JANUS ASPEN SERIES, 497, 2000-05-05

JANUS ASPEN SERIES
497, 2000-05-05

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<PAGE>

[JANUS LOGO]

Janus Aspen Series

Institutional Shares

PROSPECTUS
MAY 1, 2000
Strategic Value Portfolio

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>

[JANUS LOGO]

Strategic Value Portfolio (the "Portfolio") is a mutual fund in
Janus Aspen Series and is described in this prospectus. The
Portfolio currently offers two classes of shares. The
Institutional Shares, (the "Shares"), are sold under the name of
"Janus Aspen Series" and are offered by this prospectus in
connection with investment in and payments under variable
annuity contracts and variable life insurance contracts
(collectively, "variable insurance contracts"), as well as
certain qualified retirement plans.

Janus Aspen Series sells and redeems its Shares at net asset
value without sales charges, commissions or redemption fees.
Each variable insurance contract involves fees and expenses that
are not described in this Prospectus. See the accompanying
contract prospectus for information regarding contract fees and
expenses and any restrictions on purchases or allocations.

This prospectus contains information that a prospective
purchaser of a variable insurance contract or plan participant
should consider in conjunction with the accompanying separate
account prospectus of the specific insurance company product
before allocating purchase payments or premiums to the
Portfolio.
<PAGE>

Table of contents

<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Strategic Value Portfolio................................ 2
Fees and expenses........................................ 3
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
Strategic Value Portfolio................................ 4
General portfolio policies............................... 5
Risks for Strategic Value Portfolio...................... 7
MANAGEMENT OF THE PORTFOLIO
Investment adviser....................................... 9
Management expenses and expense limits................... 9
Investment personnel..................................... 10
OTHER INFORMATION........................................... 11
DISTRIBUTIONS AND TAXES
Distributions............................................ 12
Taxes.................................................... 12
SHAREHOLDER'S GUIDE
Pricing of portfolio shares.............................. 13
Purchases................................................ 13
Redemptions.............................................. 13
Frequent Trading......................................... 14
Shareholder communications............................... 14
FINANCIAL HIGHLIGHTS........................................ 15
GLOSSARY
Glossary of investment terms............................. 16

</TABLE>

Table of contents 1
<PAGE>
Risk return summary

STRATEGIC VALUE PORTFOLIO

Strategic Value Portfolio is designed for long-term investors who seek
growth of capital and who can tolerate the greater risks associated
with common stock investments.

1. WHAT IS THE INVESTMENT OBJECTIVE OF STRATEGIC VALUE PORTFOLIO?

- --------------------------------------------------------------------------------

STRATEGIC VALUE PORTFOLIO seeks long-term growth of capital.

The Portfolio's Trustees may change the objective without a
shareholder vote and the Portfolio will notify you of any changes
that are material. If there is a material change to the Portfolio's
objective or policies, you should consider whether the Portfolio
remains an appropriate investment for you. There is no guarantee
that the Portfolio will meet its objective.

2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF STRATEGIC VALUE PORTFOLIO?

The portfolio manager applies a "bottom up" approach in choosing
investments. In other words, he looks for companies with earnings
growth potential one at a time. If the portfolio manager is unable to
find investments with earnings growth potential, a significant portion
of the Portfolio's assets may be in cash or similar investments.

Strategic Value Portfolio invests primarily in common stocks with the
potential for long-term growth of capital using a "value" approach.
The "value" approach the portfolio manager uses emphasizes investments
in companies he believes are undervalued relative to their intrinsic
worth.

The portfolio manager measures value as a function of price/earnings
(P/E) ratios and price/free cash flow. A P/E ratio is the relationship
between the price of a stock and its earnings per share. This figure
is determined by dividing a stock's market price by the company's
earnings per share amount. Price/free cash flow is the relationship
between the price of a stock and its available cash from operations
minus capital expenditures.

The portfolio manager will typically seek attractively valued
companies that are improving their free cash flow and improving their
returns on invested capital. These companies may also include special
situations companies that are experiencing management changes and/or
are temporarily out of favor.

The Portfolio may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in high-yield/high-risk
bonds.

3. WHAT ARE THE MAIN RISKS OF INVESTING IN STRATEGIC VALUE PORTFOLIO?

The biggest risk of investing in this Portfolio is that its returns
may vary, and you could lose money. If you are considering investing
in Strategic Value Portfolio, remember that it is designed for
long-term investors who can accept the risks of investing in a
portfolio with significant common stock holdings. Common stocks tend
to be more volatile than other investment choices.

The value of the Portfolio's holdings may decrease if the value of an
individual company in the portfolio decreases or if the portfolio
manager's belief about a company's intrinsic worth is incorrect. The
value of the Portfolio's holdings could also decrease if the stock
market goes down. If the value of the Portfolio's holdings decreases,
its net asset value (NAV) will also decrease,which means if you sell
your shares in the Portfolio you would get back less money.

2 Janus Aspen Series
<PAGE>

The Portfolio is nondiversified. In other words, it may hold larger
positions in a smaller number of securities than a diversified fund.
As a result, a single security's increase or decrease in value may
have a greater impact on the Portfolio's NAV and total return.

An investment in the Portfolio is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

Since the Portfolio did not commence operations until May 1, 2000,
there is no performance available as of the date of this prospectus.

FEES AND EXPENSES

SHAREHOLDER FEES, such as sales loads, redemption fees or exchange
fees, are charged directly to an investor's account. All Janus funds
are no-load investments, so you will not pay any shareholder fees when
you buy or sell shares of the Portfolio. However, each variable
insurance contract involves fees and expenses not described in this
prospectus. See the accompanying contract prospectus for information
regarding contract fees and expenses and any restrictions on purchases
or allocations.

ANNUAL FUND OPERATING EXPENSES are paid out of the Portfolio's assets
and include fees for portfolio management, maintenance of shareholder
accounts, shareholder servicing, accounting and other services. You do
not pay these fees directly but, as the example below shows, these
costs are borne indirectly by all shareholders.

This table and example are designed to assist participants in
qualified plans that invest in the Shares of the Portfolio in
understanding the fees and expenses that you may pay as an investor in
the Shares. OWNERS OF VARIABLE INSURANCE CONTRACTS THAT INVEST IN THE
SHARES SHOULD REFER TO THE VARIABLE INSURANCE CONTRACT PROSPECTUS FOR
A DESCRIPTION OF FEES AND EXPENSES, AS THE TABLE AND EXAMPLE DO NOT
REFLECT DEDUCTIONS AT THE SEPARATE ACCOUNT LEVEL OR CONTRACT LEVEL FOR
ANY CHARGES THAT MAY BE INCURRED UNDER A CONTRACT.

<TABLE>
<CAPTION>
Management Other Total Annual Fund
Fee Expenses* Operating Expenses
<S> <C> <C> <C>
Strategic Value Portfolio 0.65% 0.35% 1.00%
</TABLE>

- --------------------------------------------------------------------------------

* Other expenses are based on the estimated annualized expenses the
Portfolio's Shares expect to incur in their initial fiscal year and are
shown without the effect of any expense offset arrangements.

- --------------------------------------------------------------------------------

EXAMPLE:
This example is intended to help you compare the cost of investing in
the Portfolio with the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in the Portfolio for the time
periods indicated then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return
each year, and that the Portfolio's operating expenses remain the same.
Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
1 Year 3 Years
------------------
<S> <C> <C>
Strategic Value Portfolio $102 $318
</TABLE>

Risk return summary 3
<PAGE>
Investment objective, principal investment
strategies and risks

Strategic Value Portfolio has a similar investment objective and
similar principal investment strategies to Janus Strategic Value Fund.
Although it is anticipated that the Portfolio and Janus Strategic
Value Fund will hold similar securities, differences in asset size,
cash flow needs and other factors may result in differences in
investment performance. The expenses of the Portfolio and Janus
Strategic Value Fund are expected to differ. The variable contract
owner will also bear various insurance related costs at the insurance
company level. You should review the accompanying separate account
prospectus for a summary of fees and expenses.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

This section takes a closer look at the investment objective of
Strategic Value Portfolio, its principal investment strategies and
certain risks of investing in Strategic Value Portfolio. Strategies
and policies that are noted as "fundamental" cannot be changed without
a shareholder vote.

Please carefully review the "Risks" section of this Prospectus on
pages 6-8 for a discussion of risks associated with certain investment
techniques. We've also included a Glossary with descriptions of
investment terms used throughout this Prospectus.

Strategic Value Portfolio seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks with the
potential for long-term growth of capital using a "value" approach.
The "value" approach the portfolio manager uses emphasizes investments
in companies he believes are undervalued relative to their intrinsic
worth.

The following questions and answers are designed to help you better understand
Strategic Value Portfolio's principal investment strategies.

1. HOW ARE COMMON STOCKS SELECTED?

The Portfolio may invest substantially all of its assets in common
stocks if the portfolio manager believes that common stocks will
appreciate in value. The portfolio manager generally takes a "bottom
up" approach to selecting companies. In other words, he seeks to
identify individual companies with earnings growth potential that may
not be recognized by the market at large. He makes this assessment by
looking at companies one at a time, regardless of size, country of
organization, place of principal business activity, or other similar
selection criteria. Realization of income is not a significant
consideration when choosing investments for the Portfolio. Income
realized on the Portfolio's investments will be incidental to its
objective.

4 Janus Aspen Series
<PAGE>

2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

Generally, yes. The portfolio manager seeks companies that meet his
selection criteria, regardless of where a company is located. Foreign
securities are generally selected on a stock-by-stock basis without
regard to any defined allocation among countries or geographic
regions. However, certain factors such as expected levels of
inflation, government policies influencing business conditions, the
outlook for currency relationships, and prospects for economic growth
among countries, regions or geographic areas may warrant greater
consideration in selecting foreign securities. There are no
limitations on the countries in which the Portfolio may invest and the
Portfolio may at times have significant foreign exposure.

3. HOW DOES THE PORTFOLIO MANAGER DETERMINE THAT A COMPANY MAY BE UNDERVALUED?

A company may be undervalued when, in the opinion of the portfolio
manager, the company is selling for a price that is below its
intrinsic worth. A company may be undervalued due to market or
economic conditions, temporary earnings declines, unfavorable
developments affecting the company or other factors. Such factors may
provide buying opportunities at attractive prices compared to
historical or market price-earnings ratios, price/free cash flow, book
value, or return on equity. The portfolio manager believes that buying
these securities at a price that is below its intrinsic worth may
generate greater returns for the Portfolio than those obtained by
paying premium prices for companies currently in favor in the market.

4. WHAT DOES "MARKET CAPITALIZATION" MEAN?

Market capitalization is the most commonly used measure of the size
and value of a company. It is computed by multiplying the current
market price of a share of the company's stock by the total number of
its shares outstanding. Although Equity Income Portfolio does not
emphasize companies of any particular size, a Portfolio with a larger
asset base are more likely to invest in larger, more established
issuers.

GENERAL PORTFOLIO POLICIES

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

CASH POSITION
When the portfolio manager believes that market conditions are
unfavorable for profitable investing, or when he is otherwise unable
to locate attractive investment opportunities, the Portfolio's cash or
similar investments may increase. In other words, the Portfolio does
not always stay fully invested in stocks and bonds. Cash or similar
investments generally are a residual - they represent the assets that
remain after the portfolio manager has committed available assets to
desirable investment opportunities. However, the portfolio manager may
also temporarily increase the Portfolio's cash position to protect its
assets or maintain liquidity.

When the Portfolio's investments in cash or similar investments
increase, it may not participate in market advances or declines to the
same extent that it would if the Portfolio remained more fully
invested in stocks or bonds.

Investment objective, principal investment strategies and risks 5
<PAGE>

OTHER TYPES OF INVESTMENTS
Strategic Value Portfolio invests primarily in domestic and foreign
equity securities, which may include preferred stocks, common stocks,
warrants and securities convertible into common or preferred stocks.
The Portfolio may also invest to a lesser degree in other types of
securities. These securities (which are described in the Glossary) may
include:

- debt securities

- indexed/structured securities

- high-yield/high-risk bonds (less than 35% of the Portfolio's assets)

- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return

- securities purchased on a when-issued, delayed delivery or forward
commitment basis

ILLIQUID INVESTMENTS
The Portfolio may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is a security or other position
that cannot be disposed of quickly in the normal course of business.
For example, some securities are not registered under U.S. securities
laws and cannot be sold to the U.S. public because of SEC regulations
(these are known as "restricted securities"). Under procedures adopted
by the Portfolio's Trustees, certain restricted securities may be
deemed liquid, and will not be counted toward this 15% limit.

FOREIGN SECURITIES
The Portfolio may invest without limit in foreign equity and debt
securities. The Portfolio may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the
United States. Other ways of investing in foreign securities include
depositary receipts or shares, and passive foreign investment
companies.

SPECIAL SITUATIONS
The Portfolio may invest in special situations. A special situation
arises when, in the opinion of the Portfolio's manager, the securities
of a particular issuer will be recognized and appreciate in value due
to a specific development with respect to that issuer. Developments
creating a special situation might include, among others, a new
product or process, a technological breakthrough, a management change
or other extraordinary corporate event, or differences in market
supply of and demand for the security. The Portfolio's performance
could suffer if the anticipated development in a "special situation"
investment does not occur or does not attract the expected attention.

PORTFOLIO TURNOVER
The Portfolio generally intends to purchase securities for long-term
investment although, to a limited extent, the Portfolio may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason of
economic or other developments not foreseen at the time of the
investment decision. The Portfolio may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or securities
prices. Changes are made in the Portfolio's holdings whenever the

6 Janus Aspen Series
<PAGE>

portfolio manager believes such changes are desirable. Portfolio
turnover rates are generally not a factor in making buy and sell
decisions.

Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also
result in taxable capital gains. Higher costs associated with
increased portfolio turnover may offset gains in the Portfolio's
performance.

RISKS FOR STRATEGIC VALUE PORTFOLIO

Because the Portfolio may invest substantially all of its assets in
common stocks, the main risk is the risk that the value of the stocks
it holds might decrease in response to the activities of an individual
company or in response to general market and/or economic conditions.
If this occurs, the Portfolio's share price may also decrease. The
Portfolio's performance may also be affected by risks specific to
certain types of investments, such as foreign securities, derivative
investments, non-investment grade bonds, initial public offerings
(IPOs) or companies with relatively small market capitalizations. IPOs
and other investment techniques may have a magnified performance
impact on a portfolio with a small asset base. A portfolio may not
experience similar performance as its assets grow.

The following questions and answers are designed to help you better understand
some of the risks of investing in Strategic Value Portfolio.

1. THE PORTFOLIO MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?

Many attractive investment opportunities may be smaller, start-up
companies offering emerging products or services. Smaller or newer
companies may suffer more significant losses as well as realize more
substantial growth than larger or more established issuers because
they may lack depth of management, be unable to generate funds
necessary for growth or potential development, or be developing or
marketing new products or services for which markets are not yet
established and may never become established. In addition, such
companies may be insignificant factors in their industries and may
become subject to intense competition from larger or more established
companies. Securities of smaller or newer companies may have more
limited trading markets than the markets for securities of larger or
more established issuers, and may be subject to wide price
fluctuations. Investments in such companies tend to be more volatile
and somewhat more speculative.

2. HOW DOES THE NONDIVERSIFIED STATUS OF STRATEGIC VALUE PORTFOLIO AFFECT ITS
RISK?

Diversification is a way to reduce risk by investing in a broad range
of stocks or other securities. A "nondiversified" portfolio has the
ability to take larger positions in a smaller number of issuers.
Because the appreciation or depreciation of a single stock may have a
greater impact on the NAV of a nondiversified portfolio, its share
price can be expected to fluctuate more than a comparable diversified
portfolio. This fluctuation, if significant, may affect the
performance of the Portfolio.

3. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?

If the portfolio manager's perception of a company's worth is not
realized in the time frame he expects, the overall performance of the
Portfolio may suffer. In addition, if the market value of a company
declines the Portfolio's performance could suffer. In general, the
portfolio manager believes these risks are mitigated by investing in
companies that are undervalued in the market in relation to earnings,
dividends and/or assets.

Investment objective, principal investment strategies and risks 7
<PAGE>

4. HOW COULD THE PORTFOLIO'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?

The Portfolio may invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets.
Investments in foreign securities, including those of foreign
governments, may involve greater risks than investing in domestic
securities because the Portfolio's performance may depend on issues
other than the performance of a particular company. These issues
include:

- CURRENCY RISK. As long as the Portfolio holds a foreign security,
its value will be affected by the value of the local currency
relative to the U.S. dollar. When the Portfolio sells a foreign
denominated security, its value may be worth less in U.S. dollars
even if the security increases in value in its home country. U.S.
dollar denominated securities of foreign issuers may also be
affected by currency risk.

- POLITICAL AND ECONOMIC RISK. Foreign investments may be subject to
heightened political and economic risks, particularly in emerging
markets which may have relatively unstable governments, immature
economic structures, national policies restricting investments by
foreigners, different legal systems, and economies based on only a
few industries. In some countries, there is the risk that the
government may take over the assets or operations of a company or
that the government may impose taxes or limits on the removal of the
Portfolio's assets from that country.

- REGULATORY RISK. There may be less government supervision of foreign
markets. As a result, foreign issuers may not be subject to the
uniform accounting, auditing and financial reporting standards and
practices applicable to domestic issuers and there may be less
publicly available information about foreign issuers.

- MARKET RISK. Foreign securities markets, particularly those of
emerging market countries, may be less liquid and more volatile than
domestic markets. Certain markets may require payment for securities
before delivery and delays may be encountered in settling securities
transactions. In some foreign markets, there may not be protection
against failure by other parties to complete transactions.

- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.

5. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?

High-yield/high-risk bonds (or "junk" bonds) are bonds rated below
investment grade by the primary rating agencies such as Standard &
Poor's and Moody's. The value of lower quality bonds generally is more
dependent on credit risk, or the ability of the issuer to meet
interest and principal payments, than investment grade bonds. Issuers
of high-yield bonds may not be as strong financially as those issuing
bonds with higher credit ratings and are more vulnerable to real or
perceived economic changes, political changes or adverse developments
specific to the issuer.

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

6. HOW DOES THE PORTFOLIO TRY TO REDUCE RISK?

The Portfolio may use futures, options, swaps and other derivative
instruments to "hedge" or protect its portfolio from adverse movements
in securities prices and interest rates. The Portfolio may also use a
variety of currency hedging techniques, including forward currency
contracts, to manage exchange rate risk. The portfolio manager
believes the use of these instruments will benefit the Portfolio.
However, the Portfolio's performance could be worse than if the
Portfolio had not used such instruments if the portfolio manager's
judgement proves incorrect. Risks associated with the use of
derivative instruments are described in the SAI.

8 Janus Aspen Series
<PAGE>

Management of the portfolio

INVESTMENT ADVISER

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

Janus Capital began serving as investment adviser to Janus Fund in
1970 and currently serves as investment adviser to all of the Janus
retail funds, acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisory services for
institutional accounts.

Janus Capital furnishes continuous advice and recommendations
concerning the Portfolio's investments. Janus Capital also furnishes
certain administrative, compliance and accounting services for the
Portfolio, and may be reimbursed by the Portfolio for its costs in
providing those services. In addition, Janus Capital employees serve
as officers of the Trust and Janus Capital provides office space for
the Portfolio and pays the salaries, fees and expenses of all
Portfolio officers and those Trustees who are affiliated with Janus
Capital.

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

MANAGEMENT EXPENSES AND EXPENSE LIMITS

The Portfolio pays Janus Capital a management fee which is calculated
daily and paid monthly. The advisory agreement with the Portfolio
spells out the management fee and other expenses that the Portfolio
must pay. The Portfolio is subject to the following management fee
schedule (expressed as an annual rate). In addition, the Shares of the
Portfolio incur expenses not assumed by Janus Capital, including
transfer agent and custodian fees and expenses, legal and auditing
fees, printing and mailing costs of sending reports and other
information to existing shareholders, and independent Trustees' fees
and expenses.

<TABLE>
<CAPTION>
Average Daily
Net Assets Annual Rate Expense Limit
Fee Schedule of Portfolio Percentage (%) Percentage (%)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Strategic Value Portfolio All Asset Levels 0.65 1.25(1)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Janus Capital has agreed to limit the Portfolio's expenses as indicated
until at least the next annual renewal of the advisory agreement. As noted
in the fee table on page 3, however, the Portfolio's expenses without
waivers are not expected to exceed the expense limit.

Management of the portfolio 9
<PAGE>

INVESTMENT PERSONNEL

PORTFOLIO MANAGER

DAVID C. DECKER
- --------------------------------------------------------------------------------

is Executive Vice President and portfolio manager of Strategic
Value Portfolio, which he has managed since inception. He is also
Executive Vice President and portfolio manager of Janus Strategic
Value Fund and Janus Special Situations Fund, each of which he
has managed since inception and an assistant portfolio manager of
Janus Fund and Growth Portfolio. He obtained a Master of Business
Administration in Finance from the Fuqua School of Business at
Duke University and a Bachelor of Arts in Economics and Political
Science from Tufts University. Mr. Decker has earned the right to
use the Chartered Financial Analyst designation.

10 Janus Aspen Series
<PAGE>
Other information

CLASSES OF SHARES

The Portfolio offers two classes of Shares, one of which, the
Institutional Shares, are offered pursuant to this prospectus and are
sold under the name Janus Aspen Series. The Shares offered by this
Prospectus are available only in connection with investment in and
payments under variable insurance contracts as well as certain
qualified retirement plans. Service Shares of the Portfolio are
offered only in connection with investment in and payments under
variable insurance contracts as well as certain qualified retirement
plans that require a fee from Portfolio assets to procure distribution
and administrative services to contract owners and plan participants.
Because the expenses of each class may differ, the performance of each
class is expected to differ. If you would like additional information
about the Service Shares, please call 1-800-525-0020.

CONFLICTS OF INTEREST

The Shares offered by this prospectus are available only to variable
annuity and variable life separate accounts of insurance companies
that are unaffiliated with Janus Capital and to certain qualified
retirement plans. Although the Portfolio does not currently anticipate
any disadvantages to policy owners because the Portfolio offers its
shares to such entities, there is a possibility that a material
conflict may arise. The Trustees monitor events in order to identify
any disadvantages or material irreconcilable conflicts and to
determine what action, if any, should be taken in response. If a
material disadvantage or conflict occurs, the Trustees may require one
or more insurance company separate accounts or qualified plans to
withdraw its investments in the Portfolio or substitute Shares of
another Portfolio. If this occurs, the Portfolio may be forced to sell
its securities at disadvantageous prices. In addition, the Trustees
may refuse to sell Shares of the Portfolio to any separate account or
qualified plan or may suspend or terminate the offering of the
Portfolio's Shares if such action is required by law or regulatory
authority or is in the best interests of the Portfolio's shareholders.
It is possible that a qualified plan investing in the Portfolio could
lose its qualified plan status under the Internal Revenue Code, which
could have adverse tax consequences on insurance company separate
accounts investing in the Portfolio. Janus Capital intends to monitor
such qualified plans and the Portfolio may discontinue sales to a
qualified plan and require plan participants with existing investments
in the Portfolio to redeem those investments if a plan loses (or in
the opinion of Janus Capital is at risk of losing) its qualified plan
status.

DISTRIBUTION OF THE PORTFOLIO

The Portfolio is distributed by Janus Distributors, Inc., a member of
the National Association of Securities Dealers, Inc. ("NASD"). To
obtain information about NASD member firms and their associated
persons, you may contact NASD Regulation, Inc. at www.nasdr.com, or
the Public Disclosure Hotline at 800-289-9999. An investor brochure
containing information describing the Public Disclosure Program is
available from NASD Regulation, Inc.

Other information 11
<PAGE>
Distributions and taxes

DISTRIBUTIONS

To avoid taxation of the Portfolio, the Internal Revenue Code requires
the Portfolio to distribute net income and any net gains realized on
its investments annually. The Portfolio's income from dividends and
interest and any net realized short-term gains are paid to
shareholders as ordinary income dividends. Net realized long-term
gains are paid to shareholders as capital gains distributions.

Each class of the Portfolio distributes substantially all of its
investment income at least semi-annually and its net realized gains,
if any, at least annually. All dividends and capital gains
distributions from Shares of the Portfolio will automatically be
reinvested into additional Shares of the Portfolio.

HOW DISTRIBUTIONS AFFECT NAV

Distributions are paid to shareholders as of the record date of the
distribution of the Portfolio, regardless of how long the shares have
been held. Undistributed income and realized gains are included in the
daily NAV of the Portfolio's Shares. The Share price of the Portfolio
drops by the amount of the distribution, net of any subsequent market
fluctuations. For example, assume that on December 31, the Shares of
Strategic Value Portfolio declared a dividend in the amount of $0.25
per share. If the price of Strategic Value Portfolio's Shares was
$10.00 on December 30, the share price on December 31 would be $9.75,
barring market fluctuations.

TAXES

TAXES ON DISTRIBUTIONS

Because Shares of the Portfolio may be purchased only through variable
insurance contracts and qualified plans, it is anticipated that any
income dividends or capital gains distributions made by the Shares of
the Portfolio will be exempt from current taxation if left to
accumulate within the variable insurance contract or qualified plan.
Generally, withdrawals from such contracts may be subject to ordinary
income tax and, if made before age 59 1/2, a 10% penalty tax. The tax
status of your investment depends on the features of your qualified
plan or variable insurance contract. Further information may be found
in your plan documents or in the prospectus of the separate account
offering such contract.

TAXATION OF THE PORTFOLIO

Dividends, interest and some gains received by the Portfolio on
foreign securities may be subject to tax withholding or other foreign
taxes. The Portfolio may from year to year make the election permitted
under Section 853 of the Internal Revenue Code to pass through such
taxes to shareholders as a foreign tax credit. If such election is not
made, any foreign taxes paid or accrued will represent an expense to
the Portfolio which will reduce its investment income.

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

12 Janus Aspen Series
<PAGE>
Shareholder's guide

INVESTORS MAY NOT PURCHASE OR REDEEM SHARES OF THE PORTFOLIO DIRECTLY.
SHARES MAY BE PURCHASED OR REDEEMED ONLY THROUGH VARIABLE INSURANCE
CONTRACTS OFFERED BY THE SEPARATE ACCOUNTS OF PARTICIPATING INSURANCE
COMPANIES OR THROUGH QUALIFIED RETIREMENT PLANS. REFER TO THE
PROSPECTUS FOR THE PARTICIPATING INSURANCE COMPANY'S SEPARATE ACCOUNT
OR YOUR PLAN DOCUMENTS FOR INSTRUCTIONS ON PURCHASING OR SELLING OF
VARIABLE INSURANCE CONTRACTS AND ON HOW TO SELECT THE PORTFOLIO AS AN
INVESTMENT OPTION FOR A CONTRACT OR A QUALIFIED PLAN.

PRICING OF PORTFOLIO SHARES

Investments will be processed at the NAV next determined after an
order is received and accepted by the Portfolio or its agent. In order
to receive a day's price, your order must be received by the close of
the regular trading session of the New York Stock Exchange any day
that the NYSE is open. Securities of the Portfolio are valued at
market value or, if a market quotation is not readily available, at
their fair value determined in good faith under procedures established
by and under the supervision of the Trustees. Short-term instruments
maturing within 60 days are valued at amortized cost, which
approximates market value. See the SAI for more detailed information.

To the extent the Portfolio holds securities that are primarily listed
on foreign exchanges that trade on weekends or other days when the
Portfolio does not price its shares, the NAV of the Portfolio's shares
may change on days when shareholders will not be able to purchase or
redeem the Portfolio's shares.

PURCHASES

Purchases of Shares may be made only by the separate accounts of
insurance companies for the purpose of funding variable insurance
contracts or by qualified plans. Refer to the prospectus of the
appropriate insurance company separate account or your plan documents
for information on how to invest in the Shares of the Portfolio.
Participating insurance companies and certain other designated
organizations are authorized to receive purchase orders on the
Portfolio's behalf.

The Portfolio does not permit frequent trading or market timing.
Excessive purchases of Portfolio Shares disrupt portfolio management
and drive Portfolio expenses higher. The Portfolio reserves the right
to reject any specific purchase order. Purchase orders may be refused
if, in Janus Capital's opinion, they are of a size that would disrupt
the management of the Portfolio. Although there is no present
intention to do so, the Portfolio may discontinue sales of its shares
if management and the Trustees believe that continued sales may
adversely affect the Portfolio's ability to achieve its investment
objective. If sales of the Portfolio's Shares are discontinued, it is
expected that existing policy owners and plan participants invested in
the Portfolio would be permitted to continue to authorize investment
in the Portfolio and to reinvest any dividends or capital gains
distributions, absent highly unusual circumstances. The Portfolio may
discontinue sales to a qualified plan and require plan participants
with existing investments in the Shares to redeem those investments if
the plan loses (or in the opinion of Janus Capital, is at risk of
losing) its qualified plan status.

REDEMPTIONS

Redemptions, like purchases, may be effected only through the separate
accounts of participating insurance companies or through qualified
plans. Please refer to the appropriate separate account prospectus or
plan documents for details.

Shares of the Portfolio may be redeemed on any business day.
Redemptions are processed at the NAV next calculated after receipt and
acceptance of the redemption order by the Portfolio or its agent.
Redemption

Shareholder's guide 13
<PAGE>

proceeds will normally be wired to the participating insurance company
the business day following receipt of the redemption order, but in no
event later than seven days after receipt of such order.

FREQUENT TRADING

Frequent trading of Portfolio shares in response in short-term
fluctuations in the market -- also known as "market timing" -- may
make it very difficult to manage the Portfolio's investments. The
Portfolio does not permit frequent trading or market timing. When
market timing occurs, the Portfolio may have to sell portfolio
securities to have the cash necessary to redeem the market timer's
shares. This can happen at a time when it is not advantageous to sell
any securities, which may harm the Portfolio's performance. When large
dollar amounts are involved, market timing can also make it difficult
to use long-term investment strategies because the portfolio manager
cannot predict how much cash the Portfolio will have to invest. When
in Janus Capital's opinion such activity would have a disruptive
effect on portfolio management, the Portfolio reserves the right to
refuse purchase orders and exchanges into the Portfolio by any person,
group or commonly controlled account. The Portfolio may notify a
market timer of rejection of a purchase or exchange order after the
day the order is placed. If the Portfolio allows a market timer to
trade Portfolio shares, it may require the market timer to enter into
a written agreement to follow certain procedures and limitations.

SHAREHOLDER COMMUNICATIONS

Shareholders will receive annual and semiannual reports including the
financial statements of the Shares of the Portfolio that they have
authorized for investment. Each report will show the investments owned
by the Portfolio and the market values thereof, as well as other
information about the Portfolio and its operations. The Trust's fiscal
year ends December 31.

14 Janus Aspen Series
<PAGE>
Financial highlights

No Financial Highlights are presented because the Portfolio did not
commence operations until May 1, 2000.

Financial highlights 15
<PAGE>
Glossary of investment terms

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

I. EQUITY AND DEBT SECURITIES

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

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

COMMON STOCKS are equity securities representing shares of ownership
in a company and usually carry voting rights and earns dividends.
Unlike preferred stock, dividends on common stock are not fixed but
are declared at the discretion of the issuer's board of directors.

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

DEBT SECURITIES are securities representing money borrowed that must
be repaid at a later date. Such securities have specific maturities
and usually a specific rate of interest or an original purchase
discount.

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

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

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

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

PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS) are any foreign
corporations which generate certain amounts of passive income or hold
certain amounts of assets for the production of passive income.
Passive income includes dividends, interest, royalties, rents and
annuities. To avoid taxes and interest that the

16 Janus Aspen Series
<PAGE>

Portfolio must pay if these investments are profitable, the Portfolio
may make various elections permitted by the tax laws. These elections
could require that the Portfolio recognize taxable income, which in
turn must be distributed, before the securities are sold and before
cash is received to pay the distributions.

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

PREFERRED STOCKS are equity securities that generally pay dividends at
a specified rate and have preference over common stock in the payment
of dividends and liquidation. Preferred stock generally does not carry
voting rights.

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

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

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

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

STEP COUPON BONDS are debt securities that trade at a discount from
their face value and pay coupon interest. The discount from the face
value depends on the time remaining until cash payments begin,
prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer.

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

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

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

Glossary of investment terms 17
<PAGE>

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

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

WHEN-ISSUED, DELAYED DELIVERY AND FORWARD TRANSACTIONS generally
involve the purchase of a security with payment and delivery at some
time in the future - i.e., beyond normal settlement. The Portfolio
does not earn interest on such securities until settlement and bear
the risk of market value fluctuations in between the purchase and
settlement dates. New issues of stocks and bonds, private placements
and U.S. government securities may be sold in this manner.

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

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

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

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

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

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

INVERSE FLOATERS are debt instruments whose interest rate bears an
inverse relationship to the interest rate on another instrument or
index. For example, upon reset the interest rate payable on a security
may go down when the underlying index has risen. Certain inverse
floaters may have an interest rate reset

18 Janus Aspen Series
<PAGE>

mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the security's
market value.

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

Glossary of investment terms 19
<PAGE>

This page intentionally left blank
<PAGE>

[JANUS LOGO]

1-800-525-0020

100 Fillmore Street
Denver, Colorado 80206-4928
janus.com

You can request other information, including a Statement of
Additional Information, free of charge by contacting your insurance
company or plan sponsor or visiting our Web site at janus.com. Other
information is also available from financial intermediaries that
sell Shares of the Portfolio.

The Statement of Additional Information provides detailed
information about the Portfolio and is incorporated into this
Prospectus by reference. You may review and copy information about
the Portfolio (including the Portfolio's Statement of Additional
Information) at the Public Reference Room of the SEC or get text
only copies, after paying a duplicating fee, by sending an
electronic request by e-mail to [email protected] or by writing to
or calling the Public Reference Room, Washington, D.C. 20549-0102
(1-202-942-8090). You may also obtain reports and other information
about the Portfolio from the Electronic Data Gathering Analysis and
Retrieval (EDGAR) Database on the SEC's Web site at
http://www.sec.gov.

Investment Company Act File No. 811-7736

INSJSIPROSV

<PAGE>

[JANUS LOGO]

Janus Aspen Series

Service Shares

PROSPECTUS
MAY 1, 2000
Strategic Value Portfolio

[JANUS LOGO]

Strategic Value Portfolio (the "Portfolio") is a mutual fund in
Janus Aspen Series and is described in this prospectus. The
Portfolio currently offers two classes of shares. The Service
Shares, (the "Shares"), are offered by this prospectus in
connection with investment in and payments under variable
annuity contracts and variable life insurance contracts
(collectively, "variable insurance contracts"), as well as
certain qualified retirement plans.

Table of contents

<TABLE>
<S> <C>
RISK/RETURN SUMMARY
Strategic Value Portfolio................................ 2
Fees and expenses........................................ 3
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND
RISKS
Strategic Value Portfolio................................ 4
General portfolio policies............................... 5
Risks for Strategic Value Portfolio...................... 7
MANAGEMENT OF THE PORTFOLIO
Investment adviser....................................... 9
Management expenses and expense limits................... 9
Investment personnel..................................... 10
OTHER INFORMATION........................................... 11
DISTRIBUTIONS AND TAXES
Distributions............................................ 12
Taxes.................................................... 12
SHAREHOLDER'S GUIDE
Pricing of portfolio shares.............................. 13
Purchases................................................ 13
Redemptions.............................................. 13
Frequent trading......................................... 14
Shareholder communications............................... 14
FINANCIAL HIGHLIGHTS........................................ 15
GLOSSARY
Glossary of investment terms............................. 16

</TABLE>

Table of contents 1
<PAGE>
Risk return summary

STRATEGIC VALUE PORTFOLIO

Strategic Value Portfolio is designed for long-term investors who seek
growth of capital and who can tolerate the greater risks associated
with common stock investments.

1. WHAT IS THE INVESTMENT OBJECTIVE OF STRATEGIC VALUE PORTFOLIO?

- --------------------------------------------------------------------------------

STRATEGIC VALUE PORTFOLIO seeks long-term growth of capital.

The Portfolio's Trustees may change this objective without a
shareholder vote and the Portfolio will notify you of any changes that
are material. If there is a material change to the Portfolio's
objective or policies, you should consider whether the Portfolio
remains an appropriate investment for you. There is no guarantee that
the Portfolio will meet its objective.

2. WHAT ARE THE MAIN INVESTMENT STRATEGIES OF STRATEGIC VALUE PORTFOLIO?

The Portfolio may invest without limit in foreign equity and debt
securities and less than 35% of its net assets in high-yield/high-risk
bonds.

3. WHAT ARE THE MAIN RISKS OF INVESTING IN STRATEGIC VALUE PORTFOLIO?

The value of the Portfolio's holdings may decrease if the value of an
individual company in the portfolio decreases or if the portfolio
manager's belief about a company's intrinsic worth is incorrect. The
value of the Portfolio's holdings could also decrease if the stock
market goes down. If the value of the Portfolio's holdings decreases,
its net asset value (NAV) will also decrease which means if you sell
your shares in the Portfolio you would get back less money.

2 Janus Aspen Series
<PAGE>

An investment in the Portfolio is not a bank deposit and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

Since the Portfolio did not commence operations until May 1, 2000,
there is no performance available as of the date of this Prospectus.

FEES AND EXPENSES

<TABLE>
<CAPTION>
Distribution Total Annual Fund
Management (12b-1) Other Operating
Fee Fees(1) Expenses Expenses(2)
<S> <C> <C> <C> <C>
Strategic Value Portfolio 0.65% 0.25% 0.35% 1.25%
</TABLE>

- --------------------------------------------------------------------------------
(1) Long-term shareholders may pay more than the economic equivalent of
the maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc.

(2) Expenses are based on the estimated expenses that the new Service
Shares Class of the Portfolio expects to incur in its initial fiscal
year. All expenses are shown without the effect of any expense offset
arrangements.

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1 Year 3 Years
------------------
<S> <C> <C>
Strategic Value Portfolio $127 $397
</TABLE>

Risk return summary 3
<PAGE>
Investment objective, principal investment
strategies and risks

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

This section takes a closer look at the investment objectives of
Strategic Value Portfolio, its principal investment strategies and
certain risks of investing in Strategic Value Portfolio. Strategies
and policies that are noted as "fundamental" cannot be changed without
a shareholder vote.

The following questions and answers are designed to help you better understand
Strategic Value Portfolio's principal investment strategies.

1. HOW ARE COMMON STOCKS SELECTED?

2. ARE THE SAME CRITERIA USED TO SELECT FOREIGN SECURITIES?

4 Janus Aspen Series
<PAGE>

any defined allocation among countries or geographic regions. However,
certain factors such as expected levels of inflation, government
policies influencing business conditions, the outlook for currency
relationships, and prospects for economic growth among countries,
regions or geographic areas may warrant greater consideration in
selecting foreign securities. There are no limitations on the
countries in which the Portfolio may invest and the Portfolio may at
times have significant foreign exposure.

3. HOW DOES THE PORTFOLIO MANAGER DETERMINE THAT A COMPANY MAY BE UNDERVALUED?

4. WHAT DOES "MARKET CAPITALIZATION" MEAN?

GENERAL PORTFOLIO POLICIES

Investment objective, principal investment strategies and risks 5
<PAGE>

Portfolio may also invest to a lesser degree in other types of
securities. These securities (which are described in the Glossary) may
include:

- debt securities

- indexed/structured securities

- high-yield/high-risk bonds (less than 35% of the Portfolio's assets)

- options, futures, forwards, swaps and other types of derivatives for
hedging purposes or for non-hedging purposes such as seeking to
enhance return

- securities purchased on a when-issued, delayed delivery or forward
commitment basis

PORTFOLIO TURNOVER

The Portfolio generally intends to purchase securities for long-term
investment although, to a limited extent, the Portfolio may purchase
securities in anticipation of relatively short-term price gains.
Short-term transactions may also result from liquidity needs,
securities having reached a price or yield objective, changes in
interest rates or the credit standing of an issuer, or by reason of
economic or other developments not foreseen at the time of the
investment decision. The Portfolio may also sell one security and
simultaneously purchase the same or a comparable security to take
advantage of short-term differentials in bond yields or securities
prices. Changes are made in the Portfolio's holdings whenever the
portfolio manager believes such changes are desirable. Portfolio
turnover rates are generally not a factor in making buy and sell
decisions.

6 Janus Aspen Series
<PAGE>

RISKS FOR STRATEGIC VALUE PORTFOLIO

The following questions and answers are designed to help you better understand
some of the risks of investing in Strategic Value Portfolio.

1. THE PORTFOLIO MAY INVEST IN SMALLER OR NEWER COMPANIES. DOES THIS CREATE ANY
SPECIAL RISKS?

2. HOW DOES THE NONDIVERSIFIED STATUS OF STRATEGIC VALUE PORTFOLIO AFFECT ITS
RISK?

3. WHAT ARE THE RISKS ASSOCIATED WITH VALUE INVESTING?

Investment objective, principal investment strategies and risks 7
<PAGE>

4. HOW COULD THE PORTFOLIO'S INVESTMENTS IN FOREIGN SECURITIES AFFECT ITS
PERFORMANCE?

- TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be
higher than those involved in domestic transactions.

5. ARE THERE SPECIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH-YIELD/HIGH-RISK
BONDS?

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

6. HOW DOES THE PORTFOLIO TRY TO REDUCE RISK?

8 Janus Aspen Series
<PAGE>
Management of the portfolio

INVESTMENT ADVISER

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

MANAGEMENT EXPENSES AND EXPENSE LIMITS

The Portfolio pays Janus Capital a management fee which is calculated
daily and paid monthly. The advisory agreement with the Portfolio
spells out the management fee and other expenses that the Portfolio
must pay. The Portfolio is subject to the following management fee
schedule (expressed as an annual rate). In addition, the Shares of the
Portfolio incur expenses not assumed by Janus Capital, including the
distribution fee, transfer agent and custodian fees and expenses,
legal and auditing fees, printing and mailing costs of sending reports
and other information to existing shareholders, and independent
Trustees' fees and expenses.

<TABLE>
<CAPTION>
Average Daily
Net Assets Annual Rate Expense Limit
Fee Schedule of Portfolio Percentage (%) Percentage (%)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Strategic Value Portfolio All Asset Levels 0.65 1.25(1)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Janus Capital has agreed to limit the Portfolio's expenses as indicated
until at least the next annual renewal of the advisory agreement. The
distribution fee described on page 11 is not included in the expense limit.
As noted in the fee table on page 3, however, the Portfolio's expenses
without waivers are not expected to exceed the expense limit.

Management of the portfolio 9
<PAGE>

INVESTMENT PERSONNEL

PORTFOLIO MANAGER

DAVID C. DECKER
- --------------------------------------------------------------------------------

10 Janus Aspen Series
<PAGE>
Other information

CLASSES OF SHARES

The Portfolio offers two classes of shares, one of which, the Service
Shares, are offered pursuant to this prospectus. The Shares offered by
this prospectus are available only in connection with investment in
and payments under variable insurance contracts as well as certain
qualified retirement plans. Institutional Shares of the Portfolio are
available only in connection with investment in and payments under
variable insurance contracts, as well as certain qualified retirement
plans. Because the expenses of each class may differ, the performance
of each class is expected to differ. If you would like additional
information about the Institutional Shares, please call
1-800-525-0020.

DISTRIBUTION FEE

Under a distribution and service plan adopted in accordance with Rule
12b-1 under the 1940 Act, the Shares may pay Janus Distributors, Inc.,
the Trust's distributor, a fee at an annual rate of up to 0.25% of the
average daily net assets of the Shares of the Portfolio. Under the
terms of the Plan, the Trust is authorized to make payments to Janus
Distributors for remittance to insurance companies and qualified plan
service providers as compensation for distribution and shareholder
servicing performed by such entities. Because 12b-1 fees are paid out
of the Service Shares' assets on an ongoing basis, they will increase
the cost of your investment and may cost you more than paying other
types of sales charges.

CONFLICTS OF INTEREST

The Trust's shares are available only to variable annuity and variable
life separate accounts of insurance companies that are unaffiliated
with Janus Capital and to certain qualified retirement plans. Although
the Portfolio does not currently anticipate any disadvantages to
owners of variable insurance contracts because the Portfolio offers
its shares to such entities, there is a possibility that a material
conflict may arise. The Trustees monitor events in order to identify
any disadvantages or material irreconcilable conflicts and to
determine what action, if any, should be taken in response. If a
material disadvantage or conflict occurs, the Trustees may require one
or more insurance company separate accounts or qualified plans to
withdraw its investments in the Portfolio or substitute Shares of
another Portfolio. If this occurs, the Portfolio may be forced to sell
its securities at disadvantageous prices. In addition, the Trustees
may refuse to sell Shares of the Portfolio to any separate account or
qualified plan or may suspend or terminate the offering of the
Portfolio's Shares if such action is required by law or regulatory
authority or is in the best interests of the Portfolio's shareholders.
It is possible that a qualified plan investing in the Portfolio could
lose its qualified plan status under the Internal Revenue Code, which
could have adverse tax consequences on insurance company separate
accounts investing in the Shares. Janus Capital intends to monitor
such qualified plans and the Portfolio may discontinue sales to a
qualified plan and require plan participants with existing investments
in the Shares to redeem those investments if a plan loses (or in the
opinion of Janus Capital is at risk of losing) its qualified plan
status.

DISTRIBUTION OF THE PORTFOLIO

The Portfolio is distributed by Janus Distributors, Inc., a member of
the National Association of Securities Dealers, Inc., ("NASD"). To
obtain information about NASD member firms and their associated
persons, you may contact NASD Regulation, Inc., at www.nasdr.com, or
the Public Disclosure Hotline at 800-289-9999. An investor brochure
containing information describing the Public Disclosure Program is
available from NASD Regulation, Inc.

Other information 11
<PAGE>
Distributions and taxes

DISTRIBUTIONS

HOW DISTRIBUTIONS AFFECT NAV

TAXES

TAXES ON DISTRIBUTIONS

Because Shares of the Portfolio may be purchased only through variable
insurance contracts and qualified plans, it is anticipated that any
income dividends or capital gains distributions made by the Shares of
the Portfolio will be exempt from current taxation if left to
accumulate within the variable insurance contract or qualified plan.
Generally, withdrawals from such contracts or plans may be subject to
ordinary income tax and, if made before age 59 1/2, a 10% penalty tax.
The tax status of your investment depends on the features of your
qualified plan or variable insurance contract. Further information may
be found in your plan documents or in the prospectus of the separate
account offering such contract.

TAXATION OF THE PORTFOLIO

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

12 Janus Aspen Series
<PAGE>

Shareholder's guide

PRICING OF PORTFOLIO SHARES

PURCHASES

The Portfolio does not permit frequent trading or market timing.
Excessive purchases of Portfolio Shares disrupt portfolio management
and drive Portfolio expenses higher. The Portfolio reserves the right
to reject any specific purchase order. Purchase orders may be refused
if, in Janus Capital's opinion, they are of a size that would disrupt
the management of the Portfolio. Although there is no present
intention to do so, the Portfolio may discontinue sales of its shares
if management and the Trustees believe that continued sales may
adversely affect the Portfolio's ability to achieve its investment
objective. If sales of the Portfolio's Shares are discontinued, it is
expected that existing participants invested in the Portfolio would be
permitted to continue to authorize investment in the Portfolio and to
reinvest any dividends or capital gains distributions, absent highly
unusual circumstances. The Portfolio may discontinue sales to a
qualified plan and require plan participants with existing investments
in the Shares to redeem those investments if the plan loses (or in the
opinion of Janus Capital, is at risk of losing) its qualified plan
status.

REDEMPTIONS

Shareholder's guide 13
<PAGE>

proceeds will normally be wired the business day following receipt of
the redemption order, but in no event later than seven days after
receipt of such order.

FREQUENT TRADING

SHAREHOLDER COMMUNICATIONS

14 Janus Aspen Series
<PAGE>
Financial highlights

No Financial Highlights are presented because the Portfolio did not
commence operations until May 1, 2000.

Financial highlights 15
<PAGE>
Glossary of investment terms

I. EQUITY AND DEBT SECURITIES

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

16 Janus Aspen Series
<PAGE>

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

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

Glossary of investment terms 17
<PAGE>

II. FUTURES, OPTIONS AND OTHER DERIVATIVES

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

18 Janus Aspen Series
<PAGE>

mechanism that multiplies the effects of change in the underlying
index. Such mechanism may increase the volatility of the security's
market value.

Glossary of investment terms 19
<PAGE>

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<PAGE>

[JANUS LOGO]

(800) 525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com

You can request other information, including a Statement of
Additional Information, free of charge, by contacting your plan
sponsor or visiting our Web site at janus.com. Other information is
also available from financial intermediaries that sell Shares of the
Portfolio.

Investment Company Act File No. 811-7736

INSJSSRPOSV

<PAGE>

[JANUS LOGO]

Janus Aspen Series

Institutional Shares

Strategic Value Portfolio

100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020

Statement of Additional Information

May 1, 2000

This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the Institutional Shares (the "Shares") of Strategic Value
Portfolio. The Portfolio is a separate series of Janus Aspen
Series, a Delaware business trust. The Shares are sold under
the name "Janus Aspen Series." Each of these series of the
Trust represents shares of beneficial interest in a separate
portfolio of securities and other assets with its own objective
and policies. The Portfolio is managed separately by Janus
Capital Corporation.

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

This SAI is not a Prospectus and should be read in conjunction
with the Portfolio's Prospectus dated May 1, 2000, which is
incorporated by reference into this SAI and may be obtained
from your insurance company or plan sponsor. This SAI contains
additional and more detailed information about the Portfolio's
operations and activities than the Prospectus.
<PAGE>

[JANUS LOGO]
<PAGE>

Table of contents

<TABLE>
<S> <C>
Classification, Portfolio Turnover, Investment Policies and
Restrictions, and Investment Strategies and Risks........... 2
Investment Adviser.......................................... 21
Custodian, Transfer Agent and Certain Affiliations.......... 23
Portfolio Transactions and Brokerage........................ 24
Trustees and Officers....................................... 26
Shares of the Trust......................................... 29
Net Asset Value Determination............................ 29
Purchases................................................ 30
Redemptions.............................................. 30
Income Dividends, Capital Gains Distributions and Tax
Status...................................................... 31
Miscellaneous Information................................... 32
Shares of the Trust...................................... 32
Shareholder Meetings..................................... 32
Voting Rights............................................ 32
Independent Accountants.................................. 33
Registration Statement................................... 33
Performance Information..................................... 34
Appendix A.................................................. 35
Explanation of Rating Categories......................... 35
</TABLE>

1
<PAGE>
Classification, portfolio turnover, investment policies
and restrictions, and investment
strategies and risks

CLASSIFICATION

The Portfolio is a series of the Trust, an open-end, management
investment company. The Investment Company Act of 1940 ("1940 Act")
classifies mutual funds as either diversified or nondiversified, and
the Portfolio is a nondiversified fund.

PORTFOLIO TURNOVER

The Prospectus includes a discussion of portfolio turnover policies.
Portfolio turnover is calculated by dividing total purchases or sales,
whichever is less, by the average monthly value of the Portfolio's
securities.

INVESTMENT POLICIES AND RESTRICTIONS

The Portfolio is subject to certain fundamental policies and
restrictions that may not be changed without shareholder approval.
Shareholder approval means approval by the lesser of (i) more than 50%
of the outstanding voting securities of the Trust (or the Portfolio or
class of shares if a matter affects just the Portfolio or class of
shares), or (ii) 67% or more of the voting securities present at a
meeting if the holders of more than 50% of the outstanding voting
securities of the Trust (or the Portfolio or class of shares) are
present or represented by proxy. As fundamental policies, the
Portfolio may not:

(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to fifty percent (50%) of the value of its total
assets, purchase the securities of any one issuer (except cash items
and "government securities" as defined under the Investment Company
Act of 1940, as amended, if immediately after and as a result of such
purchase, the value of the holdings of the Portfolio in the securities
of such issuer exceeds 5% of the value of the Portfolio's total
assets. With respect to the other 50% of the value of its total
assets, the Portfolio may invest in the securities of as few as two
issuers.

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

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

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

(5) Lend any security or make any other loan if, as a result, more
than 25% of the Portfolio's total assets would be lent to other
parties (but this limitation does not apply to purchases of commercial
paper, debt securities or repurchase agreements).

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

As a fundamental policy, the Portfolio may, notwithstanding any other
investment policy or limitation (whether or not fundamental), invest
all of its assets in the securities of a single open-end management
investment company with substantially the same fundamental investment
objective, policies and limitations as the Portfolio.

2
<PAGE>

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

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

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

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

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

(e) The Portfolio may borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding 25% of
the value of its respective total assets (including the amount
borrowed) less liabilities (other than borrowings). If borrowings
exceed 25% of the value of a Portfolio's total assets by reason of a
decline in net assets, the Portfolio will reduce its borrowings within
three business days to the extent necessary to comply with the 25%
limitation. This policy shall not prohibit reverse repurchase
agreements, deposits of assets to margin or guarantee positions in
futures, options, swaps or forward contracts, or the segregation of
assets in connection with such contracts.

(f) The Portfolio does not currently intend to purchase any security
or enter into a repurchase agreement, if as a result, more than 15% of
their respective net assets would be invested in repurchase agreements
not entitling the holder to payment of principal and interest within
seven days and in securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily
available market. The Trustees, or the Portfolio's investment adviser
acting pursuant to authority delegated by the Trustees, may determine
that a readily available market exists for securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 ("Rule
144A Securities"), or any successor to such rule, Section 4(2)
commercial paper and municipal lease obligations. Accordingly, such
securities may not be subject to the foregoing limitation.

(g) The Portfolio may not invest in companies for the purpose of
exercising control of management.

Under the terms of an exemptive order received from the Securities and
Exchange Commission ("SEC"), the Portfolio may borrow money from or
lend money to other funds that permit such transactions and for

3
<PAGE>

which Janus Capital serves as investment adviser. All such borrowing
and lending will be subject to the above limits. The Portfolio will
borrow money through the program only when the costs are equal to or
lower than the cost of bank loans. Interfund loans and borrowings
normally extend overnight, but can have a maximum duration of seven
days. The Portfolio will lend through the program only when the
returns are higher than those available from other short-term
instruments (such as repurchase agreements). The Portfolio may have to
borrow from a bank at a higher interest rate if an interfund loan is
called or not renewed. Any delay in repayment to a lending Portfolio
could result in a lost investment opportunity or additional borrowing
costs.

For purposes of the Portfolio's restriction on investing in a
particular industry, the Portfolios will rely primarily on industry
classifications as published by Bloomberg L.P. To the extent that
Bloomberg L.P. industry classifications are so broad that the primary
economic characteristics in a single industry are materially
different, the Portfolio may further classify issuers in accordance
with industry classifications as published by the SEC.

INVESTMENT STRATEGIES AND RISKS

Cash Position

As discussed in the Prospectus, when the portfolio manager believes
that market conditions are unfavorable for profitable investing, or
when he is otherwise unable to locate attractive investment
opportunities, the Portfolio's investment in cash and similar
investments may increase. Securities that the Portfolio may invest in
as a means of receiving a return on idle cash include commercial
paper, certificates of deposit, repurchase agreements or other
short-term debt obligations. The Portfolio may also invest in money
market funds, including funds managed by Janus Capital. (See
"Investment Company Securities" on page 7).

Illiquid Investments

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

If illiquid securities exceed 15% of the Portfolio's net assets after
the time of purchase the Portfolio will take steps to reduce in an
orderly fashion its holdings of illiquid securities. Because illiquid
securities may not be readily marketable, the portfolio manager may
not be able to dispose of them in a timely manner. As a result, the
Portfolio may be forced to hold illiquid securities while their price
depreciates. Depreciation in the price of illiquid securities may
cause the net asset value of the Portfolio to decline.

Securities Lending

The Portfolio may lend securities to qualified parties (typically
brokers or other financial institutions) who need to borrow securities
in order to complete certain transactions such as covering short
sales, avoiding

4
<PAGE>

failures to deliver securities or completing arbitrage activities. The
Portfolio may seek to earn additional income through securities
lending. Since there is the risk of delay in recovering a loaned
security or the risk of loss in collateral rights if the borrower
fails financially, securities lending will only be made to parties
that Janus Capital deems creditworthy and in good standing. In
addition, such loans will only be made if Janus Capital believes the
benefit from granting such loans justifies the risk. The Portfolio
will not have the right to vote on securities while they are being
lent, but they will call a loan in anticipation of any important vote.
All loans will be continuously secured by collateral which consists of
cash, U.S. government securities, letters of credit and such other
collateral permitted by the Securities and Exchange Commission and
policies approved by the Trustees. Cash collateral may be invested in
money market funds advised by Janus Capital to the extent consistent
with exemptive relief obtained from the SEC.

Short Sales

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

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

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

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

5
<PAGE>

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

Pass-Through Securities

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

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

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

Except for GMCs, each of the mortgage-backed securities described
above is characterized by monthly payments to the holder, reflecting
the monthly payments made by the borrowers who received the underlying
mortgage loans. The payments to the security holders (such as the
Portfolio), like the payments on the underlying loans, represent both
principal and interest. Although the underlying mortgage loans are for
specified periods of time, such as 20 or 30 years, the borrowers can,
and typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal in addition to the
principal that is part of the regular monthly payments. The portfolio
manager will consider estimated prepayment rates in calculating the
average-weighted maturity of the Portfolio. A borrower is more likely
to prepay a mortgage that bears a relatively high rate of interest.
This means that in times of declining interest rates, higher yielding
mortgage-backed securities held by the Portfolio might be converted to
cash and the Portfolio will be forced to accept lower interest rates
when that cash is used to purchase additional

6
<PAGE>

securities in the mortgage-backed securities sector or in other
investment sectors. Additionally, prepayments during such periods will
limit the Portfolio's ability to participate in as large a market gain
as may be experienced with a comparable security not subject to
prepayment.

Asset-backed securities represent interests in pools of consumer loans
and are backed by paper or accounts receivables originated by banks,
credit card companies or other providers of credit. Generally, the
originating bank or credit provider is neither the obligor nor the
guarantor of the security, and interest and principal payments
ultimately depend upon payment of the underlying loans by individuals.
Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales
agreements that may be created when a municipality enters into an
installment purchase contract or lease with a vendor. Such securities
may be secured by the assets purchased or leased by the municipality;
however, if the municipality stops making payments, there generally
will be no recourse against the vendor. The market for tax-exempt
asset-backed securities is still relatively new. These obligations are
likely to involve unscheduled prepayments of principal.

Investment Company Securities

From time to time, the Portfolio may invest in securities of other
investment companies, subject to the provisions of Section 12(d)(1) of
the 1940 Act. The Portfolio may invest in securities of money market
funds managed by Janus Capital in excess of the limitations of Section
12(d)(1) under the terms of an SEC exemptive order obtained by Janus
Capital and the Janus funds.

Depositary Receipts

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

Depositary Receipts are generally subject to the same sort of risks as
direct investments in a foreign country, such as, currency risk,
political and economic risk, and market risk, because their values
depend on the performance of a foreign security denominated in its
home currency. The risks of foreign investing are addressed in some
detail in the Portfolio's prospectus.

Municipal Obligations

The Portfolio may invest in municipal obligations issued by states,
territories and possessions of the United States and the District of
Columbia. The value of municipal obligations can be affected by
changes in their actual or perceived credit quality. The credit
quality of municipal obligations can be affected by, among other
things, the financial condition of the issuer or guarantor, the
issuer's future borrowing plans and sources of revenue, the economic
feasibility of the revenue bond project or general borrowing purpose,

7
<PAGE>

political or economic developments in the region where the security is
issued, and the liquidity of the security. Because municipal
securities are generally traded over-the-counter, the liquidity of a
particular issue often depends on the willingness of dealers to make a
market in the security. The liquidity of some municipal obligations
may be enhanced by demand features, which would enable the Portfolio
to demand payment on short notice from the issuer or a financial
intermediary.

Other Income-Producing Securities

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

VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities have
variable or floating rates of interest and, under certain limited
circumstances, may have varying principal amounts. These securities
pay interest at rates that are adjusted periodically according to a
specified formula, usually with reference to some interest rate index
or market interest rate. The floating rate tends to decrease the
security's price sensitivity to changes in interest rates. These types
of securities have variable or floating rates of interest and, under
certain limited circumstances, may have varying principal amounts.
Variable and floating rate securities pay interest at rates that are
adjusted periodically according to a specified formula, usually with
reference to some interest rate index or market interest rate (the
"underlying index"). See also "Inverse Floaters."

In order to most effectively use these investments, the portfolio
manager must correctly assess probable movements in interest rates.
This involves different skills than those used to select most
portfolio securities. If the portfolio manager incorrectly forecasts
such movements, the Portfolio could be adversely affected by the use
of variable or floating rate obligations.

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

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

INVERSE FLOATERS. Inverse floaters are debt instruments whose interest
bears an inverse relationship to the interest rate on another
security. The Portfolio will not invest more than 5% of its assets in
inverse floaters. Similar to variable and floating rate obligations,
effective use of inverse floaters requires skills different from those
needed to select most portfolio securities. If movements in interest
rates are incorrectly anticipated, the Portfolio could lose money or
its NAV could decline by the use of inverse floaters.

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

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

High-Yield/High-Risk Bonds

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

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<PAGE>

Portfolio would experience a reduction in its income, and could expect
a decline in the market value of the bonds so affected.

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

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

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

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

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

Repurchase and Reverse Repurchase Agreements

In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security to the seller at an
agreed upon price on an agreed upon date within a number of days
(usually not more than seven) from the date of purchase. The resale
price consists of the purchase price plus an agreed upon incremental
amount that is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of
the seller to pay the agreed upon price, which obligation is in effect
secured by the value (at least equal to the amount of the agreed upon
resale price and marked-to-market daily) of the underlying security or
"collateral." A risk associated with repurchase agreements is the
failure of the seller to repurchase the securities as agreed, which
may cause the Portfolio to suffer a loss if

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<PAGE>

the market value of such securities declines before they can be
liquidated on the open market. In the event of bankruptcy or
insolvency of the seller, the Portfolio may encounter delays and incur
costs in liquidating the underlying security. Repurchase agreements
that mature in more than seven days are subject to the 15% limit on
illiquid investments. While it is not possible to eliminate all risks
from these transactions, it is the policy of the Portfolio to limit
repurchase agreements to those parties whose creditworthiness has been
reviewed and found satisfactory by Janus Capital.

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

Futures, Options and Other Derivative Instruments

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

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

The Portfolio intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator"
adopted by the CFTC and the National Futures Association, which
regulate

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<PAGE>

trading in the futures markets. The Portfolio will use futures
contracts and related options primarily for bona fide hedging purposes
within the meaning of CFTC regulations. To the extent that the
Portfolio holds positions in futures contracts and related options
that do not fall within the definition of bona fide hedging
transactions, the aggregate initial margin and premiums required to
establish such positions will not exceed 5% of the fair market value
of the Portfolio's net assets, after taking into account unrealized
profits and unrealized losses on any such contracts it has entered
into.

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

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

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

The ordinary spreads between prices in the cash and futures markets,
due to differences in the nature of those markets, are subject to
distortions. First, all participants in the futures market are subject
to initial margin and variation margin requirements. Rather than
meeting additional variation margin requirements, investors may close
out futures contracts through offsetting transactions which could
distort the normal

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<PAGE>

price relationship between the cash and futures markets. Second, the
liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery of the
instrument underlying a futures contract. To the extent participants
decide to make or take delivery, liquidity in the futures market could
be reduced and prices in the futures market distorted. Third, from the
point of view of speculators, the margin deposit requirements in the
futures market are less onerous than margin requirements in the
securities market. Therefore, increased participation by speculators
in the futures market may cause temporary price distortions. Due to
the possibility of the foregoing distortions, a correct forecast of
general price trends by the portfolio manager still may not result in
a successful use of futures.

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

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

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

Because futures contracts are generally settled within a day from the
date they are closed out, compared with a settlement period of three
days for some types of securities, the futures markets can provide
superior liquidity to the securities markets. Nevertheless, there is
no assurance that a liquid secondary market will exist for any
particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves
upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached, it may be
impossible for the Portfolio to enter into new positions or close out

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<PAGE>

existing positions. If the secondary market for a futures contract is
not liquid because of price fluctuation limits or otherwise, the
Portfolio may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a
futures position until the delivery date, regardless of changes in its
value. As a result, the Portfolio's access to other assets held to
cover its futures positions also could be impaired.

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

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

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

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

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

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<PAGE>

contract before its maturity, or may hold the contract to maturity and
complete the contemplated exchange.

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

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

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

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<PAGE>

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

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

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

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

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

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

15
<PAGE>

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

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

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

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

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

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

16
<PAGE>

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

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

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

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

The Portfolio may write options in connection with buy-and-write
transactions. In other words, the Portfolio may buy a security and
then write a call option against that security. The exercise price of
such call will depend upon the expected price movement of the
underlying security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above
("out-of-the-money") the

17
<PAGE>

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

The writing of covered put options is similar in terms of risk and
return characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and the
Portfolio's gain will be limited to the premium received. If the
market price of the underlying security declines or otherwise is below
the exercise price, the Portfolio may elect to close the position or
take delivery of the security at the exercise price and the
Portfolio's return will be the premium received from the put options
minus the amount by which the market price of the security is below
the exercise price.

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

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

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

SWAPS AND SWAP-RELATED PRODUCTS. The Portfolio may enter into interest
rate swaps, caps and floors on either an asset-based or
liability-based basis, depending upon whether it is hedging its assets
or its liabilities, and will usually enter into interest rate swaps on
a net basis (i.e., the two payment streams are netted out, with the
Portfolio receiving or paying, as the case may be, only the net amount
of the two payments). The net amount of the excess, if any, of the
Portfolio's obligations over its entitlement with respect to each
interest rate swap will be calculated on a daily basis and an amount
of cash or other liquid assets having an aggregate net asset value at
least equal to the accrued excess will be maintained in a segregated
account by the Portfolio's custodian. If the Portfolio enters into an
interest rate swap on other than a net basis, it would maintain a
segregated account in the full amount accrued on a daily basis of its
obligations with respect to the swap. The Portfolio will not enter
into any interest rate swap, cap or floor transaction unless the
unsecured senior debt or the claims-paying ability of the other party
thereto is rated

18
<PAGE>

in one of the three highest rating categories of at least one NRSRO at
the time of entering into such transaction. Janus Capital will monitor
the creditworthiness of all counterparties on an ongoing basis. If
there is a default by the other party to such a transaction, the
Portfolio will have contractual remedies pursuant to the agreements
related to the transaction.

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

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

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

Options on foreign currencies traded on Exchanges are within the
jurisdiction of the SEC, as are other securities traded on Exchanges.
As a result, many of the protections provided to traders on organized
Exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on an
Exchange are cleared and guaranteed by the OCC, thereby reducing the
risk of counterparty default. Further, a liquid secondary market in
options traded on an Exchange may be more readily available than in
the over-the-counter market, potentially permitting the Portfolio to
liquidate open positions at a profit prior to exercise or expiration,
or to limit losses in the event of adverse market movements.

The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid
secondary market described above, as well as the risks regarding
adverse market

19
<PAGE>

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

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

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<PAGE>
Investment adviser

As stated in the Prospectus, the Portfolio has an Investment Advisory
Agreement with Janus Capital, 100 Fillmore Street, Denver, Colorado
80206-4928. The Advisory Agreement provides that Janus Capital will
furnish continuous advice and recommendations concerning the
Portfolio's investments, provide office space for the Portfolio, and
pay the salaries, fees and expenses of all Portfolio officers and of
those Trustees who are affiliated with Janus Capital. Janus Capital
also may make payments to selected broker-dealer firms or institutions
which were instrumental in the acquisition of shareholders for the
Portfolio or other Janus Funds or which perform recordkeeping or other
services with respect to shareholder accounts. The minimum aggregate
size required for eligibility for such payments, and the factors in
selecting the broker-dealer firms and institutions to which they will
be made, are determined from time to time by Janus Capital. Janus
Capital is also authorized to perform the management and
administrative services necessary for the operation of the Portfolio.

The Portfolio pays custodian and transfer agent fees and expenses,
brokerage commissions and dealer spreads and other expenses in
connection with the execution of portfolio transactions, legal and
accounting expenses, interest and taxes, registration fees, expenses
of shareholders' meetings and reports to shareholders, fees and
expenses of Portfolio Trustees who are not affiliated with Janus
Capital and other costs of complying with applicable laws regulating
the sale of Portfolio shares. Pursuant to the Advisory Agreement,
Janus Capital furnishes certain other services, including net asset
value determination, portfolio accounting and recordkeeping, for which
the Portfolio may reimburse Janus Capital for its costs.

The Portfolio has agreed to compensate Janus Capital for its services
by the monthly payment of a fee at the annual rate of 0.65% of the
Portfolio's average daily net assets.

Janus Capital has agreed to reimburse Strategic Value Portfolio by the
amount, if any, that such Portfolio's normal operating expenses in any
fiscal year, including the investment advisory fee but excluding
brokerage commissions, interest, taxes and extraordinary expenses,
exceed an annual rate of 1.25% of the average daily net assets of the
Portfolio until at least the next annual renewal of the advisory
agreements. Mortality risk, expense risk and other charges imposed by
participating insurance companies are excluded from the above expense
limitation.

The Advisory Agreement is dated December 14, 1999 and will continue in
effect until July 1, 2001, and thereafter from year to year so long as
such continuance is approved annually by a majority of the Portfolio's
Trustees who are not parties to the Advisory Agreements or interested
persons of any such party, and by either a majority of the outstanding
voting shares or the Trustees of the Portfolio. The Advisory Agreement
(i) may be terminated without the payment of any penalty by the
Portfolio or Janus Capital on 60 days' written notice; (ii) terminates
automatically in the event of its assignment; and (iii) generally, may
not be amended without the approval by vote of a majority of the
Trustees of the Portfolio, including the Trustees who are not
interested persons of the Portfolio or Janus Capital and, to the
extent required by the 1940 Act, the vote of a majority of the
outstanding voting securities of the Portfolio.

Janus Capital acts as sub-adviser for a number of private-label mutual
funds and provides separate account advisor services for institutional
accounts. Investment decisions for each account managed by Janus
Capital, including the Portfolio, are made independently from those
for any other account that is or may in the future become managed by
Janus Capital or its affiliates. If, however, a number of accounts
managed by Janus Capital are contemporaneously engaged in the purchase
or sale of the same security, the orders may be aggregated and/or the
transactions may be averaged as to price and allocated equitably to
each account. In some cases, this policy might adversely affect the
price paid or received by an account or the size of the position
obtained or liquidated for an account. Pursuant to an exemptive order
granted by the SEC, the Portfolio and other portfolios advised by
Janus Capital may also transfer daily uninvested cash

21
<PAGE>

balances into one or more joint trading accounts. Assets in the joint
trading accounts are invested in money market instruments and the
proceeds are allocated to the participating portfolios on a pro rata
basis.

Kansas City Southern Industries, Inc. ("KCSI"), indirectly through its
wholly owned subsidiary, Stilwell Financial Inc., owns approximately
81% of the outstanding voting stock of Janus Capital. KCSI is a
publicly traded holding company whose primary subsidiaries are engaged
in transportation, information processing and financial services.
Thomas H. Bailey, President and Chairman of the Board of Janus
Capital, owns approximately 12% of Janus Capital's voting stock and,
by agreement with KCSI, selects at least a majority of Janus Capital's
Board, subject to the approval of Stilwell Financial, which cannot be
unreasonably withheld.

KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in the first half of 2000.

Each account managed by Janus Capital has its own investment objective
and policies and is managed accordingly by a particular portfolio
manager or team of portfolio managers. As a result, from time to time
two or more different managed accounts may pursue divergent investment
strategies with respect to investments or categories of investments.

The portfolio manager is not permitted to purchase and sell securities
for his own accounts except under the limited exceptions contained in
the Portfolio's Code of Ethics ("Code"). The Portfolio's Code of
Ethics is on file with and available from the SEC through the SEC Web
site at www.sec.gov. The Code applies to Directors/Trustees of Janus
Capital and the Portfolio, and employees of Janus Capital and the
Trust and requires investment personnel and officers of Janus Capital,
inside Directors/Trustees of Janus Capital and the Portfolio and
certain other designated employees deemed to have access to current
trading information to pre-clear all transactions in securities not
otherwise exempt under the Code. Requests for trading authorization
will be denied when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the Code or would
be deemed to adversely affect any transaction known to be under
consideration for or to have been effected on behalf of any client
account, including the Portfolio.

In addition to the pre-clearance requirement described above, the Code
subjects such personnel to various trading restrictions and reporting
obligations. All reportable transactions are required to be reviewed
for compliance with the Code. Those persons also may be required under
certain circumstances to forfeit their profits made from personal
trading.

The provisions of the Code are administered by and subject to
exceptions authorized by Janus Capital.

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<PAGE>
Custodian, transfer agent and certain affiliations

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

Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the
Portfolio's transfer agent. In addition, Janus Service provides
certain other administrative, recordkeeping and shareholder relations
services to the Portfolio. Janus Service is not compensated for its
services related to the Shares, except for out-of-pocket costs.

The Portfolio pays DST Systems, Inc., a subsidiary of KCSI, license
fees at the annual rate of $3.06 per shareholder account for the use
of DST's shareholder accounting system. The Portfolio also pays DST
$1.10 per closed shareholder account. The Portfolio pays DST for the
use of its portfolio and fund accounting system a monthly base fee of
$250 to $1,250 per month based on the number of Janus funds using the
system and an asset charge of $1 per million dollars of net assets
(not to exceed $500 per month).

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

Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado
80206-4928, a wholly-owned subsidiary of Janus Capital, is a
distributor of the Portfolio. Janus Distributors is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc.

23
<PAGE>
Portfolio transactions and brokerage

Decisions as to the assignment of portfolio business for the Portfolio
and negotiation of its commission rates are made by Janus Capital,
whose policy is to obtain the "best execution" (prompt and reliable
execution at the most favorable security price) of all portfolio
transactions. The Portfolio may trade foreign securities in foreign
countries because the best available market for these securities is
often on foreign exchanges. In transactions on foreign stock
exchanges, brokers' commissions are frequently fixed and are often
higher than in the United States, where commissions are negotiated.

In selecting brokers and dealers and in negotiating commissions, Janus
Capital considers a number of factors, including but not limited to:
Janus Capital's knowledge of currently available negotiated commission
rates or prices of securities currently available and other current
transaction costs; the nature of the security being traded; the size
and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the quality of the execution,
clearance and settlement services; financial stability of the broker
or dealer; the existence of actual or apparent operational problems of
any broker or dealer; rebates of commissions by a broker to the
Portfolio or to a third party service provider to the Portfolio to pay
Portfolio expenses; and research products or services provided. In
recognition of the value of the foregoing factors, Janus Capital may
place portfolio transactions with a broker or dealer with whom it has
negotiated a commission that is in excess of the commission another
broker or dealer would have charged for effecting that transaction if
Janus Capital determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research
provided by such broker or dealer viewed in terms of either that
particular transaction or of the overall responsibilities of Janus
Capital. Research may include furnishing advice, either directly or
through publications or writings, as to the value of securities, the
advisability of purchasing or selling specific securities and the
availability of securities or purchasers or sellers of securities;
furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods,
legislative developments, changes in accounting practices, economic
factors and trends and portfolio strategy; access to research
analysts, corporate management personnel, industry experts, economists
and government officials; comparative performance evaluation and
technical measurement services and quotation services, and products
and other services (such as third party publications, reports and
analyses, and computer and electronic access, equipment, software,
information and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist Janus
Capital in carrying out its responsibilities. Research received from
brokers or dealers is supplemental to Janus Capital's own research
efforts. Most brokers and dealers used by Janus Capital provide
research and other services described above.

24
<PAGE>

Janus Capital may use research products and services in servicing
other accounts in addition to the Portfolio. If Janus Capital
determines that any research product or service has a mixed use, such
that it also serves functions that do not assist in the investment
decision-making process, Janus Capital may allocate the costs of such
service or product accordingly. Only that portion of the product or
service that Janus Capital determines will assist it in the investment
decision-making process may be paid for in brokerage commission
dollars. Such allocation may create a conflict of interest for Janus
Capital.

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

Janus Capital may consider sales of Portfolio Shares or shares of
other Janus funds by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase Portfolio Shares as
a factor in the selection of broker-dealers to execute Portfolio
transactions. Janus Capital may also consider payments made by brokers
effecting transactions for the Portfolio (i) to the Portfolio or (ii)
to other persons on behalf of the Portfolio for services provided to
the Portfolio for which it would be obligated to pay. In placing
portfolio business with such broker-dealers, Janus Capital will seek
the best execution of each transaction.

When the Portfolio purchases or sells a security in the
over-the-counter market, the transaction takes place directly with a
principal market-maker, without the use of a broker, except in those
circumstances where in the opinion of Janus Capital better prices and
executions will be achieved through the use of a broker.

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

25
<PAGE>
Trustees and officers

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

Thomas H. Bailey, Age 62 - Trustee, Chairman and President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Trustee, Chairman and President of Janus Investment Fund. Chairman,
Chief Executive Officer, Director and President of Janus Capital.
Director of Janus Distributors, Inc.

James P. Craig, III, Age 43 - Trustee and Vice President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------

Trustee and Vice President of Janus Investment Fund. Chief Investment
Officer, Director of Research, Vice Chairman and Director of Janus
Capital. Formerly Executive Vice President and Portfolio Manager of
Growth Portfolio and Janus Fund (from inception and 1986,
respectively, until December 1999). Formerly Executive Vice President
and Co-Manager of Janus Venture Fund. Formerly Executive Vice
President and Portfolio Manager of Balanced Portfolio and Janus
Balanced Fund.

Gary O. Loo, Age 59 - Trustee#
102 N. Cascade, Suite 500
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund. President and Director of High
Valley Group, Inc., Colorado Springs, CO (investments).

Dennis B. Mullen, Age 56 - Trustee
7500 E. McCormick Parkway, #24
Scottsdale, AZ 85258
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund. Private Investor. Formerly
(1997-1998), Chief Financial Officer-Boston Market Concepts, Boston
Chicken, Inc., Golden, CO (restaurant chain); (1993-1997), President
and Chief Executive Officer of BC Northwest, L.P., a franchise of
Boston Chicken, Inc., Bellevue, WA (restaurant chain).

James T. Rothe, Age 56 - Trustee
102 South Tejon Street, Suite 1100
Colorado Springs, CO 80903
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund. Professor of Business, University of
Colorado, Colorado Springs, CO. Principal, Phillips-Smith Retail
Group, Colorado Springs, CO (a venture capital firm).

- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.

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<PAGE>

William D. Stewart, Age 55 - Trustee#
5330 Sterling Drive
Boulder, CO 80302
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund. President of HPS Division of MKS
Instruments, Boulder, CO (manufacturer of vacuum fittings and valves).

Martin H. Waldinger, Age 61 - Trustee
4940 Sandshore Court
San Diego, CA 92130
- --------------------------------------------------------------------------------
Trustee of Janus Investment Fund. Private Consultant. Formerly
(1993-1996), Director of Run Technologies, Inc., a software
development firm, San Carlos, CA.

David C. Decker, Age 33 - Executive Vice President, Portfolio Manager of
Strategic Value Portfolio*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Executive Vice President and Portfolio Manager of Janus Investment
Fund. Vice President of Janus Capital. Formerly, research analyst at
Janus Capital (1992-1996).

Thomas A. Early, Age 45 - Vice President and General Counsel*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and General Counsel of Janus Investment Fund. Vice
President, General Counsel and Secretary of Janus Capital. Vice
President and General Counsel of Janus Service Corporation, Janus
Distributors, Inc., Janus Capital International, Ltd. and Janus
International (UK) Limited. Director of Janus World Funds Plc.
Formerly (1997 to 1998), Executive Vice President and General Counsel
of Prudential Investments Fund Management LLC, Newark, NJ. Formerly
(1994 to 1997), Vice President and General Counsel of Prudential
Retirement Services, Newark, NJ.

Steven R. Goodbarn, Age 42 - Vice President and Chief Financial Officer*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Chief Financial Officer of Janus Investment Fund.
Vice President of Finance, Treasurer and Chief Financial Officer of
Janus Capital, Janus Service Corporation, and Janus Distributors, Inc.
Director of Janus Service Corporation, Janus Distributors, Inc. and
Janus World Funds Plc. Director, Treasurer and Vice President of
Finance of Janus Capital International Ltd. and Janus International
(UK) Limited. Formerly (1992-1996), Treasurer of Janus Investment Fund
and Janus Aspen Series.

- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.

27
<PAGE>

Kelley Abbot Howes, Age 34 - Vice President and Secretary*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund. Vice President
and Assistant General Counsel of Janus Capital. Vice President of
Janus Distributors, Inc. Assistant Vice President of Janus Service
Corporation.

Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street, Suite 300
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund. Vice
President of Janus Capital. Formerly (1991-1997), Director of Fund
Accounting, Janus Capital.
----------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

The Trustees are responsible for major decisions relating to the
Portfolio's objective, policies and techniques. The Trustees also
supervise the operation of the Portfolio by its officers and review
the investment decisions of the officers although they do not actively
participate on a regular basis in making such decisions.

The Trust's Executive Committee shall have and may exercise all the
powers and authority of the Trustees except for matters requiring
action by all Trustees pursuant to the Trust's Bylaws or Trust
Instrument, Delaware law or the 1940 Act.

Because the Portfolio has not commenced operations as of the date of
this prospectus, the Trustees have not received compensation from the
Portfolio yet. The following table shows the aggregate compensation
paid to each Trustee by the Portfolio and all funds advised and
sponsored by Janus Capital (collectively, the "Janus Funds") for the
periods indicated. None of the Trustees receive pension or retirement
benefits from the Portfolio or the Janus Funds.

<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation
from the Portfolio for from the Janus Funds for
fiscal year ended calendar year ended
Name of Person, Position December 31, 1999 December 31, 1999**
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas H. Bailey, Chairman and Trustee* $ 0 $ 0
James P. Craig, III, Trustee* $ 0 $ 0
William D. Stewart, Trustee $ 0 $107,333
Gary O. Loo, Trustee $ 0 $107,333
Dennis B. Mullen, Trustee $ 0 $107,333
Martin H. Waldinger, Trustee $ 0 $107,333
James T. Rothe, Trustee $ 0 $107,333
</TABLE>

* An interested person of the Portfolio and of Janus Capital. Compensated by
Janus Capital and not the Portfolio.
** As of December 31, 1999, Janus Funds consisted of two registered investment
companies comprised of a total of 32 funds.

28
<PAGE>
Shares of the trust

NET ASSET VALUE DETERMINATION

As stated in the Prospectus, the net asset value ("NAV") of the Shares
of the Portfolio is determined once each day on which the NYSE is
open, at the close of its regular trading session (normally 4:00 p.m.,
New York time, Monday through Friday). The NAV of the Shares of the
Portfolio is not determined on days the NYSE is closed (generally, New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas). The per Share NAV of the Shares of the Portfolio is
determined by dividing the total value of a Portfolio's securities and
other assets, less liabilities, attributable to the Shares of the
Portfolio, by the total number of Shares outstanding. In determining
NAV, securities listed on an Exchange, the NASDAQ National Market and
foreign markets are valued at the closing prices on such markets, or
if such price is lacking for the trading period immediately preceding
the time of determination, such securities are valued at their current
bid price. Municipal securities held by the Portfolio are traded
primarily in the over-the-counter market. Valuations of such
securities are furnished by one or more pricing services employed by
the Portfolio and are based upon last trade or closing sales prices or
a computerized matrix system or appraisals obtained by a pricing
service, in each case in reliance upon information concerning market
transactions and quotations from recognized municipal securities
dealers. Other securities that are traded on the over-the-counter
market are valued at their closing bid prices. Foreign securities and
currencies are converted to U.S. dollars using the exchange rate in
effect at the close of the NYSE. The Portfolio will determine the
market value of individual securities held by it, by using prices
provided by one or more professional pricing services which may
provide market prices to other funds, or, as needed, by obtaining
market quotations from independent broker-dealers. Short-term
securities maturing within 60 days are valued on an amortized cost
basis. Securities for which quotations are not readily available, and
other assets, are valued at fair values determined in good faith under
procedures established by and under the supervision of the Trustees.

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

29
<PAGE>

PURCHASES

Shares of the Portfolio can be purchased only by (i) the separate
accounts of participating insurance companies for the purpose of
funding variable insurance contracts and (ii) qualified plans.
Participating insurance companies and certain other designated
organizations are authorized to receive purchase orders on the
Portfolio's behalf and those organizations are authorized to designate
their agents and affiliates as intermediaries to receive purchase
orders. Purchase orders are deemed received by the Portfolio when
authorized organizations, their agents or affiliates receive the
order. The Portfolio is not responsible for the failure of any
designated organization or its agents or affiliates to carry out its
obligations to its customers. Shares of the Portfolio are purchased at
the NAV per Share as determined at the close of the regular trading
session of the NYSE next occurring after a purchase order is received
and accepted by a Portfolio or its authorized agent. In order to
receive a day's price, your order must be received by the close of the
regular trading session of the NYSE as described above in "Net Asset
Value Determination." The prospectus for your insurance company's
separate account or your plan documents contain detailed information
about investing in the Portfolio.

REDEMPTIONS

Redemptions, like purchases, may only be effected through the separate
accounts of participating insurance companies or qualified plans.
Certain designated organizations are authorized to receive redemption
orders on the Portfolio's behalf and those organizations are
authorized to designate their agents and affiliates as intermediaries
to receive redemption orders. Redemption orders are deemed received by
the Portfolio when authorized organizations, their agents or
affiliates receive the order. The Portfolio is not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares normally will be
redeemed for cash, although the Portfolio retains the right to redeem
some or all of its Shares in kind under unusual circumstances, in
order to protect the interests of remaining shareholders, or to
accommodate a request by a particular shareholder that does not
adversely affect the interest of the remaining shareholders, by
delivery of securities selected from its assets at its discretion.
However, the Portfolio is governed by Rule 18f-1 under the 1940 Act,
which requires the Portfolio to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the NAV of the Portfolio during any 90-day
period for any one shareholder. Should redemptions by any shareholder
exceed such limitation, the Portfolio will have the option of
redeeming the excess in cash or in kind. If shares are redeemed in
kind, the redeeming shareholder might incur brokerage costs in
converting the assets to cash. The method of valuing securities used
to make redemptions in kind will be the same as the method of valuing
portfolio securities described under "Shares of the Trust - Net Asset
Value Determination" and such valuation will be made as of the same
time the redemption price is determined.

The right to require the Portfolio to redeem its shares may be
suspended, or the date of payment may be postponed, whenever (1)
trading on the NYSE is restricted, as determined by the SEC, or the
NYSE is closed except for holidays and weekends, (2) the SEC permits
such suspension and so orders, or (3) an emergency exists as
determined by the SEC so that disposal of securities or determination
of NAV is not reasonably practicable.

30
<PAGE>
Income dividends, capital gains distributions and tax status

It is a policy of the Shares of the Portfolio to distribute
substantially all of its respective investment income at least
semi-annually and its respective net realized gains, if any, at least
annually. The Portfolio intends to qualify as a regulated investment
company by satisfying certain requirements prescribed by Subchapter M
of the Internal Revenue Code ("Code"). In addition, the Portfolio
intends to comply with the diversification requirements of Code
Section 817(h) related to the tax-deferred status of insurance company
separate accounts.

All income dividends and capital gains distributions, if any, on the
Portfolio's Shares are reinvested automatically in additional Shares
of the Portfolio at the NAV determined on the first business day
following the record date.

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

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

Because Shares of the Portfolio can only be purchased through variable
insurance contracts or qualified plans, it is anticipated that any
income dividends or capital gains distributions will be exempt from
current taxation if left to accumulate within such contracts or plans.
See the prospectus for the separate account of the related insurance
company or the plan documents for additional information.

31
<PAGE>
Miscellaneous information

The Portfolio is a series of the Trust, an open-end management
investment company registered under the 1940 Act and organized as a
Delaware business trust on May 20, 1993. As of the date of this SAI,
the Trust is offering fourteen series of shares, known as
"Portfolios," each of which consists of two or three classes of
shares. Additional series and/or classes may be created from time to
time.

SHARES OF THE TRUST

The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $.001 per share for each
series of the Trust. Shares of the Portfolio are fully paid and
nonassessable when issued. Shares of the Portfolio participate equally
in dividends and other distributions by the shares of the Portfolio,
and in residual assets of the Portfolio in the event of liquidation.
Shares of the Portfolio have no preemptive, conversion or subscription
rights.

The Portfolio offers two classes of shares. The Shares discussed in
this SAI are offered only in connection with investment in and
payments under variable insurance contracts and to qualified
retirement plans. A second class of shares, Service Shares, is offered
only in connection with investment in and payments under variable
insurance contracts and to qualified retirement plans that require a
fee from Portfolio assets to procure distribution and administrative
services to contract owners and plan participants.

SHAREHOLDER MEETINGS

The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for a specific Portfolio or
for the Trust as a whole for purposes such as electing or removing
Trustees, terminating or reorganizing the Trust, changing fundamental
policies, or for any other purpose requiring a shareholder vote under
the 1940 Act. Separate votes are taken by the Portfolio or class only
if a matter affects or requires the vote of only the Portfolio or
class or the Portfolio's or class' interest in the matter differs from
the interest of other Portfolios of the Trust. Shareholder is entitled
to one vote for each Share owned.

VOTING RIGHTS

A participating insurance company issuing a variable insurance
contract will vote shares in the separate account as required by law
and interpretations thereof, as may be amended or changed from time to
time. In accordance with current law and interpretations, a
participating insurance company is required to request voting
instructions from policy owners and must vote shares in the separate
account, including shares for which no instructions have been
received, in proportion to the voting instructions received.
Additional information may be found in the participating insurance
company's separate account prospectus.

The Trustees are responsible for major decisions relating to the
Portfolio's policies and objectives; the Trustees oversee the
operation of the Portfolio by its officers and review the investment
decisions of the officers.

The present Trustees were elected by the initial trustee of the Trust
on May 25, 1993, and were approved by the initial shareholder on May
25, 1993, with the exception of Mr. Craig and Mr. Rothe who were
appointed by the Trustees as of June 30, 1995 and as of January 1,
1997, respectively. Under the Trust Instrument, each Trustee will
continue in office until the termination of the Trust or his earlier
death, retirement, resignation, bankruptcy, incapacity or removal.
Vacancies will be filled by a majority of the remaining Trustees,
subject to the 1940 Act. Therefore, no annual or regular meetings of
shareholders normally will be held, unless otherwise required by the
Trust Instrument or the 1940 Act. Subject to the foregoing,
shareholders have the power to vote to elect or remove Trustees, to
terminate or reorganize the Portfolio, to amend the Trust Instrument,
to bring certain derivative actions and on any other matters on

32
<PAGE>

which a shareholder vote is required by the 1940 Act, the Trust
Instrument, the Trust's Bylaws or the Trustees.

As mentioned above in "Shareholder Meetings," each share of the
Portfolio of the Trust has one vote (and fractional votes for
fractional shares). Shares of all portfolios of the Trust have
noncumulative voting rights, which means that the holders of more than
50% of the shares of all series of the Trust voting for the election
of Trustees can elect 100% of the Trustees if they choose to do so
and, in such event, the holders of the remaining shares will not be
able to elect any Trustees. The Portfolio or class of the Trust will
vote separately only with respect to those matters that affect only
the Portfolio or class or if an interest of a portfolio or class in
the matter differs from the interests of other portfolios or classes
of the Trust.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500,
Denver, Colorado 80202, independent accountants for the Portfolio,
audit the Portfolio's annual financial statements and prepare its tax
returns.

REGISTRATION STATEMENT

The Trust has filed with the SEC, Washington, D.C., a Registration
Statement under the Securities Act of 1933, as amended, with respect
to the securities to which this SAI relates. If further information is
desired with respect to the Portfolio or such securities, reference is
made to the Registration Statement and the exhibits filed as a part
thereof.

33
<PAGE>
Performance information

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

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

34
<PAGE>
Appendix A

EXPLANATION OF RATING CATEGORIES

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

STANDARD & POOR'S
RATINGS SERVICES

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
AAA......................... Highest rating; extremely strong capacity to pay principal
and interest.
AA.......................... High quality; very strong capacity to pay principal and
interest.
A........................... Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances
and economic conditions.
BBB......................... Adequate capacity to pay principal and interest; normally
exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to
a weakened capacity to pay principal and interest than for
higher rated bonds.
Non-Investment Grade
BB, B, CCC, CC, C........... Predominantly speculative with respect to the issuer's
capacity to meet required interest and principal payments.
BB -- lowest degree of speculation; C -- the highest degree
of speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to
adverse conditions.
D........................... In default.
</TABLE>

MOODY'S INVESTORS SERVICE, INC.

<TABLE>
<S> <C>
BOND RATING EXPLANATION
-----------------------------------------------------------------------------------------
Investment Grade
Aaa......................... Highest quality, smallest degree of investment risk.
Aa.......................... High quality; together with Aaa bonds, they compose the
high-grade bond group.
A........................... Upper-medium grade obligations; many favorable investment
attributes.
Baa......................... Medium-grade obligations; neither highly protected nor
poorly secured. Interest and principal appear adequate for
the present but certain protective elements may be lacking
or may be unreliable over any great length of time.
Non-Investment Grade
Ba.......................... More uncertain, with speculative elements. Protection of
interest and principal payments not well safeguarded during
good and bad times.
B........................... Lack characteristics of desirable investment; potentially
low assurance of timely interest and principal payments or
maintenance of other contract terms over time.
Caa......................... Poor standing, may be in default; elements of danger with
respect to principal or interest payments.
Ca.......................... Speculative in a high degree; could be in default or have
other marked shortcomings.
C........................... Lowest-rated; extremely poor prospects of ever attaining
investment standing.
</TABLE>

Unrated securities will be treated as noninvestment grade securities
unless the portfolio manager determines that such securities are the
equivalent of investment grade securities. Securities that have
received ratings from more than one agency are considered investment
grade if at least one agency has rated the security investment grade.

35
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<PAGE>

[JANUS LOGO]

(800) 525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com

INSJSISAISV

<PAGE>

[JANUS LOGO]

Janus Aspen Series

Service Shares

Strategic Value Portfolio

100 Fillmore Street
Denver, CO 80206-4928
(800) 525-0020

Statement of Additional Information

May 1, 2000

This Statement of Additional Information expands upon and
supplements the information contained in the current Prospectus
for the Service Shares (the "Shares") of Strategic Value
Portfolio. The Portfolio is a separate series of Janus Aspen
Series, a Delaware business trust. The Shares are sold under
the name "Janus Aspen Series." Each of these series of the
Trust represents shares of beneficial interest in a separate
portfolio of securities and other assets with its own objective
and policies. The Portfolio is managed separately by Janus
Capital Corporation.

The Service Shares of the Portfolio may be purchased only by
separate accounts of insurance companies for the purpose of
funding variable life insurance policies and variable annuity
contracts (collectively, "variable insurance contracts") and by
certain qualified retirement plans.

[JANUS LOGO]
<PAGE>

Table of contents

<TABLE>
<S> <C>
Classification, Portfolio Turnover, Investment Policies and
Restrictions, and Investment Strategies and Risks........... 2
Investment Adviser.......................................... 21
Custodian, Transfer Agent and Certain Affiliations.......... 23
Portfolio Transactions and Brokerage........................ 24
Trustees and Officers....................................... 26
Shares of the Trust......................................... 29
Net Asset Value Determination............................ 29
Purchases................................................ 29
Distribution and Shareholder Servicing Plan.............. 30
Redemptions.............................................. 30
Income Dividends, Capital Gains Distributions and Tax
Status...................................................... 32
Miscellaneous Information................................... 33
Shares of the Trust...................................... 33
Shareholder Meetings..................................... 33
Voting Rights............................................ 33
Independent Accountants.................................. 34
Registration Statement................................... 34
Performance Information..................................... 35
Appendix A.................................................. 36
Explanation of Rating Categories......................... 36
</TABLE>

1
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Classification, portfolio turnover, investment policies
and restrictions, and investment
strategies and risks

CLASSIFICATION

PORTFOLIO TURNOVER

INVESTMENT POLICIES AND RESTRICTIONS

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

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

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

2
<PAGE>

(g) The Portfolio may not invest in companies for the purpose of
exercising control of management.

3
<PAGE>

INVESTMENT STRATEGIES AND RISKS

Cash Position

Illiquid Investments

Securities Lending

4
<PAGE>

Short Sales

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

5
<PAGE>

Pass-Through Securities

6
<PAGE>

Investment Company Securities

Depositary Receipts

Municipal Obligations

7
<PAGE>

Other Income-Producing Securities

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

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

Repurchase and Reverse Repurchase Agreements

8
<PAGE>

in effect secured by the value (at least equal to the amount of the
agreed upon resale price and marked-to-market daily) of the underlying
security or "collateral." A risk associated with repurchase agreements
is the failure of the seller to repurchase the securities as agreed,
which may cause the Portfolio to suffer a loss if the market value of
such securities declines before they can be liquidated on the open
market. In the event of bankruptcy or insolvency of the seller, the
Portfolio may encounter delays and incur costs in liquidating the
underlying security. Repurchase agreements that mature in more than
seven days are subject to the 15% limit on illiquid investments. While
it is not possible to eliminate all risks from these transactions, it
is the policy of the Portfolio to limit repurchase agreements to those
parties whose creditworthiness has been reviewed and found
satisfactory by Janus Capital.

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

High-Yield/High-Risk Bonds

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

9
<PAGE>

of income, however, the purchase of any security on which payment of
interest or dividends is suspended involves a high degree of risk.
Such risk includes, among other things, the following:

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

Futures, Options and Other Derivative Instruments

10
<PAGE>

11
<PAGE>

12
<PAGE>

13
<PAGE>

contract before its maturity, or may hold the contract to maturity and
complete the contemplated exchange.

14
<PAGE>

15
<PAGE>

16
<PAGE>

17
<PAGE>

18
<PAGE>

19
<PAGE>

20
<PAGE>
Investment adviser

The Portfolio has agreed to compensate Janus Capital for its services
by the monthly payment of a fee at the annual rate of 0.65% of the
Portfolio's average daily net assets.

Janus Capital has agreed to reimburse Strategic Value Portfolio by the
amount, if any, that such Portfolio's normal operating expenses in any
fiscal year, including the investment advisory fee but excluding the
distribution fee described on page 30, brokerage commissions,
interest, taxes and extraordinary expenses, exceed an annual rate of
1.25% of the average daily net assets of the Portfolio until at least
the next annual renewal of the advisory agreement. Mortality risk,
expense risk and other charges imposed by participating insurance
companies are also excluded from the above expense limitation.

The Advisory Agreement is dated December 14, 1999 and will continue in
effect until July 1, 2001, and thereafter from year to year so long as
such continuance is approved annually by a majority of the Portfolio's
Trustees who are not parties to the Advisory Agreements or interested
persons of any such party, and by either a majority of the outstanding
voting shares or the Trustees of the Portfolio. The Advisory Agreement
(i) may be terminated without the payment of the penalty by any
Portfolio or Janus Capital on 60 days' written notice; (ii) terminates
automatically in the event of its assignment; and (iii) generally, may
not be amended without the approval by vote of a majority of the
Trustees of the Portfolio, including the Trustees who are not
interested persons of the Portfolio or Janus Capital and, to the
extent required by the 1940 Act, the vote of a majority of the
outstanding voting securities of the Portfolio.

21
<PAGE>

KCSI has announced its intention to separate its transportation and
financial services businesses. KCSI anticipates the separation to be
completed in the first half of 2000.

The provisions of the Code are administered by and subject to
exceptions authorized by Janus Capital.

22
<PAGE>
Custodian, transfer agent and certain affiliations

Janus Service Corporation, P.O. Box 173375, Denver, Colorado
80217-3375, a wholly-owned subsidiary of Janus Capital, is the
Portfolio's transfer agent. In addition, Janus Service provides
certain other administrative, recordkeeping and shareholder relations
services to the Portfolio. Janus Service Corporation is not
compensated for its services related to the Shares, except for
out-of-pocket costs.

Janus Distributors, Inc., 100 Fillmore Street, Denver, Colorado
80206-4928, a wholly-owned subsidiary of Janus Capital, is the Trust's
distributor. Janus Distributors is registered as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc.

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Portfolio transactions and brokerage

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research may not necessarily be used by Janus Capital in connection
with the accounts which paid commissions to the broker-dealer
providing such research products and services.

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Trustees and officers

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

James P. Craig, III, Age 43 - Trustee and Vice President*#
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.
#Member of the Trust's Executive Committee.

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- --------------------------------------------------------------------------------
#Member of the Trust's Executive Committee.
*Interested person of the Trust and of Janus Capital.

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Kelley Abbott Howes, Age 34 - Vice President and Secretary*
100 Fillmore Street
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Vice President and Secretary of Janus Investment Fund. Vice President
and Assistant General Counsel of Janus Capital. Vice President of
Janus Distributors, Inc. Assistant Vice President of Janus Service
Corporation.

Glenn P. O'Flaherty, Age 41 - Treasurer and Chief Accounting Officer*
100 Fillmore Street, Suite 300
Denver, CO 80206-4928
- --------------------------------------------------------------------------------
Treasurer and Chief Accounting Officer of Janus Investment Fund. Vice
President of Janus Capital. Formerly (1991-1997), Director of Fund
Accounting, Janus Capital.
- --------------------------------------------------------------------------------
*Interested person of the Trust and of Janus Capital.

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Shares of the trust

NET ASSET VALUE DETERMINATION

PURCHASES

Shares of the Portfolio can be purchased only by (i) the separate
accounts of participating insurance companies for the purpose of
funding variable insurance contracts and (ii) qualified plans.
Participating insurance companies and certain designated organizations
are authorized to receive purchase orders on the Portfolio's behalf
and those organizations are authorized to designate their agents and
affiliates as intermediaries to receive purchase orders. Purchase
orders are deemed received by the Portfolio when authorized
organizations, their agents or affiliates receive the order. The
Portfolio is not responsible for the failure of any designated
organization or its agents or affiliates to carry out its obligations
to its customers. Shares of the Portfolio are purchased at the NAV per
Share as determined at the close of the regular trading session of the
NYSE next occurring after a purchase order is received and accepted by
a Portfolio or its authorized agent. In order to receive a day's
price, your order must be received by the close of the regular trading
session of the NYSE as described above in "Net Asset Value
Determination." The prospectus

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for your insurance company's separate account or your plan documents
contain detailed information about investing in the Portfolio.

DISTRIBUTION AND SHAREHOLDER SERVICING PLAN

Under a distribution and shareholder servicing plan ("Plan") adopted
in accordance with Rule 12b-1 under the 1940 Act, the Shares may pay
Janus Distributors, the Trust's distributor, a fee at an annual rate
of up to 0.25% of the average daily net assets of the Shares of the
Portfolio. Under the terms of the Plan, the Trust is authorized to
make payments to Janus Distributors for remittance to insurance
companies and qualified plan service providers as compensation for
distribution and shareholder servicing performed by such service
providers. The Plan is a compensation type plan and permits the
payment at an annual rate of up to 0.25% of the average daily net
assets of the Shares of the Portfolio for recordkeeping and
administrative services as well as activities which are primarily
intended to result in sales of the Shares, including but not limited
to preparing, printing and distributing prospectuses, Statements of
Additional Information, shareholder reports, and educational materials
to prospective and existing contract owners and plan participants;
responding to inquiries by contract owners and plan participants;
receiving and answering correspondence; contract owner and participant
level recordkeeping and administrative services; and similar
activities. On December 14, 1999, Trustees unanimously approved the
Plan which became effective on that date. The Plan and any Rule 12b-1
related agreement that is entered into by the Portfolio or Janus
Distributors in connection with the Plan will continue in effect for a
period of more than one year only so long as continuance is
specifically approved at least annually by a vote of a majority of the
Trustees, and of a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Trust and who have no
direct or indirect financial interest in the operation of the Plan or
any related agreements ("12b-1 Trustees"). All material amendments to
the Plan must be approved by a majority vote of the Trustees,
including a majority of the 12b-1 Trustees, at a meeting called for
that purpose. In addition, the Plan may be terminated at any time,
without penalty, by vote of a majority of the outstanding Shares of
the Portfolio or by vote of a majority of 12b-1 Trustees.

REDEMPTIONS

Redemptions, like purchases, may only be effected through the separate
accounts of participating insurance companies or qualified plans.
Certain designated organizations are authorized to receive redemption
orders on the Portfolio's behalf and those organizations are
authorized to designate their agents and affiliates as intermediaries
to receive redemption orders. Redemption orders are deemed received by
the Portfolio when authorized organizations, their agents or
affiliates receive the order. The Portfolio is not responsible for the
failure of any designated organization or its agents or affiliates to
carry out its obligations to its customers. Shares normally will be
redeemed for cash, although the Portfolio retains the right to redeem
some or all of its shares in kind under unusual circumstances, in
order to protect the interests of remaining shareholders, or to
accommodate a request by a particular shareholder that does not
adversely affect the interest of the remaining shareholders, by
delivery of securities selected from its assets at its discretion.
However, the Portfolio is governed by Rule 18f-1 under the 1940 Act,
which requires the Portfolio to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the NAV of the Portfolio during any 90-day
period for any one shareholder. Should redemptions by any shareholder
exceed such limitation, the Portfolio will have the option of
redeeming the excess in cash or in kind. If shares are redeemed in
kind, the redeeming shareholder might incur brokerage costs in
converting the assets to cash. The method of valuing securities used
to make redemptions in kind will be the same as the method of valuing
portfolio securities described under "Shares of the Trust - Net Asset
Value Determination" and such valuation will be made as of the same
time the redemption price is determined.

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Income dividends, capital gains distributions and tax status

Because Shares of the Portfolio can only be purchased through variable
insurance contracts or qualified plans, it is anticipated that any
income dividends or capital gains distributions will be exempt from
current taxation if left to accumulate within such plans. See the
prospectus for the separate account of the related insurance company
or the plan documents for additional information.

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Miscellaneous information

SHARES OF THE TRUST

The Portfolio offers two classes of shares. The Shares discussed in
this SAI are offered only in connection with investment in and
payments under variable insurance contracts and to qualified
retirement plans that require a fee from Portfolio assets to procure
distribution and administrative services to contract owners and plan
participants. A second class of shares, Institutional Shares, is
offered only in connection with investments in and payments under
variable insurance contracts as well as other qualified retirement
plans.

SHAREHOLDER MEETINGS

The Trust does not intend to hold annual shareholder meetings.
However, special meetings may be called for a specific Portfolio or
for the Trust as a whole for purposes such as electing or removing
Trustees, terminating or reorganizing the Trust, changing fundamental
policies, or for any other purpose requiring a shareholder vote under
the 1940 Act. Separate votes are taken by the Portfolio or class only
if a matter affects or requires the vote of only the Portfolio or
class or the Portfolio's or class' interest in the matter differs from
the interest of other Portfolios of the Trust. A shareholder is
entitled to one vote for each Share owned.

VOTING RIGHTS

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Portfolio, to amend the Trust Instrument, to bring certain derivative
actions and on any other matters on which a shareholder vote is
required by the 1940 Act, the Trust Instrument, the Trust's Bylaws or
the Trustees.

As mentioned above in "Shareholder Meetings," each share of the
Portfolio of the Trust has one vote (and fractional votes for
fractional shares). Shares of all portfolios of the Trust have
noncumulative voting rights, which means that the holders of more than
50% of the shares of all series of the Trust voting for the election
of Trustees can elect 100% of the Trustees if they choose to do so
and, in such event, the holders of the remaining shares will not be
able to elect any Trustees. The Portfolio or class of the Trust will
vote separately only with respect to those matters that affect only
the Portfolio or class in the matter differs from the interests of
other portfolios or classes of the Trust.

INDEPENDENT ACCOUNTANTS

REGISTRATION STATEMENT

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Performance information

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Appendix A

EXPLANATION OF RATING CATEGORIES

STANDARD & POOR'S
RATINGS SERVICES

MOODY'S INVESTORS SERVICE, INC.

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(800) 525-0020
100 Fillmore Street
Denver, Colorado 80206-4928
janus.com

INSJSSSAISV