of all
Portfolio officers and those Trustees who are affiliated with Janus
Capital.
Participating insurance companies that purchase the Portfolio's shares
may perform certain administrative services relating to the Portfolio
and Janus Capital or the Portfolio may pay those companies for such
services.
MANAGEMENT EXPENSES AND EXPENSE LIMITS
The Portfolio pays Janus Capital a management fee which is calculated
daily. The advisory agreement with the Portfolio spells out the
management fee and other expenses that the Portfolio must pay. The
Portfolio is subject to the following management fee schedule
(expressed as an annual rate). In addition, the Shares of the
Portfolio incur expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and auditing
fees, printing and mailing costs of sending reports and other
information to existing shareholders, and independent Trustees' fees
and expenses.
<TABLE>
<CAPTION>
Average Daily
Net Assets Annual Rate Expense Limit
Fee Schedule of Portfolio Percentage (%) Percentage (%)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
High-Yield Portfolio First $300 Million 0.75 1.00(1)
Over $300 Million 0.65
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</TABLE>
(1) Janus Capital has agreed to limit the Portfolio's expenses as indicated
until at least the next annual renewal of the advisory contracts.
Management of the portfolio 11
<PAGE>
INVESTMENT PERSONNEL
PORTFOLIO MANAGER
SANDY R. RUFENACHT
- --------------------------------------------------------------------------------
is Executive Vice President and portfolio manager of High-Yield
Portfolio, which he has managed or co-managed since October 1996.
He previously co-managed Flexible Income Portfolio from January
1997 to May 1998. Mr. Rufenacht joined Janus Capital in 1990 and
has managed Janus Short-Term Bond Fund since January 1996. He is
also the portfolio manager of Janus High-Yield Fund. He
previously co-managed Janus Flexible Income Fund from June 1996
to February 1998. He holds a Bachelor of Arts in Business from
the University of Northern Colorado.
12 Janus Aspen Series
<PAGE>
Other information
CLASSES OF SHARES
The Portfolio currently offers two classes of Shares, one of which,
the Institutional Shares, are offered pursuant to this prospectus and
are sold under the name Janus Aspen Series. The Shares offered by this
Prospectus are available only in connection with investment in and
payments under variable insurance contracts as well as certain
qualified retirement plans. Retirement Shares of the Portfolio are
offered by separate prospectus and are available only to qualified
plans using plan service providers that are compensated for providing
distribution and/or recordkeeping and other administrative services.
Because the expenses of each class may differ, the performance of each
class is expected to differ. If you would like additional information
about the Retirement Shares, please call 1-800-525-0020.
CONFLICTS OF INTEREST
The Shares offered by this prospectus are available only to variable
annuity and variable life separate accounts of insurance companies
that are unaffiliated with Janus Capital and to certain qualified
retirement plans. Retirement Shares of the Portfolio (offered through
a separate prospectus) are available to certain qualified plans.
Although the Portfolio does not currently anticipate any disadvantages
to policy owners because the Portfolio offers its shares to such
entities, there is a possibility that a material conflict may arise.
The Trustees monitor events in order to identify any disadvantages or
material irreconcilable conflicts and to determine what action, if
any, should be taken in response. If a material disadvantage or
conflict occurs, the Trustees may require one or more insurance
company separate accounts or qualified plans to withdraw its
investments in the Portfolio or substitute Shares of another
Portfolio. If this occurs, the Portfolio may be forced to sell its
securities at disadvantageous prices. In addition, the Trustees may
refuse to sell Shares of the Portfolio to any separate account or
qualified plan or may suspend or terminate the offering of the
Portfolio's Shares if such action is required by law or regulatory
authority or is in the best interests of the Portfolio's shareholders.
It is possible that a qualified plan investing in the Retirement
Shares of the Portfolio could lose its qualified plan status under the
Internal Revenue Code, which could have adverse tax consequences on
insurance company separate accounts investing in the Shares. Janus
Capital intends to monitor such qualified plans and the Portfolio may
discontinue sales to a qualified plan and require plan participants
with existing investments in the Retirement Shares to redeem those
investments if a plan loses (or in the opinion of Janus Capital is at
risk of losing) its qualified plan status.
YEAR 2000
Preparing for Year 2000 is a high priority for Janus Capital, which
has established a dedicated group to address this issue. Janus Capital
has devoted considerable internal resources and has engaged one of the
foremost experts in the field to help achieve Year 2000 readiness.
Janus Capital does not anticipate that Year 2000-related issues will
have a material impact on its ability to continue to provide the
Portfolio with service at current levels; however, Janus Capital
cannot make any assurances that the steps it has taken to ensure Year
2000 readiness will be successful. In addition, there can be no
assurance that Year 2000 issues will not affect the companies in which
the Portfolio invests or worldwide markets and economies.
Other information 13
<PAGE>
Distributions and taxes
DISTRIBUTIONS
To avoid taxation of the Portfolio, the Internal Revenue Code requires
the Portfolio to distribute net income and any net gains realized on
its investments annually. The Portfolio's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.
Each class of the Portfolio makes semi-annual distributions in June
and December of substantially all of its investment income and an
annual distribution in June of its net realized gains, if any. All
dividends and capital gains distributions from Shares of the Portfolio
will automatically be reinvested into additional Shares of the
Portfolio.
HOW DISTRIBUTIONS AFFECT NAV
Distributions are paid to shareholders as of the record date of the
distribution of the Portfolio, regardless of how long the shares have
been held. Undistributed income and realized gains are included in the
daily NAV of the Portfolio's Shares. The Share price of the Portfolio
drops by the amount of the distribution, net of any subsequent market
fluctuations. For example, assume that on December 31, the Shares of
High-Yield Portfolio declared a dividend in the amount of $0.25 per
share. If the price of High-Yield Portfolio's Shares was $10.00 on
December 30, the share price on December 31 would be $9.75, barring
market fluctuations.
TAXES
TAXES ON DISTRIBUTIONS
Because Shares of the Portfolio may be purchased only through variable
insurance contracts and qualified plans, it is anticipated that any
income dividends or capital gains distributions made by the Shares of
the Portfolio will be exempt from current taxation if left to
accumulate within the variable insurance contract or qualified plan.
Generally, withdrawals from such contracts may be subject to ordinary
income tax and, if made before age 59 1/2, a 10% penalty tax. The tax
status of your investment depends on the features of your qualified
plan or variable insurance contract. Further information may be found
in your plan documents or in the prospectus of the separate account
offering such contract.
TAXATION OF THE PORTFOLIO
Dividends, interest and some gains received by the Portfolio on
foreign securities may be subject to withholding of foreign taxes. The
Portfolio may from year to year make the election permitted under
Section 853 of the Internal Revenue Code to pass through such taxes to
shareholders. If such election is not made, any foreign taxes paid or
accrued will represent an expense to the Portfolio which will reduce
its investment income.
The Portfolio does not expect to pay any federal income or excise
taxes because it intends to meet certain requirements of the Internal
Revenue Code. In addition, the Portfolio intends to qualify under the
Internal Revenue Code with respect to the diversification requirements
related to the tax-deferred status of insurance company separate
accounts.
14 Janus Aspen Series
<PAGE>
Shareholder's guide
INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIO DIRECTLY.
SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH VARIABLE INSURANCE
CONTRACTS OFFERED BY THE SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE
COMPANIES OR THROUGH QUALIFIED RETIREMENT PLANS. REFER TO THE
PROSPECTUS FOR THE PARTICIPATING INSURANCE COMPANY'S SEPARATE ACCOUNT
OR YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON PURCHASING OR SELLING OF
VARIABLE INSURANCE CONTRACTS AND ON HOW TO SELECT THE PORTFOLIO AS AN
INVESTMENT OPTION FOR A CONTRACT OR A QUALIFIED PLAN.
PRICING OF PORTFOLIO SHARES
Investments will be processed at the NAV next determined after an
order is received and accepted by the Portfolio or its agent. In order
to receive a day's price, your order must be received by the close of
the regular trading session of the New York Stock Exchange any day
that the NYSE is open. Securities are valued at market value or, if a
market quotation is not readily available, at their fair value
determined in good faith under procedures established by and under the
supervision of the Trustees. Short-term instruments maturing within 60
days are valued at amortized cost, which approximates market value.
See the SAI for more detailed information.
To the extent the Portfolio holds securities that are primarily listed
on foreign exchanges that trade on weekends or other days when the
Portfolio does not price its shares, the NAV of the Portfolio's shares
may change on days when shareholders will not be able to purchase or
redeem the Portfolio's shares.
PURCHASES
Purchases of Shares may be made only by the separate accounts of
insurance companies for the purpose of funding variable insurance
contracts or by qualified plans. Refer to the prospectus of the
appropriate insurance company separate account or your plan documents
for information on how to invest in the Shares of the Portfolio.
Participating insurance companies and certain other designated
organizations are authorized to receive purchase orders on the
Portfolio's behalf.
The Portfolio reserves the right to reject any specific purchase
order. Purchase orders may be refused if, in Janus Capital's opinion,
they are of a size that would disrupt the management of the Portfolio.
Although there is no present intention to do so, the Portfolio may
discontinue sales of its shares if management and the Trustees believe
that continued sales may adversely affect the Portfolio's ability to
achieve its investment objective. If sales of the Portfolio's Shares
are discontinued, it is expected that existing policy owners and plan
participants invested in the Portfolio would be permitted to continue
to authorize investment in the Portfolio and to reinvest any dividends
or capital gains distributions, absent highly unusual circumstances.
REDEMPTIONS
Redemptions, like purchases, may be effected only through the separate
accounts of participating insurance companies or through qualified
plans. Please refer to the appropriate separate account prospectus or
plan documents for details.
Shares of the Portfolio may be redeemed on any business day.
Redemptions are processed at the NAV next calculated after receipt and
acceptance of the redemption order by the Portfolio or its agent.
Redemption proceeds will normally be wired to the participating
insurance company the business day following receipt of the redemption
order, but in no event later than seven days after receipt of such
order.
Shareholder's guide 15
<PAGE>
SHAREHOLDER COMMUNICATIONS
Shareholders will receive annual and semiannual reports including the
financial statements of the Shares of the Portfolio. Each report will
show the investments owned by the Portfolio and the market values
thereof, as well as other information about the Portfolio and its
operations. The Trust's fiscal year ends December 31.
16 Janus Aspen Series
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand the
Institutional Shares' financial performance for the life of the
Portfolio. Items 1 through 9 reflect financial results for a single
Share. Total return in the table represents the rate that an investor
would have earned (or lost) on an investment in the Institutional
Shares of the Portfolio (assuming reinvestment of all dividends and
distributions) but does not include charges and expenses attributable
to any insurance product. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Portfolio's
financial statements, is included in the Annual Report, which is
available upon request and incorporated by reference into the SAI.
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO - INSTITUTIONAL SHARES
- -----------------------------------------------------------------------------------------------
Periods ending December 31
1998 1997 1996(1)
<S> <C> <C> <C>
1. NET ASSET VALUE, BEGINNING OF PERIOD $11.78 $10.83 $10.00
INCOME FROM INVESTMENT OPERATIONS:
2. Net investment income 0.87 0.70 0.43
3. Net gains or losses on securities (both realized and
unrealized) (0.70) 0.99 0.80
4. Total from investment operations 0.17 1.69 1.23
LESS DISTRIBUTIONS:
5. Dividends (from net investment income) (0.89) (0.68) (0.40)
6. Tax return of capital distributions -- -- --
7. Distributions (from capital gains) (0.05) (0.06) --
8. Distributions (in excess of realized gains) (0.16) -- --
9. Total distributions (1.10) (0.74) (0.40)
10. NET ASSET VALUE, END OF PERIOD $10.85 $11.78 $10.83
11. Total return* 1.26% 15.98% 12.40%
12. Net assets, end of period (in thousands) $2,977 $2,914 $783
13. Average net assets for the period (in thousands) $3,281 $1,565 $459
14. Ratio of gross expenses to average net assets** 1.00%(4) 1.00%(3) 1.01(2)
15. Ratio of net expenses to average net assets** 1.00% 1.00% 1.00%
16. Ratio of net investment income to average net assets** 7.76% 7.98% 5.74%
17. Portfolio turnover rate** 301% 299% 301%
- ------------------------------------------------------------------------------------------------
</TABLE>
* Total return not annualized for periods of less than one full year.
** Annualized for periods of less than one full year.
(1) May 1, 1996 (inception) through December 31, 1996.
(2) The ratio was 6.29% before waiver of certain fees incurred by the Portfolio.
(3) The ratio was 3.27% before waiver of certain fees incurred by the Portfolio.
(4) The ratio was 2.11% before waiver of certain fees incurred by the Portfolio.
Financial highlights 17
<PAGE>
Glossary of investment terms
This glossary provides a more detailed description of some of the
types of securities and other instruments in which the Portfolio may
invest. The Portfolio may invest in these instruments to the extent
permitted by its investment objectives and policies. The Portfolio is
not limited by this discussion and may invest in any other types of
instruments not precluded by the policies discussed elsewhere in this
Prospectus. Please refer to the SAI for a more detailed discussion of
certain instruments.
I. EQUITY AND DEBT SECURITIES
BONDS are debt securities issued by a company, municipality,
government or government agency. The issuer of a bond is required to
pay the holder the amount of the loan (or par value of the bond) at a
specified maturity and to make scheduled interest payments.
COMMERCIAL PAPER is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other
borrowers to investors seeking to invest idle cash. The Portfolio may
purchase commercial paper issued in private placements under Section
4(2) of the Securities Act of 1933.
COMMON STOCKS are equity securities representing shares of ownership
in a company and usually carry voting rights and earns dividends.
Unlike preferred stock, dividends on common stock are not fixed but
are declared at the discretion of the issuer's board of directors.
CONVERTIBLE SECURITIES are preferred stocks or bonds that pay a fixed
dividend or interest payment and are convertible into common stock at
a specified price or conversion ratio.
DEBT SECURITIES are securities representing money borrowed that must
be repaid at a later date. Such securities have specific maturities
and usually a specific rate of interest or an original purchase
discount.
DEPOSITARY RECEIPTS are receipts for shares of a foreign-based
corporation that entitle the holder to dividends and capital gains on
the underlying security. Receipts include those issued by domestic
banks (American Depositary Receipts), foreign banks (Global or
European Depositary Receipts) and broker-dealers (depositary shares).
FIXED-INCOME SECURITIES are securities that pay a specified rate of
return. The term generally includes short-and long-term government,
corporate and municipal obligations that pay a specified rate of
interest or coupons for a specified period of time, and preferred
stock, which pays fixed dividends. Coupon and dividend rates may be
fixed for the life of the issue or, in the case of adjustable and
floating rate securities, for a shorter period.
HIGH-YIELD/HIGH-RISK SECURITIES are securities that are rated below
investment grade by the primary rating agencies (e.g., BB or lower by
Standard & Poor's and Ba or lower by Moody's). Other terms commonly
used to describe such securities include "lower rated bonds,"
"noninvestment grade bonds" and "junk bonds."
MORTGAGE- AND ASSET-BACKED SECURITIES are shares in a pool of
mortgages or other debt. These securities are generally pass-through
securities, which means that principal and interest payments on the
underlying securities (less servicing fees) are passed through to
shareholders on a pro rata basis. These securities involve prepayment
risk, which is the risk that the underlying mortgages or other debt
may be refinanced or paid off prior to their maturities during periods
of declining interest rates. In that case, the portfolio manager may
have to reinvest the proceeds from the securities at a lower rate.
Potential market gains on a security subject to prepayment risk may be
more limited than potential market gains on a comparable security that
is not subject to prepayment risk.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive
18 Janus Aspen Series
<PAGE>
income includes dividends, interest, royalties, rents and annuities.
To avoid taxes and interest that the Portfolio must pay if these
investments are profitable, the Portfolio may make various elections
permitted by the tax laws. These elections could require that the
Portfolio recognize taxable income, which in turn must be distributed,
before the securities are sold and before cash is received to pay the
distributions.
PAY-IN-KIND BONDS are debt securities that normally give the issuer an
option to pay cash at a coupon payment date or give the holder of the
security a similar bond with the same coupon rate and a face value
equal to the amount of the coupon payment that would have been made.
PREFERRED STOCKS are equity securities that generally pay dividends at
a specified rate and have preference over common stock in the payment
of dividends and liquidation. Preferred stock generally does not carry
voting rights.
REPURCHASE AGREEMENTS involve the purchase of a security by the
Portfolio and a simultaneous agreement by the seller (generally a bank
or dealer) to repurchase the security from the Portfolio at a
specified date or upon demand. This technique offers a method of
earning income on idle cash. These securities involve the risk that
the seller will fail to repurchase the security, as agreed. In that
case, the Portfolio will bear the risk of market value fluctuations
until the security can be sold and may encounter delays and incur
costs in liquidating the security.
REVERSE REPURCHASE AGREEMENTS involve the sale of a security by the
Portfolio to another party (generally a bank or dealer) in return for
cash and an agreement by the Portfolio to buy the security back at a
specified price and time. This technique will be used primarily to
provide cash to satisfy unusually high redemption requests, or for
other temporary or emergency purposes.
RULE 144A SECURITIES are securities that are not registered for sale
to the general public under the Securities Act of 1933, but that may
be resold to certain institutional investors.
STANDBY COMMITMENTS are obligations purchased by the Portfolio from a
dealer that give the Portfolio the option to sell a security to the
dealer at a specified price.
STEP COUPON BONDS are debt securities that trade at a discount from
their face value and pay coupon interest. The discount from the face
value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer.
STRIP BONDS are debt securities that are stripped of their interest
(usually by a financial intermediary) after the securities are issued.
The market value of these securities generally fluctuates more in
response to changes in interest rates than interest-paying securities
of comparable maturity.
TENDER OPTION BONDS are generally long-term securities that are
coupled with an option to tender the securities to a bank,
broker-dealer or other financial institution at periodic intervals and
receive the face value of the bond. This type of security is commonly
used as a means of enhancing the security's liquidity.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S.
government that are supported by its full faith and credit. Treasury
bills have initial maturities of less than one year, Treasury notes
have initial maturities of one to ten years and Treasury bonds may be
issued with any maturity but generally have maturities of at least ten
years. U.S. government securities also include indirect obligations of
the U.S. government that are issued by federal agencies and government
sponsored entities. Unlike Treasury securities, agency securities
generally are not backed by the full faith and credit of the U.S.
government. Some agency securities are supported by the right of the
issuer to borrow from the Treasury, others are supported by the
discretionary authority of the U.S. government to purchase the
agency's obligations and others are supported only by the credit of
the sponsoring agency.
Glossary of investment terms 19
<PAGE>
VARIABLE AND FLOATING RATE SECURITIES have variable or floating rates
of interest and, under certain limited circumstances, may have varying
principal amounts. These securities pay interest at rates that are
adjusted periodically according to a specified formula, usually with
reference to some interest rate index or market interest rate. The
floating rate tends to decrease the security's price sensitivity to
changes in interest rates.
WARRANTS are securities, typically issued with preferred stock or
bonds, that give the holder the right to buy a proportionate amount of
common stock at a specified price, usually at a price that is higher
than the market price at the time of issuance of the warrant. The
right may last for a period of years or indefinitely.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at some
time in the future - i.e., beyond normal settlement. The Portfolio
does not earn interest on such securities until settlement and bear
the risk of market value fluctuations in between the purchase and
settlement dates. New issues of stocks and bonds, private placements
and U.S. government securities may be sold in this manner.
ZERO COUPON BONDS are debt securities that do not pay regular interest
at regular intervals, but are issued at a discount from face value.
The discount approximates the total amount of interest the security
will accrue from the date of issuance to maturity. The market value of
these securities generally fluctuates more in response to changes in
interest rates than interest-paying securities.
II. FUTURES, OPTIONS AND OTHER DERIVATIVES
FORWARD CONTRACTS are contracts to purchase or sell a specified amount
of a financial instrument for an agreed upon price at a specified
time. Forward contracts are not currently exchange traded and are
typically negotiated on an individual basis. The Portfolio may enter
into forward currency contracts to hedge against declines in the value
of securities denominated in, or whose value is tied to, a currency
other than the U.S. dollar or to reduce the impact of currency
appreciation on purchases of such securities. It may also enter into
forward contracts to purchase or sell securities or other financial
indices.
FUTURES CONTRACTS are contracts that obligate the buyer to receive and
the seller to deliver an instrument or money at a specified price on a
specified date. The Portfolio may buy and sell futures contracts on
foreign currencies, securities and financial indices including
interest rates or an index of U.S. government, foreign government,
equity or fixed-income securities. The Portfolio may also buy options
on futures contracts. An option on a futures contract gives the buyer
the right, but not the obligation, to buy or sell a futures contract
at a specified price on or before a specified date. Futures contracts
and options on futures are standardized and traded on designated
exchanges.
INDEXED/STRUCTURED SECURITIES are typically short- to
intermediate-term debt securities whose value at maturity or interest
rate is linked to currencies, interest rates, equity securities,
indices, commodity prices or other financial indicators. Such
securities may be positively or negatively indexed (i.e. their value
may increase or decrease if the reference index or instrument
appreciates). Indexed/structured securities may have return
characteristics similar to direct investments in the underlying
instruments and may be more volatile than the underlying instruments.
The Portfolio bears the market risk of an investment in the underlying
instruments, as well as the credit risk of the issuer.
INTEREST RATE SWAPS involve the exchange by two parties of their
respective commitments to pay or receive interest (e.g., an exchange
of floating rate payments for fixed rate payments).
INVERSE FLOATERS are debt instruments whose interest rate bears an
inverse relationship to the interest rate on another instrument or
index. For example, upon reset the interest rate payable on a security
may go down when the underlying index has risen. Certain inverse
floaters may have an interest rate reset
20 Janus Aspen Series
<PAGE>
mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the security's
market value.
OPTIONS are the right, but not the obligation, to buy or sell a
specified amount of securities or other assets on or before a fixed
date at a predetermined price. The Portfolio may purchase and write
put and call options on securities, securities indices and foreign
currencies.
Glossary of investment terms 21
<PAGE>
Explanation of rating categories
The following is a description of credit ratings issued by two of the
major credit ratings agencies. Credit ratings evaluate only the safety
of principal and interest payments, not the market value risk of lower
quality securities. Credit rating agencies may fail to change credit
ratings to reflect subsequent events on a timely basis. Although Janus
Capital considers security ratings when making investment decisions,
it also performs its own investment analysis and does not rely solely
on the ratings assigned by credit agencies.
STANDARD & POOR'S
RATINGS SERVICES
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB - lowest degree of speculation; C - the highest degree of
speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>
22 Janus Aspen Series
<PAGE>
MOODY'S INVESTORS SERVICE, INC.
<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of investment risk.
Aa.......................... High quality; together with Aaa bonds, they compose the
high-grade bond group.
A........................... Upper-medium grade obligations; many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B........................... Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa......................... Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca.......................... Speculative in a high degree; could be in default or have
other marked shortcomings.
C........................... Lowest-rated; extremely poor prospects of ever attaining
investment standing.
</TABLE>
Unrated securities will be treated as noninvestment grade securities
unless the portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.
Explanation of rating categories 23
<PAGE>
SECURITIES HOLDINGS BY RATING CATEGORY
During the fiscal period ended December 31, 1998, the percentage of
securities holdings for High-Yield Portfolio by rating category based
upon a weighted monthly average was:
<TABLE>
<CAPTION>
HIGH-YIELD PORTFOLIO
----------------------------------------------------------------------------------------
<S> <C>
BONDS-S&P RATING:
AAA 3%
AA 0%
A 0%
BBB 1%
BB 2%
B 60%
CCC 2%
CC 0%
C 0%
Preferred Stock 3%
Cash and Options 29%
TOTAL 100%
----------------------------------------------------------------------------------------
</TABLE>
24 Janus Aspen Series
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Explanation of rating categories 25
<PAGE>
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26 Janus Aspen Series
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<PAGE>
[JANUS LOGO]
1-800-29JANUS
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com
You can request other information, including a Statement of
Additional Information, Annual Report or Semiannual Report, free of
charge, by contacting your insurance company or plan sponsor or
visiting our Web site at janus.com. In the Portfolio's Annual
Report, you will find a discussion of the market conditions and
investment strategies that significantly affected the Portfolio's
performance during its last fiscal year. Other information is also
available from financial intermediaries that sell Shares of the
Portfolio.
The Statement of Additional Information provides detailed
information about the Portfolio and is incorporated into this
Prospectus by reference. You may review the Portfolio's Statement of
Additional Information at the Public Reference Room of the SEC or
get text only copies for a fee, by writing to or calling the Public
Reference Room, Washington, D.C. 20549-6009 (1-800-SEC-0330). You
may obtain the Statement of Additional Information for free from the
SEC's Web site at http://www.sec.gov.
Investment Company Act File No. 811-7736
