Janus | Aspen Series
1998 Annual Report
Janus Aspen Growth Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Janus Aspen International Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Equity Income Portfolio
Janus Aspen Growth and Income Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen High-Yield Portfolio
Janus Aspen Money Market Portfolio
[LOGO] JANUS
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Table | of Contents
Janus Aspen Series
Portfolio Managers' Commentaries and Schedules of Investments
Growth Portfolio ..................................... 14
Aggressive Growth Portfolio .......................... 17
Capital Appreciation Portfolio ....................... 20
International Growth Portfolio ....................... 23
Worldwide Growth Portfolio ........................... 28
Balanced Portfolio ................................... 34
Equity Income Portfolio .............................. 38
Growth and Income Portfolio .......................... 41
Flexible Income Portfolio ............................ 45
High-Yield Portfolio ................................. 50
Money Market Portfolio ............................... 54
Statements of Operations .................................. 56
Statements of Assets and Liabilities ...................... 58
Statements of Changes in Net Assets ....................... 60
Financial Highlights ...................................... 63
Notes to the Schedules of Investments ..................... 72
Notes to Financial Statements ............................. 73
Explanation of Charts, Tables
and Financial Statements ............................. 78
Report of Independent Accountants ......................... 81
[LOGO] JANUS
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Janus | Aspen Growth Portfolio
[PHOTO]
James P. Craig
portfolio manager
For the fiscal year ended December 31, 1998, Janus Aspen Growth Portfolio
outpaced the S&P 500 Index, returning 35.66% for its Institutional Shares and
34.99% for its Retirement Shares. By comparison, the index posted a gain of
28.74%.(1)
Low interest rates, benign inflation and steady corporate earnings helped the
U.S. stock market get off to a strong start in 1998. However, in the third
quarter, stocks dropped precipitously following an outbreak of economic turmoil
that started in Japan and spread to Russia, Brazil and other emerging markets.
In the U.S., the Federal Reserve responded to this turbulence by making three
consecutive interest rate cuts. This injected liquidity into the stock market,
which bolstered consumer confidence and enabled the economy to power through
recession fears. In fact, consumer confidence was so solid that even President
Clinton's impeachment and other signs of political instability in the U.S.
failed to shake the markets.
The economic situation also improved from a global perspective. Japan, which was
considered "ground zero" economically speaking, began to take small but positive
steps toward economic reform. Meanwhile, the outlook for Brazil brightened
thanks to its financial bailout by the International Monetary Fund.
During the period, much of the optimism in the U.S. stock market was fueled by
economic changes giving rise to new industries and dominant players. For
example, an explosion in Internet growth helped drive selected technology
stocks, including Cisco Systems and Microsoft. Cisco gained a remarkable 150%
for the year, contributing substantially to the Portfolio's overall performance.
Already the biggest hardware supplier to Internet and networking companies, this
company is also making serious inroads in the area of voice-data transmission, a
new market in which Cisco is quickly becoming the leader.
Despite the U.S. government's anti-trust case against Microsoft, it remains a
leader in the software industry. We believe technology changes too quickly for
Microsoft or any other technology company to establish a monopoly in this
industry. Furthermore, we are impressed with the rapid pace at which Microsoft
continues to develop and introduce new products; therefore, our outlook for this
stock is positive.
Several of our cable positions also ended the period with extraordinary results,
including Tele-Communications, Inc. (TCI), Time Warner, Inc. and Comcast Corp.
After a flat first half, these stocks rallied on news of TCI's acquisition by
AT&T. This merger further validates our theory that digital cable, telephony,
high-speed Internet access and other new value-added services cable companies
are currently rolling out could generate a free cash flow boom over the next few
years.
Breakthroughs in drug therapies helped push several of our pharmaceutical stocks
forward. Pfizer gained on news of a new arthritis drug known as Celebrex, which
it will co-market with Monsanto, while Warner-Lambert benefited from optimism
surrounding Lipitor, a cholesterol-lowering drug. Although we remain positive
about these two companies' solid business fundamentals, rhetoric out of
Washington about increasing drug prices has us keeping an especially close eye
on this industry.
Selected financial services companies also contributed to our strong results.
The increasing growth of Charles Schwab's online trading business leads us to
believe it is the epitome of all good things for Internet consumers. Schwab also
continues to flex its muscles in the banking business by providing unparalleled
asset management services in terms of quality and price. These services enable
customers to consolidate everything from banking to paying bills to investing,
all through one account.
Unfortunately, not all of our financial services positions impressed us as much
as Charles Schwab. Uncertain prospects in asset quality created by financial
discord in Russia and Brazil resulted in significant deterioration and
profitability at BankAmerica, UBS and Morgan Stanley Dean Witter and Co.
Consequently, we liquidated these positions at a loss.
Another disappointment was Parametric Technology, a software developer in
computer-aided design and manufacturing. Parametric's earnings suffered as a
result of management losing sight of its core business during the introduction
of a new product. Therefore, this position was also liquidated at a loss.
While I believe near-term economic growth in the U.S. will remain moderate, I
anticipate slower earnings growth among large multinational companies. Going
forward, the combination of a slowing global economy and low inflation should
keep long-term interest rates low. In this environment, talented stock pickers
thrive, and I am confident that in the coming year we'll continue to uncover
several more dynamic earnings stories.
In closing, I'd like to thank you for investing in Janus Aspen Growth Portfolio
and assure you of our dedication in pursuing strong results for 1999.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 93.2% 91.3%
Foreign 4.9% 9.4%
Europe 3.6% 9.4%
Top 10 Equities 36.5% 27.1%
Number of Stocks 70 80
Cash & Cash Equivalents 6.8% 8.7%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
2 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 9/13/93)
1 Year 35.66%
5 Year 21.41%
From Inception 20.91%
- --------------------------------------------------------------------------------
S&P 500 Index
1 Year 28.74%
5 Year 24.08%
From Inception Date of Institutional Shares 23.06%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 34.99%
5 Year (unaudited) 20.71%
From Portfolio Inception (unaudited) 20.01%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Growth Portfolio - Institutional Shares and the S&P 500 Index.
Janus Aspen Growth Portfolio - Institutional Shares is represented by a shaded
area of blue. The S&P 500 Index is represented by a solid black 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, 1998. The upper
right quadrant reflects the ending value of the hypothetical investment in Janus
Aspen Growth Portfolio - Institutional Shares ($27,315) as compared to the S&P
500 Index ($29,978).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 35.66%
Five Year, 21.41%
Since 9/13/93,* 20.91%
Janus Aspen Growth Portfolio
- - Institutional Shares - $27,315
S&P 500 Index - $29,978
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 93.2%
Advertising Sales - 0.4%
138,040 Outdoor Systems, Inc.* ................. $ 4,141,200
Agricultural Biotechnology - 0.4%
96,970 Monsanto Co. ........................... 4,606,075
Automotive - Truck Parts and Equipment - 1.4%
253,275 Federal-Mogul Corp. .................... 15,069,862
Broadcast Services and Programming - 1.0%
231,400 Tele-Communications Liberty Media
Group, Inc. - Class A* ................. 10,658,862
Cable Television - 10.0%
251,640 Adelphia Communications Corp. - Class A* 11,512,530
686,325 Comcast Corp. - Special Class A ........ 40,278,698
359,990 Cox Communications, Inc. - Class A* .... 24,884,309
464,040 MediaOne Group, Inc.* .................. 21,809,880
208,660 Tele-Communications, Inc. - Class A* ... 11,541,506
110,026,923
Chemicals - Diversified - 0.2%
80,630 Solutia, Inc. .......................... 1,804,096
Chemicals - Specialty - 0.2%
104,610 Cytec Industries, Inc.* ................ 2,222,963
Circuits - 4.4%
290,700 Linear Technology Corp. ................ 26,035,819
516,700 Maxim Integrated Products, Inc.* ....... 22,573,331
48,609,150
Commercial Banks - 1.6%
79,045 Firstar Corp. .......................... $ 7,370,946
19,475 M & T Bank Corp. ....................... 10,106,308
17,477,254
Computer Software - 6.2%
396,850 Microsoft Corp.* ....................... 55,038,134
50,000 Oracle Corp.* .......................... 2,156,250
240,000 Wind River Systems, Inc.* .............. 11,280,000
68,474,384
Computers - Integrated Systems - 1.0%
364,235 Cadence Design Systems, Inc.* .......... 10,835,991
Computers - Memory Devices - 2.5%
266,225 EMC Corp.* ............................. 22,629,125
81,670 VERITAS Software Corp.* ................ 4,895,096
27,524,221
Computers - Micro - 4.7%
125,000 Dell Computer Corp.* ................... 9,148,438
126,210 IBM Corp. .............................. 23,317,298
226,090 Sun Microsystems, Inc.* ................ 19,358,956
51,824,692
Cruise Lines - 0.7%
154,050 Carnival Corp. ......................... 7,394,400
Data Processing and Management - 0.7%
100,000 Automatic Data Processing, Inc. ........ 8,018,750
Diversified Operations - 4.7%
111,100 General Electric Co. ................... 11,339,144
544,959 Tyco International, Ltd. ............... 41,110,345
52,449,489
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 3
<PAGE>
Janus | Aspen Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Drug Delivery Systems - 0.7%
142,365 ALZA Corp.* ............................ $ 7,438,571
Electronic Components - Semiconductors - 1.6%
199,950 Texas Instruments, Inc. ................ 17,108,222
Electronic Safety Devices - 0.4%
141,350 Pittway Corp. - Class A ................ 4,673,384
Finance - Credit Card - 0.7%
80,000 American Express Co. ................... 8,180,000
Finance - Investment Bankers/Brokers - 2.8%
543,805 Charles Schwab Corp. ................... 30,555,043
Finance - Mortgage Loan Banker - 1.2%
64,250 Fannie Mae ............................. 4,754,500
129,975 Freddie Mac ............................ 8,375,264
13,129,764
Finance - Other Services - 1.3%
200,000 Newcourt Credit Group, Inc. ............ 6,966,409
204,709 Newcourt Credit Group, Inc. ............
- New York Shares .................... 7,152,021
14,118,430
Food - Wholesale - 0.4%
98,725 U.S. Foodservice* ...................... 4,837,525
Human Resources - 0.9%
223,320 Robert Half International, Inc.* ....... 9,979,613
Instruments - Scientific - 0.9%
268,450 Dionex Corp.* .......................... 9,831,981
Internet Software - 1.7%
130,000 America Online, Inc.* .................. 18,817,500
Medical - Drugs - 7.5%
64,810 Merck & Co., Inc. ...................... 9,571,627
296,935 Pfizer, Inc. ........................... 37,246,784
164,000 Pharmacia & Upjohn, Inc. ............... 9,286,500
214,350 Schering-Plough Corp. .................. 11,842,838
204,600 Warner-Lambert Co. ..................... 15,383,363
83,331,112
Medical - Wholesale Drug Distributors - 1.3%
175,745 McKesson Corp. ......................... 13,894,839
Medical Information Systems - 1.4%
549,000 HBO & Co. .............................. 15,749,437
Medical Instruments - 0.6%
90,000 Medtronic, Inc. ........................ 6,682,500
Money Center Banks - 3.0%
827,190 Bank of New York Co., Inc. ............. 33,294,397
Multimedia - 6.2%
289,530 Meredith Corp. ......................... 10,965,949
931,946 Time Warner, Inc. ...................... 57,838,899
68,804,848
Networking Products - 5.0%
592,337 Cisco Systems, Inc.* ................... 54,976,278
Pharmacy Services - 0.4%
139,890 Omnicare, Inc. ......................... 4,861,177
Property and Casualty Insurance - 0.5%
34,440 Progressive Corp. ...................... 5,833,275
Publishing - Periodicals - 2.4%
125,221 Wolters Kluwer N.V ..................... 26,810,175
Radio - 3.2%
244,010 Chancellor Media Corp.* ................ $ 11,681,979
238,565 Clear Channel Communications, Inc.* .... 13,001,792
386,770 Infinity Broadcasting Corp. - Class A* . 10,587,829
35,271,600
Retail - Building Products - 0.5%
89,855 Home Depot, Inc. ....................... 5,498,003
Retail - Discount - 2.6%
301,865 Costco Companies, Inc.* ................ 21,790,880
92,010 Wal-Mart Stores, Inc. .................. 7,493,064
29,283,944
Retail - Office Supplies - 0.8%
200,000 Staples, Inc.* ......................... 8,737,500
Retail - Regional Department Stores - 0.6%
108,520 Fred Meyer, Inc.* ...................... 6,538,330
Super-Regional Banks - 0.8%
107,805 Northern Trust Corp. ................... 9,412,724
Telecommunication Equipment - 1.2%
105,890 Nokia Oyj (ADR) - Class A .............. 12,753,127
Telecommunication Services - 0.2%
125,000 Hyperion Telecommunications, Inc.
- Class A* ........................... 1,890,625
Telephone - Long Distance - 1.6%
242,860 MCI WorldCom, Inc.* .................... 17,425,205
Television - 0.7%
226,450 Univision Communications, Inc. - Class A* 8,194,659
- --------------------------------------------------------------------------------
Total Common Stock (cost $707,733,191) .................... 1,029,052,100
- --------------------------------------------------------------------------------
Preferred Stock - 0%
Computer Software - 0%
236 SAP A.G. (cost $108,534) ............... 112,678
- --------------------------------------------------------------------------------
U.S. Government Agencies - 6.6%
Freddie Mac:
$ 47,700,000 4.70%, 1/4/99 ........................ 47,681,318
25,000,000 4.80%, 1/8/99 ........................ 24,975,208
- --------------------------------------------------------------------------------
Total U.S. Government Agencies (amortized cost $72,656,526) 72,656,526
- --------------------------------------------------------------------------------
Total Investments (total cost $780,498,251) - 99.8% ....... 1,101,821,304
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 0 2% 1,745,423
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 1,103,566,727
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Canada 1.3% $ 14,118,430
Finland 1.2% 12,753,127
Germany -- 112,678
Netherlands 2.4% 26,810,175
United States++ 95.1% 1,048,026,894
- --------------------------------------------------------------------------------
Total 100.0% $1,101,821,304
++Includes Short-Term Securities (88.5% excluding Short-Term Securities)
See Notes to Schedules of Investments.
4 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Aggressive Growth Portfolio
[PHOTO]
James P. Goff
portfolio manager
Janus Aspen Aggressive Growth Portfolio posted solid gains during the fiscal
year ended December 31, 1998, returning 34.26% for its Institutional Shares and
33.58% for its Retirement Shares. In comparison, the S&P MidCap 400 Index rose
18.25%.(1)
After a strong first half, the global economy slowed in the third quarter as the
"Asian Contagion" spread to other parts of the world. The Federal Reserve
responded to this negative turn of events by making three interest rate cuts in
quick succession, which helped boost investor confidence in the U.S. and jump
start our economy.
While most investors were pleasantly surprised that Asia's shock waves weren't
as severe as first thought, the slowdown caused many large multinational
companies to experience earnings disappointments. Larger technology companies,
however, gained considerable momentum near year-end, as more and more people
embraced the innovation these companies continue to introduce. Consequently,
technology businesses played an instrumental role in pushing U.S. markets
forward.
A standout among our technology companies was Vitesse Semiconductor, which
contributed significant gains to the Portfolio. Our confidence in Vitesse
prompted us to add to this position during October's brief sell-off, which was
caused by recession fears. The stock has since rebounded and, at the end of the
period, was trading above its previous highs. Going forward, we believe rapid
growth within the telecommunications and data communications industries will
drive demand for this company's products steadily higher.
While our position in America Online (AOL) also aided the Portfolio's
performance, our underweighting in this stock relative to our index placed us at
a disadvantage. We purchased AOL when it was a mid-cap company; however, near
year-end its market capitalization topped out at more than $62 billion. As such,
it was the largest company in the S&P MidCap 400 Index and accounted for 7.1% of
the Index's 18.25% gain for the year. AOL has since been bumped up to the S&P
500 Index.
The Portfolio's positive results can also be attributed to several of our life
sciences positions, including MedImmune, Sepracor and Sofamor Danek Group.
MedImmune, which develops products for the treatment of infectious diseases,
gained from strong sales of its existing drugs, as well as optimism surrounding
four new drugs currently in clinical trials. Sepracor's solid returns were
linked to lucrative agreements it signed with several big drug companies,
including one with Eli Lilly for Prozac. By patenting the single-isomer versions
of many blockbuster drugs, Sepracor has attracted great interest from large
pharmaceutical companies wanting to license these drugs, which boast reduced
side effects and longer-lasting patents. And long-time holding Sofamor Danek, a
successful maker of spinal implants, rose on news of its acquisition by
Medtronic.
Our interest in Internet-related businesses heightened in tandem with Internet
traffic growth during the period. As a result, we established positions in
companies we believe are driving progress in this business, including Exodus
Communications, Lycos, and Amazon.com. While all of these stocks posted solid
gains, we are especially excited about Amazon.com. This company epitomizes
shopping on the Web. It's currently planning to expand its successful book,
music and video business to include a one-stop-shopping service that will enable
people to buy products from as many as 300 companies. We believe royalties from
these sales could possibly double Amazon.com's earnings potential three years
out.
One reason for our substantial outperformance in 1998 was a lack of disasters.
We managed to avoid most of the bigger disappointments and maintained a
portfolio of companies growing at 30% on average. Our losers suffered primarily
from negative perceptions but continue to thrive fundamentally. For example, our
position in HealthCare Financial Partners joined other financial-related stocks
in a decline fueled by fears surrounding global economic breakdowns. However, we
remain impressed with this company's solid business fundamentals and have
increased our position.
Our holding in Apollo Group also faltered because of concerns arising from a
routine Department of Education (DOE) review. We found these results to be
inaccurate based on the fact that Apollo's universities are relatively less
traditional (they cater to working adults) than most other institutions reviewed
by the DOE. Our confidence in this company is further boosted by its increasing
enrollment and revenue figures. Consequently, we also added to this position.
In the near term, we believe a slowing world economy will lead to further
lackluster corporate earnings growth. Nonetheless, we adamantly believe we can
continue to uncover compelling growth stories irrespective of macroeconomic
trends. Our hope is that as earnings growth scarcity continues, a premium for
growth will be placed on our companies, leading to further gains.
Thank you for your investment in Janus Aspen Aggressive Growth Portfolio.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 95.6% 97.0%
Foreign 9.7% 13.6%
Number of Stocks 50 68
Top 10 Equities 47.4% 41.5%
Cash & Cash Equivalents 4.4% 3.0%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
Janus Aspen Series / December 31, 1998 5
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 9/13/93)
1 Year 34.26%
5 Year 19.35%
From Inception 21.96%
- --------------------------------------------------------------------------------
S&P MidCap 400 Index
1 Year 18.25%
5 Year 18.67%
From Inception Date of Institutional Shares 18.06%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 33.58%
5 Year (unaudited) 17.05%
From Portfolio Inception (unaudited) 21.14%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Aggressive Growth Portfolio - Institutional Shares and the S&P
MidCap 400 Index. Janus Aspen Aggressive Growth Portfolio - Institutional Shares
is represented by a shaded area of blue. The S&P MidCap 400 Index is represented
by a solid black 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, 1998. The upper right quadrant reflects the ending value of
the hypothetical investment in Janus Aspen Aggressive Growth Portfolio -
Institutional Shares ($28,587) as compared to the S&P MidCap 400 Index
($24,072).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 34.26%
Five Year, 19.35%
Since 9/13/93,* 21.96%
Janus Aspen Aggressive Growth Portfolio
- - Institutional Shares - $28,587
S&P MidCap 400 Index - $24,072
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 95.6%
Advertising Sales - 1.6%
421,884 Outdoor Systems, Inc.* ................. $ 12,656,520
Advertising Services - 1.6%
323,425 HA-LO Industries, Inc.* ................ 12,168,866
Aerospace and Defense - 1.0%
176,825 Orbital Sciences Corp.* ................ 7,824,506
Airlines - 1.8%
362,098 Ryanair Holdings PLC (ADR)* ............ 13,669,199
Audio and Video Products - 0.4%
60,090 Gemstar International Group, Ltd.* ..... 3,440,152
Cable Television - 1.8%
193,125 Adelphia Communications Corp. - Class A* 8,835,469
138,825 TCA Cable TV, Inc. ..................... 4,954,317
13,789,786
Cellular Telecommunications - 2.9%
590,820 Crown Castle International Corp.* ...... 13,884,270
221,050 WinStar Communications, Inc.* .......... 8,620,950
22,505,220
Circuits - 7.0%
1,180,590 Vitesse Semiconductor Corp.* ........... 53,864,419
Commercial Banks - 3.4%
209,950 Firstar Corp. .......................... 19,577,838
85,180 U.S. Trust Corp. ....................... 6,473,680
26,051,518
Commercial Services - 3.9%
581,323 Paychex, Inc. .......................... $ 29,901,802
Computers - Integrated Systems - 0.6%
65,167 Equant N.V. - New York Shares* ......... 4,419,137
Computers - Memory Devices - 4.1%
534,745 VERITAS Software Corp.* ................ 32,051,278
Finance - Investment Bankers/Brokers - 1.8%
243,780 Charles Schwab Corp. ................... 13,697,389
Finance - Other Services - 2.0%
381,591 HealthCare Financial Partners, Inc.* ... 15,215,941
Human Resources - 1.5%
814,892 Capita Group PLC** ..................... 7,511,223
96,400 Robert Half International, Inc.* ....... 4,307,875
11,819,098
Internet Content - 0.9%
51,290 Broadcast.com, Inc.* ................... 3,923,685
91,035 InfoSpace.com, Inc.* ................... 3,470,709
7,394,394
Internet Software - 2.6%
90,840 America Online, Inc.* .................. 13,149,090
68,690 Exodus Communications, Inc.* ........... 4,413,333
53,130 Lycos, Inc.* ........................... 2,952,036
20,514,459
Lasers - Systems and Components - 1.1%
117,655 Uniphase Corp.* ........................ 8,162,316
See Notes to Schedules of Investments.
6 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Aggressive Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Medical - Drugs - 5.9%
235,270 MedImmune, Inc.* ....................... $ 23,394,661
249,775 Sepracor, Inc.* ........................ 22,011,422
45,406,083
Medical - Generic Drugs - 0.9%
104,915 Watson Pharmaceuticals, Inc.* .......... 6,596,531
Medical Instruments - 1.2%
74,990 Sofamor Danek Group, Inc.* ............. 9,130,033
Networking Products - 2.0%
169,560 Cisco Systems, Inc.* ................... 15,737,288
Pharmacy Services - 3.0%
674,555 Omnicare, Inc. ......................... 23,440,786
Radio - 13.0%
317,050 Chancellor Media Corp.* ................ 15,178,769
333,925 Clear Channel Communications, Inc.* .... 18,198,912
724,030 Heftel Broadcasting Corp. - Class A* ... 35,658,477
490,915 Jacor Communications, Inc.* ............ 31,602,653
100,638,811
Resorts and Theme Parks - 0.9%
232,365 Premier Parks, Inc. .................... 7,029,041
Retail - Drug Store - 1.8%
259,870 CVS Corp. .............................. 14,292,850
Retail - Internet - 1.9%
44,795 Amazon.com, Inc.* ...................... 14,390,394
Retail - Pubs - 1.6%
4,110,285 J.D. Wetherspoon PLC** ................. 12,241,252
Retail - Restaurants - 3.8%
2,207,716 PizzaExpress PLC** ..................... 29,459,029
Schools - 13.4%
2,494,771 Apollo Group, Inc. - Class A* .......... 84,510,368
557,885 ITT Educational Services, Inc.* ........ 18,968,090
103,478,458
Telecommunication Services - 4.4%
35,755 Global Crossing, Ltd.* ................. 1,613,444
210,305 Level 3 Communications, Inc.* .......... 9,069,403
18,135 MetroNet Communications Corp.* ......... 607,523
313,430 Qwest Communications International, Inc.* 15,671,500
251,490 RSL Communications, Ltd.* .............. 7,418,955
34,380,825
Telephone - Integrated - 0%
360 NEXTLINK Communications, Inc.* ......... 10,215
Television - 1.0%
209,288 Univision Communications, Inc. - Class A* 7,573,609
Wireless Equipment - 0.8%
205,875 American Tower Corp. - Class A ......... 6,086,180
- --------------------------------------------------------------------------------
Total Common Stock (cost $491,820,724) .................... 739,037,385
- --------------------------------------------------------------------------------
U.S. Government Agency - 3.0%
Freddie Mac
$ 23,100,000 4.70%, 1/4/99
(amortized cost $23,090,952) ......... $ 23,090,952
- --------------------------------------------------------------------------------
Total Investments (total cost $514,911,676) - 98.6% ....... 762,128,337
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 1 4% 10,831,809
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 772,960,146
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Bermuda 1.0% $ 7,418,955
Ireland 1.8% 13,669,199
Netherlands 0.6% 4,419,137
United Kingdom 6.4% 49,211,504
United States++ 90.2% 687,409,542
- --------------------------------------------------------------------------------
Total 100.0% $ 762,128,337
++Includes Short-Term Securities (87.2% excluding Short-Term Securities)
Forward Currency Contracts, Open at December 31, 1998
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- --------------------------------------------------------------------------------
British Pound 4/7/99 13,080,000 $21,605,544 $374,574
British Pound 5/13/99 1,015,000 1,675,968 2,842
- --------------------------------------------------------------------------------
Total $23,281,512 $377,416
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 7
<PAGE>
Janus | Aspen Capital Appreciation Portfolio
[PHOTO]
Scott W. Schoelzel
portfolio manager
I'd like to thank all of you for your continued commitment and confidence during
what was a tremendous year for Janus Aspen Capital Appreciation Portfolio. For
the 12-month period ended December 31, 1998, the Portfolio's Institutional
Shares gained 58.11% and its Retirement Shares gained 57.37%. This compares with
the 28.74% return posted by the S&P 500 Index.(1)
One principle of the Portfolio is to invest in companies that provide more and
more of the goods and services you and I use in our everyday lives. These
companies span a wide range of industries, representing what we believe to be
the most dynamic growth areas of the market. Particularly astonishing has been
the pace of innovation and development within the telecommunications,
technology, pharmaceutical, financial services, retailing and media businesses.
Rapid progress in these areas often makes it a challenge to keep up. So the job
our research analysts have done in identifying and analyzing the opportunities
responsible for the Portfolio's strong results has been nothing short of
extraordinary.
That said, we experienced powerful moves by a number of our technology stocks.
Most of our gains were fueled by Internet growth, which I believe will be the
single most influential phenomenon affecting our lives over the next 10 years.
The Internet has no road maps. It's virgin territory. And it continues to impact
how we work, learn and entertain ourselves in ways we'd never imagined.
Three Internet-related stocks posting outstanding results during the period were
Dell Computer, returning 248%, Microsoft, gaining 115%, and America Online
(AOL), moving up 586%. As the Portfolio's largest position, AOL was our biggest
winner. AOL is already signing up an average of one million new subscribers a
month, and we believe this company is taking strategic steps that will lead to
even more growth. For example, its planned acquisition of Netscape
Communications and joint venture with Sun Microsystems could help build and
direct more Internet traffic its way, particularly among business users.
Life sciences is another area in which we continue to see a proliferation of
opportunities. Our positions in Pfizer, Warner-Lambert and Eli Lilly benefited
from the increased acceptance of a number of recently launched drugs, all of
which have proven successful in treating everything from elevated cholesterol
levels to osteoporosis. Going forward, we expect the pipeline of "blockbuster"
drugs to accelerate throughout this broad industry.
Telecommunications continues to offer great potential as well. Gains from our
relatively new position in Nokia, a leader in the cellular phone equipment
industry, were driven by the increasing use of cellular phones both in the U.S.
and around the world. There are currently about 250 million subscribers
worldwide, and we expect an increase to more than 600 million in the next couple
of years. We believe Nokia is well positioned to maintain its leadership.
Despite the Portfolio's noteworthy gains, there were stocks that fell short of
our expectations. Our financial services holdings, once thought to be some of
the more stable and predictable in the Portfolio, proved to be some of the most
volatile. The Asian economic crisis, Russian debt fiasco, hedge fund meltdowns
and assimilation difficulties with some of the higher-profile banking mergers
all contributed to our loss of confidence. Consequently, we chose to liquidate
our positions in Citigroup, BankAmerica and American Express but will continue
to monitor future developments.
Looking ahead, I believe the volatility we saw during the second half of the
period - motivated largely by the speed and sheer volume by which information is
now being disseminated - is only a precursor to future market actions.
Nonetheless, I remain very bullish on the longer-term prospects for financial
assets, particularly growth stocks. I would, however, urge you to maintain
realistic expectations going forward. The average return on stocks over the past
30 years is around 11%, not 40%. (And, yes, some years even produce losses!)
Finally, because I'm just like you - investing for my kids' education,
retirement and such - my money management style is probably a lot like yours.
Therefore, rest assured that the next time the market swoons, I know firsthand
what you're going through, and I'm working hard to navigate the uncertainties of
the marketplace with your best interests in mind.
Thank you for your continued investment in Janus Aspen Capital Appreciation
Portfolio.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 89.7% 81.0%
Foreign 5.9% 7.2%
Europe 5.9% 7.2%
Top 10 Equities 57.5% 42.4%
Number of Stocks 23 33
Cash & Cash Equivalents 10.3% 19.0%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
8 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/1/97)
1 Year 58.11%
From Inception 51.65%
- --------------------------------------------------------------------------------
S&P 500 Index
1 Year 28.74%
From Inception Date of Institutional Shares 31.38%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 57.37%
From Inception 50.93%
- --------------------------------------------------------------------------------
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Capital Appreciation Portfolio - Institutional Shares and the S&P
500 Index. Janus Aspen Capital Appreciation Portfolio - Institutional Shares is
represented by a shaded area of blue. The S&P 500 Index is represented by a
solid black line. The "y" axis reflects the value of the investment. The "x"
axis reflects the computation periods from inception, May 1, 1997, through
December 31, 1998. The upper right quadrant reflects the ending value of the
hypothetical investment in Janus Aspen Capital Appreciation Portfolio -
Institutional Shares ($20,017) as compared to the S&P 500 Index ($15,778).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 58.11%
Since 5/1/97,* 51.65%
Janus Aspen Capital Appreciation Portfolio
- - Institutional Shares - $20,017
S&P 500 Index - $15,778
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 89.7%
Applications Software - 0.6%
6,340 Intuit, Inc.* .......................... $ 459,650
Cable Television - 3.1%
42,150 Tele-Communications, Inc. - Class A* ... 2,331,422
Computer Software - 5.4%
29,090 Microsoft Corp.* ....................... 4,034,419
Computers - Memory Devices - 3.2%
27,855 EMC Corp.* ............................. 2,367,675
Computers - Micro - 3.5%
35,121 Dell Computer Corp.* ................... 2,570,418
Diversified Operations - 0.5%
3,935 General Electric Co. ................... 401,616
Electronic Components - 3.6%
29,030 Solectron Corp.* ....................... 2,697,976
Electronic Components - Semiconductor - 4.2%
36,685 Texas Instruments, Inc. ................ 3,138,860
Internet Content - 4.5%
33,965 At Home Corp. - Class A* ............... 2,521,901
6,485 Inktomi Corp.* ......................... 838,997
3,360,898
Internet Software - 12.8%
65,665 America Online, Inc.* .................. 9,505,009
Medical - Drugs - 7.5%
24,735 Eli Lilly and Co. ...................... $ 2,198,323
20,769 Pfizer, Inc. ........................... 2,605,211
9,669 Warner-Lambert Co. ..................... 726,988
5,530,522
Medical Information Systems - 4.2%
40,785 IMS Health, Inc. ....................... 3,076,718
Multimedia - 8.8%
104,610 Time Warner, Inc. ...................... 6,492,358
Networking Products - 4.7%
37,272 Cisco Systems, Inc.* ................... 3,459,308
Retail - Building Products - 3.4%
40,595 Home Depot, Inc. ....................... 2,483,907
Retail - Discount - 6.8%
29,605 Costco Companies, Inc.* ................ 2,137,111
35,755 Wal-Mart Stores, Inc. .................. 2,911,798
5,048,909
Telecommunication Equipment - 8.9%
20,305 Lucent Technologies, Inc. .............. 2,233,550
36,275 Nokia Oyj (ADR) - Class A .............. 4,368,870
6,602,420
Telephone - Long Distance - 4.0%
41,335 MCI WorldCom, Inc.* .................... 2,965,786
- --------------------------------------------------------------------------------
Total Common Stock (cost $46,355,348) ..................... 66,527,871
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 9
<PAGE>
Janus | Aspen Capital Appreciation Portfolio
SCHEDULE OF INVESTMENTS (continued)
Principal Amount Market Value
- --------------------------------------------------------------------------------
U.S. Government Agency - 8.2%
Freddie Mac
$ 6,100,000 4.70%, 1/4/99
(amortized cost $6,097,611) .......... $ 6,097,611
- --------------------------------------------------------------------------------
Total Investments (total cost $52,452,959) - 97.9% ........ 72,625,482
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 2 1% 1,581,739
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 74,207,221
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Finland 6.0% $ 4,368,870
United States++ 94.0% 68,256,612
- --------------------------------------------------------------------------------
Total 100.0% $ 72,625,482
++Includes Short-Term Securities (85.6% excluding Short-Term Securities)
See Notes to Schedules of Investments.
10 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen International Growth Portfolio
[PHOTO]
Helen Young Hayes
portfolio manager
[PHOTO]
Laurence Chang
portfolio manager
For the fiscal year ended December 31, 1998, Janus Aspen International Growth
Portfolio returned 17.23% for the Institutional Shares and 16.86% for the
Retirement Shares. These gains trailed the Morgan Stanley Capital International
EAFE Index's return of 20%.(1)
When the period began, low interest rates and strong corporate earnings,
particularly in the U.S. and Western Europe, enabled international stock markets
to move steadily higher. Although the Japanese and Asian markets were much
weaker in comparison, their weakness helped keep commodity prices in check,
which in turn created a more favorable inflationary environment with lower
interest rates. However, in July, the Russian currency devaluation and
subsequent debt crisis caused international stock markets to begin to capsize.
Also contributing to this volatility were political and economic uncertainties
in Japan, Germany and the U.S.
In the U.S., the Federal Reserve reacted to these negative events by making
three consecutive interest rate cuts. Several other countries soon followed
suit, and by year-end rates had been cut in 60 countries around the world. This
effectively bolstered investor sentiment and stabilized equity markets
worldwide. Global economic growth therefore continued, albeit at a somewhat
slower pace.
Despite strong performance for the first eight months of the year, we were
disappointed that we did not keep pace with our benchmark, the Morgan Stanley
EAFE Index, for the 12-month period. This was partly due to our weighting in
European stocks. European markets were significantly impacted during the third
quarter's dramatic sell-off and still have not recovered completely. Also
restraining our performance was our relatively small weighting in Japan versus
the index. Because Japanese stocks began the period at already depressed levels,
they simply did not have large gains to give up.
Among the Portfolio's biggest disappointments was our position in UBS, a large
Swiss banking and financial services conglomerate. Damaged by the Russian debt
crisis, this company was forced to write down not only its loans to Russia, but
also its exposure to hedge funds and Russian bonds. We subsequently cut our
position at a loss, but maintain holdings in this and other European financial
services stocks given their solid underlying fundamentals and inexpensive
valuations.
Alcatel was another holding that underperformed during the period. This French
telecommunications equipment vendor reported disappointing order trends in its
public telephone business. Also contributing to its decline was weaker global
economic growth, which pressured its revenue and profit outlook. Consequently,
our earnings expectations for this company were cut dramatically, and the
position was reduced at a loss.
Additional stocks that were hit during the third quarter sell-off were rapidly
growing companies, such as COLT Telecom Group in the UK, and economically
sensitive companies, such as Renault in France. In the first case, investors
were unwilling to hold stocks with strong earnings potential but a small current
earnings base. Meanwhile, cyclical or economically sensitive businesses were
bruised by fears of a possible global recession. Both categories have since
rebounded, with some back at their all-time highs. Nonetheless, cyclical stocks
remain below recent levels as well as historical valuation measures.
Despite our disappointments, the Portfolio had many outstanding stocks during
the year. Among our most impressive performers was Wolters Kluwer, a Dutch
publishing company that has virtually no exposure to emerging markets. The
company's steady revenue streams helped its stock gain a solid 58% for the
fiscal year. Securitas also ended the period with exceptional results - up 58%
for the period. This Swedish security firm made two very significant
acquisitions that we believe could help accelerate its earnings beyond the 20%
growth rate Securitas has seen over the past few years. Another winner was
Nokia, a Finnish telecommunications equipment maker. As consumers increasingly
recognize the convenience and productivity afforded by wireless telephones, we
remain bullish on Nokia's prospects.
Several of the Portfolio's European technology holdings also aided our
performance, including Cap Gemini and Getronics. Despite their strong returns,
these two companies gave up some of their gains in the fourth quarter. This was
due to concerns about a potential post-year 2000 slowdown in corporate IT
spending, which we believe would be only a temporary situation.
Looking ahead, it appears the worst of the volatility is behind us. We remain
positive on the outlook for global interest rates and expect modest growth for
the upcoming year. Stock price valuations in foreign markets have come down to
levels we have not seen for quite a while. In addition, positive secular trends
in Europe are continuing, such as increased focus on profitability and
shareholder value. Europe's introduction of the euro in 1999 should also benefit
its economy, helping to formalize the integration of Europe as an economic
entity.
Thank you for your continued confidence and investment in Janus Aspen
International Growth Portfolio.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 91.0% 91.6%
Foreign 89.3% 90.1%
Number of Stocks 146 188
Top 10 Equities 26.4% 22.9%
Cash & Fixed-Income
Securities 9.0% 8.4%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
Janus Aspen Series / December 31, 1998 11
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/2/94)
1 Year 17.23%
From Inception 18.87%
- --------------------------------------------------------------------------------
Morgan Stanley Capital International EAFE Index(2)
1 Year 20.00%
From Inception Date of Institutional Shares 8.11%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 16.86%
From Portfolio Inception (unaudited) 17.92%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen International Growth Portfolio - Institutional Shares and the
Morgan Stanley Capital International EAFE Index. Janus Aspen International
Growth Portfolio - Institutional Shares is represented by a shaded area of blue.
The Morgan Stanley Capital International EAFE Index is represented by a solid
black 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, 1998. The upper right quadrant reflects the ending value of the hypothetical
investment in Janus Aspen International Growth Portfolio - Institutional Shares
($22,403) as compared to the Morgan Stanley Capital International EAFE Index
($14,389).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 17.23%
Since 5/2/94,* 18.87%
Janus Aspen International Growth Portfolio
- - Institutional Shares - $22,403
Morgan Stanley Capital
International EAFE
Index - $14,389
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
(2) 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. EAFE stands for Europe, Australasia and the Far East.
Neither the U.S. market nor the emerging markets of Latin America and
Eastern Europe are represented in EAFE.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 88.5%
Advertising Agencies - 1.2%
632,959 WPP Group PLC** ........................ $ 3,843,875
Airlines - 0.1%
11,248 SAS Norge ASA - Class B ................ 94,487
19,316 SAS Sverige A.B.** ..................... 177,538
272,025
Appliances - 0.9%
163,952 Electrolux A.B. - Class B** ............ 2,821,687
Audio and Video Products - 0.7%
31,000 Sony Corp.** ........................... 2,261,859
Automotive - Cars and Light Trucks - 2.2%
17,503 DaimlerChrysler A.G.*,** ............... 1,728,730
15,056 DaimlerChrysler A.G. (ADR)*,** ......... 1,446,317
29,000 Honda Motor Co., Ltd.** ................ 953,841
50,762 Renault S.A ............................ 2,280,924
14,171 Volvo A.B. - Class B** ................. 325,186
6,734,998
Automotive - Truck Parts and Equipment - 0.8%
29,974 Valeo S.A.+ ............................ 2,363,146
Beverages - Non-Alcoholic - 0.1%
18,280 Coca-Cola Femsa S.A. (ADR) ............. 242,210
Beverages - Wine and Spirits - 0.6%
179,618 Diageo PLC** ........................... 1,994,812
Brewery - 0.7%
170,000 Kirin Brewery Co., Ltd.** .............. 2,170,278
Broadcast Services and Programming - 0.7%
9,375 Fox Entertainment Group, Inc.* ......... $ 236,133
77,695 Grupo Televisa S.A. (GDR)* ............. 1,918,095
2,154,228
Building and Construction - 0.9%
13,769 Suez Lyonnaise des Eaux ................ 2,829,715
Building Products - Cement and Aggregate - 0.1%
11,764 Cimpor-Cimentos de Portugal S.A ........ 375,534
Cellular Telecommunications - 6.4%
10,597 Cellular Communications International, Inc.* 720,596
1,010,000 China Telecom, Ltd.* ................... 1,746,993
4,706 MobilCom A.G.** ........................ 1,498,947
255 NTT Mobile Communication
Network, Inc.** ...................... 10,512,284
9,580 Orange PLC*,** ......................... 109,980
7,458 Panafon Hellenic Telecom S.A.*,+ ....... 199,738
472,870 Telecom Italia Mobile S.p.A. ........... 3,499,581
103,040 Vodafone Group PLC** ................... 1,676,662
19,964,781
Chemicals - Diversified - 0.7%
20,618 Akzo Nobel N.V.** ...................... 939,345
28,467 Hoechst A.G.** ......................... 1,181,051
2,120,396
Closed-End Funds - 0%
163 Romania Investment Fund*,+ ............. 118,358
See Notes to Schedules of Investments.
12 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen International Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Commercial Banks - 1.0%
40,500 Argentaria, Caja Postal y Banco Hipotecario
de Espana S.A ........................ $ 1,050,435
55,566 Banco Central Hispanoamericano ......... 660,794
6,275 Bayerische Vereinsbank A.G.** .......... 491,669
48,643 Den Norske Bank A.S.A .................. 167,916
16 Julius Baer Holding A.G. - Class B** ... 53,179
1,053 Kapital Holdings ....................... 52,118
108,194 Unicredito Italiano S.p.A .............. 640,479
3,116,590
Computer Services - 4.3%
5,368 Atos S.A.* ............................. 1,283,859
28,043 Cap Gemini S.A.+ ....................... 4,503,139
13,041 EDB - Elektronisk Databehandling A.S.A . 32,522
62,915 Getronics N.V.** ....................... 3,117,810
371,025 Logica PLC** ........................... 3,228,537
138,413 Misys PLC** ............................ 1,017,888
3,912 WM-Data A.B. - Class B** ............... 166,991
13,350,746
Computer Software - 0.5%
15,970 JBA Holdings PLC** ..................... 50,485
32,502 Tieto Corp. - Class B .................. 1,457,147
1,507,632
Computers - Integrated Systems - 1.2%
8,408 Equant N.V.*,** ........................ 585,368
16,734 Equant N.V. - New York Shares*,** ...... 1,134,774
92,300 Fujitsu, Ltd.** ........................ 1,231,522
90,387 SEMA Group PLC** ....................... 891,788
3,843,452
Cosmetics and Toiletries - 2.7%
375,000 Kao Corp.** ............................ 8,477,648
Cruise Lines - 0.1%
119,500 NCL Holdings A.S.A.* ................... 282,329
Diversified Operations - 10.2%
348,778 Hays PLC** ............................. 3,075,571
24,329 Lagardere S.C.A ........................ 1,034,395
811,586 Rentokil Initial PLC** ................. 6,127,990
358,051 Siebe PLC** ............................ 1,405,911
168,112 Tomkins PLC** .......................... 799,955
67,560 Unilever N.V.** ........................ 5,777,996
6,997 VEBA A.G.** ............................ 418,847
37,677 Vivendi ................................ 9,780,088
564,881 Williams PLC** ......................... 3,233,079
31,653,832
Drug Delivery Systems - 2.0%
87,297 Elan Corp. PLC (ADR)* .................. 6,072,598
Electronic Components - 1.1%
17,013 Electrocomponents PLC** ................ 112,376
25,709 Koninklijke Philips Electronics N.V.** . 1,726,109
20,935 Philips Electronics N.V ................
- New York Shares** .................. 1,417,038
3,255,523
Electronic Components - Semiconductors - 0.1%
2,500 Rohm Co., Ltd.** ....................... 228,065
Electronic Measuring Instruments - 0.1%
16,530 Simac Techniek N.V.** .................. $ 418,388
Finance - Other Services - 0.5%
42,040 Newcourt Credit Group, Inc. ............ 1,464,339
5,985 Newcourt Credit Group, Inc. ............
- New York Shares .................... 209,101
1,673,440
Food - Catering - 1.7%
453,291 Compass Group PLC** .................... 5,181,252
Food - Diversified - 1.2%
11,212 Danone ................................. 3,211,453
38,517 Raisio Group PLC ....................... 418,391
3,629,844
Food - Retail - 1.0%
1,878 Carrefour S.A .......................... 1,418,416
47,547 Koninklijke Ahold N.V.** ............... 1,758,309
3,176,725
Hotels and Motels - 0%
85 EIH, Ltd.+ ............................. 446
Human Resources - 1.9%
4,722 Adecco S.A.** .......................... 2,155,612
303,308 Capita Group PLC** ..................... 2,795,725
9,640 Select Appointments Holdings PLC** ..... 99,442
45,545 Select Appointments Holdings PLC (ADR)** 979,218
6,029,997
Investment Companies - 0.3%
4,479 Ratin A/S - B Shares ................... 950,082
Investment Management and Advisory Services - 0.3%
104,715 Amvescap PLC** ......................... 810,145
Life and Health Insurance - 0.1%
230 Schweizerische Lebensversicherungs-und
Rentenanstalt** ...................... 170,807
Machinery - General Industrial - 3.5%
95,225 Mannesmann A.G.** ...................... 10,920,265
Medical - Biomedical and Genetic - 0%
22 Ares-Serono Group - Class B** .......... 34,854
Medical - Drugs 9.9%
90,697 Astra A.B. - Class A** ................. 1,851,863
86,411 Glaxo Wellcome PLC** ................... 2,983,239
10,645 Merck KGaA** ........................... 479,353
1,501 Novartis A.G.** ........................ 2,950,676
3,852 Pharmacia & Upjohn, Inc.** ............. 215,755
72,650 Pharmacia & Upjohn, Inc. ............... 4,113,806
50,235 Rhone-Poulenc S.A ...................... 2,586,388
374 Roche Holding A.G.** ................... 4,563,758
10,463 Sanofi S.A ............................. 1,723,227
6,053 Schering A.G.** ........................ 760,475
42,852 SmithKline Beecham PLC** ............... 594,753
35,175 SmithKline Beecham PLC (ADR)** ......... 2,444,663
2,290 Synthelabo ............................. 484,974
129,000 Takeda Chemical Industries** ........... 4,974,884
30,727,814
Medical Products - 0%
2,792 Ortivus A.B.*,** ....................... 20,323
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 13
<PAGE>
Janus | Aspen International Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Metal Processsors and Fabricators - 1.3%
106,744 Assa Abloy A.B. - Class B** ............ $ 4,082,471
Money Center Banks - 3.6%
217,757 Banca Commerciale Italiana ............. 1,512,645
1,269,662 Banca di Roma* ......................... 2,155,255
80,638 Banco Bilbao Vizcaya S.A ............... 1,280,498
8,609 Bank Austria A.G ....................... 438,015
211,506 Lloyds TSB Group PLC** ................. 3,012,294
60,700 Skandinaviska Enskilda Banken - Class A** 640,284
7,106 UBS A.G.** ............................. 2,183,306
11,222,297
Mortgage Banks - 1.1%
39,919 Deutsche Pfandbrief-und
Hypothekenbank A.G.** ................ 3,499,301
Multi-Line Insurance - 2.3%
6,881 Aegon N.V.** ........................... 845,519
870 Baloise Holding Ltd. - Class R** ....... 902,633
1,385 ERGO Versicherungs Gruppe A.G.** ....... 228,682
53,548 Sampo Insurance Co. PLC - Class A ...... 2,041,117
4,233 Zurich Allied A.G.** ................... 3,134,341
7,152,292
Office Furnishings - 0.1%
14,624 Koninklijke Ahrend N.V.** .............. 334,300
Publishing - Periodicals - 3.1%
44,389 Wolters Kluwer N.V.** .................. 9,503,812
Retail - Diversified - 0.6%
28,000 Ito-Yokado Co., Ltd.** ................. 1,961,052
Retail - Major Department Stores - 0.6%
24,027 Metro A.G.** ........................... 1,918,669
Retail - Restaurants - 0.7%
226,922 TelePizza S.A.* ........................ 2,154,049
Rubber - Tires - 0.1%
10,000 Bridgestone Corp.** .................... 227,400
Security Services - 3.2%
75,036 Prosegur, Companhia de Seguridad S.A ... 887,036
578,488 Securitas A.B. - Class B** ............. 8,992,550
9,879,586
Telecommunication Equipment - 4.0%
740 Alcatel S.A ............................ 90,612
12,455 Alcatel S.A. (ADR) ..................... 304,369
35,341 Nokia Oyj - Class A .................... 4,327,507
49,940 Nokia Oyj (ADR) - Class A .............. 6,014,649
1,189 Telefonaktiebolaget L.M. Ericsson - Class B** 28,311
68,204 Telefonaktiebolaget L.M. Ericsson (ADR)
- Class B** .......................... 1,632,633
12,398,081
Telecommunication Services - 4.7%
496,240 Cable & Wireless Optus, Ltd.*,+ ........ 1,044,002
324,380 COLT Telecom Group PLC*,** ............. 4,800,659
142,964 Energis PLC*,** ........................ 3,187,369
280 NTT Data Corp.** ....................... 1,392,595
51,987 Sonera Group Oyj*,+ .................... 934,337
21,700 STET Hellas Telecommunications
S.A. (ADR)* .......................... 702,538
300,562 Telecom Italia S.p.A ................... 2,564,513
14,626,013
Telephone - Integrated - 3.2%
37 Nippon Telegraph & Telephone Corp.** ... $ 286,037
36,846 Portugal Telecom S.A ................... 1,689,426
10,817 Swisscom A.G.*,** ...................... 4,528,472
7,640 Telecom Argentina Stet S.A. (ADR) ...... 210,100
17,830 Telefonica de Argentina S.A. (ADR) ..... 498,126
45,726 Telefonica S.A ......................... 2,036,336
6,267 Telefonica S.A. (ADR) .................. 848,395
10,096,892
Transportation - Air Freight - 0%
4,815 SAS Danmark A/S ........................ 54,472
Travel Services - 0.1%
97 Kuoni Reisen A.G. - Class B** .......... 384,898
- --------------------------------------------------------------------------------
Total Common Stock (cost $219,072,265) .................... 275,296,284
- --------------------------------------------------------------------------------
Preferred Stock - 2.5%
Automotive - Cars and Light Trucks - 1.2%
1,636 Porsche A.G.** ......................... 3,732,637
Computer Software - 0.5%
2,964 SAP A.G.** ............................. 1,415,153
Insurance Brokers - 0.3%
1,641 Marschollek, Lautenschlaeger und
Partner A.G.** ....................... 936,011
Telephone - Integrated - 0.5%
20,540 Telecomunicacoes Brasileiras S.A. (ADR) 1,493,001
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $7,318,045) ................... 7,576,802
- --------------------------------------------------------------------------------
Rights - 0%
45,726 Telefonica S.A. * (cost $0) ............ 40,662
- --------------------------------------------------------------------------------
Warrants - 0%
75 Muenchener Rueckversicherungs
- Gesellschaft A.G. *,** (cost $0) ... 3,490
- --------------------------------------------------------------------------------
U.S. Government Agency - 9.7%
Freddie Mac
$ 30,300,000 4.70%, 1/4/99
(amortized cost $30,288,133) ......... 30,288,133
- --------------------------------------------------------------------------------
Total Investments (total cost $256,678,443) - 100.7% ...... 313,205,371
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (0.7%) (2,078,809)
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 311,126,562
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
14 Janus Aspen Series / December 31, 1998
<PAGE>
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Argentina 0.2% $ 708,225
Australia 0.3% 1,044,002
Austria 0.1% 438,015
Brazil 0.5% 1,493,001
Canada 0.5% 1,673,440
Denmark 0.3% 1,056,671
Finland 4.9% 15,193,148
France 10.8% 33,894,706
Germany 9.8% 30,659,599
Greece 0.3% 902,275
Hong Kong 0.6% 1,746,993
India -- 446
Ireland 1.9% 6,072,597
Italy 3.3% 10,372,474
Japan 11.1% 34,677,466
Mexico 0.7% 2,160,305
Netherlands 8.8% 27,558,769
Norway 0.2% 577,253
Portugal 0.7% 2,064,960
Romania -- 118,358
Spain 2.9% 8,958,205
Sweden 6.7% 20,955,592
Switzerland 6.7% 21,062,536
United Kingdom 17.4% 54,457,669
United States++ 11.3% 35,358,666
- --------------------------------------------------------------------------------
Total 100.0% $ 313,205,371
++Includes Short-Term Securities (1.6% excluding Short-Term Securities)
Forward Currency Contracts, Open at December 31, 1998
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- --------------------------------------------------------------------------------
British Pound 4/7/99 11,220,000 $18,533,196 $282,665
British Pound 5/6/99 4,380,000 7,232,694 (32,237)
British Pound 5/13/99 900,000 1,486,080 2,520
Dutch Guilder 1/21/99 2,000,000 1,065,246 (18,948)
Dutch Guilder 1/22/99 10,500,000 5,592,841 (37,286)
Dutch Guilder 1/26/99 5,000,000 2,663,825 8,742
Dutch Guilder 1/27/99 3,400,000 1,811,498 (40,664)
German Deutschemark
1/22/99 10,000,000 6,011,060 2,820
German Deutschemark
1/25/99 229,000 137,678 1,718
German Deutschemark
1/26/99 1,500,000 901,876 (18,002)
German Deutschemark
1/27/99 11,550,000 6,944,862 (160,617)
Japanese Yen 2/12/99 1,060,000,000 9,364,504 (216,009)
Japanese Yen 3/25/99 200,700,000 1,773,170 (76,636)
Japanese Yen 4/7/99 500,000,000 4,417,539 (612,364)
Japanese Yen 4/8/99 129,500,000 1,144,145 (6,183)
Japanese Yen 4/21/99 359,800,000 3,178,920 40,767
Japanese Yen 5/20/99 50,000,000 441,779 (18,409)
Swedish Krona 4/7/99 28,500,000 3,532,824 23,825
Swedish Krona 5/6/99 464,000 57,583 1,969
Swedish Krona 5/13/99 585,000 72,620 50
Swiss Franc 3/25/99 185,000 135,870 662
Swiss Franc 4/7/99 2,200,000 1,617,766 11,291
Swiss Franc 4/8/99 50,000 36,770 909
Swiss Franc 5/20/99 165,000 121,789 (2,827)
- --------------------------------------------------------------------------------
Total $78,276,135 ($862,244)
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 15
<PAGE>
Janus | Aspen Worldwide Growth Portfolio
[PHOTO]
Helen Young Hayes
portfolio manager
For the 12-month period ended December 31, 1998, Janus Aspen Worldwide Growth
Portfolio returned an impressive 28.92% for the Institutional Shares and 28.25%
for the Retirement Shares. In comparison, the Morgan Stanley Capital
International World Index gained 24.34%.(1)
Throughout the first half of the year, low interest rates and positive earnings
reports, primarily in the U.S. and Europe, provided a positive backdrop for
global financial markets. Although Asian markets and economies were much weaker
in comparison, their weakness helped keep commodity prices in check, which in
turn created a more favorable inflationary environment with lower interest
rates. However, in July, financial discord in the Far East extended to Russia,
Brazil and other emerging economies, sending widespread shocks throughout
international stock markets.
In the U.S., the Federal Reserve responded to these events with three interest
rate cuts. This not only helped investor sentiment, but sparked a trend toward
lower rates in 60 other countries, which contributed to the stabilization of
equity markets worldwide. Although global economic growth continued at a
somewhat slower pace, growth remained moderate here in the U.S.
and, by year-end, the U.S. stock market had set new record highs.
Several of our U.S. technology holdings helped lead this rally, including
Microsoft and Cisco Systems. We added to both positions on market declines in
the third quarter then watched them regain their losses to finish the year with
outstanding 115% and 150% returns, respectively. European information technology
(IT) companies also performed well, including Cap Gemini and Getronics. Despite
their strong returns, these two companies gave up some of their gains in the
fourth quarter due to concerns about a potential post-year 2000 slowdown in
corporate IT spending. While we believe IT spending will increase, especially
among European corporations and governments, we are keeping a particularly close
eye on the situation.
Other strong U.S. performers included our positions in Time Warner, Comcast and
Tele-Communications, Inc.,all of which continued to benefit from optimism
surrounding new value-added services currently being introduced within the cable
industry. We were also pleased with solid results from U.S. pharmaceutical
companies like Warner-Lambert and Bristol-Myers Squibb.
Telecommunications stocks were among our strongest European holdings and
continued to gain from the deregulation of this industry. One of our biggest
winners was Nokia, a Finnish telecommunications equipment maker with outstanding
returns attributed to huge global demand for cellular telephony. Colt Telecom
Group, a telecommunication services provider in England and Germany, also
returned impressive results despite taking a blow to its stock during the third
quarter on fears of a recession. Our confidence in Colt's growth opportunities
prompted us to take advantage of this decline by adding to our position, and by
year-end the stock had fully recovered.
In spite of the Portfolio's solid performance, we did experience some
disappointments. European financial stocks such as UBS and Bank Austria, which
we held because of strong business fundamentals coupled with declining interest
rates and industry consolidation, were broadly hit by the financial crisis
mentioned earlier. UBS was particularly disappointing. Despite the positive
benefits from cost-cutting and an attractive private banking business, the
earnings potential of UBS was impaired by its exposure to Russia's debt debacle
and the subsequent hedge fund meltdown. Consequently, we cut this position, as
well as our position in Bank Austria, at a loss. However, we chose to maintain
our holdings in these and other European financial services companies based on
their positive fundamentals and low valuations.
Also hit by the series of negative global events were economically sensitive
stocks. As a result, Sony and Philips Electronics, manufacturers of consumer
electronics, fell short of our high expectations when demand for their products
weakened. We subsequently reduced both positions at a loss. Philips' stock also
declined from laggard semiconductor sales, as well as its disappointing wireless
handset business.
Looking ahead, we expect slower global economic growth to continue. Meanwhile,
Japan takes one step forward and two steps back in its attempt to find a
solution for its banking crisis and economic reform. Nonetheless, we are finding
select opportunities here. Asian economies have stabilized, but equity
valuations are still expensive relative to earnings potential.
Currently, the bulk of our holdings remains in the U.S. and Europe. We expect
continued modest growth in these regions, coupled with measures to improve
profitability and shareholder value. We also believe Europe's introduction of
the euro in 1999 will be positive for its economy, helping to formalize the
integration of Europe as an economic entity.
In closing, I would like to thank you for your continued investment in Janus
Aspen Worldwide Growth Portfolio.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 90.0% 97.4%
Foreign 65.8% 77.8%
Number of Stocks 156 205
Top 10 Equities 25.9% 21.0%
Cash & Cash Equivalents 10.0% 2.6%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
16 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 9/13/93)
1 Year 28.92%
5 Year 21.32%
From Inception 24.06%
- --------------------------------------------------------------------------------
Morgan Stanley Capital International World Index(2)
1 Year 24.34%
5 Year 15.68%
From Inception Date of Institutional Shares 14.39%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 28.25%
5 Year (unaudited) 20.68%
From Portfolio Inception (unaudited) 23.22%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Worldwide Growth Portfolio - Institutional Shares and the Morgan
Stanley Capital International World Index. Janus Aspen Worldwide Growth
Portfolio - Institutional Shares is represented by a shaded area of blue. The
Morgan Stanley Capital International World Index is represented by a solid black
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,
1998. The upper right quadrant reflects the ending value of the hypothetical
investment in Janus Aspen Worldwide Growth Portfolio - Institutional Shares
($31,299) as compared to the Morgan Stanley Capital International World Index
($20,843).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 28.92%
Five Year, 21.32%
Since 9/13/93,* 24.06%
Janus Aspen Worldwide Growth Portfolio
- - Institutional Shares - $31,299
Morgan Stanley
Capital International
World Index - $20,843
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
(2) 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.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 88.7%
Advertising Agencies - 0%
36,544 WPP Group PLC** ........................ $ 221,927
Agricultural Biotechnology - 0.4%
250,530 Monsanto Co. ........................... 11,900,175
Agricultural Operations - 0.1%
49,955 Delta and Pine Land Co. ................ 1,848,335
Airlines - 0%
30,101 SAS Norge A.S.A. - Class B ............. 252,858
Appliances - 0.9%
1,536,685 Electrolux A.B. - Class B** ............ 26,447,036
Applications Software - 0.5%
200,335 Intuit, Inc.* .......................... 14,524,287
Audio and Video Products - 0.7%
279,700 Sony Corp.** ........................... 20,407,803
Automotive - Cars and Light Trucks - 2.2%
158,957 DaimlerChrysler A.G.*,** ............... 15,699,828
136,740 DaimlerChrysler A.G. (ADR)*,** ......... 13,135,566
280,000 Honda Motor Co., Ltd.** ................ 9,209,497
521,081 Renault S.A ............................ 23,414,097
131,140 Volvo A.B. - Class B** ................. 3,009,304
64,468,292
Automotive - Truck Parts and Equipment - 0.7%
261,702 Valeo S.A.+ ............................ 20,632,545
Beverages - Non-Alcoholic - 0.1%
175,035 Coca-Cola Femsa S.A. (ADR) ............. 2,319,214
Beverages - Wine and Spirits - 0.2%
589,427 Diageo PLC** ........................... $ 6,546,093
Brewery - 0.6%
1,420,000 Kirin Brewery Co., Ltd.** .............. 18,128,204
Broadcast Services and Programming - 0.3%
85,910 Fox Entertainment Group, Inc.* ......... 2,163,858
287,695 Grupo Televisa S.A. (GDR)* ............. 7,102,470
9,266,328
Building and Construction - 0.7%
92,067 Suez Lyonnaise des Eaux ................ 18,921,010
Building Products - Cement and Aggregate - 0.1%
112,769 Cimpor-Cimentos de Portugal S.A ........ 3,599,849
Cable Television - 3.6%
648,685 Comcast Corp. - Special Class A ........ 38,069,701
147,575 MediaOne Group, Inc.* .................. 6,936,025
1,083,230 Tele-Communications, Inc. - Class A* ... 59,916,159
104,921,885
Cellular Telecommunications - 3.7%
54,757 Cellular Communications International, Inc.* 3,723,476
6,554,000 China Telecom, Ltd.* ................... 11,336,429
1,346 NTT Mobile Communication
Network, Inc.** ...................... 55,488,370
88,141 Orange PLC*,** ......................... 1,011,877
68,801 Panafon Hellenic Telecom S.A.*,+ ....... 1,842,610
2,171,558 Telecom Italia Mobile S.p.A. ........... 16,071,104
1,015,915 Vodafone Group PLC** ................... 16,530,922
106,004,788
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 17
<PAGE>
Janus | Aspen Worldwide Growth Portfolio
SCHEDULES OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Chemicals - Diversified - 0.7%
185,559 Akzo Nobel N.V.** ...................... $ 8,453,970
272,486 Hoechst A.G.** ......................... 11,305,013
10,316 Solutia, Inc. .......................... 230,821
19,989,804
Commercial Banks - 0.8%
402,824 Argentaria, Caja Postal y Banco
Hipotecario de Espana S.A. ........... 10,447,911
575,220 Banco Central Hispanoamericano ......... 6,840,544
28,364 Bayerische Vereinsbank A.G.** .......... 2,222,424
387,590 Den Norske Bank A.S.A .................. 1,337,962
16,778 Kapital Holdings ....................... 830,418
21,679,259
Computer Services - 4.5%
65,614 Atos S.A.* ............................. 15,692,835
249,134 Cap Gemini S.A.+ ....................... 40,005,886
565,294 Getronics N.V.** ....................... 28,013,661
3,543,065 Logica PLC** ........................... 30,830,578
1,239,103 Misys PLC** ............................ 9,112,353
134,324 WM-Data A.B. - Class B** ............... 5,733,868
129,389,181
Computer Software - 3.3%
195,179 JBA Holdings PLC** ..................... 617,003
569,160 Microsoft Corp.* ....................... 78,935,378
350,889 Tieto Corp. - Class B .................. 15,731,238
95,283,619
Computers - Integrated Systems - 1.1%
77,453 Equant N.V.* ........................... 5,392,307
152,665 Equant N.V. - New York Shares* ......... 10,352,595
849,300 Fujitsu, Ltd.** ........................ 11,331,870
376,593 SEMA Group PLC** ....................... 3,715,590
30,792,362
Computers - Memory Devices - 0.1%
30,175 EMC Corp.* ............................. 2,564,875
Computers - Micro - 0.7%
78,950 Dell Computer Corp.* ................... 5,778,153
13,795 IBM Corp. .............................. 2,548,626
136,035 Sun Microsystems, Inc.* ................ 11,647,997
19,974,776
Cosmetics and Toiletries - 1.7%
365,105 Estee Lauder Companies, Inc. - Class A . 31,216,477
843,000 Kao Corp.** ............................ 19,057,754
50,274,231
Cruise Lines - 0.2%
82,855 Carnival Corp. ......................... 3,977,040
566,008 NCL Holdings A.S.A.* ................... 1,337,244
5,314,284
Diversified Operations - 9.5%
3,210,349 Hays PLC** ............................. $ 28,309,290
218,159 Lagardere S.C.A ........................ 9,275,454
7,412,950 Rentokil Initial PLC** ................. 55,972,487
3,319,572 Siebe PLC** ............................ 13,034,517
1,421,566 Tomkins PLC** .......................... 6,764,472
1,232,230 Tyco International, Ltd. ............... 92,956,351
141,239 Unilever N.V.** ........................ 12,079,313
61,794 VEBA A.G.** ............................ 3,699,051
180,035 Vivendi ................................ 46,732,971
1,166,485 Williams PLC** ......................... 6,676,340
275,500,246
Drug Delivery Systems - 0.6%
257,905 Elan Corp. PLC (ADR)* .................. 17,940,517
Electronic Components - 1.1%
57,681 Electrocomponents PLC** ................ 380,999
230,407 Koninklijke Philips Electronics N.V.** . 15,469,589
243,258 Philips Electronics N.V ................
- New York Shares** .................. 16,465,526
32,316,114
Electronic Components - Semiconductors - 0.1%
20,500 Rohm Co., Ltd.** ....................... 1,870,136
Finance - Other Services - 0%
35,030 Newcourt Credit Group, Inc.
- New York Shares .................... 1,223,861
Food - Catering - 0.8%
1,902,740 Compass Group PLC** .................... 21,748,887
Food - Diversified - 0.9%
79,858 Danone ................................. 22,873,723
390,024 Raisio Group PLC ....................... 4,236,637
27,110,360
Food - Retail - 0.5%
425,857 Koninklijke Ahold N.V.** ............... 15,748,377
Hotels and Motels - 0%
5,260 EIH, Ltd.+ ............................. 27,615
Human Resources - 0.7%
11,260 Adecco S.A.** .......................... 5,140,235
1,703,956 Capita Group PLC** ..................... 15,706,123
20,846,358
Internet Software - 0.1%
13,555 America Online, Inc.* .................. 1,962,086
Investment Management and Advisory Services - 0.2%
709,883 Amvescap PLC** ......................... 5,492,127
Life and Health Insurance - 0.1%
2,575 Schweizerische Lebensversicherungs-und
Rentenanstalt** ...................... 1,912,293
Machinery - General Industrial - 2.7%
675,459 Mannesmann A.G.** ...................... 77,460,662
See Notes to Schedules of Investments.
18 Janus Aspen Series / December 31, 1998
<PAGE>
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Medical - Drugs - 10.9%
228,510 American Home Products Corp. ........... $ 12,867,969
856,173 Astra A.B. - Class A** ................. 17,481,451
137,300 Bristol-Myers Squibb Co. ............... 18,372,456
534,160 Glaxo Wellcome PLC** ................... 18,441,249
107,143 Merck KGaA** ........................... 4,824,740
13,632 Novartis A.G.** ........................ 26,797,876
152,335 Pfizer, Inc. ........................... 19,108,522
34,497 Pharmacia & Upjohn, Inc.** ............. 1,932,214
657,705 Pharmacia & Upjohn, Inc. ............... 37,242,546
501,097 Rhone-Poulenc S.A ...................... 25,799,372
2,271 Roche Holding A.G.** ................... 27,712,020
79,100 Sanofi S.A ............................. 13,027,550
389,348 SmithKline Beecham PLC** ............... 5,403,856
164,725 SmithKline Beecham PLC (ADR)** ......... 11,448,387
949,000 Takeda Chemical Industries** ........... 36,598,174
499,023 Warner-Lambert Co. ..................... 37,520,292
314,578,674
Medical Products - 0%
36,108 Ortivus A.B.*,** ....................... 262,829
Metal Processors and Fabricators - 1.0%
758,119 Assa Abloy A.B. - Class B** ............ 28,994,593
Money Center Banks - 3.3%
2,029,329 Banca Commerciale Italiana ............. 14,096,695
8,776,999 Banca di Roma* ......................... 14,898,983
801,793 Banco Bilbao Vizcaya S.A ............... 12,732,145
69,981 Bank Austria A.G ....................... 3,560,546
1,858,970 Lloyds TSB Group PLC** ................. 26,475,673
619,139 Skandinaviska Enskilda Banken - Class A** 6,530,888
43,909 UBS A.G.** ............................. 13,490,965
38,197 Unidanmark A/S - Class A ............... 3,450,986
95,236,881
Mortgage Banks - 0.6%
212,930 Deutsche Pfandbrief-und
Hypothekenbank A.G.** ................ 18,665,454
Multi-Line Insurance - 1.6%
62,784 Aegon N.V.** ........................... 7,714,732
10,650 Baloise Holding Ltd. - Class R** ....... 11,049,471
11,730 ERGO Versicherungs Gruppe A.G.** ....... 1,936,777
216,204 Sampo Insurance Co. PLC - Class A ...... 8,241,159
23,837 Zurich Allied A.G.** ................... 17,650,198
46,592,337
Multimedia - 2.3%
1,065,770 Time Warner, Inc. ...................... 66,144,351
Networking Products - 4.9%
1,537,395 Cisco Systems, Inc.* ................... 142,689,473
Office Furnishings - 0.1%
154,723 Koninklijke Ahrend N.V.** .............. 3,536,916
Publishing - Periodicals - 1.7%
230,449 Wolters Kluwer N.V.** .................. 49,339,792
Radio - 0.6%
326,415 Clear Channel Communications, Inc.* .... 17,789,618
Recycling - 0.2%
165,718 Tomra Systems A.S.A .................... 5,437,824
Retail - Diversified - 0.7%
271,000 Ito-Yokado Co., Ltd.** ................. $ 18,980,180
Retail - Restaurants - 0.7%
2,223,283 TelePizza S.A.* ........................ 21,104,439
Rubber - Tires - 0.1%
91,000 Bridgestone Corp.** .................... 2,069,344
Security Services - 1.0%
1,938,540 Securitas A.B. - Class B** ............. 30,134,449
Telecommunication Equipment - 4.6%
6,559 Alcatel S.A ............................ 803,142
117,775 Alcatel S.A. (ADR) ..................... 2,878,127
528,651 Nokia Oyj - Class A .................... 64,733,342
424,275 Nokia Oyj (ADR) - Class A .............. 51,098,620
163,980 Northern Telecom, Ltd. ................. 8,219,497
10,698 Telefonaktiebolaget L.M. Ericsson
- Class B** .......................... 254,729
228,972 Telefonaktiebolaget L.M. Ericsson (ADR)
- Class B** .......................... 5,481,017
133,468,474
Telecommunication Services - 3.6%
851,483 COLT Telecom Group PLC*,** ............. 12,601,516
1,294,866 Energis PLC*,** ........................ 28,868,917
1,625 NTT Data Corp.** ....................... 8,082,025
20,510 Qwest Communications International, Inc.* 1,025,500
6,393,195 Telecom Italia S.p.A ................... 54,549,258
105,127,216
Telephone - Integrated - 2.9%
389 Nippon Telegraph & Telephone Corp.** ... 3,007,253
148,628 Portugal Telecom S.A ................... 6,814,744
98,211 Swisscom A.G.*,** ...................... 41,115,446
71,880 Telecom Argentina Stet S.A. (ADR) ...... 1,976,700
190,090 Telefonica de Argentina S.A. (ADR) ..... 5,310,639
272,151 Telefonica S.A ......................... 12,119,817
104,627 Telefonica S.A. (ADR) .................. 14,163,812
84,508,411
Telephone - Long Distance - 1.7%
668,455 MCI WorldCom, Inc.* .................... 47,961,646
Transportation - Air Freight - 0%
48,956 SAS Danmark A/S ........................ 553,840
Travel Services - 0.2%
1,323 Kuoni Reisen A.G. - Class B** .......... 5,249,687
Wireless Telecommunications - 0.8%
332,800 AirTouch Communications, Inc.* ......... 24,003,200
- --------------------------------------------------------------------------------
Total Common Stock (cost $1,783,557,695) .................. 2,569,262,287
- --------------------------------------------------------------------------------
Preferred Stock - 1.3%
Automotive - Cars and Light Trucks - 0.4%
5,142 Porsche A.G.** ......................... 11,731,796
Computer Software - 0.4%
26,665 SAP A.G.** ............................. 12,731,126
Telephone - Integrated - 0.5%
187,475 Telecomunicacoes Brasileiras S.A. (ADR) 13,627,089
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $47,864,905) .................. 38,090,011
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 19
<PAGE>
Janus | Aspen Worldwide Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Rights - 0%
272,151 Telefonica S.A.* (cost $0) ............. $ 242,012
- --------------------------------------------------------------------------------
Warrants - 0%
718 Muenchener Rueckversicherungs
- Gesellschaft A.G.*,** (cost $0) .... 33,410
- --------------------------------------------------------------------------------
Short-Term Corporate Notes - 3.5%
$ 50,000,000 Ford Motor Credit Corp.
5.30%, 1/12/99 ....................... 49,919,028
50,000,000 JP Morgan Securities
5.25%, 2/8/99 ........................ 49,722,917
- --------------------------------------------------------------------------------
Total Short-Term Corporate Notes
(amortized cost $99,641,945) ........... 99,641,945
- --------------------------------------------------------------------------------
U.S. Government Agencies - 6.8%
Fannie Mae
50,000,000 5.45%, 1/6/99 ........................ 49,965,208
Federal Home Loan Bank System
25,000,000 5.45%, 1/19/99 ....................... 24,939,125
Freddie Mac:
23,500,000 4.70%, 1/4/99 ........................ 23,490,796
50,000,000 5.45%, 1/22/99 ....................... 49,853,875
50,000,000 5.45%, 2/23/99 ....................... 49,638,569
- --------------------------------------------------------------------------------
Total U.S. Government Agencies
(amortized cost $197,887,573) ........................... 197,887,573
- --------------------------------------------------------------------------------
Total Investments (total cost $2,128,952,118) - 100.3% .... 2,905,157,238
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (0.3%) (8,945,326)
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 2,896,211,912
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
20 Janus Aspen Series / December 31, 1998
<PAGE>
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Argentina 0.2% $ 7,287,339
Austria 0.1% 3,560,546
Bermuda 3.2% 92,956,351
Brazil 0.5% 13,627,089
Canada 0.3% 9,443,358
Denmark 0.2% 4,835,245
Finland 5.0% 144,040,997
France 8.3% 240,056,712
Germany 6.0% 173,445,846
Greece 0.1% 1,842,610
Hong Kong 0.4% 11,336,429
India -- 27,615
Ireland 0.6% 17,940,517
Italy 3.4% 99,616,039
Japan 7.0% 204,230,610
Mexico 0.3% 9,421,684
Netherlands 5.9% 172,566,778
Norway 0.3% 8,365,888
Portugal 0.4% 10,414,593
Spain 2.7% 77,650,682
Sweden 4.3% 126,262,375
Switzerland 5.2% 150,118,190
United Kingdom 11.2% 325,911,185
United States++ 34.4% 1,000,198,560
- --------------------------------------------------------------------------------
Total 100.0% $ 2,905,157,238
++Includes Short-Term Securities (24.2% excluding Short-Term Securities)
Forward Currency Contracts, Open at December 31, 1998
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- --------------------------------------------------------------------------------
British Pound 4/7/99 49,700,000 $82,094,460 $1,318,725
British Pound 5/6/99 45,300,000 74,803,890 (333,408)
British Pound 5/13/99 9,000,000 14,860,800 25,200
Dutch Guilder 1/21/99 17,000,000 9,054,594 (161,055)
Dutch Guilder 1/22/99 21,000,000 11,185,682 (74,571)
Dutch Guilder 1/26/99 80,000,000 42,621,204 139,879
Dutch Guilder 1/27/99 18,300,000 9,750,120 (218,870)
German Deutschemark
1/22/99 25,000,000 15,027,651 7,049
German Deutschemark
1/25/99 19,600,000 11,783,803 147,047
German Deutschemark
1/26/99 13,000,000 7,816,258 (156,019)
German Deutschemark
1/27/99 108,800,000 65,419,999 (1,515,504)
Japanese Yen 2/12/99 7,800,000,000 68,908,611 (1,559,462)
Japanese Yen 3/25/99 950,000,000 8,393,183 (362,752)
Japanese Yen 4/8/99 1,887,000,000 16,671,820 (90,098)
Japanese Yen 4/21/99 4,363,000,000 38,548,158 494,348
Japanese Yen 5/20/99 3,000,000,000 26,506,708 (1,104,506)
Swedish Krona 3/25/99 22,000,000 2,725,505 40,052
Swedish Krona 4/7/99 111,000,000 13,759,421 91,400
Swedish Krona 4/8/99 25,000,000 3,099,083 147,670
Swedish Krona 5/6/99 23,650,000 2,935,008 100,351
Swiss Franc 3/25/99 500,000 367,215 1,789
Swiss Franc 4/7/99 10,300,000 7,574,086 (78,905)
Swiss Franc 4/8/99 6,000,000 4,412,414 109,063
- --------------------------------------------------------------------------------
Total $538,319,673 ($3,032,577)
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 21
<PAGE>
Janus | Aspen Balanced Portfolio
[PHOTO]
Blaine P. Rollins
portfolio manager
For the fiscal year ended December 31, 1998, Janus Aspen Balanced Portfolio
provided shareholders with a total return of 34.28% for its Institutional Shares
and 33.59% for its Retirement Shares. These gains were well ahead of the S&P 500
Index, which appreciated 28.74%, and the Lehman Brothers Government/Corporate
Bond Index, which returned 9.47%.(1)
Following a strong first half, a series of events took its toll on global
economic growth. The Russian debt crisis, breakdowns in several emerging market
economies and Japan's struggle toward financial reform all negatively impacted
the financial markets, sparking fears of a possible recession. In the end,
however, economic growth continued at a decent pace here in the U.S., aided by
Federal Reserve interest rate cuts. Meanwhile, economies in other parts of the
world maintained much lower growth levels.
Although the worldwide economic slowdown caused earnings among several large
multinational companies to suffer, certain niche businesses still managed to
find significant growth particularly technology companies. In fact, near
year-end, technology was the U.S. market's strongest growth area, a clear sign
that high-tech corporate spending had remained virtually unaffected by the
recent turn of events.
Several of our technology holdings not only participated in this rally, but led
it, including America Online (AOL) - one of our strongest-performing
fixed-income instruments (a convertible bond). Already the premier name among
Internet service providers, this company continues to amaze us. Its planned
acquisition of Netscape Communications, a company that develops Internet
browsers, will provide AOL with yet another way to get its name and services in
front of people.
Cable is another part of the market that continues to take off. Our long-time
interest in the new value-added services under development at many of these
companies rewarded us in the form of high returns for Time Warner (via the
Houston Industries convertible preferred stocks), Tele-Communications, Inc. (via
the TCI Pacific Communications convertible preferred stocks), and Comcast. Among
the services coming down the pike are digital cable, telephony, video on demand
and high-speed Internet access, which should provide these companies with
additional revenue streams and a burst of free cash flow during the next few
years.
Our biggest home run among the Portfolio's cable positions was Time Warner, and
this company continues to hit on every other cylinder across its portfolio of
businesses. New titles from existing artists have turned its music business
around. Meanwhile, TV advertising is in high demand on Time Warner's WB Network
- - currently the eyeball magnet for viewers in their mid-teens to early 20s. Add
to that a thriving TV syndication business, which includes hits like "Seinfeld,"
"Friends" and "ER," and it's no wonder Time Warner remains one of our favorite
companies.
Another compelling area is in the Hispanic segment of the broadcast market in
which advertising rates are growing at twice the rate of all ad spending. Our
holdings in this niche include Univision Communications and Heftel Broadcasting.
And although both were bruised by fears of a possible recession, our optimism
convinced us to add to our holdings.
Even though market downturns can present buying opportunities, they also
occasionally lead to disappointments, as was the case with a few of our
financial services stocks. Damaged by credit issues related to economic
deterioration in several emerging markets, Household International and Morgan
Stanley Dean Witter & Co. declined to a point beyond my comfort zone, and I
liquidated these stocks from the Portfolio at a loss. But not all of our
financial services stocks let us down. Charles Schwab, U.S. Trust, Bank of New
York and Northern Trust all benefited from thriving asset management businesses.
Another disappointment was Parametric Technology. This company took a hit to its
earnings when management shifted its attention away from Parametric's core
business during a new-product rollout. We sold this position, but not before
taking a loss on it.
Looking ahead, near-term surges in economic growth don't seem likely. However,
the global slowing has caused commodity prices to drop and subsequently promoted
a worldwide trend toward lower interest rates. In this environment, we believe
the financial markets should continue to experience moderate growth.
In closing, I'd like to thank shareholders for their continued investment. We
appreciate this show of confidence and assure you that achieving the success you
desire and deserve is our top priority.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 41.1% 47.8%
Number of Stocks 52 71
Top 10 Equities/Preferred 32.1% 18.8%
Fixed-Income Securities 45 60
U.S. Treasury Notes/Bonds 6.8% 18.9%
Investment-Grade
Corporate Bonds 9.5% 8.6%
High-Yield Corporate Bonds 13.6% 4.3%
Foreign Corporate Bonds -- 0.8%
Preferred Stock 19.2% 8.3%
Cash & Cash Equivalents 9.8% 11.3%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
22 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 9/13/93)
1 Year 34.28%
5 Year 19.11%
From Inception 19.53%
- --------------------------------------------------------------------------------
Lehman Brothers Govt./Corp. Bond Index
1 Year 9.47%
5 Year 7.30%
From Inception Date of Institutional Shares 6.90%
- --------------------------------------------------------------------------------
S&P 500 Index
1 Year 28.74%
5 Year 24.08%
From Inception Date of Institutional Shares 23.06%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 33.59%
5 Year (unaudited) 18.57%
From Portfolio Inception (unaudited) 18.73%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Balanced Portfolio - Institutional Shares, the Lehman Brothers
Govt./Corp. Bond Index and the S&P 500 Index. Janus Aspen Balanced Portfolio -
Institutional Shares is represented by a shaded area of blue. The Lehman
Brothers Govt./Corp. Bond Index is represented by a solid black line. The S&P
500 Index is represented by a solid 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, 1998. The upper right quadrant reflects
the ending value of the hypothetical investment in Janus Aspen Balanced
Portfolio - Institutional Shares ($25,699) as compared to the Lehman Brothers
Govt./Corp. Bond Index ($14,233) and the S&P 500 Index ($29,978).
Average Annual Total Return for the periods ended December 31, 1998 One Year,
34.28% Five Year, 19.11% Since 9/13/93,* 19.53%
Janus Aspen Balanced Portfolio
- - Institutional Shares - $25,699
Lehman Brothers Govt./Corp. Bond Index - $14,233
S&P 500 Index - $29,978
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 41.1%
Airlines - 0.3%
76,025 Ryanair Holdings PLC (ADR)* ............ $ 2,869,944
Cable Television - 3.0%
460,570 Comcast Corp. - Special Class A ........ 27,029,702
Chemicals - Diversified - 0.1%
16,510 Solutia, Inc. .......................... 369,411
Circuits - 2.9%
135,980 Linear Technology Corp. ................ 12,178,709
249,740 Maxim Integrated Products, Inc.* ....... 10,910,516
90,800 SIPEX Corp.* ........................... 3,189,350
26,278,575
Commercial Banks - 1.2%
43,725 Firstar Corp. .......................... 4,077,356
5,480 M & T Bank Corp. ....................... 2,843,778
47,180 U.S. Trust Corp. ....................... 3,585,680
10,506,814
Computer Software - 3.0%
127,180 Microsoft Corp.* ....................... 17,638,276
193,850 Wind River Systems, Inc.* .............. 9,110,950
26,749,226
Computers - Integrated Systems - 0.6%
188,285 Cadence Design Systems, Inc.* .......... 5,601,479
Computers - Micro - 4.0%
490,970 Dell Computer Corp.* ................... 35,932,867
Cruise Lines - 2.0%
160,780 Carnival Corp. ......................... $ 7,717,440
282,515 Royal Caribbean Cruises, Ltd. .......... 10,453,055
18,170,495
Electronic Components - Semiconductors - 0.6%
64,515 Texas Instruments, Inc. ................ 5,520,065
Electronic Safety Devices - 0.1%
33,850 Pittway Corp. - Class A ................ 1,119,166
Finance - Investment Bankers/Brokers - 2.7%
431,620 Charles Schwab Corp. ................... 24,251,649
Finance - Mortgage Loan Banker - 0.7%
80,120 Fannie Mae ............................. 5,928,880
Finance - Other Services - 1.0%
34,825 HealthCare Financial Partners, Inc.* ... 1,388,647
131,890 Newcourt Credit Group, Inc. ............ 4,593,998
85,765 Newcourt Credit Group, Inc.
- New York Shares .................... 2,996,415
8,979,060
Human Resources - 1.3%
192,380 Robert Half International, Inc.* ....... 8,596,981
145,205 Romac International, Inc.* ............. 3,230,811
11,827,792
Instruments - Scientific - 1.3%
329,850 Dionex Corp.* .......................... 12,080,756
Internet Software - 0.3%
16,400 America Online, Inc.* .................. 2,373,900
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 23
<PAGE>
Janus | Aspen Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Medical - Drugs - 2.8%
36,820 Pfizer, Inc. ........................... $ 4,618,609
127,620 Pharmacia & Upjohn, Inc. ............... 7,226,483
66,740 Schering-Plough Corp. .................. 3,687,385
128,600 Warner-Lambert Co. ..................... 9,669,113
25,201,590
Medical Instruments - 0.5%
65,305 Medtronic, Inc. ........................ 4,848,896
Money Center Banks - 1.6%
354,720 Bank of New York Co., Inc. ............. 14,277,480
Multimedia - 0.8%
197,130 Meredith Corp. ......................... 7,466,299
Music/Clubs - 0.2%
65,230 Steinway Musical Instruments, Inc.* .... 1,695,980
Networking Products - 2.3%
223,613 Cisco Systems, Inc.* ................... 20,754,082
Optical Supplies - 0.4%
51,000 Allergan, Inc. ......................... 3,302,250
Radio - 2.0%
149,110 Heftel Broadcasting Corp. - Class A* ... 7,343,668
381,530 Infinity Broadcasting Corp. - Class A* . 10,444,384
17,788,052
Retail - Discount - 1.0%
124,775 Costco Companies, Inc.* ................ 9,007,195
Retail - Internet - 0.7%
19,925 Amazon.com, Inc.* ...................... 6,400,906
Retail - Regional Department Stores - 0.9%
132,965 Fred Meyer, Inc.* ...................... 8,011,141
Schools - 0.3%
76,860 Apollo Group, Inc. - Class A* .......... 2,603,632
Super-Regional Banks - 0.5%
56,490 Northern Trust Corp. ................... 4,932,283
Telecommunication Equipment - 1.0%
75,545 Nokia Oyj (ADR) - Class A .............. 9,098,451
Television - 1.0%
253,803 Univision Communications, Inc. - Class A* 9,184,496
- --------------------------------------------------------------------------------
Total Common Stock (cost $240,347,848) .................... 370,162,514
- --------------------------------------------------------------------------------
Corporate Bonds - 23.1%
Advertising Services - 0.4%
$ 2,950,000 AKI, Inc., 10.50%
senior notes, due 7/1/08+ ............ 2,806,187
377,000 R.H. Donnelly, Inc., 9.125%
senior subordinated notes, due 6/1/08 394,436
3,200,623
Brewery - 0.6%
5,350,000 Anheuser-Busch Companies, Inc., 5.65%
notes, due 9/15/08 ................... 5,450,312
Cable Television - 7.1%
Adelphia Communications Corp.:
$ 10,145,000 9.25%, senior notes, due 10/1/02 ..... $ 10,741,019
9,230,000 8.375%, senior notes, due 2/1/08 ..... 9,553,050
5,140,000 Classic Cable, Inc., 9.875%
senior subordinated notes, due 8/1/08 5,345,600
6,000,000 FrontierVision, 11.00%
senior subordinated notes, due 10/15/06 6,637,500
6,845,000 Galaxy Telecom, L.P., 12.375%
senior subordinated notes, due 10/1/05 7,597,950
11,205,000 Jones Intercable, Inc., 7.625%
senior notes, due 4/15/08 ............ 11,737,238
3,000,000 Lenfest Communications, Inc., 7.625%
senior notes, due 2/15/08 ............ 3,116,250
6,000,000 Mediacom L.L.C., 8.50%
senior notes, due 4/15/08 ............ 6,127,500
2,505,000 Rifkin Acquisition Partners, L.P., 11.125%
senior subordinated notes, due 1/15/06 2,739,844
63,595,951
Casino Hotels - 0.3%
Station Casinos, Inc.:
1,242,000 9.625%, senior subordinated notes,
due 6/1/03 ........................... 1,287,022
1,222,000 10.125%, senior subordinated notes,
due 3/15/06 .......................... 1,276,990
2,564,012
Computer Software - 1.4%
4,353,000 Aspen Technology, Inc., 5.25%
subordinated debenture, due 6/15/05+ . 3,057,983
8,500,000 Wind River Systems, Inc., 5.00%
convertible subordinated notes,
due 8/1/02 ........................... 9,828,125
12,886,108
Computers - Mainframe - 0.2%
2,000,000 IBM Corp., 6.375%
notes, due 6/15/00 ................... 2,032,500
Computers - Memory Devices - 0.7%
4,000,000 VERITAS Software Corp., 5.25%
convertible subordinated notes,
due 11/1/04 .......................... 6,320,000
Computers - Micro - 0.9%
7,900,000 Dell Computer Corp., 6.55%
senior notes, due 4/15/08 ............ 8,196,250
Cosmetics and Toiletries - 0.5%
4,000,000 Procter and Gamble Co., 5.25%
notes, due 9/15/03 ................... 4,030,000
Cruise Lines - 0.1%
1,300,000 Royal Caribbean Cruises, Ltd., 7.00%
senior notes, due 10/15/07 ........... 1,304,875
Distribution and Wholesale - 0.3%
3,000,000 Aviation Sales Co., 8.125%
company guaranteed notes, due 2/15/08 2,970,000
Diversified Financial Services - 0.2%
2,000,000 Associates Corp. N.A. 6.75%
senior notes, due 7/15/01 ............ 2,062,500
See Notes to Schedules of Investments.
24 Janus Aspen Series / December 31, 1998
<PAGE>
Principal Amount Market Value
- --------------------------------------------------------------------------------
Drug Delivery Systems - 0.9%
$ 5,765,000 ALZA Corp., 5.00%
convertible subordinated debentures,
due 5/1/06 ........................... $ 8,287,187
Fiber Optics - 0.3%
2,395,000 Metromedia Fiber Network, Inc., 10.00%
senior notes, due 11/15/08+ .......... 2,475,831
Food - Canned - 0.5%
4,500,000 Campbell Soup Co., 4.75%
notes, due 10/1/03 ................... 4,426,875
Food - Retail - 0.1%
631,000 Marsh Supermarkets, Inc., 8.875%
company guaranteed notes, due 8/1/07 . 660,184
Hotels and Motels - 0.2%
1,882,000 Hard Rock Hotel, Inc., 9.25%
senior subordinated notes, due 4/1/05 1,882,000
Internet Software - 1.5%
1,990,000 America Online, Inc., 4.00%
convertible subordinated notes,
due 11/15/02 ......................... 11,181,312
2,280,000 Exodus Communications, Inc., 11.25%
senior notes, due 7/1/08 ............. 2,291,400
13,472,712
Medical Nursing Home - 0.2%
1,884,000 HMH Properties, Inc., 7.875%
company guaranteed notes, due 8/1/08 . 1,834,545
Multimedia - 1.6%
8,000,000 Time Warner, Inc., 8.11%
notes, due 8/15/06 ................... 9,100,000
Walt Disney Co. (The):
2,000,000 6.375%, senior notes, due 3/30/01 .... 2,055,000
2,500,000 6.75%, senior notes, due 3/30/06 ..... 2,706,250
13,861,250
Retail - Building Products - 0.9%
3,185,000 Home Depot, Inc., 3.25%
convertible subordinated notes,
due 10/1/01 .......................... 8,368,587
Retail - Diversified - 1.1%
10,000,000 Falcon Holdings Group L.P., 8.375%
debentures, due 4/15/10 .............. 10,275,000
Retail - Music Store - 0.7%
6,220,000 MTS, Inc., 9.375%
senior subordinated notes, due 5/1/05 5,940,100
Retail - Regional Department Stores - 0.6%
5,000,000 Fred Meyer, Inc., 7.45%
company guaranteed notes, due 3/1/08 . 5,400,000
Telecommunication Services - 1.8%
2,500,000 Global Crossing Holding, Ltd., 9.625%
company guaranteed notes, due 5/15/08 2,650,000
11,500,000 Level 3 Communications, Inc., 9.125%
senior notes, due 5/1/08 ............. 11,413,750
1,570,000 Qwest Communications International, Inc.,
10.875%, senior notes, due 4/1/07 .... 1,807,462
15,871,212
- --------------------------------------------------------------------------------
Total Corporate Bonds (cost $190,928,392) ................. 207,368,614
- --------------------------------------------------------------------------------
Preferred Stock - 19.2%
Cable Television - 5.4%
275,233 MediaOne Group, Inc., convertible, 4.50% $ 26,147,135
79,983 TCI Pacific Communications, Inc. .......
- Series A, convertible, 5.00% ....... 22,505,217
48,652,352
Cruise Lines - 3.6%
282,652 Royal Caribbean Cruises, Ltd.,
convertible, 7.25% ................... 32,504,980
Electric - Integrated - 7.5%
632,525 Houston Industries, Inc., convertible, 7.00% 67,284,847
Medical - Wholesale Drug Distributors - 0.7%
53,725 McKesson Financing Trust, convertible,
5.00% ................................ 5,768,722
Radio - 1.3%
121,918 Chancellor Media Corp., convertible, $3.00 11,323,134
Telecommunication Services - 0.7%
140,430 Qwest Trends Trust, convertible, 5.75%+ 6,600,210
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $127,218,327) ................. 172,134,245
- --------------------------------------------------------------------------------
U.S. Government Obligations - 6.8%
U.S. Treasury Notes:
$ 8,000,000 6.50%, due 5/15/05 ................... 8,764,480
525,000 7.00%, due 7/15/06 ................... 599,062
26,000,000 6.125%, due 8/15/07 .................. 28,446,860
22,000,000 5.625%, due 5/15/08 .................. 23,477,300
- --------------------------------------------------------------------------------
Total U.S. Government Obligations (cost $57,843,028) ...... 61,287,702
- --------------------------------------------------------------------------------
U.S. Government Agencies - 9.1%
Freddie Mac:
16,000,000 4.50%, 1/4/99 ........................ 15,994,000
66,200,000 4.70%, 1/4/99 ........................ 66,174,072
- --------------------------------------------------------------------------------
Total U.S. Government Agencies (amortized cost $82,168,072) 82,168,072
- --------------------------------------------------------------------------------
Total Investments (total cost $698,505,667) - 99.3% ....... 893,121,147
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 0 7% 6,636,315
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 899,757,462
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Canada 0.9% $ 7,590,412
Finland 1.0% 9,098,451
Ireland 0.3% 2,869,944
United States++ 97.8% 873,562,340
- --------------------------------------------------------------------------------
Total 100.0% $ 893,121,147
++Includes Short-Term Securities (88.6% excluding Short-Term Securities)
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 25
<PAGE>
Janus | Aspen Equity Income Portfolio
[PHOTO]
Blaine P. Rollins
portfolio manager
For the fiscal year ended December 31, 1998, I'm happy to report that Janus
Aspen Equity Income Portfolio returned an impressive 46.24% for its
Institutional Shares and 45.55% for its Retirement Shares. In comparison, the
S&P 500 Index gained 28.74%.(1)
Despite a series of events that stirred up market volatility and slowed the
global economy in the second half, U.S. growth remained steady. In this
environment we were able to achieve high returns with below-average volatility,
tracking down some of the best income-producing securities the market has to
offer.
While a number of companies contributed substantially to the Portfolio's
success, those that stand out in my mind include America Online (AOL) and Dell
Computer. These, and a handful of our other technology holdings, not only rode
out some storms early in the period, but also helped lead a rally near year-end
as technology proved to be the U.S. market's strongest growth area.
Our convertible bond position in AOL - the premier name among Internet service
providers - became a definite winner for the Portfolio. Practically every
business wants to be involved with AOL in some shape or form. And following the
completion of its merger with Netscape Communications, a developer of Internet
browsers, AOL will reach an even larger audience of people that will include
business, residential and college users.
Dell was another standout during the period. By selling made-to-order computers
over the phone and Internet and shipping them the same day, Dell continues
cutting costs and taking market share from its competitors. Meanwhile, other PC
manufacturers are crossing their fingers in hopes of selling their higher-priced
products through retail stores.
Cable companies also remain on our list of favorites thanks to the rejuvenation
of this business caused by new, value-added services that include digital cable,
telephony, video on demand and high-speed Internet access. Among our holdings
benefiting from the continued growth of this industry are Comcast Corp.,
Tele-Communications, Inc. (via the TCI Pacific Communications convertible
preferred stocks), and Time Warner, Inc.
While Time Warner was a home run among the Portfolio's cable positions, this
media conglomerate is also drawing steady cash flows from its TV broadcasting
and syndication businesses. New hit shows like "Felicity" and "Dawson's Creek,"
as well as reruns of "Seinfeld" and "Friends" are attracting not only more
viewers, but also advertising dollars. Time Warner's thriving music and
publishing businesses further justify our investment in this company (via
Houston Industries convertible preferred stocks).
The Portfolio's pharmaceutical holdings aided our performance, with notable
gains from Warner-Lambert and Pfizer. Newcomers to the Portfolio - Pharmacia &
Upjohn and Alza - also performed well, gaining from enthusiasm surrounding their
two new incontinence drugs.
Royal Caribbean Cruises and Carnival Corporation remain among our favorite
positions. However, during the second half, their stocks stumbled briefly from
fears of a possible recession. By dropping in at their Miami headquarters, we
were able to double-check both companies' stories and walked away feeling
reassured their businesses remain very tight. Consequently, we used the sell-off
as an opportunity to add to these two positions, which, by year-end, had
regained lost ground.
In spite of the Portfolio's solid gains, a few of our holdings failed to meet
our high expectations. Household International and UBS were among some of our
financial services positions that suffered late in the period. Their
fundamentals deteriorated under the weight of several external factors that
included credit issues related to economic breakdowns in several emerging
economies. We sold these positions at a loss.
Parametric Technology was another disappointment. This company shifted much of
its attention toward a new-product rollout and, in doing so, its core business
suffered. Consequently, Parametric's earnings fell short of expectations, and
its stock dropped sharply. We therefore sold this position at a loss.
Looking ahead, near-term surges in economic growth don't seem likely. The good
news is that the global economic slowdown has caused commodity prices to drop
and subsequently promoted a worldwide trend toward lower interest rates. In this
environment, we believe the financial markets should continue to grow at a
moderate pace.
In closing, I'd like to thank you for your continued investment in Janus Aspen
Equity Income Portfolio. We look forward to what we hope will be equal if not
better returns for the Portfolio in 1999.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Equities 61.9% 74.7%
Number of Stocks 47 65
Top 10 Equities/Preferred 39.2% 28.5%
Fixed-Income Securities
Investment-Grade
Corporate Bonds -- 7.9%
High-Yield Corporate Bonds 12.7% --
Preferred Stock 21.2% 6.2%
Cash & Cash Equivalents 4.2% 11.2%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
26 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/1/97)
1 Year 46.24%
From Inception 50.20%
- --------------------------------------------------------------------------------
S&P 500 Index
1 Year 28.74%
From Inception Date of Institutional Shares 31.38%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 45.55%
From Inception 49.43%
- --------------------------------------------------------------------------------
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Equity Income Portfolio - Institutional Shares and the S&P 500
Index. Janus Aspen Equity Income Portfolio - Institutional Shares is represented
by a shaded area of blue. The S&P 500 Index is represented by a solid black
line. The "y" axis reflects the value of the investment. The "x" axis reflects
the computation periods from inception, May 1, 1997, through December 31, 1998.
The upper right quadrant reflects the ending value of the hypothetical
investment in Janus Aspen Equity Income Portfolio - Institutional Shares
($19,679) as compared to the S&P 500 Index ($15,778).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 46.24%
Since 5/1/97,* 50.20%
Janus Aspen Equity Income Portfolio
- - Institutional Shares - $19,679
S&P 500 Index - $15,778
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Commom Stock - 61.9%
Cable Television - 4.6%
1,035 Adelphia Communications Corp. - Class A* $ 47,351
6,237 Comcast Corp. - Special Class A ........ 366,034
413,385
Chemicals - Diversified - 0.1%
215 Solutia, Inc. .......................... 4,811
Circuits - 5.0%
2,365 Linear Technology Corp. ................ 211,815
4,435 Maxim Integrated Products, Inc.* ....... 193,754
1,425 SIPEX Corp.* ........................... 50,053
455,622
Commercial Banks - 2.3%
575 Firstar Corp. .......................... 53,619
115 M & T Bank Corp. ....................... 59,678
1,235 U.S. Trust Corp. ....................... 93,860
207,157
Computer Software - 3.8%
1,490 Microsoft Corp.* ....................... 206,644
2,845 Wind River Systems, Inc.* .............. 133,715
340,359
Computers - Integrated Systems - 1.3%
3,880 Cadence Design Systems, Inc.* .......... 115,430
Computers - Micro - 4.0%
4,925 Dell Computer Corp.* ................... 360,448
Cruise Lines - 3.0%
4,025 Carnival Corp. ......................... $ 193,200
2,168 Royal Caribbean Cruises, Ltd. .......... 80,216
273,416
Electronic Components - Semiconductors - 0.9%
985 Texas Instruments, Inc. ................ 84,279
Finance - Investment Bankers/Brokers - 4.2%
6,757 Charles Schwab Corp. ................... 379,659
Finance - Mortgage Loan Banker - 0.9%
1,060 Fannie Mae ............................. 78,440
Finance - Other Services - 1.1%
1,520 Newcourt Credit Group, Inc. ............ 52,945
1,350 Newcourt Credit Group, Inc. ............
- New York Shares .................... 47,166
100,111
Human Resources - 1.3%
2,580 Robert Half International, Inc.* ....... 115,294
Instruments - Scientific - 2.3%
5,730 Dionex Corp.* .......................... 209,861
Medical - Drugs - 5.5%
610 American Home Products Corp. ........... 34,351
800 Pfizer, Inc. ........................... 100,350
1,830 Pharmacia & Upjohn, Inc. ............... 103,624
2,170 Schering-Plough Corp. .................. 119,893
1,900 Warner-Lambert Co. ..................... 142,856
501,074
See Notes to Schedules of Investments.
Janus Aspen Series/ December 31, 1998 27
<PAGE>
Janus | Aspen Equity Income Portfolio
SCHEDULE OF INVESTMENTS (Continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Medical Instruments - 0.7%
835 Medtronic, Inc. ........................ $ 61,999
Money Center Banks - 4.0%
9,095 Bank of New York Co., Inc. ............. 366,074
Multimedia - 0.9%
2,125 Meredith Corp. ......................... 80,484
Networking Products - 3.0%
2,920 Cisco Systems, Inc.* ................... 271,012
Optical Supplies - 0.8%
1,115 Allergan, Inc. ......................... 72,196
Radio - 4.1%
3,335 Heftel Broadcasting Corp. - Class A* ... 164,249
7,665 Infinity Broadcasting Corp. - Class A* . 209,829
374,078
Retail - Discount - 2.2%
2,815 Costco Companies, Inc.* ................ 203,208
Retail - Internet - 1.1%
320 Amazon.com, Inc.* ...................... 102,800
Retail - Regional Department Stores - 1.0%
1,475 Fred Meyer, Inc.* ...................... 88,869
Super-Regional Banks - 0.6%
575 Northern Trust Corp. ................... 50,204
Telecommunication Equipment - 1.3%
980 Nokia Oyj (ADR) - Class A .............. 118,029
Television - 1.9%
4,697 Univision Communications, Inc. - Class A* 169,973
- --------------------------------------------------------------------------------
Total Commom Stock (cost $3,887,110) ...................... 5,598,272
- --------------------------------------------------------------------------------
Corporate Bonds - 12.7%
Cable Television - 0.4%
$ 35,000 Classic Cable, Inc., 9.875%
senior subordinated notes, due 8/1/08 36,400
Computer Software - 5.8%
193,000 Aspen Technology, Inc., 5.25%
subordinated debentures, due 6/15/05 . 135,582
140,000 Beyond.com Corp., 7.25%
subordinated notes, due 12/1/03 ...... 173,950
185,000 Wind River Systems, Inc., 5.00%
convertible subordinated notes,
due 8/1/02 ........................... 213,906
523,438
Computers - Memory Devices - 0.9%
50,000 VERITAS Software Corp., 5.25%
convertible subordinated notes,
due 11/1/04 .......................... 79,000
Drug Delivery Systems - 2.0%
125,000 ALZA Corp., 5.00%
convertible subordinated debentures,
due 5/1/06 ........................... 179,687
Fiber Optics - 0.1%
7,000 Metromedia Fiber Network, Inc., 10.00%
senior notes, due 11/15/08 ........... 7,236
Human Resources - 0.7%
75,000 Interim Services, Inc., 4.50%
subordinated notes, due 6/1/05 ....... 65,719
Internet Software - 1.9%
$ 25,000 America Online, Inc., 4.00%
convertible subordinated notes,
due 11/15/02 ......................... $ 140,469
25,000 Exodus Communications, Inc., 11.25%
senior notes, due 7/1/08 ............. 25,125
165,594
Retail - Building Products - 0.9%
30,000 Home Depot, Inc., 3.25%
convertible subordinated notes,
due 10/1/01 .......................... 78,825
- --------------------------------------------------------------------------------
Total Corporate Bonds (cost $927,630) ..................... 1,135,899
- --------------------------------------------------------------------------------
Preferred Stock - 21.2%
Cable Television - 5.0%
2,910 MediaOne Group, Inc., convertible, 4.50% 276,450
600 TCI Pacific Communications, Inc.
- Series A, convertible, 5.00% ....... 168,825
445,275
Cruise Lines - 3.4%
2,700 Royal Caribbean Cruises, Ltd.,
convertible, 7.25% ................... 310,500
Electric - Intergrated - 8.2%
6,975 Houston Industries, Inc., convertible, 7.00% 741,966
Medical - Wholesale Drug Distributors - 1.0%
870 McKesson Financing Trust,
convertible, 5.00% ................... 93,416
Radio - 2.9%
2,792 Chancellor Media Corp., convertible, $3.00 259,307
Telecommunication Services - 0.7%
1,400 Qwest Trends Trust, convertible, 5.75% . 65,800
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $1,458,459) ................... 1,916,264
- --------------------------------------------------------------------------------
U.S. Government Agency - 2.5%
Freddie Mac
$ 230,000 4.70%, 1/4/99 (amortized cost $229,910) 229,910
- --------------------------------------------------------------------------------
Total Investments (total cost $6,503,109) - 98.3% ......... 8,880,345
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 1 7% 156,472
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 9,036,817
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Canada 1.1% $ 100,111
Finland 1.3% 118,029
United States++ 97.6% 8,662,205
- --------------------------------------------------------------------------------
Total 100.0% $ 8,880,345
++Includes Short-Term Securities (95.0% excluding Short-Term Securities)
See Notes to Schedules of Investments.
28 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Growth and Income Portfolio
[PHOTO]
David J. Corkins
portfolio manager
Since its inception on May 1, 1998, Janus Aspen Growth and Income Portfolio has
posted solid returns for investors in spite of extreme volatility that occurred
in the second half of the year. For the period ended December 31, 1998, the
Portfolio returned 19.80% for its Institutional Shares and 19.40% for its
Retirement Shares. In comparison, the S&P 500 Index gained 11.72%.(1)
The first three months of the Portfolio's operation were generally constructive
for stocks and bonds, as both the Dow Jones Industrial Average and the S&P 500
Index pushed into new high ground in July following a brief period of
consolidation. From August through mid-October, however, the stock and bond
markets were derailed by several factors. These included increasing concerns
about the effects of the Asian financial crisis on the U.S. economy, fears about
the Brazilian banking system and Russia's unexpected devaluation of its currency
and default on its debt. Consequently, the popular stock averages declined
approximately 20% from their highs, while many individual stocks experienced
considerably greater losses.
Fixed-income investments were also hit hard, with the exception of U.S.
Treasuries, which were seen as a safe haven. In the fourth quarter, however,
U.S. bond and equity markets rebounded sharply, primarily in response to three
cuts in short-term interest rates by the Federal Reserve Board. The year ended
on a strong note, with the Dow hovering near record highs and the S&P 500 Index
breaking through the 1200 barrier in December.
My approach to picking stocks is bottom-up; that is, I look at the merits of
individual companies rather than at big-picture, macroeconomic factors. However,
low inflation is one big-picture consideration that heavily influences what I
do. Low inflation makes it difficult for companies to raise prices. This means
that in order to increase earnings, most firms have to grow their sales or cut
costs. In choosing stocks to add to the Portfolio, therefore, I'm looking for
companies that can offer one or more of the following benefits: pricing power,
sales growth, or the ability to lower costs. Mergers and acquisitions are one
avenue for increasing top-line growth and cutting costs; that's why we're seeing
so many mergers in virtually all sectors of the economy. Technology offers
another important method of cutting costs. In taking all of these factors into
account, I try to anticipate opportunities and exemplify Wayne Gretsky's advice
to "Go to where the puck is going to be, not to where it is."
Two areas that were helpful to the Portfolio's performance were technology and
cable television. In technology, Dell Computer was a big winner. Dell has an
outstanding management team and has been extremely effective at marketing
computers online. In cable, At Home is a provider of Internet connections
through cable TV, a far more convenient method of accessing the Internet than
dialing an Internet service provider.
As for stocks that hurt performance, Monsanto comes to mind. The company's
planned merger with American Home Products fell apart, damaging the stock price
in the process. We consequently liquidated our position in Monsanto. Another
underperformer, BankAmerica, suffered from turmoil in upper management and
problems regarding the company's merger with NationsBank. Despite these set
backs my long-term outlook for BankAmerica persuaded me to hold on to this
position.
Looking ahead, I see continued slow economic growth with no outright recession,
low interest rates, and benign inflation - in other words, a reasonably
favorable environment for stocks and bonds. In terms of the Portfolio, I take
the "growth" part of the equation seriously and share many of the proven
techniques employed by other Janus managers. I also try to manage risk by
limiting the size of our positions. To achieve its income goals and provide
downside protection, the Portfolio generally holds a number of stocks that pay
dividends, as well as selected preferred stocks and fixed-income securities.
As always, thank you for your continued investment in Janus Aspen Growth and
Income Portfolio.
Portfolio Asset Mix December 31, 1998
- --------------------------------------------------------------------------------
Equities 83.3%
Number of Stocks 73
Top 10 Equities 31.1%
Fixed-Income Securities 0.7%
Cash & Cash Equivalents 16.0%
- --------------------------------------------------------------------------------
(1) All returns include reinvested dividends.
Janus Aspen Series / December 31, 1998 29
<PAGE>
Cumulative Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/1/98)
From Inception 19.80%
- --------------------------------------------------------------------------------
S&P 500 Index
From Inception Date of Institutional Shares 11.72%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/98)
From Inception 19.40%
- --------------------------------------------------------------------------------
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Growth and Income Portfolio - Institutional Shares and the S&P
500 Index. Janus Aspen Growth and Income Portfolio - Institutional Shares is
represented by a shaded area of blue. The S&P 500 Index is represented by a
solid black line. The "y" axis reflects the value of the investment. The "x"
axis reflects the computation periods from inception, May 1, 1998, through
December 31, 1998. The upper right quadrant reflects the ending value of the
hypothetical investment in Janus Aspen Growth and Income Portfolio -
Institutional Shares ($11,980) as compared to the S&P 500 Index ($11,172).
Cumulative Total Return
for the periods ended December 31, 1998
Since 5/1/98,* 19.80%
Janus Aspen Growth and Income Portfolio
- - Institutional Shares - $11,980
S&P 500 Index - $11,172
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Common Stock - 79.1%
Advertising Sales - 0.9%
2,000 Outdoor Systems, Inc.* ................. $ 60,000
Agricultural Operations - 0.2%
420 Delta and Pine Land Co. ................ 15,540
Automotive - Cars and Light Trucks - 0.9%
600 Ford Motor Co. ......................... 35,212
500 Renault S.A ............................ 22,467
57,679
Beverages - Non-Alcoholic - 0.5%
800 Coca-Cola Enterprises, Inc. ............ 28,600
Broadcast Services and Programming - 0.5%
675 Tele-Communications Liberty Media
Group, Inc. - Class A* ............... 31,092
Cable Television - 5.3%
3,600 Comcast Corp. - Special Class A ........ 211,275
1,300 Cox Communications, Inc. - Class A* .... 89,862
300 MediaOne Group, Inc. ................... 14,100
500 Tele-Communications, Inc. - Class A* ... 27,656
342,893
Circuits - 0.7%
1,000 Maxim Integrated Products, Inc.* ....... 43,687
Commercial Banks - 2.5%
1,700 Firstar Corp. .......................... 158,525
Computer Software - 4.4%
1,700 Microsoft Corp.* ....................... $ 235,769
1,000 Wind River Systems, Inc.* .............. 47,000
282,769
Computers - Micro - 2.6%
2,250 Dell Computer Corp.* ................... 164,672
Containers - Paper and Plastic - 0.3%
400 Sealed Air Corp.* ...................... 20,425
Cruise Lines - 0.9%
1,500 Royal Caribbean Cruises, Ltd. .......... 55,500
Diversified Financial Services - 0.9%
1,100 Citigroup, Inc. ........................ 54,450
Diversified Operations - 5.1%
2,000 General Electric Co. ................... 204,125
1,600 Tyco International, Ltd. ............... 120,700
324,825
Drug Delivery Systems - 1.2%
1,100 Elan Corp. PLC (ADR)* .................. 76,519
Electronic Components - Semiconductors - 1.3%
500 Intel Corp. ............................ 59,281
300 Texas Instruments, Inc. ................ 25,669
84,950
Finance - Consumer Loans - 0.4%
600 Household International, Inc. .......... 23,775
Finance - Credit Card - 1.9%
1,200 American Express Co. ................... 122,700
See Notes to Schedules of Investments.
30 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Growth and Income Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Finance - Investment Bankers/Brokers - 1.0%
1,125 Charles Schwab Corp. ................... $ 63,211
Finance - Mortgage Loan Banker - 0.9%
800 Fannie Mae ............................. 59,200
Finance - Other Services - 0.7%
1,300 Newcourt Credit Group, Inc.
- New York Shares .................... 45,419
Internet Content - 0.8%
300 At Home Corp. - Class A* ............... 22,275
715 InfoSpace.com, Inc.* ................... 27,260
49,535
Internet Software - 2.9%
1,300 America Online, Inc.* .................. 188,175
Investment Companies - 1.4%
3,900 Tele-Communications TCI Ventures
Group - Class A* ..................... 91,894
Life and Health Insurance - 1.0%
800 SunAmerica, Inc. ....................... 64,900
Medical - Drugs - 12.6%
445 American Home Products Corp. ........... 25,059
700 Bristol-Myers Squibb Co. ............... 93,669
1,000 Eli Lilly and Co. ...................... 88,875
700 Merck & Co., Inc. ...................... 103,381
1,400 Pfizer, Inc. ........................... 175,613
2,300 Pharmacia & Upjohn, Inc. ............... 130,238
1,000 Schering-Plough Corp. .................. 55,250
1,800 Warner-Lambert Co. ..................... 135,338
807,423
Medical Instruments - 0.3%
300 Medtronic, Inc. ........................ 22,275
Money Center Banks - 1.5%
1,300 BankAmerica Corp. ...................... 78,162
64 UBS A.G ................................ 19,664
97,826
Multi-Line Insurance - 0.9%
190 American Bankers Insurance Group, Inc. . 9,191
1,100 Assicurazioni Generali ................. 46,032
55,223
Multimedia - 5.3%
1,200 CBS Corp. .............................. 39,300
3,700 Time Warner, Inc. ...................... 229,631
1,000 Viacom, Inc. - Class B* ................ 74,000
342,931
Networking Products - 3.9%
2,700 Cisco Systems, Inc.* ................... 250,594
Optical Supplies - 1.0%
1,000 Allergan, Inc. ......................... 64,750
Radio - 1.3%
500 Chancellor Media Corp.* ................ 23,937
1,025 Infinity Broadcasting Corp. - Class A* . 28,059
500 Jacor Communications, Inc.* ............ 32,188
84,184
Retail - Building Products - 1.3%
1,400 Home Depot, Inc. ....................... 85,662
Retail - Discount - 1.6%
1,400 Costco Companies, Inc.* ................ $ 101,062
Retail - Regional Department Stores - 1.5%
1,600 Fred Meyer, Inc.* ...................... 96,400
Savings/Loan/Thrifts - 0.1%
1,000 Thistle Group Holdings Co. ............. 9,625
Telecommunication Equipment - 3.2%
800 Lucent Technologies, Inc. .............. 88,000
1,000 Nokia Oyj (ADR) - Class A .............. 120,438
208,438
Telecommunication Services - 0.8%
140 Global Crossing, Ltd.* ................. 6,318
5,000 Telecom Italia S.p.A ................... 42,662
48,980
Telephone - Long Distance - 2.8%
2,500 MCI WorldCom, Inc.* .................... 179,375
Tobacco - 1.2%
1,500 Philip Morris Companies, Inc. .......... 80,250
Transportation - Air Freight - 0.6%
400 FDX Corp.* ............................. 35,600
- --------------------------------------------------------------------------------
Total Common Stock (cost $4,121,889) ...................... 5,081,533
- --------------------------------------------------------------------------------
Corporate Bonds - 0.7%
Cable Television - 0.3%
$ 1,000 Mediacom L.L.C., 8.50%
senior notes, due 4/15/08 ........... 1,021
15,000 Rifkin Acquisition Partners, L.P., 11.125%
senior subordinated notes, due 1/15/06 16,406
17,427
Distribution and Wholesale - 0.1%
8,000 Aviation Sales Co., 8.125%
company guaranteed notes, due 2/15/08 7,920
Metal Processors and Fabricators - 0%
2,000 Haynes International, Inc. 11.625%
senior notes, due 9/1/04 ............. 1,860
Music/Clubs - 0.1%
5,000 Selmer Co., Inc., 11.00%
senior subordinated notes, due 5/15/05 5,344
Retail - Diversified - 0%
2,000 Eye Care Centers of America, Inc., 9.125%
senior subordinated notes, due 5/1/08+ 1,920
Retail - Regional Department Stores - 0.1%
7,000 Fred Meyer, Inc., 7.45%
company guaranteed notes, due 3/1/08 . 7,560
Telecommunication Services - 0.1%
3,000 Level 3 Communications, Inc., 9.125%
senior notes, due 5/1/08 ............. 2,978
- --------------------------------------------------------------------------------
Total Corporate Bonds (cost $44,963) ...................... 45,009
- --------------------------------------------------------------------------------
Preferred Stock - 4.2%
Automotive - Cars and Light Trucks - 0.4%
10 Porsche A.G ............................ 22,816
Automotive - Truck Parts and Equipment - 0.5%
528 Federal-Mogul Financial Trust,
convertible, 7.00% ................... 34,650
See Notes to Schedules of Investments
Janus Aspen Series / December 31, 1998 31
<PAGE>
Janus | Aspen Growth and Income Portfolio
SCHEDULE OF INVESTMENTS (continued)
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Cable Television - 2.0%
MediaOne Group, Inc., convertible:
490 4.50% ................................ $ 46,550
225 6.25% ................................ 14,962
225 TCI Pacific Communications, Inc.,
- Series A, convertible, 5.00% ....... 63,309
124,821
Cruise Lines - 0.1%
70 Royal Caribbean Cruises, Ltd., convertible,
7.25% ................................ 8,050
Electric - Integrated - 1.0%
600 Houston Industries, Inc., convertible, 7.00% 63,825
Radio - 0.2%
165 Chancellor Media Corp., convertible, $3.00 15,324
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $224,655) ..................... 269,486
- --------------------------------------------------------------------------------
U.S. Government Agency - 18.7%
$ 1,200,000 Freddie Mac
4.70%, 1/4/99
(amortized cost $1,199,530) .......... 1,199,530
- --------------------------------------------------------------------------------
Total Investments (total cost $5,591,037) - 102.7% ........ 6,595,558
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (2.7%) (170,606)
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 6,424,952
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Canada 0.7% $ 45,419
Finland 1.8% 120,438
France 0.3% 22,467
Germany 0.4% 22,816
Ireland 1.2% 76,519
Italy 1.4% 88,694
Switzerland 0.3% 19,664
United States++ 93.9% 6,199,541
- --------------------------------------------------------------------------------
Total 100.0% $ 6,595,558
++Includes Short-Term Securities (75.8% excluding Short-Term Securities)
See Notes to Schedules of Investments.
32 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Flexible Income Portfolio
[PHOTO]
Ronald V. Speaker
portfolio manager
For the 12 months ended December 31, 1998, Janus Aspen Flexible Income Portfolio
slightly trailed the Lehman Brothers Government/Corporate Bond Index, returning
9.11% for its Institutional Shares and 8.58% for its Retirement Shares. In
comparison, the Index returned 9.47% for the same period.(1)
The Portfolio's diversified investment approach served it well throughout the
first half of the year, which was characterized by rising stock and bond prices.
In the third quarter, however, the markets did an about-face, as investors
sought quality and safety, and avoided risk. Increasing concerns about the
effect of the Asian financial crisis on the U.S. economy, fears about the
Brazilian banking system and Russia's devaluation of its currency and default on
its debt all contributed to dislocations in the financial markets. This, in
turn, caused certain strategies employed by a number of large hedge funds to
backfire. As the hedge funds were forced to unwind many of their positions, the
spread, or difference, between the yields on corporate bonds and the yields on
Treasuries widened considerably. While the Portfolio's positions in Treasury
securities benefited from this turn of events, its corporate holdings were hurt
by them, particularly the high-yield issues.
In the fourth quarter, equity markets rebounded strongly, primarily in response
to three cuts in short-term interest rates by the Federal Reserve Board. The Dow
Jones Industrial Average rallied back to a new all-time high close of 9374.27 on
November 23, while the S&P 500 Index crossed the 1200 mark for the first time in
December. The bond market's reaction to the rate cuts was mixed, with high-yield
bonds responding favorably while Treasuries softened from their precrisis levels
because of investor perceptions that the economy had been saved by Fed Chairman
Alan Greenspan.
Like the markets of 1998, my strategy can be understood as having three distinct
phases. For the first half of the year, I pursued a diversification strategy
that included extensive participation in the high-yield market, as well as in
investment-grade corporates and Treasuries. In late summer, quality became a
much higher priority for the Portfolio, and I reduced higher-risk assets in
favor of those with lower risk. Within the high-yield sector, for instance, I
cut back our overall exposure and upgraded the quality of many of our holdings.
When the markets settled down and prices began to rally in the fourth quarter, I
increased our high-yield exposure somewhat but maintained a strong emphasis on
quality.
The supermarket industry was one area in which the Portfolio had a number of
successes during the period. Fred Meyer, the Portfolio's single largest
corporate bond holding, recently agreed to be acquired by Kroger, a
higher-rated, less-leveraged bond. This helped the Fred Meyer bond outperform.
In another consolidation move, J. Sainsbury took over Star Markets, aiding our
position in the latter's bonds for the same reason.
In cable telephony, our holdings in TCI Communications benefited from that
company's acquisition by AT&T and the stability of cash flow investors
anticipate from the union. Telecommunications was another strong sector for the
Portfolio. One name that stood out was Qwest Communications International, whose
bonds were helped when the company entered into an attractive joint venture with
Microsoft.
On the other hand, Metricom was one holding that proved disappointing. This bond
suffered from a slower-than-anticipated rollout of the company's technology, as
well as from the overall modest valuations investors accorded the securities of
companies in the small-capitalization category. However, we continued to hold
this bond in view of the quality of Metricom's wireless technology and the
prospects for its imminent nationwide rollout.
Overall, I look for economic growth in the U.S. and abroad to be slower in 1999
than it was in 1998, as the Asian financial crisis continues to result in slower
earnings growth for multinational companies with Asian exposure. However, I see
no recession on the horizon any time soon. A scenario of moderate economic
growth, low inflation and low interest rates should be supportive of bond
investments.
Thank you for your continued investment in Janus Aspen Flexible Income
Portfolio.
Portfolio Asset Mix December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Investment-Grade
Corporate Bonds 37.1% 26.9%
High-Yield/High-Risk Bonds 26.5% 39.9%
Long Term U.S. Government
Obligations and Agencies 23.8% 20.9%
Preferred Stock 2.4% 0.6%
Cash & Cash Equivalents 10.2% 11.7%
- --------------------------------------------------------------------------------
Portfolio Profile
- --------------------------------------------------------------------------------
Weighted Average Maturity 8.7 Yrs. 9.2 Yrs.
Average Modified Duration* 6.0 Yrs. 5.8 Yrs.
30-Day Average Yield
Institutional Shares** 6.21% 6.85%
Retirement Shares** 5.70% 6.32%
Average Rating A+ BBB+
- --------------------------------------------------------------------------------
*A theoretical measure of price volatility.
**Yields will fluctuate.
(1) All returns include reinvested dividends.
Janus Aspen Series / December 31, 1998 33
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 9/13/93)
1 Year 9.11%
5 Year 10.32%
From Inception 9.87%
- --------------------------------------------------------------------------------
Lehman Brothers Govt./Corp. Bond Index
1 Year 9.47%
5 Year 7.30%
From Inception Date of Institutional Shares 6.90%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 8.58%
5 Year (unaudited) 9.77%
From Portfolio Inception (unaudited) 9.29%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen Flexible Income Portfolio - Institutional Shares and the Lehman
Brothers Govt./Corp. Bond Index. Janus Aspen Flexible Income Portfolio -
Institutional Shares is represented by a shaded area of blue. The Lehman
Brothers Govt./Corp. Bond Index is represented by a solid black 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, 1998. The upper
right quadrant reflects the ending value of the hypothetical investment in Janus
Aspen Flexible Income Portfolio - Institutional Shares ($16,456) as compared to
the Lehman Brothers Govt./Corp. Bond Index ($14,233).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 9.11%
Five Year, 10.32%
Since 9/13/93,* 9.87%
Janus Aspen Flexible Income Portfolio
- - Institutional Shares - $16,456
Lehman Brothers Govt./Corp. Bond Index - $14,233
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Past performance does not guarantee
future results.
SCHEDULE OF INVESTMENTS
Principal Amount Market Value
- --------------------------------------------------------------------------------
Corporate Bonds - 62.0%
Automotive - Truck Parts and Equipment - 0.4%
$ 500,000 Safelite Glass Corp., 9.875%
senior subordinated notes, due 12/15/06+ $ 463,750
Beverages - Non-Alcoholic - 1.2%
1,500,000 Coca-Cola Enterprises, Inc., 6.95%
debentures, due 11/15/26 ............. 1,608,750
Brewery - 0.8%
1,000,000 Anheuser-Busch Companies, Inc., 5.65%
notes, due 9/15/08 ................... 1,018,750
Broadcast Services and Programming - 0.8%
1,000,000 Fox/Liberty Networks L.L.C., 8.875%
senior notes, due 8/15/07 ............ 1,020,000
Cable Television - 4.7%
250,000 Adelphia Communications Corp., 9.50%
senior notes, due 2/15/04 ............ 265,000
500,000 Century Communications Corp., 8.375%
senior notes, due 12/15/07 ........... 537,500
500,000 Galaxy Telecom, L.P., 12.375%
senior subordinated notes, due 10/1/05 555,000
1,000,000 Jones Intercable, Inc., 7.625%
senior notes, due 4/15/08 ............ 1,047,500
1,000,000 Lenfest Communications, 7.625%
senior notes, due 2/15/08 ............ 1,038,750
TCI Communications, Inc.:
1,000,000 6.375%, senior notes, due 5/1/03 ..... 1,035,000
1,500,000 6.875%, senior notes, due 2/15/06 .... 1,601,250
6,080,000
Casino Hotels - 1.3%
$ 1,250,000 Venetian Casino Resort L.L.C., 12.25%
company guaranteed notes, due 11/15/04 $ 1,171,875
500,000 Santa Fe Hotel, Inc., 11.00%
first mortgage notes, due 12/15/00 ... 485,625
1,657,500
Casino Services - 0.4%
500,000 Isle of Capri Black Hawk L.L.C., 13.00%
first mortgage bonds, due 8/31/04 .... 530,000
Cellular Telecommunications - 1.0%
1,250,000 360(degree) Communications Co., 6.65%
notes, due 1/15/08 ................... 1,320,312
Chemicals - Speciality - 0.3%
350,000 Praxair, Inc., 6.625%
notes, due 10/15/07 .................. 357,000
Commercial Banks - 3.4%
1,500,000 Bank One Texas, 6.25%
subordinated notes, due 2/15/08 ...... 1,569,375
1,000,000 First Union National Bank,
5.80%, subordinated notes, due 12/1/08 1,010,000
700,000 HUBCO, Inc., 8.20%
subordinated debentures, due 9/15/06 . 763,000
1,000,000 Provident Trust I Corp., 8.29%
company guaranteed notes, due 4/15/28 1,125,000
4,467,375
See Notes to Schedules of Investments.
34 Janus Aspen Series / December 31, 1998
<PAGE>
Janus | Aspen Flexible Income Portfolio
SCHEDULE OF INVESTMENTS (continued)
Principal Amount Market Value
- --------------------------------------------------------------------------------
Computers - Integrated Systems - 0.2%
$ 250,000 Candescent Technologies Corp., 7.00%
convertible senior subordinated
debentures, due 5/1/03+ .............. $ 220,000
Computers - Mainframe - 2.1%
IBM Corp.:
1,500,000 6.45%, notes, due 8/1/07 ............. 1,610,625
1,000,000 7.00%, debentures, due 10/30/25 ...... 1,108,750
2,719,375
Consumer Products - 0.2%
450,000 Spin Cycle, Inc., zero coupon
senior discount notes, due 5/1/05 .... 243,131
Containers - Metal and Glass - 0.2%
250,000 Crown Cork & Seal Co., Inc., 7.00% company
guaranteed notes, due 12/15/06 ....... 263,750
Cruise Lines - 0.8%
1,000,000 Royal Caribbean Cruises, Ltd., 7.00%
senior notes, due 10/15/07 ........... 1,003,750
Distribution and Wholesale - 0.3%
445,000 Aviation Sales Co., 8.125%
company guaranteed notes, due 2/15/08 440,550
Diversified Operations - 1.0%
1,250,000 Seagram, Joseph E. & Sons, Inc., 6.80%
company guaranteed notes, due 12/15/08 1,250,000
Drug Delivery Systems - 0.1%
100,000 Biovail Corporation International, Inc.,
10.875%, senior notes, due 11/15/05+ . 101,500
Electric - Integrated - 0.9%
600,000 El Paso Electric Co., 9.40%
first mortgage bonds, due 5/1/11 ..... 695,250
500,000 National Rural Utilities, 5.75%
notes, due 12/1/08 ................... 501,250
1,196,500
Electronic Components - Semiconductors - 0.4%
500,000 Motorola, Inc., 5.80%
notes, due 10/15/08 .................. 510,000
Fiber Optics - 1.0%
1,250,000 Metromedia Fiber Network, Inc., 10.00%
senior notes, due 11/15/08+ .......... 1,292,188
Finance - Auto Loans - 3.3%
Ford Motor Credit Corp.:
1,000,000 5.125%, notes, due 10/15/01 .......... 993,750
1,000,000 5.375%, notes, due 10/15/02 .......... 995,000
1,000,000 6.75%, notes, due 8/15/08 ............ 1,082,500
General Motors Acceptance Corp.:
400,000 5.75%, notes, due 11/10/03 ........... 401,500
750,000 6.125%, notes, due 1/22/08 ........... 765,000
4,237,750
Food - Diversified - 0.7%
750,000 Ralston Purina Co., 7.875%
debentures, due 6/15/25 .............. 863,438
Food - Retail - 3.2%
$ 500,000 Marsh Supermarkets, Inc., 8.875%
company guaranteed notes, due 8/1/07 . $ 523,125
910,000 Pantry, Inc., 10.25%
company guaranteed notes, due 10/15/07 946,400
Safeway, Inc.:
450,000 5.875%, notes, due 11/15/01 .......... 451,687
1,400,000 6.50%, notes, due 11/15/08 ........... 1,438,500
725,000 Star Markets Co., Inc., 13.00%
senior subordinated notes, due 11/1/04 815,625
4,175,337
Funeral Services and Related Items - 0.4%
250,000 Loewen Group, Inc., 7.60%
company guaranteed notes, due 6/1/08 . 201,563
250,000 Service Corporation International, 7.70%
notes, due 4/15/09 ................... 276,875
478,438
Home Furnishings - 0.3%
390,000 Lifestyle Furnishings International, Inc.,
10.875%, company guaranteed notes,
due 8/1/06 ........................... 428,025
Hotels and Motels - 0.4%
500,000 Marriot International, Inc., 6.625%
notes, due 11/15/03+ ................. 501,250
Industrial Audio and Visual Products - 0.1%
100,000 Unifrax Investment Corp., 10.50%
senior notes, due 11/1/03 ............ 102,000
Insurance Brokers - 0.3%
500,000 SIG Capital Trust I, 9.50%
company guaranteed notes, due 8/15/27 415,000
Life and Health Insurance - 0.6%
742,000 Delphi Financial Group, Inc., 8.00%
senior notes, due 10/1/03 ............ 792,085
Manufacturing - 0.4%
500,000 Day International Group, Inc., 11.125%
senior notes, due 6/1/05 ............. 510,000
Multimedia - 2.7%
250,000 News America Holdings, Inc., 7.70%
debentures, due 10/30/25 ............. 270,000
Time Warner, Inc.:
1,000,000 8.18%, notes, due 8/15/07 ............ 1,157,500
1,000,000 6.95%, company guaranteed notes,
due 1/15/28 .......................... 1,053,750
1,000,000 Walt Disney Co. (The), 6.75%
senior notes, due 3/30/06 ............ 1,082,500
3,563,750
Music/Clubs - 0.4%
150,000 Selmer Co., Inc., 11.00%
senior subordinated notes, due 5/15/05 160,312
880,000 V2 Music Holdings PLC, zero coupon
senior discount notes, due 4/15/08+ .. 415,985
576,297
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 35
<PAGE>
Janus | Aspen Flexible Income Portfolio
SCHEDULE OF INVESTMENTS (continued)
Principal Amount Market Value
- --------------------------------------------------------------------------------
Networking Products - 0.4%
$ 500,000 Anixter International, Inc., 8.00%
company guaranteed notes, due 9/15/03 $ 528,125
Office Automation and Equipment - 0.4%
500,000 Dictaphone Corp., 11.75%
senior subordinated notes, due 8/1/05 486,250
Paint and Related Products - 0.4%
500,000 Sherwin-Williams Co., 6.85%
notes, due 2/1/07 .................... 545,000
Physical Therapy and Rehabilitation Centers - 2.4%
HEALTHSOUTH Corp.:
1,500,000 9.50%, senior subordinated notes,
due 4/1/01 ........................... 1,552,500
1,500,000 7.00%, senior notes, due 6/15/08 ..... 1,498,125
3,050,625
Property and Casualty Insurance - 0.7%
500,000 First American Capital Trust, 8.50%
company guaranteed notes, due 4/15/12 586,250
350,000 Orion Capital Corp., 7.25%
senior notes, due 7/15/05 ............ 371,437
957,687
Radio - 0.4%
440,000 Chancellor Media Corp., 9.00%
senior subordinated notes, due 10/1/08 466,400
Recreational Centers - 1.1%
1,500,000 Bally Total Fitness Holding Corp., 9.875%
senior subordinated notes, due 10/15/07 1,466,250
Reinsurance - 0.4%
500,000 Veritas Capital Trust, 10.00%
company guaranteed notes, due 1/1/28 . 455,000
Retail - Regional Department Stores - 4.4%
Fred Meyer, Inc.:
2,000,000 7.15%, company guaranteed notes,
due 3/1/03 ........................... 2,080,000
3,385,000 7.45%, company guaranteed notes,
due 3/1/08 ........................... 3,655,800
5,735,800
Retail - Restaurants - 2.6%
500,000 Carrols Corp., 9.50%
senior subordinated notes, due 12/1/08+ 508,750
1,500,000 McDonald's Corp., 6.375%
debentures, due 1/8/28 ............... 1,561,875
500,000 Perkins Family Restaurant, L.P., 10.125%
senior notes, due 12/15/07 ........... 533,125
250,000 ROMACORP Inc., 12.00%
senior notes, due 7/1/06+ ............ 244,687
500,000 Tricon Global Restaurants, Inc., 7.65%
senior notes, due 5/15/08 ............ 525,000
3,373,437
Satellite Telecommunications - 0.6%
250,000 Digital Television Services L.L.C., 12.50%
company guaranteed notes, due 8/1/07 . 271,250
500,000 PanAmSat Corp., 6.375%
notes, due 1/15/08 ................... 506,250
777,500
Savings/Loan/Thrifts - 1.3%
Local Financial Corp.
$ 1,650,000 11.00%, senior notes, due 9/8/04+ .... $ 1,668,563
Security Services - 0.8%
1,000,000 Protection One Alarm Monitor, Inc., 7.375%
senior notes, due 8/15/05+ ........... 1,032,500
Super - Regional Banks - 1.6%
2,000,000 Mellon Financial Co., 6.375%
subordinated notes, due 2/15/10 ...... 2,097,500
Telecommunications Equipment - 0.7%
480,000 Filtronic PLC, 10.00%
senior notes, due 12/1/05+ ........... 478,800
500,000 Global Tele-Systems, Ltd., 9.875%
senior notes, due 2/15/05 ............ 475,625
954,425
Telecommunications Services - 3.1%
2,000,000 LCI International, Inc., 7.25%
senior notes, due 6/15/07 ............ 2,055,000
750,000 Level 3 Communications, Inc., 9.125%
senior notes, due 5/1/08 ............. 744,375
750,000 Metricom, Inc., 8.00%
convertible subordinated notes,
due 9/15/03 .......................... 480,000
600,000 Talton Holdings, Inc., 11.00%
company guaranteed notes, due 6/30/07 569,250
225,000 Versatel Telecom B.V., 13.25%
notes, due 5/15/08+ .................. 223,313
4,071,938
Telephone - Integrated - 1.6%
300,000 Dobson Wireline Co., 12.25%
senior notes, due 6/15/08 ............ 276,750
750,000 NEXTLINK Communications, Inc., 10.75%
senior notes, due 11/15/08+ .......... 768,750
1,000,000 Qwest Communications International, Inc.,
7.50%, senior notes, due 11/1/08+ .... 1,043,750
2,089,250
Telephone - Local - 0.4%
500,000 Bellsouth Telecommunication, Inc., 6.375%
debentures, due 6/1/28 ............... 518,750
Telephone - Long Distance - 1.7%
500,000 Esprit Telecom Group PLC, 11.50%
senior notes, due 12/15/07 ........... 514,375
MCI Worldcom, Inc.:
500,000 6.40%, senior notes, due 8/15/05 ..... 518,750
1,000,000 7.75%, notes, due 4/1/07 ............. 1,123,750
2,156,875
Television - 2.3%
1,050,000 Dialog Corp. PLC, 11.00%
senior subordinated notes, due 11/15/07 1,042,125
News America, Inc.:
750,000 6.625%, senior notes, due 1/9/08 ..... 770,625
1,000,000 7.30%, debentures, due 4/30/28 ....... 1,028,750
150,000 Pegasus Media Communications, 12.50%
notes, due 7/1/05 .................... 164,625
3,006,125
See Notes to Schedules of Investments.
36 Janus Aspen Series / December 31, 1998
<PAGE>
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Trucking and Leasing - 0.4%
$ 500,000 Ryder System, Inc., 6.60%
notes, due 11/15/05 .................. $ 505,625
- --------------------------------------------------------------------------------
Total Corporate Bonds (cost $78,890,024) .................. 80,351,176
- --------------------------------------------------------------------------------
Foreign Bonds - 1.6%
CAD
2,000,000 Canadian National Government, 6.00%
debentures, due 6/1/08** ............. 1,409,428
DEM
1,000,000 Esprit Telecom Group PLC, 11.50%
senior notes, due 12/15/07** ......... 606,415
- --------------------------------------------------------------------------------
Total Foreign Bonds (cost $1,985,972) ..................... 2,015,843
- --------------------------------------------------------------------------------
Preferred Stocks - 2.4%
Computer Software - 0.6%
851 Concentric Network Corp. - Series B, 13 50% 714,840
Savings/Loan/Thrifts - 0.8%
35,000 Chevy Chase Savings, 13.00% ............ 1,050,000
Telecommunications Services - 1.0%
30,000 Qwest Trends Trust, convertible, 5.75%+ 1,410,000
- --------------------------------------------------------------------------------
Total Preferred Stocks (cost $3,104,871) .................. 3,174,840
- --------------------------------------------------------------------------------
Warrants - 0%
Consumer Products - 0%
450 Spin Cycle, Inc. - expires 5/1/05* ..... 0
Music/Clubs - 0%
880 V2 Music Holdings PLC
- expires 4/15/08*,+ ................ 0
- --------------------------------------------------------------------------------
Total Warrants (cost $0) .................................. 0
- --------------------------------------------------------------------------------
U.S. Government Obligations - 22.3%
U.S. Treasury Notes:
$ 3,000,000 4.625%, due 12/31/00 ................. 3,004,200
10,000,000 6.125%, due 8/15/07 .................. 10,941,100
13,500,000 5.625%, due 5/15/08** ................ 14,406,525
500,000 4.75%, due 11/15/08 .................. 503,575
- --------------------------------------------------------------------------------
Total U.S. Government Obligations (cost $27,991,868) ...... 28,855,400
- --------------------------------------------------------------------------------
U.S. Government Agencies - 9.2%
Federal Home Loan Bank System
2,000,000 5.125%, due 9/15/03 .................. 2,003,560
Freddie Mac
10,000,000 4.70%, 1/4/99 ........................ 9,996,083
- --------------------------------------------------------------------------------
Total U.S. Government Agencies (cost $12,017,847) ......... 11,999,643
- --------------------------------------------------------------------------------
Total Investments (total cost $123,990,582) - 97.5% ....... 126,396,902
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 2 5% 3,197,240
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 129,594,142
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Futures - Short
90 Contracts U.S. Treasury - 10 year bond, expires
March 1999, principal amount
$10,741,913 value $10,724,063,
cumulative appreciation .............. $ 17,850
- --------------------------------------------------------------------------------
Summary of Investments by Country, December 31, 1998
Country % of Investment Securities Market Value
- --------------------------------------------------------------------------------
Canada 1.1% $ 1,409,428
United Kingdom 1.2% 1,536,775
United States++ 97.7% 123,450,699
- --------------------------------------------------------------------------------
Total 100.0% $ 126,396,902
++Includes Short-Term Securities (89.8% excluding Short-Term Securities)
Forward Currency Contracts, Open at December 31, 1998
Currency Sold and Currency Currency Unrealized
Settlement Date Units Sold Value in $ U.S. Gain/(Loss)
- --------------------------------------------------------------------------------
Canadian Dollar 10/8/99 2,040,000 $ 1,335,166 ($16,198)
German Deutschemark
3/5/99 825,000 496,988 (29,221)
- --------------------------------------------------------------------------------
Total $ 1,832,154 ($45,419)
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 37
<PAGE>
Janus | Aspen High-Yield Portfolio
Sandy R. Rufenacht
portfolio manager
Extreme volatility in the stock and bond markets during the second half of the
year provided a difficult backdrop for high-yield securities in 1998. For the 12
months ended December 31, 1998, Janus Aspen High-Yield Portfolio posted a return
of 1.26% for the Institutional Shares and 0.67% for the Retirement Shares. By
contrast, the Lehman Brothers High-Yield Bond Index returned 1.60% for the same
period.(1)
In the first half of the year, the high-yield market benefited from strength in
the stock market, with which it shares a close correlation. However, an excess
supply of new high-yield issuance limited gains for much of the category.
Furthermore, from August through October, the markets were roiled by increasing
concerns regarding the effects of the Asian financial crisis on the U.S. economy
and fears about the Brazilian banking system. Investors were also caught off
guard by Russia's devaluation of its currency and default on its debt. In
particular, a number of large hedge funds were forced to liquidate many of their
highly leveraged positions. As they did so, the spread, or difference, between
the yields on corporate bonds and the yields on Treasuries widened considerably.
At the same time, increased volatility caused many investors to shift assets out
of riskier investments and into those considered to be safer. High-yield bonds
were particularly hurt by this turn of events.
In the fourth quarter, U.S. bond and equity markets rebounded sharply, primarily
in response to three cuts in short-term interest rates by the Federal Reserve
Board. The high-yield market participated in this recovery, although not nearly
to the same extent as investment-grade bonds, as many investors continued to
avoid investments perceived to be risky.
Throughout the year our strategy has been to try to shield the Portfolio from
the effects of the Asian slowdown by emphasizing the bonds of companies with
primarily U.S.-based businesses. At the same time, we avoided companies that
tend to be adversely affected by low-cost Asian imports of industrial materials
such as steel, paper, and chemicals. In the third and fourth quarters, we also
upgraded many of the Portfolio's holdings with higher-quality issues.
For example, in October, as investors demanded higher spreads to compensate for
what they perceived to be a riskier investment environment, the difference
between yields on investment-grade bonds and yields on Treasuries widened to the
extent that the former were trading roughly 300 basis points above the curve -
very close to the 350-basis-point spread at which high-yield issues were
trading. We took advantage of this dislocation in the markets to add some BB-
and BBB-rated issues to the Portfolio, thereby improving quality without
sacrificing much yield potential. Finally, we sharpened our focus on buying the
bonds of larger, public companies because they tend to be more capable of
withstanding liquidity crunches of the sort we had just experienced. In short,
we took quite a few defensive steps to protect our investors during the year.
The supermarket industry performed well for the Portfolio during 1998. One
example was Star Markets, which was purchased by J. Sainsbury - a London-based
company. The acquisition benefited our Star Markets holdings because of the
higher-rated, less-leveraged status of its acquirer. Another holding that did
well was Isle of Capri. The company is building a casino in Black Hawk,
Colorado, not far from Denver. Because of our proximity to it, we were able to
monitor this project very closely, and the issue did well for us. On the
downside, Telegroup is a telecommunications company that experienced liquidity
problems during the fall. Sparkling Spring Water Group also hurt performance, as
the company saw a decline in demand for its bottled water.
My outlook calls for the economy to grow at a much slower pace, though not
enough to bring on a recession. Together with low inflation and interest rates,
moderate economic growth should provide a reasonably positive environment for
both stocks and high-yield bonds. However, the markets will continue to punish
companies that miss their earnings estimates. Therefore, it will be important
going forward to be vigilant about buying quality and keeping in close touch
with management about a company's prospects.
As always, thank you for your continued investment in Janus Aspen High-Yield
Portfolio.
Portfolio Profile December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------
Weighted Average Maturity 5.1 Yrs. 6.8 Yrs.
Average Modified Duration* 3.7 Yrs. 4.5 Yrs.
30-Day Average Yield
Institutional Shares** 8.31% 8.10%
Without Reimbursement** N/A 7.04%
Retirement Shares** 7.89% 7.68%
Without Reimbursement** N/A 6.60%
Average Rating B B+
- --------------------------------------------------------------------------------
*A theoretical measure of price volatility.
** Yields will fluctuate.
(1) All returns include reinvested dividends.
38 Janus Aspen Series / December 31, 1998
<PAGE>
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/1/96)
1 Year 1.26%
From Inception 10.97%
- --------------------------------------------------------------------------------
Lehman Brothers High-Yield Bond Index
1 Year 1.60%
From Inception Date of Institutional Shares 7.15%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 0.67%
From Portfolio Inception (unaudited) 8.25%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
Note: Performance of the Retirement Shares is lower from the performance shown
on this graph for the Institutional Shares, based upon the higher fees
paid by shareholders investing in this class.
Performance Overview(1)
[GRAPHIC OMITTED]
A graphic comparison of the change in value of a hypothetical $10,000 investment
in Janus Aspen High-Yield Portfolio - Institutional Shares and the Lehman
Brothers High-Yield Bond Index. Janus Aspen High-Yield Portfolio - Institutional
Shares is represented by a shaded area of blue. The Lehman Brothers High-Yield
Bond Index is represented by a solid black 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, 1998. The upper right quadrant reflects the
ending value of the hypothetical investment in Janus Aspen High-Yield Portfolio
- - Institutional Shares ($13,184) as compared to the Lehman Brothers High-Yield
Bond Index ($12,508).
Average Annual Total Return
for the periods ended December 31, 1998
One Year, 1.26%
Since 5/1/96,* 10.97%
Janus Aspen High-Yield Portfolio
- - Institutional Shares - $13,184
Lehman Brothers
High-Yield Bond Index - $12,508
*The Portfolio's inception date.
Source - Lipper Analytical Services, Inc. 1998.
(1) All returns reflect reinvested dividends. The Portfolio's securities may
differ significantly from the securities in the Index. Index returns do not
include taxes or dividends and interest payments or operating expenses
necessary to maintain a portfolio consisting of the same securities that
are in the Index. These returns do not reflect the charges and expenses of
any particular insurance product or qualified plan. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The adviser voluntarily waives a
portion of the Portfolio's expenses. Without such waiver, the Portfolio's
total returns for each class would have been lower. Past performance does
not guarantee future results.
SCHEDULE OF INVESTMENTS
Principal Amount Market Value
- --------------------------------------------------------------------------------
Corporate Bonds - 64.6%
Advertising Services - 0.4%
$ 13,000 Outsourcing Services Group, 10.875%
senior subordinated notes, due 3/1/06+ $ 12,317
Auto Repair Centers - 3.3%
100,000 Diamond Triumph Autoglass, Inc., 9.25%
senior notes, due 4/1/08+ ............ 99,000
Building - Heavy Construction - 0.5%
15,000 Iron Age Corp., 9.875%
company guaranteed notes, due 5/1/08 . 13,650
Building - Residential and Commercial - 0.9%
28,000 Toll Corp., 9.50%
senior subordinated notes, due 3/15/03 28,350
Building and Construction Products - 0.8%
25,000 Generac Portable Products, L.L.C., 11.25%
senior subordinated notes, due 7/1/06 24,750
Cable Television - 3.7%
15,000 Adelphia Communications Corp., 8.375%
senior notes, due 2/1/08+ ............ 15,525
50,000 Classic Cable, Inc., 9.875%
senior subordinated notes, due 8/1/08+ 52,000
25,000 Fundy Cable, Ltd., 11.00%
senior notes, due 11/15/05 ........... 26,563
5,000 Galaxy Telecom, L.P., 12.375%
senior subordinated notes, due 10/1/05 5,550
10,000 Rifkin Acquisition Partners, L.P., 11.125%
senior subordinated notes, due 1/15/06 10,937
110,575
Casino Hotels - 2.1%
$ 30,000 Santa Fe Hotel, Inc., 11.00%
first mortgage notes, due 12/15/00 ... $ 29,138
10,000 Station Casinos, Inc., 10.125%
senior subordinated notes, due 3/15/06 10,450
25,000 Venetian Casino Resort, L.L.P., 12.25%
company guaranteed notes, due 11/15/04 23,437
63,025
Casino Services - 1.8%
50,000 Isle of Capri Black Hawk, L.L.C., 13.00%
first mortgage bonds, due 8/31/04 .... 53,000
Cellular Telecommunications - 0.3%
25,000 Telesystem International Wireless, Inc., zero
coupon, senior discount notes, due 11/1/07 9,344
Containers - Metal and Glass - 0.5%
15,000 Ball Corp., 7.75%
senior notes, due 8/1/06 ............. 15,750
Containers - Paper and Plastic - 1.2%
35,000 Plastic Containers, Inc., 10.00%
senior notes, due 12/15/06 ........... 36,706
Distribution and Wholesale - 1.7%
50,000 Aviation Sales Co., 8.125%
company guaranteed notes, due 2/15/08 49,500
Electric - Integrated - 0.9%
25,000 Niagara Mohawk Power Corp., 7.75%
senior notes, due 10/1/08 ............ 27,062
See Notes to Schedules of Investments
Janus Aspen Series / December 31, 1998 39
<PAGE>
Janus | Aspen High-Yield Portfolio
SCHEDULE OF INVESTMENTS (continued)
Principal Amount Market Value
- --------------------------------------------------------------------------------
Fiber Optics - 0.4%
$ 10,000 Metromedia Fiber Network, Inc., 10.00%
senior notes, due 11/15/08 ........... $ 10,337
Finance - Other Services - 0.2%
20,000 SF Holdings Group, Inc., zero coupon
senior notes, due 3/15/08 ............ 6,575
Food - Diversified - 2.1%
85,000 Richmont Marketing Specialists, Inc.,
10.125%, senior subordinated notes,
due 12/15/07+ ........................ 62,688
Food - Retail - 1.7%
45,000 Star Markets Co., Inc., 13.00%
senior subordinated notes, due 11/1/04 50,625
Gambling-Non Hotel Casinos - 1.8%
25,000 Casino America, Inc., 12.50%
senior notes, due 8/1/03 ............. 27,750
25,000 Lady Luck Gaming Corp., 11.875%
first mortgage notes, due 3/1/01 ..... 25,500
53,250
Hotels and Motels - 1.2%
35,000 Hard Rock Hotel, Inc., 9.25%
senior subordinated notes, due 4/1/05 35,000
Instruments - Controls - 1.2%
35,000 Imo Industries, Inc., 11.75%
senior subordinated notes, due 5/1/06 36,225
Internet Software - 1.7%
50,000 Exodus Communications, Inc., 11.25%
senior notes, due 7/1/08 ............. 50,250
Machinery - General Industrial - 1.4%
40,000 Fairfield Manufacturing Co., Inc., 11.375%
senior subordinated notes, due 7/1/01 41,000
Manufacturing - 3.0%
80,000 Foamex International, Inc., 13.50%
senior subordinated notes, due 8/15/05+ 90,400
Medical - Hospital - 0.9%
25,000 Tenet Healthcare Corp., 8.125%
senior subordinated notes, due 12/1/08+ 25,844
Medical Products - 0.2%
6,000 Universal Hospital Service, Inc., 10.25%
senior notes, due 3/1/08+ ............ 5,273
Music/Clubs - 1.1%
15,000 SFX Entertainment, Inc., 9.125%
company guaranteed notes, due 2/1/08 . 14,925
40,000 V2 Music Holdings PLC, zero coupon
senior discount notes, due 4/15/08+ .. 18,908
33,833
Oil Companies - Exploration and Production - 0.7%
20,000 Nuevo Energy Co., 9.50%
senior subordinated notes, due 4/15/06 19,550
Physical Therapy and Rehabilitation Centers - 0.5%
15,000 HEALTHSOUTH Corp., 6.875%
senior notes, due 6/15/05 ............ 15,169
Publishing - Books - 1.2%
$ 35,000 TransWestern Publishing Company, L.P.,
9.625%, senior subordinated notes,
due 11/15/07+ ........................ $ 36,444
Radio - 1.4%
39,000 SFX Broadcasting, Inc., 10.75%
senior subordinated notes, due 5/15/06 42,997
Reinsurance - 0.3%
10,000 Veritas Holdings GmbH, 9.625%
senior notes, due 12/15/03 ........... 9,975
Retail - Convenience Stores - 0.7%
20,000 Core-Mark International, Inc., 11.375%
senior subordinated notes, due 9/15/03 20,350
Retail - Discount - 1.7%
52,000 Pamida,Inc., 11.75%
senior subordinated notes, due 3/15/03 49,660
Retail - Diversified - 1.1%
35,000 Eye Care Centers of America, Inc., 9.125%
senior subordinated notes, due 5/1/08+ 33,600
Retail - Drug Store - 0.8%
25,000 Community Distributors, Inc., 10.25%
company guaranteed notes, due 10/15/04 24,250
Retail - Internet - 1.4%
60,000 Amazon.com, Inc., zero coupon
senior discount notes, due 5/1/08 .... 40,200
Retail - Mail Order - 1.5%
40,000 Herff Jones, Inc., 11.00%
senior subordinated notes, due 8/15/05 43,500
Satellite Telecommunications - 1.4%
25,000 Digital Television Services, L.L.C., 12 50%
company guaranteed notes, due 8/1/07 . 27,125
15,000 Echostar Communications Corp., 12.875%
senior discount notes, due 6/1/04 .... 15,394
42,519
Savings/Loan/Thrifts - 2.5%
75,000 Local Financial Corp., 11.00%
senior notes, due 9/8/04+ ............ 75,844
Telecommunication Services - 7.2%
15,000 Focal Communications Corp., 12.125%
senior discount notes, due 2/15/08 ... 7,838
15,000 Global Crossing Holding, Ltd., 9.625%
company guaranteed notes, due 5/15/08 15,900
50,000 IDT Corp., 8.75%
senior notes, due 2/15/06 ............ 46,125
88,000 Level 3 Communications, Inc., 9.125%
senior notes, due 5/1/08 ............. 87,340
15,000 RSL Communications PLC, 10.50%
senior notes, due 11/15/08 ........... 14,550
25,000 SBA Communications Corp., zero coupon
senior discount notes, due 3/1/08 .... 14,594
47,000 Telegroup, Inc., zero coupon
senior discount notes, due 11/1/04 ... 27,671
214,018
See Notes to Schedules of Investments.
40 Janus Aspen Series / December 31, 1998
<PAGE>
Shares or Principal Amount Market Value
- --------------------------------------------------------------------------------
Telephone - Integrated - 2.3%
$ 25,000 Dobson Wireline Co., 12.25%
senior notes, due 6/15/08 ............ $ 23,062
30,000 Intermedia Communications, Inc.,
zero coupon, senior discount notes,
due 7/15/07 .......................... 20,962
25,000 NEXTLINK Communications, Inc., 10.75%
senior notes, due 11/15/08 ........... 25,625
69,649
Telephone - Local - 1.1%
50,000 e.Spire Communications, Inc., zero coupon
senior discount notes, due 4/1/06 .... 34,000
Television - 0.4%
10,000 Price Communications Corp., 11.75%
senior subordinated notes, due 7/15/07 10,525
Textile - Products - 0.9%
20,000 Glenoit Corp., 11.00%
company guaranteed notes, due 4/15/07 18,700
30,000 Steel Heddle Group, Inc., zero coupon
debentures, due 6/1/09+ .............. 9,562
28,262
Transportation - Services - 1.0%
30,000 Atlantic Express, Inc., 10.75%
company guaranteed notes, due 2/1/04 . 30,450
Water - 0.8%
25,000 Sparkling Spring Water Group, 11.50%
senior subordinated notes, due 11/15/07 24,750
Wire and Cable Products - 0.7%
20,000 International Wire Group, Inc., 11.75%
senior subordinated notes, due 6/1/05 21,200
- --------------------------------------------------------------------------------
Total Corporate Bonds (cost $2,013,981) ................... 1,931,241
- --------------------------------------------------------------------------------
Preferred Stock - 3.0%
Savings/Loan/Thrifts - 0.6%
600 Chevy Chase Savings - Series A, 13.00% . 18,000
Telecommunication Services - 2.4%
1,500 Qwest Trends Trust, convertible, 5.75%+ 70,500
- --------------------------------------------------------------------------------
Total Preferred Stock (cost $81,225) ...................... 88,500
- --------------------------------------------------------------------------------
Common Stock - 0%
40 SF Holdings Group, Inc. * (cost $0) .... $ 0
- --------------------------------------------------------------------------------
Warrants - 0%
40 V2 Music Holdings PLC
- expires 4/15/08*,+ (cost $0) ....... 0
- --------------------------------------------------------------------------------
U.S. Government Obligations - 3.3%
U.S. Treasury Notes:
$ 50,000 4.25%, due 11/15/03 .................. 49,340
50,000 4.75%, due 11/15/08 .................. 50,358
- --------------------------------------------------------------------------------
Total U.S. Government Obligations (cost $100,678) ......... 99,698
- --------------------------------------------------------------------------------
U.S Government Agency - 28.3%
Freddie Mac
845,000 4.70%, 1/4/99 (amortized cost $844,669) 844,669
- --------------------------------------------------------------------------------
Total Investments (total cost $3,040,553) - 99.2% ......... 2,964,108
- --------------------------------------------------------------------------------
Cash, Receivables and Other Assets, net of Liabilities - 0 8% 23,639
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 2,987,747
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 41
<PAGE>
Janus | Aspen Money Market Portfolio
[PHOTO]
Sharon S. Pichler
portfolio manager
For the fiscal year ended December 31, 1998, Aspen Money Market Portfolio
returned 5.36% for the Institutional Shares and 4.85% for the Retirement
Shares.(1) The seven-day current yield, as of December 31, 1998, was 4.87% and
4.40% for the Institutional and Retirement Shares, respectively.
During the first half of the year, the Federal Reserve continued to hold
interest rates steady while closely monitoring an economy that seemed to be
successfully combining strong growth and benign inflation. For this reason,
domestic market volatility in the first and second quarters was driven primarily
by investor perceptions that the Asian crisis could have a negative impact on
U.S. growth and corporate earnings. However, financial turmoil in the Far East
was generally a positive for the markets because it kept global inflationary
pressures in check. This positive turned into a negative in the third quarter
when renewed problems in Asia and financial deterioration in Russia triggered a
worldwide economic slowdown. Federal Reserve policy shifted dramatically in
response to these events, resulting in a trio of interest rate cuts that
ultimately drove U.S. money markets forward.
Early in the year, my strategy was to invest primarily in very short-term
obligations, which are influenced more by changes in the federal funds rate than
by broader market forces. Despite the market developments in the latter part of
the year, I haven't substantially changed this strategy or significantly
extended the maturity of the Portfolio. However, I did purchase some longer-term
paper that will maintain a higher yield in a declining interest rate
environment. Overall, our performance has benefited from our strict discipline
of detailed credit analysis and our careful evaluation of each company's
risk-reward characteristics.
Going forward, we'll continue to invest in shorter-term maturities as long as
the global outlook remains somewhat uncertain. At this time, market consensus is
that the Federal Reserve will probably continue lowering interest rates to
maintain stability in the U.S. markets. We could see another .25% reduction in
rates by next spring. I believe we're positioned to capitalize on this
possibility, while also retaining the flexibility that will allow us to react to
any changes that might arise in the economic landscape.
In closing, I'd like to thank you for your continued investment in Janus Aspen
Money Market Portfolio.
Average Annual Total Return(1)
For the Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
Institutional Shares (Inception Date 5/1/95)
1 Year 5.36%
From Inception 5.25%
- --------------------------------------------------------------------------------
Retirement Shares (Inception Date 5/1/97)
1 Year 4.85%
From Inception (unaudited) 4.37%
- --------------------------------------------------------------------------------
Returns shown for Retirement Shares for periods prior to their inception are
derived from the historical performance of Institutional Shares, adjusted to
reflect the higher operating expenses of Retirement Shares.
(1) All returns reflect reinvested dividends.
An investment in the Portfolio(s) is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Portfolio(s) seeks to preserve the value of your investment at $1.00 per share,
it is possible to lose money by investing in the Portfolio.
42 Janus Aspen Series / December 31, 1998
<PAGE>
SCHEDULE OF INVESTMENTS
Principal Amount Market Value
- --------------------------------------------------------------------------------
Short-Term Corporate Notes - 23.0%
$ 2,300,000 Countrywide Home Loans, Inc.
5.25%, 1/29/99 ....................... $ 2,290,608
2,000,000 Credit Suisse First Boston
4.875%, 5/7/99 ....................... 1,965,875
2,000,000 General Electric Capital Corp.
5.09%, 3/10/99 ....................... 1,980,771
2,000,000 Morgan Stanley Group, Inc.
4.92%, 3/26/99 ....................... 1,977,040
680,000 UBS Financial Corp.
5.17%, 1/8/99 ........................ 679,317
- --------------------------------------------------------------------------------
Total Short-Term Corporate Notes (amortized cost $8,893,611) 8,893,611
- --------------------------------------------------------------------------------
Taxable Variable Rate Demand Notes - 24.5%
3,000,000 Asset Partners, Inc.
5.20%, 11/1/27 ....................... 3,000,000
750,000 Chicago, Illinois Industrial Development
Revenue, (BTI, Inc. Project), Series B,
Variable Rate, 5.20%, 9/1/27 ......... 750,000
2,140,000 Kentucky Economic Development
Financing Authority Hospital Facilities
Revenue, (Highlands Regional Project),
Series B, Variable Rate, 5.75%, 8/1/03 2,140,000
1,605,000 Michigan State Strategic Fund Limited
Obligation Revenue, (Wade Trim Group),
Variable Rate, 5.20%, 12/1/16 ........ 1,605,000
2,000,000 New York State Housing Finance Agency
Revenue, (750 Sixth Avenue Project),
Series B, Variable Rate, 5.25%, 11/1/31 2,000,000
- --------------------------------------------------------------------------------
Total Taxable Variable Rate Demand Notes (cost $9,495,000) 9,495,000
- --------------------------------------------------------------------------------
Floating Rate Notes - 24.0%
2,000,000 American Honda Finance Corp.
5.3568%, 5/7/99+ ..................... 1,999,264
1,264,000 Barclays Bank PLC of New York
5.4856%, 6/2/99 ...................... 1,263,260
2,000,000 CIT Group, Inc.
4.93%, 11/2/99 ....................... 1,999,673
2,000,000 Citicorp
5.45%, 11/23/99 ...................... 2,003,508
2,000,000 Goldman Sachs Group, L.P.
5.2596%, 2/1/99+ ..................... 1,999,938
- --------------------------------------------------------------------------------
Total Floating Rate Notes (cost $9,265,643) ............... 9,265,643
- --------------------------------------------------------------------------------
Certificate of Deposit - 5.2%
$ 2,000,000 Credit Agricole Indosuez
5.75%, 4/16/99 (cost $2,003,332) ..... $ 2,003,332
- --------------------------------------------------------------------------------
Put Bond - 7.1%
2,765,000 Aurora, Colorado Centretch Metropolitan
District, Series B, Variable Rate, 5.65%,
12/1/99 (cost $2,765,000) ............ 2,765,000
- --------------------------------------------------------------------------------
Bank Notes - 5.2%
2,000,000 Morgan Guaranty Trust Co.
5.75%, 10/8/99 (cost $2,014,204) ..... 2,014,204
- --------------------------------------------------------------------------------
Repurchase Agreement - 12.7%
4,920,000 ABN AMRO Securities, Inc., 5.15%,
dated 12/31/98, maturing 1/4/99, to
be repurchased at $4,920,704,
collateralized by $4,823,474 in
Government National Mortgage
Association, 6.4945%, 2/20/28 with
a value of $5,018,401 (cost $4,920,000) 4,920,000
- --------------------------------------------------------------------------------
Total Investments (total cost $39,356,790) - 101.7% ....... 39,356,790
- --------------------------------------------------------------------------------
Liabilities, net of Cash, Receivables and Other Assets - (1.7%) (655,533)
- --------------------------------------------------------------------------------
Net Assets - 100% ......................................... $ 38,701,257
- --------------------------------------------------------------------------------
See Notes to Schedules of Investments.
Janus Aspen Series / December 31, 1998 43
<PAGE>
Statements of | Operations
<TABLE>
<CAPTION>
Janus Aspen Janus Aspen Janus Aspen Janus Aspen
For the fiscal year or period Janus Aspen Aggressive Capital International Worldwide Janus Aspen
ended December 31, 1998 Growth Growth Appreciation Growth Growth Balanced
(all numbers in thousands) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
<S> <C> <C> <C> <C> <C> <C>
Interest $ 3,648 $ 808 $ 226 $ 1,482 $ 10,446 $ 13,219
Dividends 3,904 1,531 81 2,535 22,161 4,408
Foreign tax withheld (124) (75) -- (308) (2,535) (55)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 7,428 2,264 307 3,709 30,072 17,572
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Advisory fees 5,145 4,160 181 1,548 14,485 4,021
Transfer agent fees and expenses 2 8 -- -- 24 4
Registration fees 59 8 9 56 61 6
System fees 16 20 11 14 20 21
Custodian fees 120 126 21 366 1,361 75
Insurance expense 10 8 -- 2 21 3
Audit fees 16 8 11 18 7 8
Distribution fees - Retirement Shares -- -- -- -- 4 9
Administrative fees - Retirement Shares -- -- -- -- 4 9
Other expenses 10 6 5 5 19 7
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 5,378 4,344 238 2,009 16,006 4,163
Expense and Fee Offsets (11) (21) (1) (3) (19) (19)
Net Expenses 5,367 4,323 237 2,006 15,987 4,144
Excess Expense Reimbursement -- -- -- -- -- --
Net Expenses After Reimbursement 5,367 4,323 237 2,006 15,987 4,144
Net Investment Income/(Loss) 2,061 (2,059) 70 1,703 14,085 13,428
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/
(Loss) on Investments:
Net realized gain/(loss) from
securities transactions 10,172 64,034 (3,801) (11,118) (32,014) (1,251)
Net realized gain/(loss) from
foreign currency transactions (441) (1,868) -- (3,112) (25,926) 262
Net realized gain/(loss) from
futures contracts -- -- -- (439) (2,812) --
Change in net unrealized appreciation/
(depreciation) of investments 246,903 133,925 19,907 43,585 569,104 174,276
- ------------------------------------------------------------------------------------------------------------------------------------
Net Gain/(Loss) on Investments 256,634 196,091 16,106 28,916 508,352 173,287
Net Increase in Net Assets
Resulting from Operations $ 258,695 $ 194,032 $ 16,176 $ 30,619 $ 522,437 $ 186,715
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Janus Aspen Janus Aspen Janus Aspen
For the fiscal year or period Equity Growth and Flexible Janus Aspen Janus Aspen
ended December 31, 1998 Income Income Income High-Yield Money Market
(all numbers in thousands) Portfolio Portfolio(1) Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
<S> <C> <C> <C> <C> <C>
Interest $ 22 $ 24 $ 6,103 $ 285 $ 1,759
Dividends 59 13 39 3 --
Foreign tax withheld (1) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 80 37 6,142 288 1,759
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Advisory fees 42 13 563 25 79
Transfer agent fees and expenses -- 2 -- -- --
Registration fees 9 3 2 2 1
System fees 14 7 15 12 9
Custodian fees 24 24 42 21 9
Insurance expense -- -- 1 -- --
Audit fees 12 8 6 7 7
Distribution fees - Retirement Shares -- -- -- -- --
Administrative fees - Retirement Shares -- -- -- -- --
Other expenses 3 -- 4 2 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 104 57 633 69 109
Expense and Fee Offsets -- -- (4) -- --
Net Expenses 104 57 629 69 109
Excess Expense Reimbursement (34) (33) -- (36) --
Net Expenses After Reimbursement 70 24 629 33 109
Net Investment Income/(Loss) 10 13 5,513 255 1,650
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/
(Loss) on Investments:
Net realized gain/(loss) from
securities transactions 61 (119) 924 (50) --
Net realized gain/(loss) from
foreign currency transactions 4 -- (9) (1) --
Net realized gain/(loss) from
futures contracts -- -- 49 -- --
Change in net unrealized appreciation/
(depreciation) of investments 2,297 1,005 680 (141) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Gain/(Loss) on Investments 2,362 886 1,644 (192) --
Net Increase in Net Assets
Resulting from Operations $ 2,372 $ 899 $ 7,157 $ 63 $ 1,650
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Period May 1, 1998, (inception) to December 31, 1998.
See Notes to Financial Statements.
44 and 45 Janus Aspen Series / December 31, 1998
<PAGE>
Statements of | Assets & Liabilities
<TABLE>
<CAPTION>
As of December 31, 1998 Janus Aspen Janus Aspen Janus Aspen Janus Aspen
(all numbers in thousands except Janus Aspen Aggressive Capital International Worldwide Janus Aspen
Retirement Shares outstanding and Growth Growth Appreciation Growth Growth Balanced
net asset value per share) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C>
Investments at cost $ 780,498 $ 514,912 $ 52,453 $ 256,678 $2,128,952 $ 698,506
Investments at value: $1,101,821 $ 762,128 $ 72,625 $ 313,205 $2,905,157 $ 893,121
Cash 169 174 30 118 534 176
Receivables:
Investments sold 1,887 28,291 -- 120 1,806 689
Portfolio shares sold 777 92 1,594 373 4,466 3,553
Dividends 263 114 4 241 1,743 556
Interest -- -- -- -- -- 4,534
Other assets 1 2 1 -- -- 1
Variation margin -- -- -- -- -- --
Forward currency contracts -- 377 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 1,104,918 791,178 74,254 314,057 2,913,706 902,630
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
Payables:
Investments purchased 34 10,029 -- 1,806 10,379 2,288
Portfolio shares repurchased 712 7,736 -- 20 2,426 70
Advisory fees 555 426 35 165 1,512 491
Accrued expenses 50 27 12 77 144 24
Forward currency contracts -- -- -- 862 3,033 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 1,351 18,218 47 2,930 17,494 2,873
Net Assets $1,103,567 $ 772,960 $ 74,207 $ 311,127 $2,896,212 $ 899,757
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets - Institutional Shares $1,103,549 $ 772,943 $ 74,187 $ 311,110 $2,890,375 $ 882,495
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 46,885 27,964 3,720 14,623 99,373 39,226
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 23.54 $ 27.64 $ 19.94 $ 21.27 $ 29.09 $ 22.50
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets - Retirement Shares $ 18 $ 17 $ 20 $ 17 $ 5,837 $ 17,262
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 754 620 1,000 808 200,866 764,143
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 23.45 $ 27.42 $ 19.86 $ 21.27 $ 29.06 $ 22.59
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1998 Janus Aspen Janus Aspen Janus Aspen
(all numbers in thousands except Equity Growth and Flexible Janus Aspen Janus Aspen
Retirement Shares outstanding and Income Income Income High-Yield Money Market
net asset value per share) Portfolio Portfolio(1) Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C>
Investments at cost $ 6,503 $ 5,591 $ 123,991 $ 3,041 $ 39,357
Investments at value: $ 8,880 $ 6,596 $ 126,397 $ 2,964 $ 39,357
Cash 5 30 539 9 1
Receivables:
Investments sold 9 100 515 -- --
Portfolio shares sold 164 61 459 10 7
Dividends 7 3 -- -- --
Interest 9 1 1,878 45 228
Other assets 9 7 -- -- --
Variation margin -- -- 3 -- --
Forward currency contracts -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 9,083 6,798 129,791 3,028 39,593
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
Payables:
Investments purchased 25 358 72 30 --
Portfolio shares repurchased -- -- 3 -- 886
Advisory fees 5 3 69 5 9
Accrued expenses 16 12 8 5 (3)
Forward currency contracts -- -- 45 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 46 373 197 40 892
Net Assets $ 9,037 $ 6,425 $ 129,594 $ 2,988 $ 38,701
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets - Institutional Shares $ 9,017 $ 6,413 $ 129,582 $ 2,977 $ 38,690
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 465 536 10,750 274 38,690
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 19.41 $ 11.96 $ 12.05 $ 10.85 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets - Retirement Shares $ 20 $ 12 $ 12 $ 11 $ 11
Shares Outstanding, $0.001 Par Value
(unlimited shares authorized) 1,013 1,000 989 1,039 10,802
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share $ 19.28 11.94 $ 12.05 $ 10.84 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Period May 1, 1998, (inception) to December 31, 1998.
See Notes to Financial Statements.
46 and 47 Janus Aspen Series / December 31, 1998
<PAGE>
Statements of | Changes in Net Assets
<TABLE>
<CAPTION>
Janus Aspen Janus Aspen Janus Aspen
Growth Aggressive Growth Capital Appreciation
For the fiscal year or period ended Portfolio Portfolio Portfolio
December 31 (all numbers in thousands) 1998 1997 1998 1997 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ 2,061 $ 4,350 $ (2,059) $ (436) $ 70 $ 25
Net realized gain/(loss)
from investment transactions 9,731 47,939 62,166 788 (3,801) (146)
Change in unrealized net appreciation
or depreciation of investments 246,903 39,125 133,925 56,805 19,907 265
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 258,695 91,414 194,032 57,157 16,176 144
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income* (1,969) (4,361) -- -- (40) (21)
Dividends (in excess of net investment income)* -- -- -- -- -- --
Net realized gain from investment transactions* (48,597) (9,976) -- -- -- --
Distributions (in excess of realized gains) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions (50,566) (14,337) -- -- (40) (21)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Institutional Shares 375,818 244,131 388,732 204,318 78,521 9,452
Retirement Shares 2 10 -- 10 -- 10
Reinvested dividends and distributions
Institutional Shares 50,565 14,337 -- -- 40 21
Retirement Shares 1 -- -- -- -- --
Shares repurchased
Institutional Shares (139,241) (53,051) (318,015) (136,967) (27,336) (2,760)
Retirement Shares -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from
Capital Share Transactions 287,145 205,427 70,717 67,361 51,225 6,723
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 495,274 282,504 264,749 124,518 67,361 6,846
Net Assets:
Beginning of period 608,293 325,789 508,211 383,693 6,846 --
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $1,103,567 $ 608,293 $ 772,960 $ 508,211 $ 74,207 $ 6,846
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in surplus)* $ 773,002 $ 485,858 $ 475,254 $ 404,537 $ 57,948 $ 6,723
Undistributed net investment income/(loss)* 210 117 (6) -- 34 4
Undistributed net realized gain/(loss)
from investments* 9,028 47,894 50,119 (9,994) (3,947) (146)
Unrealized appreciation/(depreciation)
of investments and foreign currency 321,327 74,424 247,593 113,668 20,172 265
$1,103,567 $ 608,293 $ 772,960 $ 508,211 $ 74,207 $ 6,846
Transactions in Portfolio Shares
- Institutional Shares
Shares sold 18,605 14,157 17,430 11,104 4,982 765
Reinvested dividends and distributions 2,441 829 -- -- 2 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 21,046 14,986 17,430 11,104 4,984 767
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased (7,082) (3,068) (14,193) (7,417) (1,805) (226)
Net Increase/(Decrease) in Portfolio Shares 13,964 11,918 3,237 3,687 3,179 541
Shares Outstanding Beginning of Period 32,921 21,003 24,727 21,040 541 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 46,885 32,921 27,964 24,727 3,720 541
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Portfolio Shares
- Retirement Shares(3)
Shares sold 79 618 -- 620 -- 1,000
Reinvested dividends and distributions 40 17 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 119 635 -- 620 -- 1,000
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased -- -- -- -- -- --
Net Increase/(Decrease) in Portfolio Shares 119 635 -- 620 -- 1,000
Shares Outstanding Beginning of Period 635 -- 620 -- 1,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 754 635 620 620 1,000 1,000
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases and Sales of Investment Securities:
(excluding short-term securities)
Purchases of securities $ 747,926 $ 713,049 $ 795,996 $ 583,004 $ 65,706 $ 6,590
Proceeds from sales of securities 531,213 506,228 747,773 509,947 20,828 1,165
Purchases of long-term
U.S. government obligations -- -- -- -- -- --
Proceeds from sales of long-term
U.S. government obligations -- -- -- -- -- --
<CAPTION>
Janus Aspen Janus Aspen Janus Aspen
International Growth Worldwide Growth Balanced
For the fiscal year or period ended Portfolio Portfolio Portfolio
December 31 (all numbers in thousands) 1998 1997 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) $ 1,703 $ 669 $ 14,085 $ 7,744 $ 13,428 $ 5,061
Net realized gain/(loss)
from investment transactions (14,669) (148) (60,752) 46,834 (989) 13,320
Change in unrealized net appreciation
or depreciation of investments 43,585 10,109 569,104 135,768 174,276 15,763
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 30,619 10,630 522,437 190,346 186,715 34,144
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income* (1,573) (645) (15,228) (9,330) (13,267) (5,104)
Dividends (in excess of net investment income)* -- -- -- (1,332) -- --
Net realized gain from investment transactions* -- (59) -- (8,190) (12,240) (1,791)
Distributions (in excess of realized gains) (3,097) (161) (69,710) -- (987) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions (4,670) (865) (84,938) (18,852) (26,494) (6,895)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Institutional Shares 265,075 185,562 1,208,930 897,983 390,880 254,907
Retirement Shares 4 10 5,082 402 15,037 10
Reinvested dividends and distributions
Institutional Shares 4,670 864 84,904 18,852 26,417 7,744
Retirement Shares -- -- 34 -- 77 --
Shares repurchased
Institutional Shares (145,673) (62,291) (417,023) (94,383) (54,219) (12,969)
Retirement Shares -- -- (165) -- (1,077) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from
Capital Share Transactions 124,076 124,145 881,762 822,854 377,115 249,692
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 150,025 133,910 1,319,261 994,348 537,336 276,941
Net Assets:
Beginning of period 161,102 27,192 1,576,951 582,603 362,421 85,480
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 311,127 $ 161,102 $2,896,212 $1,576,951 $ 899,757 $ 362,421
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in surplus)* $ 273,222 $ 149,136 $2,209,339 $1,327,595 $ 705,836 $ 328,723
Undistributed net investment income/(loss)* 114 80 400 1,556 527 129
Undistributed net realized gain/(loss)
from investments* (17,886) (206) (86,790) 43,642 (1,222) 13,228
Unrealized appreciation/(depreciation)
of investments and foreign currency 55,677 12,092 773,263 204,158 194,616 20,341
$ 311,127 $ 161,102 $2,896,212 $1,576,951 $ 899,757 $ 362,421
Transactions in Portfolio Shares
- Institutional Shares
Shares sold 12,915 10,297 44,980 40,742 20,067 15,268
Reinvested dividends and distributions 212 46 2,966 819 1,279 470
- ------------------------------------------------------------------------------------------------------------------------------------
Total 13,127 10,343 47,946 41,561 21,346 15,738
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased (7,220) (3,357) (15,979) (4,123) (2,871) (776)
Net Increase/(Decrease) in Portfolio Shares 5,907 6,986 31,967 37,438 18,475 14,962
Shares Outstanding Beginning of Period 8,716 1,730 67,406 29,968 20,751 5,789
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 14,623 8,716 99,373 67,406 39,226 20,751
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Portfolio Shares
- Retirement Shares(3)
Shares sold 201 595 188,749 17,245 815,403 650
Reinvested dividends and distributions 8 4 1,188 6 3,415 19
- ------------------------------------------------------------------------------------------------------------------------------------
Total 209 599 189,937 17,251 818,818 669
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased -- -- (6,322) -- (55,344) --
Net Increase/(Decrease) in Portfolio Shares 209 599 183,615 17,251 763,474 669
Shares Outstanding Beginning of Period 599 -- 17,251 -- 669 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 808 599 200,866 17,251 764,143 669
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases and Sales of Investment Securities:
(excluding short-term securities)
Purchases of securities $ 295,506 $ 193,061 $2,082,135 $1,715,083 $ 608,627 $ 377,245
Proceeds from sales of securities 194,200 73,634 1,556,004 862,382 284,350 221,317
Purchases of long-term
U.S. government obligations -- -- -- -- 76,402 70,831
Proceeds from sales of long-term
U.S. government obligations -- -- -- -- 87,965 13,669
<CAPTION>
Janus Aspen Janus Aspen Janus Aspen
Equity Income Growth and Income Flexible Income
For the fiscal year or period ended Portfolio Portfolio Portfolio
December 31 (all numbers in thousands) 1998 1997(1) 1998(2) 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C> <C> <C>
Net investment income/(loss) $ 10 $ 3 $ 13 $ 5,513 $ 2,522
Net realized gain/(loss)
from investment transactions 65 71 (119) 964 683
Change in unrealized net appreciation
or depreciation of investments 2,297 80 1005 680 1,050
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 2,372 154 899 7,157 4,255
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income* (9) (2) (11) (5,587) (2,372)
Dividends (in excess of net investment income)* -- -- -- -- --
Net realized gain from investment transactions* (74) -- -- (704) (322)
Distributions (in excess of realized gains) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions (83) (2) (11) (6,291) (2,694)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Institutional Shares 6,139 3,884 6,714 84,767 35,431
Retirement Shares -- 10 10 -- 10
Reinvested dividends and distributions
Institutional Shares 83 2 11 6,290 2,693
Retirement Shares -- -- -- 1 1
Shares repurchased
Institutional Shares (2,534) (988) (1,198) (16,439) (10,902)
Retirement Shares -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from
Capital Share Transactions 3,688 2,908 5,537 74,619 27,233
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 5,977 3,060 6,425 75,485 28,794
Net Assets:
Beginning of period 3,060 -- -- 54,109 25,315
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 9,037 $ 3,060 $ 6,425 $ 129,594 $ 54,109
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in surplus)* $ 6,596 $ 2,908 $ 5,537 $ 126,149 $ 51,530
Undistributed net investment income/(loss)* 5 1 2 169 208
Undistributed net realized gain/(loss)
from investments* 59 71 (119) 897 672
Unrealized appreciation/(depreciation)
of investments and foreign currency 2,377 80 1,005 2,379 1,699
$ 9,037 $ 3,060 $ 6,425 $ 129,594 $ 54,109
Transactions in Portfolio Shares
- Institutional Shares
Shares sold 399 301 655 6,992 3,048
Reinvested dividends and distributions 5 -- 1 525 234
- ------------------------------------------------------------------------------------------------------------------------------------
Total 404 301 656 7,517 3,282
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased (165) (75) (120) (1,360) (941)
Net Increase/(Decrease) in Portfolio Shares 239 226 536 6,157 2,341
Shares Outstanding Beginning of Period 226 -- -- 4,593 2,252
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 465 226 536 10,750 4,593
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Portfolio Shares
- Retirement Shares(3)
Shares sold -- 1,000 1,000 -- 876
Reinvested dividends and distributions 13 -- -- 57 56
- ------------------------------------------------------------------------------------------------------------------------------------
Total 13 1,000 1,000 57 932
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased -- -- -- -- --
Net Increase/(Decrease) in Portfolio Shares 13 1,000 1,000 57 932
Shares Outstanding Beginning of Period 1,000 -- -- 932 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 1,013 1,000 1,000 989 932
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases and Sales of Investment Securities:
(excluding short-term securities)
Purchases of securities $ 7,825 $ 3,560 $ 5,637 $ 140,772 $ 46,074
Proceeds from sales of securities 4,252 997 1,126 93,382 31,006
Purchases of long-term
U.S. government obligations -- -- -- 37,749 15,463
Proceeds from sales of long-term
U.S. government obligations -- -- -- 19,499 7,755
</TABLE>
(1) Period May 1, 1997, (inception) to December 31, 1997.
(2) Period May 1, 1998, (inception) to December 31, 1998.
(3) Transactions in Portfolio Shares - Retirement Shares numbers are not in
thousands.
*See Note 3 in Notes to Financial Statements.
See Notes to Financial Statements.
48 and 49 Janus Aspen Series / December 31, 1998
<PAGE>
Statements of | Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Janus Aspen Janus Aspen
High-Yield Money Market
For the fiscal year or period ended Portfolio Portfolio
December 31 (all numbers in thousands) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
<S> <C> <C> <C> <C>
Net investment income/(loss) $ 255 $ 125 $ 1,650 $ 461
Net realized gain/(loss) from
investment transactions (51) 67 -- --
Change in unrealized net appreciation
or depreciation of investments (141) 39 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 63 231 1,650 461
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders:
Net investment income* (257) (117) (1,650) (461)
Dividends (in excess of net investment income)* -- -- -- --
Net realized gain from investment transactions* (15) (6) -- --
Distributions (in excess of realized gains) (51) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Decrease from Dividends and Distributions (323) (123) (1,650) (461)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares sold
Institutional Shares 4,244 3,976 132,432 78,614
Retirement Shares -- 10 -- 10
Reinvested dividends and distributions
Institutional Shares 322 122 1,650 461
Retirement Shares 1 1 -- --
Shares repurchased
Institutional Shares (4,244) (2,075) (110,765) (69,807)
Retirement Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) from
Capital Share Transactions 323 2,034 23,317 9,278
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets 63 2,142 23,317 9,278
Net Assets:
Beginning of period 2,925 783 15,384 6,106
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 2,988 $ 2,925 $ 38,701 $ 15,384
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Consist of:
Capital (par value and paid-in surplus)* $ 3,106 $ 2,783 $ 38,701 $ 15,384
Undistributed net investment income/(loss)* 8 12 -- --
Undistributed net realized gain/(loss)
from investments* (50) 66 -- --
Unrealized appreciation/(depreciation) of
investments and foreign currency (76) 64 -- --
$ 2,988 $ 2,925 $ 38,701 $ 15,384
Transactions in Portfolio Shares
- Institutional Shares
Shares sold 356 343 132,432 78,614
Reinvested dividends and distributions 28 11 1,650 461
- ------------------------------------------------------------------------------------------------------------------------------------
Total 384 354 134,082 79,075
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased (357) (179) (110,766) (69,807)
Net Increase/(Decrease) in Portfolio Shares 27 175 23,316 9,268
Shares Outstanding Beginning of Period 247 72 15,374 6,106
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 274 247 38,690 15,374
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in Portfolio Shares
- Retirement Shares(1)
Shares sold -- 893 -- 10,000
Reinvested dividends and distributions 89 57 496 306
- ------------------------------------------------------------------------------------------------------------------------------------
Total 89 950 496 10,306
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Repurchased -- -- -- --
Net Increase/(Decrease) in Portfolio Shares 89 950 496 10,306
Shares Outstanding Beginning of Period 950 -- 10,306 --
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding End of Period 1,039 950 10,802 10,306
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases and Sales of Investment Securities:
(excluding short-term securities)
Purchases of securities $ 8,323 $ 6,515 -- --
Proceeds from sales of securities 9,612 4,066 -- --
Purchases of long-term
U.S. government obligations 640 24 -- --
Proceeds from sales of long-term
U.S. government obligations 536 25 -- --
</TABLE>
(1) Transactions in Portfolio Shares - Retirement Shares numbers are not in
thousands.
*See Note 3 in Notes to Financial Statements.
See Notes to Financial Statements.
50 Janus Aspen Series / December 31, 1998
<PAGE>
Financial | Highlights - Institutional Shares
<TABLE>
<CAPTION>
For a share outstanding throughout, Janus Aspen Growth Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.48 $ 15.51 $ 13.45 $ 10.57 $ 10.32
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .05 .15 .17 .28 .09
Net gains/(losses) on securities
(both realized and unrealized) 6.36 3.34 2.29 2.90 .20
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.41 3.49 2.46 3.18 .29
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.05) (.15) (.17) (.30) (.04)
Dividends (in excess of net investment income) -- -- -- -- --
Distributions (from capital gains) (1.30) (.37) (.23) -- --
Distributions (in excess of realized gains) -- -- -- -- --
Tax return of capital -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.35) (.52) (.40) (.30) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.54 $ 18.48 $ 15.51 $ 13.45 $ 10.57
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 35.66% 22.75% 18.45% 30.17% 2.76%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $1,103,549 $ 608,281 $ 325,789 $ 126,911 $ 43,549
Average Net Assets for the Period (in thousands) $ 789,454 $ 477,914 $ 216,125 $ 77,344 $ 26,464
Ratio of Gross Expenses to Average Net Assets**(1) 0.68% 0.70% 0.69% 0.78% N/A
Ratio of Net Expenses to Average Net Assets**(1) 0.68% 0.69% 0.69% 0.76% 0.88%
Ratio of Net Investment Income to Average Net Assets** 0.26% 0.91% 1.39% 1.24% 1.45%
Portfolio Turnover Rate** 73% 122% 87% 185% 169%
<CAPTION>
For a share outstanding throughout Janus Aspen Aggressive Growth Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 20.55 $ 18.24 $ 17.08 $ 13.62 $ 11.80
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) -- -- -- .24 .11
Net gains/(losses) on securities
(both realized and unrealized) 7.09 2.31 1.36 3.47 1.82
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 7.09 2.31 1.36 3.71 1.93
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) -- -- -- (.25) (.11)
Dividends (in excess of net investment income) -- -- -- -- --
Distributions (from capital gains) -- -- (.19) -- --
Distributions (in excess of realized gains) -- -- -- -- --
Tax return of capital -- -- (.01) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- -- (.20) (.25) (.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 27.64 $ 20.55 $ 18.24 $ 17.08 $ 13.62
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 34.26% 12.66% 7.95% 27.48% 16.33%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 772,943 $ 508,198 $ 383,693 $ 185,911 $ 41,289
Average Net Assets for the Period (in thousands) $ 576,444 $ 418,464 $ 290,629 $ 107,582 $ 14,152
Ratio of Gross Expenses to Average Net Assets**(1) 0.75% 0.76% 0.76% 0.86% N/A
Ratio of Net Expenses to Average Net Assets**(1) 0.75% 0.76% 0.76% 0.84% 1.05%
Ratio of Net Investment Income to Average Net Assets** (0.36%) (0.10%) (0.27%) 0.58% 2.18%
Portfolio Turnover Rate** 132% 130% 88% 155% 259%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) See footnote #5 in Notes to Financial Statements.
N/A - Disclosure not required for prior periods.
See Notes to Financial Statements.
Janus Aspen Series / December 31, 1998 51
<PAGE>
Financial | Highlights - Institutional Shares (continued)
<TABLE>
<CAPTION>
For a share outstanding throughout Janus Aspen Capital Appreciation Portfolio
each fiscal year or period ended December 31 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 12.62 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .01 .05
Net gains/(losses) on securities
(both realized and unrealized) 7.32 2.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 7.33 2.66
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.01) (.04)
Dividends (in excess of net investment income) -- --
Distributions (from capital gains) -- --
Distributions (in excess of realized gains) -- --
Tax return of capital -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.01) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 19.94 $ 12.62
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 58.11% 26.60%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 74,187 $ 6,833
Average Net Assets for the Period (in thousands) $ 25,964 $ 2,632
Ratio of Gross Expenses to Average Net Assets**(3) 0.92% 1.26%
Ratio of Net Expenses to Average Net Assets**(3) 0.91% 1.25%
Ratio of Net Investment Income to Average Net Assets** 0.27% 1.43%
Portfolio Turnover Rate** 91% 101%
<CAPTION>
For a share outstanding throughout Janus Aspen International Growth Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.48 $ 15.72 $ 11.95 $ 9.72 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .13 .11 .05 .09 (.09)
Net gains/(losses) on securities
(both realized and unrealized) 3.07 2.80 4.06 2.16 (.19)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.20 2.91 4.11 2.25 (.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.14) (.11) (.11) (.02) --
Dividends (in excess of net investment income) -- -- -- -- --
Distributions (from capital gains) -- (.01) (.23) -- --
Distributions (in excess of realized gains) (.27) (.03) -- -- --
Tax return of capital -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.41) (.15) (.34) (.02) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 21.27 $ 18.48 $ 15.72 $ 11.95 $ 9.72
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 17.23% 18.51% 34.71% 23.15% (2.80%)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 311,110 $ 161,091 $ 27,192 $ 1,608 $ 1,353
Average Net Assets for the Period (in thousands) $ 234,421 $ 96,164 $ 7,437 $ 1,792 $ 1,421
Ratio of Gross Expenses to Average Net Assets**(3) 0.86% 0.96% 1.26% 2.69% N/A
Ratio of Net Expenses to Average Net Assets**(3) 0.86% 0.96% 1.25% 2.50% 2.50%
Ratio of Net Investment Income to Average Net Assets** 0.73% 0.70% 0.62% (.80%) (1.30%)
Portfolio Turnover Rate** 93% 86% 65% 211% 275%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1997, (inception) to December 31, 1997
(2) Period May 2, 1994 (inception) to December 31, 1994
(3) See footnote #5 in Notes to Financial Statements.
N/A - Disclosure not required for prior periods.
See Notes to Financial Statements.
52 Janus Aspen Series / December 31, 1998
<PAGE>
<TABLE>
<CAPTION>
For a share outstanding throughout Janus Aspen Worldwide Growth Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 23.39 $ 19.44 $ 15.31 $ 12.07 $ 11.89
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .16 .16 .16 .11 .04
Net gains/(losses) on securities
(both realized and unrealized) 6.59 4.14 4.27 3.19 .14
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.75 4.30 4.43 3.30 .18
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.18) (.17) (.17) (.06) --
Dividends (in excess of net investment income) -- (.02) -- -- --
Distributions (from capital gains) -- (.16) (.13) -- --
Distributions (in excess of realized gains) (.87) -- -- -- --
Tax return of capital -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.05) (.35) (.30) (.06) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 29.09 $ 23.39 $ 19.44 $ 15.31 $ 12.07
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 28.92% 22.15% 29.04% 27.37% 1.53%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $2,890,375 $1,576,548 $ 582,603 $ 108,563 $ 37,728
Average Net Assets for the Period (in thousands) $2,217,695 $1,148,951 $ 304,111 $ 59,440 $ 22,896
Ratio of Gross Expenses to Average Net Assets**(1) 0.72% 0.74% 0.80% 0.90% N/A
Ratio of Net Expenses to Average Net Assets**(1) 0.72% 0.74% 0.80% 0.87% 1.18%
Ratio of Net Investment Income to Average Net Assets** 0.64% 0.67% 0.83% 0.95% 0.50%
Portfolio Turnover Rate** 77% 80% 62% 113% 217%
<CAPTION>
For a share outstanding throughout Janus Aspen Balanced Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.47 $ 14.77 $ 13.03 $ 10.63 $ 10.64
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .39 .34 .32 .17 .15
Net gains/(losses) on securities
(both realized and unrealized) 5.51 2.89 1.81 2.45 (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 5.90 3.23 2.13 2.62 .09
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.38) (.35) (.30) (.22) (.10)
Dividends (in excess of net investment income) -- -- -- -- --
Distributions (from capital gains) (.45) (.18) (.09) -- --
Distributions (in excess of realized gains) (.04) -- -- -- --
Tax return of capital -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.87) (0.53) (.39) (.22) (.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 22.50 $ 17.47 $ 14.77 $ 13.03 $ 10.63
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 34.28% 22.10% 16.18% 24.79% 0.84%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 882,495 $ 362,409 $ 85,480 $ 14,021 $ 3,153
Average Net Assets for the Period (in thousands) $ 555,002 $ 176,432 $ 43,414 $ 5,739 $ 2,336
Ratio of Gross Expenses to Average Net Assets**(1) 0.74% 0.83% 0.94% 1.37% N/A
Ratio of Net Expenses to Average Net Assets**(1) 0.74% 0.82% 0.92% 1.30% 1.57%
Ratio of Net Investment Income to Average Net Assets** 2.41% 2.87% 2.92% 2.41% 1.90%
Portfolio Turnover Rate** 70% 139% 103% 149% 158%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) See footnote #5 in Notes to Financial Statements.
N/A - Disclosure not required for prior periods.
Janus Aspen Series / December 31, 1998 53
<PAGE>
Financial | Highlights - Institutional Shares (continued)
<TABLE>
<CAPTION>
For a share outstanding throughout Janus Aspen Equity Income Portfolio
each fiscal year or period ended December 31 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 13.46 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .02 .01
Net gains/(losses) on securities
(both realized and unrealized) 6.16 3.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.18 3.47
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.02) (.01)
Dividends (in excess of net investment income) -- --
Distributions (from capital gains) (.21) --
Distributions (in excess of realized gains) -- --
Tax return of capital -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.23) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 19.41 $ 13.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 46.24% 34.70%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 9,017 $ 3,047
Average Net Assets for the Period (in thousands) $ 5,629 $ 1,101
Ratio of Gross Expenses to Average Net Assets**(2) 1.25% 1.25%
Ratio of Net Expenses to Average Net Assets**(2) 1.25% 1.25%
Ratio of Net Investment Income to Average Net Assets** 0.17% 0.35%
Portfolio Turnover Rate** 79% 128%
<CAPTION>
Janus Aspen
For a share outstanding throughout Growth and Income Portfolio
each fiscal year or period ended December 31 1998(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .02
Net gains/(losses) on securities
(both realized and unrealized) 1.96
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.98
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.02)
Dividends (in excess of net investment income) --
Distributions (from capital gains) --
Distributions (in excess of realized gains) --
Tax return of capital --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.96
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 19.80%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 6,413
Average Net Assets for the Period (in thousands) $ 2,883
Ratio of Gross Expenses to Average Net Assets**(2) 1.25%
Ratio of Net Expenses to Average Net Assets**(2) 1.25%
Ratio of Net Investment Income to Average Net Assets** 0.66%
Portfolio Turnover Rate** 62%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1997, (inception) to December 31, 1997.
(2) See footnote #5 in Notes to Financial Statements.
(3) Period May 1, 1998, (inception) to December 31, 1998.
See Notes to Financial Statements.
54 Janus Aspen Series / December 31, 1998
<PAGE>
<TABLE>
<CAPTION>
For a share outstanding throughout Janus Aspen Flexible Income Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.78 $ 11.24 $ 11.11 $ 9.48 $ 9.97
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .64 .67 .74 .53 .47
Net gains/(losses) on securities
(both realized and unrealized) .41 .62 .24 1.70 (.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.05 1.29 .98 2.23 (.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.67) (.64) (.72) (.60) (.40)
Dividends (in excess of net investment income) -- -- -- -- --
Distributions (from capital gains) (.11) (.11) (.13) -- --
Distributions (in excess of realized gains) -- -- -- -- --
Tax return of capital -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.78) (.75) (.85) (.60) (.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.05 $ 11.78 $ 11.24 $ 11.11 $ 9.48
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 9.11% 11.76% 9.19% 23.86% (0.91%)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 129,582 $ 54,098 $ 25,315 $ 10,831 $ 1,924
Average Net Assets for the Period (in thousands) $ 86,627 $ 36,547 $ 17,889 $ 5,556 $ 1,636
Ratio of Gross Expenses to Average Net Assets**(1) 0.73% 0.75% 0.84% 1.07% N/A
Ratio of Net Expenses to Average Net Assets**(1) 0.73% 0.75% 0.83% 1.00% 1.00%
Ratio of Net Investment Income to Average Net Assets** 6.36% 6.90% 7.31% 7.46% 5.49%
Portfolio Turnover Rate** 145% 119% 250% 236% 234%
<CAPTION>
For a share outstanding throughout Janus Aspen High-Yield Portfolio
each fiscal year or period ended December 31 1998 1997 1996(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.78 $ 10.83 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .87 .70 .43
Net gains/(losses) on securities
(both realized and unrealized) (.70) .99 .80
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .17 1.69 1.23
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.89) (.68) (.40)
Dividends (in excess of net investment income) -- -- --
Distributions (from capital gains) (.05) (.06) --
Distributions (in excess of realized gains) (.16) -- --
Tax return of capital -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.10) (.74) (.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.85 $ 11.78 $ 10.83
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 1.26% 15.98% 12.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 2,977 $ 2,914 $ 783
Average Net Assets for the Period (in thousands) $ 3,281 $ 1,565 $ 459
Ratio of Gross Expenses to Average Net Assets**(1) 1.00% 1.00% 1.01%
Ratio of Net Expenses to Average Net Assets**(1) 1.00% 1.00% 1.00%
Ratio of Net Investment Income to Average Net Assets** 7.76% 7.98% 5.74%
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) See footnote #5 in Notes to Financial Statements.
(2) Period May 1, 1996, (inception) to December 31, 1996.
N/A - Disclosure not required for prior periods.
Janus Aspen Series / December 31, 1998 55
<PAGE>
Financial | Highlights - Institutional Shares (continued)
<TABLE>
<CAPTION>
For a share outstanding throughout Janus Aspen Money Market Portfolio
each fiscal year or period ended December 31 1998 1997 1996 1995(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .05 .05 .05 .04
Net gains/(losses) on securities
(both realized and unrealized) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .05 .05 .05 .04
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.05) (.05) (.05) (.04)
Dividends (in excess of net investment income) -- -- -- --
Distributions (from capital gains) -- -- -- --
Distributions (in excess of realized gains) -- -- -- --
Tax return of capital -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.05) (.05) (.05) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 5.36% 5.17% 5.05% 3.63%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 38,690 $ 15,374 $ 6,106 $ 1,735
Average Net Assets for the Period (in thousands) $ 31,665 $ 8,926 $ 3,715 $ 1,543
Ratio of Gross Expenses to Average Net Assets**(2) 0.34% 0.50% 0.50% 0.50%
Ratio of Net Expenses to Average Net Assets**(2) 0.34% 0.50% 0.50% 0.50%
Ratio of Net Investment Income to Average Net Assets** 5.21% 5.17% 4.93% 5.30%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1995, (inception) to December 31, 1995.
(2) See footnote #5 in Notes to Financial Statements.
N/A - Disclosure not required for prior periods.
See Notes to Financial Statements.
56 Janus Aspen Series / December 31, 1998
<PAGE>
Financial | Highlights - Retirement Shares
<TABLE>
<CAPTION>
Janus Aspen
For a share outstanding throughout Janus Aspen Growth Portfolio Aggressive Growth Portfolio
each fiscal year or period ended December 31 1998 1997(1) 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.46 $ 16.18 $ 20.49 $ 16.12
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.03) .04 (.12) (.06)
Net gains/(losses) on securities
(both realized and unrealized) 6.32 2.71 7.05 4.43
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.29 2.75 6.93 4.37
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) -- (.10) -- --
Distributions (from capital gains) (1.30) (.37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.30) (.47) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.45 $ 18.46 $ 27.42 $ 20.49
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 34.99% 17.22% 33.58% 27.11%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 18 $ 12 $ 17 $ 13
Average Net Assets for the Period (in thousands) $ 13 $ 11 $ 14 $ 11
Ratio of Gross Expenses to Average Net Assets**(2) 1.18% 1.20% 1.26% 1.32%
Ratio of Net Expenses to Average Net Assets**(2) 1.18% 1.20% 1.26% 1.32%
Ratio of Net Investment Income to Average Net Assets** (0.23%) 0.29% (0.86%) (0.62%)
Portfolio Turnover Rate** 73% 122% 132% 130%
<CAPTION>
Janus Aspen Capital Janus Aspen International
For a share outstanding throughout Appreciation Portfolio Growth Portfolio
each fiscal year or period ended December 31 1998 1997(1) 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.62 $ 10.00 $ 18.44 $ 16.80
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.04) .12 .05 .04
Net gains/(losses) on securities
(both realized and unrealized) 7.28 2.50 3.07 1.73
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 7.24 2.62 3.12 1.77
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) -- -- (.01) (.09)
Distributions (from capital gains) -- -- (.28) (.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- -- (.29) (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 19.86 $ 12.62 $ 21.27 $ 18.44
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 57.37% 26.20% 16.86% 10.53%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 20 $ 13 $ 17 $ 11
Average Net Assets for the Period (in thousands) $ 15 $ 12 $ 13 $ 11
Ratio of Gross Expenses to Average Net Assets**(2) 1.44% 1.73% 1.35% 1.45%
Ratio of Net Expenses to Average Net Assets**(2) 1.44% 1.73% 1.35% 1.45%
Ratio of Net Investment Income to Average Net Assets** (0.25%) 1.55% 0.26% 0.26%
Portfolio Turnover Rate** 91% 101% 93% 86%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1997, (inception) to December 31, 1997.
(2) See footnote #5 in Notes to Financial Statements.
See Notes to Financial Statements.
Janus Aspen Series / December 31, 1998 57
<PAGE>
Financial | Highlights - Retirement Shares (continued)
<TABLE>
<CAPTION>
Janus Aspen Worldwide Janus Aspen
For a share outstanding throughout Growth Portfolio Balanced Portfolio
each fiscal year or period ended December 31 1998 1997(1) 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 23.36 $ 20.72 $ 17.47 $ 15.38
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .02 .14 .21 .27
Net gains/(losses) on securities
(both realized and unrealized) 6.57 2.80 5.58 2.30
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.59 2.94 5.79 2.57
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.02) (.14) (.18) (.30)
Distributions (from capital gains) (.87) (.16) (.49) (.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.89) (.30) (.67) (.48)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 29.06 $ 23.36 $ 22.59 $ 17.47
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 28.25% 14.22% 33.59% 16.92%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 5,837 $ 403 $ 17,262 $ 12
Average Net Assets for the Period (in thousands) $ 1,742 $ 11 $ 3,650 $ 11
Ratio of Gross Expenses to Average Net Assets**(2) 1.22% 1.26% 1.24% 1.32%
Ratio of Net Expenses to Average Net Assets**(2) 1.22% 1.26% 1.24% 1.32%
Ratio of Net Investment Income to Average Net Assets** (0.02%) 0.16% 2.04% 2.38%
Portfolio Turnover Rate** 77% 80% 70% 139%
<CAPTION>
Janus Aspen
Janus Aspen Equity Income Growth and Income
For a share outstanding throughout Portfolio Portfolio
each fiscal year or period ended December 31 1998 1997(1) 1998(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.42 $ 10.00 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (.05) .01 .01
Net gains/(losses) on securities
(both realized and unrealized) 6.12 3.41 1.93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.07 3.42 1.94
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gains) (.21) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.21) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 19.28 $ 13.42 $ 11.94
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 45.55% 34.20% 19.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 20 $ 13 $ 12
Average Net Assets for the Period (in thousands) $ 16 $ 12 $ 10
Ratio of Gross Expenses to Average Net Assets**(2) 1.75% 1.74% 1.72%
Ratio of Net Expenses to Average Net Assets**(2) 1.75% 1.74% 1.72%
Ratio of Net Investment Income to Average Net Assets** (0.33)% 0.07% 0.21%
Portfolio Turnover Rate** 79% 128% 62%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1997, (inception) to December 31, 1997.
(2) See footnote #5 in Notes to Financial Statements.
(3) Period May 1, 1998, (inception) to December 31, 1998
See Notes to Financial Statements
58 Janus Aspen Series / December 31, 1998
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Flexible Income Janus Aspen
For a share outstanding throughout Portfolio High-Yield Portfolio
each fiscal year or period ended December 31 1998 1997(1) 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.77 $ 11.41 $ 11.78 $ 11.19
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .73 .50 .87 .59
Net gains/(losses) on securities
(both realized and unrealized) .27 .58 (.77) .71
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.00 1.08 .10 1.30
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.61) (.61) (.83) (.65)
Distributions (from capital gains) (.11) (.11) (.21) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.72) (.72) (1.04) (.71)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.05 $ 11.77 $ 10.84 $ 11.78
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 8.58% 9.73% 0.67% 11.96%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 12 $ 11 $ 11 $ 11
Average Net Assets for the Period (in thousands) $ 11 $ 10 $ 12 $ 11
Ratio of Gross Expenses to Average Net Assets**(2) 1.24% 1.23% 1.50% 1.50%
Ratio of Net Expenses to Average Net Assets**(2) 1.23% 1.23% 1.50% 1.50%
Ratio of Net Investment Income to Average Net Assets** 5.92% 6.39% 7.33% 7.42%
Portfolio Turnover Rate** 145% 119% 301% 299%
<CAPTION>
Janus Aspen Money
For a share outstanding throughout Market Portfolio
each fiscal year or period ended December 31 1998 1997(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) .05 .03
Net gains/(losses) on securities
(both realized and unrealized) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .05 .03
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) (.05) (.03)
Distributions (from capital gains) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (.05) (.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 4.85% 3.13%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $ 11 $ 10
Average Net Assets for the Period (in thousands) $ 10 $ 10
Ratio of Gross Expenses to Average Net Assets**(2) 0.84% 1.00%
Ratio of Net Expenses to Average Net Assets**(2) 0.84% 1.00%
Ratio of Net Investment Income to Average Net Assets** 4.74% 4.66%
</TABLE>
*Total return not annualized for periods of less than one full year.
**Annualized for periods of less than one full year.
(1) Period May 1, 1997, (inception) to December 31, 1997.
(2) See footnote #5 in Notes to Financial Statements.
N/A - Disclosure not required for prior periods.
Janus Aspen Series / December 31, 1998 59
<PAGE>
Notes to | Schedules of Investments
ADR - American Depository Receipt
CAD - Canadian Dollar
DEM - German Deutschemark
GDR - Global Depository Receipt
* Non-income-producing security
** A portion of this security has been segregated by the custodian to cover
margin or segregation requirements on open futures contracts and/or forward
currency contracts.
+ Securities are registered pursuant to Rule 144A and may be deemed to be
restricted for resale.
1) Variable Rate Notes. The interest rate, which is based on specific, or an
index of, market interest rates, is subject to change. Rates in the security
description are as of December 31, 1998.
2) Money market funds may hold securities with stated maturities of greater than
397 days when those securities have features that allow a fund to "put" back
the security to the issuer or to a third party within 397 days of
acquisition. The maturity dates shown in the security descriptions are the
stated maturity dates.
3) Repurchase Agreements held by a 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. In the
event of default on the obligation to repurchase, the Portfolio has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
60 Janus Aspen Series / December 31, 1998
<PAGE>
Notes to | Financial Statements
The following section describes the organization and significant accounting
policies of the Portfolios and provides more detailed information about the
schedules and tables that appear throughout this report. In addition, the Notes
explain how the Portfolios operate and the methods used in preparing and
presenting this report.
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
11 Portfolios or series of shares with differing investment objectives and
policies. Eight Portfolios invest primarily in equity securities: Janus Aspen
Growth Portfolio, Janus Aspen Aggressive Growth Portfolio, Janus Aspen
Capital Appreciation Portfolio, Janus Aspen International Growth Portfolio,
Janus Aspen Worldwide Growth Portfolio, Janus Aspen Balanced Portfolio, Janus
Aspen Equity Income Portfolio, and Janus Aspen Growth and Income Portfolio.
Two Portfolios invest primarily in income-producing securities: Janus Aspen
Flexible Income Portfolio and Janus Aspen High-Yield Portfolio. Janus Aspen
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 and Capital Appreciation Portfolio, which are
nondiversified.
Institutional 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, 1997, the Trust
issued a new class of shares, the Retirement Shares. Retirement Shares of the
Trust are issued and redeemed only in connection with certain qualified
retirement plans. Janus Capital invested $10,000 of initial seed capital in
the Retirement Shares of each Portfolio.
Effective May 1, 1998, the Trust issued one new series of shares, the Janus
Aspen Growth and Income Portfolio. Janus Capital invested $10,000 of initial
seed capital in each class of the Portfolio.
The following accounting policies have been consistently followed by the
Trust 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 securities 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 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 covered by other
securities, in possession at the Portfolio's custodian, which are denoted in
the accompanying Schedule of Investments. The market value of these
securities is evaluated daily to ensure that it is equal to or exceeds the
current market value of the corresponding forward currency contract.
Currency gain and loss are also calculated on payables and receivables that
are denominated in foreign currencies. The payables and receivables are
generally related to security transactions and income.
Janus Aspen Series / December 31, 1998 61
<PAGE>
Notes to | Financial Statements (continued)
Futures contracts are marked to market daily, and the 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 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 indexes 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 because of 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 based generally on the relative net assets of
each Portfolio.
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 eight equity Portfolios are payable
to Janus Capital based upon annual rates of .75% of the first $300 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 Capital Appreciation
Portfolio, Janus Aspen International Growth Portfolio, Janus Aspen Worldwide
Growth Portfolio, Janus Aspen Balanced Portfolio, Janus Aspen Equity Income
Portfolio, and Janus Aspen Growth and Income Portfolio advisory fees are
reduced to the effective rates of Janus Fund, Janus Enterprise Fund, Janus
Olympus Fund, Janus Overseas Fund, Janus Worldwide Fund, Janus Balanced Fund,
Janus Equity Income Fund and Janus Growth and Income Fund, respectively. The
effective rate for each Portfolio for the period ended December 31, 1998, was
.65%, .71%, .68%, .66%, .65%, .69%, .74%, and .66%, respectively. The
Flexible Income Portfolio is 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. For additional information on the specific fees
for the Retirement Shares, please refer to note 4 of the financial
statements.
62 Janus Aspen Series / December 31, 1998
<PAGE>
Janus Capital has agreed to reduce its fee to the extent normal operating
expenses exceed 1% of the average net assets of the Flexible Income and
High-Yield Portfolios and .50% of the average net assets of the Money Market
Portfolio for a fiscal year.
Janus Capital may terminate any of these fee waivers or reductions on at
least 90 days' notice to the Trustees. The participant administration fee and
distribution fee applicable to the Retirement Shares are not included in
these expense limits.
Until at least May 1, 1999, Janus Capital has also agreed to reduce its fee
to the extent that normal operating expenses exceed 1.25% of the average net
assets of the Equity Income and Growth and Income Portfolios. The participant
administration fee and distribution fee applicable to the Retirement Shares
are not included in this expense limit.
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, 1998, are noted below:
<TABLE>
<CAPTION>
DST Securities, Inc. Portfolio Expense DST Systems
Portfolio Commissions Paid* Reduction* Costs
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Janus Aspen Growth Portfolio $6,937 $5,203 $11,354
Janus Aspen Aggressive Growth Portfolio 9,626 7,219 10,858
Janus Aspen Capital Appreciation Portfolio -- -- 10,647
Janus Aspen International Growth Portfolio -- -- 13,976
Janus Aspen Worldwide Growth Portfolio -- -- 20,260
Janus Aspen Balanced Portfolio -- -- 17,181
Janus Aspen Equity Income Portfolio 7 6 9,671
Janus Aspen Growth and Income Portfolio -- -- 5,305
Janus Aspen Flexible Income Portfolio -- -- 12,101
Janus Aspen High-Yield Portfolio -- -- 11,049
Janus Aspen Money Market Portfolio -- -- 11,323
- ------------------------------------------------------------------------------------------------------
</TABLE>
*The difference between commissions paid to DST Securities, Inc. and expenses
reduced constituted commissions paid to an unaffiliated clearing broker.
Janus Aspen Series / December 31, 1998 63
<PAGE>
Notes to | Financial Statements (continued)
3. FEDERAL INCOME TAX
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations that 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, 1998, have been
reclassified among the components of net assets as follows:
<TABLE>
<CAPTION>
Undistributed Undistributed
Net Investment Net Realized Paid-In
Portfolio Income Gains and Losses Capital
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Janus Aspen Growth Portfolio $ 723 ($ 188) ($ 535)
Janus Aspen Aggressive Growth Portfolio 2,052,294 (2,052,294) --
Janus Aspen Capital Appreciation Portfolio -- -- --
Janus Aspen International Growth Portfolio (97,537) 87,314 10,223
Janus Aspen Worldwide Growth Portfolio (13,914) 30,816 (16,902)
Janus Aspen Balanced Portfolio 237,457 (234,881) (2,576)
Janus Aspen Equity Income Portfolio 2,963 (2,963) --
Janus Aspen Growth and Income Portfolio 5 (5) --
Janus Aspen Flexible Income Portfolio 35,484 (35,453) (31)
Janus Aspen High-Yield Portfolio (811) 811 --
Janus Aspen Money Market Portfolio -- -- --
- ---------------------------------------------------------------------------------------------
</TABLE>
The Portfolios have elected to treat gains and losses on forward foreign
currency contracts as capital gains and losses. Other 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. As of December
31, 1998, the net capital loss carryovers noted below are available to offset
future realized capital gains and thereby reduce future taxable gains
distributions. These carryovers expire between December 31, 2005, and December
31, 2006. In 1998, the Portfolios noted below incurred "post-October" losses
during the period from November 1 through December 31, 1998. These losses will
be deferred for tax purposes and recognized in 1999.
The aggregate cost of investments and the composition of unrealized appreciation
and depreciation of investments for federal income tax purposes as of December
31, 1998, are also noted below.
<TABLE>
<CAPTION>
Net Capital Loss Post-October Federal Tax Unrealized Unrealized Net Appreciation/
Portfolio Carryovers Losses Cost Appreciation (Depreciation) (Depreciation)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Janus Aspen Growth Portfolio -- -- $ 780,498,251 $330,622,745 ($9,299,692) $ 321,323,053
Janus Aspen Aggressive Growth Portfolio -- ($ 6,411) 516,465,352 248,870,051 (3,207,066) 245,662,985
Janus Aspen Capital
Appreciation Portfolio ($ 3,876,042) (71,212) 52,452,959 20,215,922 (43,399) 20,172,523
Janus Aspen International
Growth Portfolio (16,186,634) (1,812,383) 257,366,821 61,858,909 (6,020,359) 55,838,550
Janus Aspen Worldwide Growth Portfolio (71,839,828) (12,508,850) 2,134,486,640 802,344,152 (31,673,554) 770,670,598
Janus Aspen Balanced Portfolio (1,222,295) -- 698,505,667 200,644,127 (6,028,647) 194,615,480
Janus Aspen Equity Income Portfolio -- (419) 6,503,109 2,453,086 (75,850) 2,377,236
Janus Aspen Growth and Income Portfolio (94,424) -- 5,615,638 1,043,873 (63,953) 979,920
Janus Aspen Flexible Income Portfolio -- (55,806) 124,036,913 3,696,489 (1,336,500) 2,359,989
Janus Aspen High-Yield Portfolio (13,866) (36,298) 3,040,840 23,053 (99,785) (76,732)
Janus Aspen Money Market Portfolio -- -- 39,356,790 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Janus Aspen International Growth and Janus Aspen Worldwide Growth have elected
to pass through to shareholders foreign taxes under Section 853. Foreign taxes
paid and foreign source income for the Portfolios making the election are as
folllows:
Foreign Foreign
Portfolio Taxes Paid Source Income
- --------------------------------------------------------------------------------
Janus Aspen
International Growth Portfolio $ 307,479 $ 1,259,751
Janus Aspen
Worldwide Growth Portfolio $2,534,346 $10,477,564
- --------------------------------------------------------------------------------
64 Janus Aspen Series / December 31, 1998
<PAGE>
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).
Janus Aspen Series Retirement Shares incur a pro rata share of operating
expenses. In addition, the Retirement Shares pay a distribution fee of up to
.25% of average net assets and a participant administration fee of up to .25%
of average net assets.
5. EXPENSE RATIOS
Listed below are the gross expense ratios for the various Portfolios that
would be in effect, absent the waiver of certain fees and/or voluntary
reduction of the adviser's fee to the effective rate of the corresponding
Janus retail fund. Expense ratios are annualized for all periods less than
one year.
<TABLE>
<CAPTION>
Institutional Shares Retirement Shares
Portfolio 1998 1997 1996 1995 1994 1998 1997(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Janus Aspen Growth Portfolio 0.75% 0.78% 0.83% 0.98% 1.23% 1.28% 1.28%
Janus Aspen Aggressive Growth Portfolio 0.75% 0.78% 0.83% 0.93% 1.14% 1.29% 1.34%
Janus Aspen Capital Appreciation Portfolio 0.97% 2.19%(2) N/A N/A N/A 1.49% 2.66%
Janus Aspen International Growth Portfolio 0.95% 1.08% 2.21% 3.57% 4.67%(5) 1.44% 1.57%
Janus Aspen Worldwide Growth Portfolio 0.74% 0.81% 0.91% 1.09% 1.49% 1.32% 1.32%
Janus Aspen Balanced Portfolio 0.74% 0.83% 1.07% 1.55% 1.74% 1.29% 1.33%
Janus Aspen Equity Income Portfolio 1.86% 5.75%(2) N/A N/A N/A 2.36% 6.19%
Janus Aspen Growth and Income Portfolio 3.06%(1) N/A N/A N/A N/A 3.53%(1) N/A
Janus Aspen Flexible Income Portfolio 0.73% 0.75% 0.84% 1.07% 1.35% 1.24% 1.23%
Janus Aspen High-Yield Portfolio 2.11% 3.27% 6.29%(3) N/A N/A 2.61% 3.42%
Janus Aspen Money Market Portfolio 0.34% 0.55% 0.78% 1.07%(4) N/A 0.84% 1.10%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Period May 1, 1998, (inception) to December 31, 1998.
(2) Period May 1, 1997, (inception) to December 31, 1997.
(3) Period May 1, 1996, (inception) to December 31, 1996.
(4) Period May 1, 1995, (inception) to December 31, 1995.
(5) Period May 2, 1994, (inception) to December 31, 1994.
Janus Aspen Series / December 31, 1998 65
<PAGE>
Explanations of | Charts, Tables and Financial Statements
1. PERFORMANCE OVERVIEWS
Performance overview graphs on the previous pages compare the performance of
a $10,000 investment in Institutional Shares of each Portfolio (from
inception) to one or more widely used market indexes through December 31,
1998.
When comparing the performance of a Portfolio with an index, keep in mind
that market indexes do not include brokerage commissions that would be
incurred if you purchased the individual securities in the index. They also
do not include taxes payable on dividends and interest or operating expenses
incurred if you maintained a Portfolio invested in the index.
Average annual total returns are also quoted for each class of Portfolio.
Average annual total return is calculated by taking the growth or decline in
value of an investment over a period of time, including reinvestment of
dividends and distributions, then calculating the annual compounded
percentage rate that would have produced the same result had the rate of
growth been constant throughout the period.
2. SCHEDULES OF INVESTMENTS
Following the performance overview section is each Portfolio's Schedule of
Investments. This schedule reports the industry concentrations and types of
securities held in each Portfolio on the last day of the reporting period.
Securities are usually listed by type (common stock, corporate bonds, U.S.
government obligations, etc.) and by industry classification (banking,
communications, insurance, etc.).
The market value of each security is quoted as of the last day of the
reporting period. The value of securities denominated in foreign currencies
is converted into U.S. dollars.
Portfolios that invest in foreign securities also provide a summary of
investments by country. This summary reports the Portfolio's exposure to
different countries by providing the percentage of securities invested in
each country.
2A. FORWARD CURRENCY CONTRACTS
A table listing forward currency contracts follows each Portfolio's Schedule
of Investments (if applicable). Forward currency contracts are agreements to
deliver or receive a preset amount of currency at a future date. Forward
currency contracts are used to hedge against foreign currency risk in the
Portfolio's long-term holdings.
The table provides the name of the foreign currency, the settlement date of
the contract, the amount of the contract, the value of the currency in U.S.
dollars and the amount of unrealized gain or loss. The amount of unrealized
gain or loss reflects the change in currency exchange rates from the time the
contract was opened to the last day of the reporting period.
3. STATEMENT OF OPERATIONS
This statement details the Portfolios' income, expenses, gains and losses on
securities and currency transactions, and appreciation or depreciation of
current Portfolio holdings.
The first section in this statement, titled "Investment Income," reports the
dividends earned from stocks and interest earned from interest-bearing
securities in the Portfolio.
The next section reports the expenses and expense offsets incurred by the
Portfolios, including the advisory fee paid to the investment adviser,
transfer agent fees, shareholder servicing expenses, and printing and postage
for mailing statements, financial reports and prospectuses.
The last section lists the increase or decrease in the value of securities
held in the Portfolios. Portfolios realize a gain (or loss) when they sell
their position in a particular security. An unrealized gain (or loss) refers
to the change in net appreciation or depreciation of the Portfolios during
the period. "Net Gain/(Loss) on Investments" is affected both by changes in
the market value of Portfolio holdings and by gains (or losses) realized
during the reporting period.
66 Janus Aspen Series / December 31, 1998
<PAGE>
4. STATEMENT OF ASSETS AND LIABILITIES
This statement is often referred to as the "balance sheet." It lists the
assets and liabilities of the Portfolios on the last day of the reporting
period.
The Portfolios' assets are calculated by adding the value of the securities
owned, the receivable for securities sold but not yet settled, the receivable
for dividends declared but not yet received on stocks owned, and the
receivable for Portfolio shares sold to investors but not yet settled. The
Portfolios' liabilities include payables for securities purchased but not yet
settled, Portfolio shares redeemed but not yet paid, and expenses owed but
not yet paid. Additionally, there may be other assets and liabilities such as
forward currency contracts.
The last line of this statement reports the net asset value (NAV) per share
on the last day of the reporting period for each class of the Portfolio. The
NAV is calculated by dividing the Portfolios' net assets (assets minus
liabilities) by the number of shares outstanding.
5. STATEMENT OF CHANGES IN NET ASSETS
This statement reports the increase or decrease in the Portfolios' net assets
during the reporting period. Changes in the Portfolios' net assets are
attributable to investment operations, dividends, distributions and capital
share transactions. This is important to investors because it shows exactly
what caused the Portfolios' net asset size to change during the period.
The first section summarizes the information from the Statement of Operations
regarding changes in net assets due to the Portfolios' investment
performance. The Portfolios' net assets may also change as a result of
dividend and capital gains distributions to investors. If investors receive
their dividends in cash, money is taken out of the Portfolio to pay the
distribution. If investors reinvest their dividends, the Portfolios' net
assets will not be affected. If you compare each Portfolio's "Net Decrease
from
Dividends and Distributions" to the "Reinvested dividends and distributions,"
you'll notice that dividend distributions had little effect on each
Portfolio's net assets. This is because the majority of Janus investors
reinvest their distributions.
The reinvestment of dividends is included under "Capital Share Transactions."
"Capital Shares" refers to the money investors contribute to the Portfolios
through purchases or withdrawal via redemptions. Each Portfolio's net assets
will increase and decrease in value as investors purchase and redeem shares
from a Portfolio.
The section entitled "Net Assets Consist of" breaks down the components of
the Portfolios' net assets. Because Portfolios must distribute substantially
all earnings, you'll notice that a significant portion of net assets is
shareholder capital.
Janus Aspen Series / December 31, 1998 67
<PAGE>
Explanations of | Charts, Tables and Financial Statements (continued)
6. FINANCIAL HIGHLIGHTS
This schedule provides a per-share breakdown of the components that affect
the net asset value (NAV) for current and past reporting periods for each
class of the Portfolio. Not only does this table provide you with total
return, it also reports total distributions, asset size, expense ratios and
portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of
the reporting period. The next line reports the net investment income per
share, which comprises dividends and interest income earned on securities
held by the Portfolios. Following is the total of gains, realized and
unrealized. Dividends and distributions are then subtracted to arrive at the
NAV per share at the end of the period.
Also included are the expense ratios, or the percentage of net assets that
was used to cover operating expenses during the period. Expense ratios vary
across the Portfolios for a number of reasons, including the differences in
management fees, average shareholder account size, the frequency of dividend
payments and the extent of foreign investments, which entail greater
transaction costs.
The Portfolios' expenses may be reduced through expense-reduction
arrangements. These arrangements include the use of brokerage commissions,
uninvested cash balances earning interest or balance credits. The Statement
of Operations reflects total expenses before any such offset, the amount of
offset and the net expenses. The expense ratios listed in the Financial
Highlights reflect total expenses both prior to any expense offset and after
the offsets.
Expense ratios prior to any expense offset are part of disclosure
requirements imposed in 1996. Years prior to 1995 do not reflect this
information.
The ratio of net investment income summarizes the income earned divided by
the average net assets of a Portfolio during the reporting period. Don't
confuse this ratio with a Portfolio's yield. The net investment income ratio
is not a true measure of a Portfolio's yield because it doesn't take into
account the dividends distributed to the Portfolio's investors.
The next ratio is the portfolio turnover rate, which measures the buying and
selling activity in a Portfolio. Portfolio turnover is affected by market
conditions, changes in the size of a Portfolio, the nature of the Portfolio's
investments and the investment style of the portfolio manager. A 100% rate
implies that an amount equal to the value of the entire Portfolio is turned
over in a year; a 50% rate means that an amount equal to the value of half
the Portfolio is traded in a year; and a 200% rate means that an amount equal
to the value of the Portfolio is sold every six months.
68 Janus Aspen Series / December 31, 1998
<PAGE>
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 Capital Appreciation Portfolio,
Janus Aspen International Growth Portfolio, Janus Aspen Worldwide Growth
Portfolio, Janus Aspen Balanced Portfolio, Janus Aspen Equity Income Portfolio,
Janus Aspen Growth and Income Portfolio, Janus Aspen Flexible Income Portfolio,
Janus Aspen High-Yield Portfolio, and Janus Aspen Money Market Portfolio
(constituting the Janus Aspen Series, hereafter referred to as the "Portfolios")
at December 31, 1998, the results of each of their operations for the year then
ended, 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 Portfolios'
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, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
February 3, 1999
Euro-Conversion | Discussion (unaudited)
On January 1, 1999, eleven European countries were converted to a common
currency: Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, Netherlands, Portugal, and Spain. Investments traded in the markets
of these countries are denominated in the new currency, referred to as the
"Euro." Conversion to the Euro may present certain risks to investments of the
Funds held in one of the currencies that is being replaced. Janus Capital,
however, does not believe that the conversion will have a material impact on the
Portfolios' investments.
Year 2000 | Discussion (unaudited)
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 Portfolios 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 Portfolios
invest or worldwide markets and economies.
Janus Aspen Series / December 31, 1998 69
