UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment
(Amendment No. ______________ )
Filed by the Registrant [X]x Filed by a Party other than the Registrant [ ]
¨
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Section 240.14a-12
JANUS INVESTMENT FUND
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(Exact
| ¨ | Preliminary Proxy Statement | |
| ¨ | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| x | Definitive Proxy Statement | |
| ¨ | Definitive Additional Materials | |
| ¨ | Soliciting Material Pursuant to § 240.14a-12 | |
Janus Investment Fund
(Exact Name of Registrant as Specified in Charter)
151 Detroit Street, Denver, Colorado 80206-4805
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(Address
(Address of Principal Executive Offices)
303-333-3863
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(Registrant's
(Registrant’s Telephone No., including Area Code)
Stephanie Grauerholz-Lofton --Grauerholz — 151 Detroit Street, Denver, Colorado 80206-4805
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CONTROL NUMBER.
SEC 1913 (04-05)
FOR SHAREHOLDERS OF
JANUS INVESTMENT FUND
(THE "TRUST")
(JANUS LOGO)
[ , 2010]
| x | No fee required. | |||
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For shareholders of Janus Investment Fund |  |
May 5, 2016
Dear Shareholder:
As a shareholder of one or more Janus mutual funds, the Board of Trustees for your Fund is requesting that you vote on one or morea proposal to elect eight Trustees to serve on the Board of the five proposals
thatTrustees of your Fund. The proposal will be presented to shareholders at twoa joint Special MeetingsMeeting of Shareholders to be held on [ , 2010].June 14, 2016. The various proposals areproposal is briefly summarized below and in the Synopsis section that precedes the enclosed joint proxy statement (the "Proxy Statement"“Proxy Statement”). The Proxy Statement includes a detailed discussion of each of the proposals,proposal, which you should read carefully. The Board of Trustees recommends that you vote to approve all of the applicable proposals
presentedproposal as presented.
The proposal for your consideration.
The first special meeting will occur at [9:30 a.m.] and relatesconsideration applies to PROPOSAL
1 WHICH APPLIES TO ALL JANUS FUNDS. Proposal 1all Janus funds,and asks that shareholders elect teneight Trustees to serve on the Board of Trustees. EightSix of the individuals you are being asked to consider for election currently serve on the Funds'Funds’ Board of Trustees and the remaining two nominees would become new Trustees upon election. Because two Trustees will retire effective December 31, 2010 in accordance with
the retirement policy set by the Trustees, the Board is seeking to add two
independent Trustees to maintain the number of Trustees at eight following their
retirement. Each nominee is considered "independent,"“independent,” meaning that the nominee is not affiliated with the Funds'Funds’ adviser or its related entities, and if elected would serve as an "independent“Independent Trustee."
”
The second special meeting will occur at [10:00 a.m.] and relates to
Proposals 2, 3, 4 and 5 which apply to specific Funds. PROPOSAL 2 SEEKS
SHAREHOLDER APPROVAL TO ADD "PERFORMANCE FEES" AS PART OF THE INVESTMENT
ADVISORY FEE STRUCTURE FOR FIVE FUNDS: JANUS FORTY FUND, JANUS FUND, JANUS
GLOBAL OPPORTUNITIES FUND, JANUS OVERSEAS FUND AND JANUS TWENTY FUND. By adding
a performance fee structure, the advisory fee paid to each Fund's adviser, Janus
Capital Management LLC ("Janus Capital"), would change from a fixed-rate fee to
a fee that varies based on the Fund's performance relative to its benchmark
index. The Board ofIndependent Trustees has previously approved performance-based advisory
fees for a number of Janus funds, and believes that moving to a fee schedule
that moves up or down based upon a Fund's performance better aligns the
interests of the Fund's manager with thoseFunds believe that the proposal is in the best interest of the shareholders of the Fund.
PROPOSAL 3 APPLIES TO JANUS GLOBAL REAL ESTATE FUND ONLY, and seeks
shareholder approval to change the benchmark index currently used to calculate
the performance based investment advisory fee the Fund pays to the Fund's
adviser. The independent third-party that created the Fund's current benchmark
index has created a new index, which the Board of Trustees believes better
reflects the investment approach of theeach Fund and as a result, would be more
appropriate to compare againstits shareholders and have recommended that shareholders vote “FOR” the Fund's performance.
Finally, PROPOSALS 4 AND 5 APPLY TO JANUS GLOBAL OPPORTUNITIES FUND ONLY.
Proposal 4 seeks shareholder approval to amend the investment advisory agreement
between the Fund and Janus Capital, the Fund's investment adviser, to allow
Janus Capital to engage a subadviser for the Fund. Proposal 5 seeks shareholder
approval of a new sub-advisory agreement between Janus Capital and Perkins
Investment Management LLC ("Perkins"), the proposed subadviser for the Fund. As
discussed in greater detail in the attached materials, these changes are part of
a larger effort to focus the Fund's investment approach primarily on value
investing. If shareholders approve the new sub-advisory agreement, Perkins will
assume the day-to-day management of the Fund, and the Fund's current portfolio
manager, Gregory Kolb, will continue to manage the Fund although as an employee
of Perkins rather than Janus Capital. Note that Janus Capital, and not the Fund,
is responsible for paying the subadviser's fee. If Fund shareholders approve a
performance-based fee for the Fund as discussed in Proposal 2, then the
subadvisory fee Janus Capital pays the Fund's subadviser would also be a
performance-based fee.
THE INDEPENDENT TRUSTEES OF THE FUNDS BELIEVE THAT EACH PROPOSAL IS IN THE
BEST INTEREST OF EACH FUND, AS APPLICABLE, AND ITS SHAREHOLDERS AND HAVE
RECOMMENDED THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL(S) APPLICABLE TO THEIR
FUND.
proposal.
You can vote in one of four ways:
- BY MAIL
Your vote is important, so please read the enclosed Proxy Statement carefully and submit your vote. If you have any questions about the proposal(s),proposal, please call the proxy solicitor, [ ],Computershare Fund Services, at [1- ].
1-866-492-0863.
Thank you for your consideration of the proposal(s).proposal. We value you as a shareholder and look forward to our continued relationship.
Sincerely,
/s/
/s/ William F. McCalpin
William F. McCalpin
Chairman of the Board of
Janus Investment Fund
(JANUS LOGO)
JANUS INVESTMENT FUND
151 DETROIT STREET
DENVER, COLORADODetroit Street
Denver, Colorado 80206
NOTICE OF A JOINT SPECIAL MEETINGSMEETING OF SHAREHOLDERS
Notice is hereby given that a joint Special Meeting of Shareholders of Janus Investment Fund (the "Trust,"“Trust,” each separate series thereof, a "Fund"“Fund”), has been called to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver, Colorado 80206, on [ , 2010],June 14, 2016 at [9:309:00 a.m.] Mountain Time.Time (together with any adjournments or postponements thereof, the “Meeting”). At the meeting,Meeting, shareholders of each Fund will be asked to vote on the proposal set forth below and to transact such other business, if any, as may properly come before the meeting.
Meeting.
Proposal 1. To elect teneight Trustees, each of whom is considered "independent."
Further notice is hereby given that a separate joint Special Meeting of
Shareholders of the Trust on behalf of specific Funds as indicated below, has
been called to be held at the JW Marriott Hotel, 150 Clayton Lane, Denver,
Colorado 80206, on [ , 2010], at [10:00 a.m.] Mountain Time. At the
meeting, shareholders of each Fund noted below will be asked to vote on the
proposals set forth below, as applicable, and to transact such other business,
if any, as may properly come before the meeting.
Proposal 2. To approve an amended and restated investment advisory
agreement between the Fund and Janus Capital Management LLC
("Janus Capital") to change the investment advisory fee rate
from a fixed rate to a rate that adjusts up or down based upon
the Fund's performance relative to its benchmark index for the
following Funds:
a. Janus Forty Fund
b. Janus Fund
c. Janus Global Opportunities Fund
d. Janus Overseas Fund
e. Janus Twenty Fund
Proposal 3. For Janus Global Real Estate Fund only, to approve an
amendment to the Fund's investment advisory agreement, which
changes the Fund's benchmark index for purposes of calculating
the performance-based investment advisory fee.
Proposal 4. For Janus Global Opportunities Fund only, to approve an
amended and restated investment advisory agreement between the
Fund and Janus Capital to allow Janus Capital to engage a
subadviser for the Fund.
Proposal 5. For Janus Global Opportunities Fund only, to approve a
subadvisory agreement between Janus Capital, the Fund's
investment adviser, and Perkins Investment Management LLC
("Perkins"), that appoints Perkins as subadviser to the Fund.
Unless otherwise indicated, the first joint Special Meeting of Shareholders
of the Trust and the second joint Special Meeting of Shareholders of the Trust
(together with any adjournments or postponements thereof) are each referred to
herein as the "Meeting" and together, the "Meetings."
“independent.”
Shareholders of record of each Fund, as of the close of business on [ , 2010],April 5, 2016, will receive notice of the MeetingsMeeting and will be entitled to vote at the MeetingsMeeting with respect to proposals applicablethe proposal.
If you do not expect to their Fund.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING PLEASE COMPLETE, SIGN, AND DATE
THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED ADDRESSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR TAKE ADVANTAGE OF THE
INTERNET OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE ENCLOSED PROXY
CARD(S)attend the Meeting please complete, sign, and date the enclosed proxy card(s) and return it in the enclosed addressed envelope, which needs no postage if mailed in the United States, or take advantage of the Internet or telephonic voting procedures described on the enclosed proxy card(s). PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) (OR VOTING BY INTERNET OR
TELEPHONE) WILL HELP YOUR FUND TO AVOID THE EXPENSES OF ADDITIONAL
SOLICITATIONS. IF YOU WISH TO ATTEND THE MEETING AND VOTE YOUR SHARES IN PERSON
AT THAT TIME, YOU WILL STILL BE ABLE TO DO SO.
Prompt return of the enclosed proxy card(s) (or voting by Internet or telephone) will help your Fund to avoid the expenses of additional solicitations. If you wish to attend the Meeting and vote your shares in person at that time, you will still be able to do so.
By order of the Board of Trustees,
/s/ Robin C. Beery
Robin C. Beery
/s/ Bruce L. Koepfgen
Bruce L. Koepfgen
President and Chief Executive Officer of
Janus Investment Fund
[ , 2010]
May 5, 2016
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [ , 2010]:
THE ENCLOSED PROXY STATEMENT, ALONG WITH THE FUNDS' MOST RECENT ANNUAL REPORT
AND ANY
MORE RECENT SEMIANNUAL REPORT, ARE AVAILABLE FEE OF CHARGE AT
[WWW. .COM]JUNE 14, 2016:
The enclosed Proxy Statement is available free of charge at janus.com/fundupdate.
The Funds’ most recent annual report and any more recent semiannual report
are available free of charge at janus.com/info
(or janus.com/reports if you hold shares directly with Janus Capital).
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to you and may avoid any delay involved in validating your vote if you fail to sign your proxy card(s) properly.
1. INDIVIDUAL ACCOUNT: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNT: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the
proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:
| 1. | Individual Account: Sign your name exactly as it appears in the registration on the proxy card. |
| 2. | Joint Account: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card. |
| 3. | All Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example: |
| Registration | Valid Signature | |
Corporate Account | ||
(1) ABC Corp. | ABC Corp. | |
(2) ABC Corp. | John Doe, Treasurer | |
(3) ABC Corp. c/o John Doe, Treasurer | John Doe | |
(4) ABC Corp. Profit Sharing Plan | John Doe, Trustee | |
Trust Account | ||
(1) ABC Trust | Jane B. Doe, Trustee | |
(2) Jane B. Doe, Trustee u/t/d 12/28/78 | Jane B. Doe | |
Custodial or Estate Account | ||
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA | John B. Smith | |
(2) Estate of John B. Smith | John B. Smith, Jr., Executor |
TABLE OF CONTENTS
SYNOPSIS | 1 | |||
JOINT PROXY | 3 | |||
Proposal 1 | 4 | |||
Introduction | 4 | |||
General Information Regarding the Board of | 8 | |||
Committees of the Board of | 10 | |||
Process for Identifying and Evaluating Trustee Nominees and Nominee | 11 | |||
Board Oversight of Risk | 13 | |||
Trustee Share | 14 | |||
Compensation of | 16 | |||
Officers of the |
| 17 | ||||
MANAGEMENT AND OTHER SERVICE PROVIDERS | 18 | |||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 18 | |||
ADDITIONAL INFORMATION ABOUT THE | 20 | |||
Quorum and | 20 | |||
Fund Share | 20 | |||
Solicitation of | 21 | |||
Shareholder Proposals for Subsequent | 22 | |||
Shareholder | 23 | |||
Reports to Shareholders and Financial | 23 | |||
Other Matters to Come Before the | 24 | |||
APPENDICES | ||||
Appendix A | A-1 | |||
Appendix B | B-1 | |||
Appendix | C-1 | |||
Appendix | D-1 |
i
The following synopsis is intended to provide an overview of the information provided in the joint proxy statement (the "Proxy Statement"“Proxy Statement”) and to summarize the proposalsproposal to be considered at the two joint Special MeetingsMeeting of Shareholders, or at any adjournment or postponement thereof (each a "Meeting,"
and together,(the “Meeting”).
What is the "Meetings"purpose of this proxy solicitation?
The purpose of this proxy solicitation is to ask shareholders of each Fund to vote on the election of eight members of the Board of Trustees of the Funds (the “Board”).
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
There
Who are several proposals thatthe nominees to be elected Trustees?
You are being votedasked to elect eight Trustees to serve on at the Meetings. Not
all of these proposals will impact your Fund. Please refer to the following
table as a reference for which proposal(s) applies to you.
Why am I being asked to elect Trustees?
The Funds are not required and do not intend, to hold annual shareholder meetings for the purpose of electing Trustees, under the
terms of a settlement reached between Janus Capital Management LLC ("Janus
Capital") and the Securities and Exchange Commission in August 2004, commencing
in 2005 and not less than every fifth calendar year thereafter, the Funds are
obligated to hold a meeting of shareholders to elect Trustees. The last
shareholder meetingor to elect Trustees occurredannually. Since the last Trustee election in 2005. The2010, the Board of Trustees of
your Fund (the "Board") is currently comprised ofhas sought to maintain its size at eight Trustees,members, with each serving as an Independent Trustee. Currently, the Board only has six members, all of whom are independent. TwoIndependent Trustees. While the Board ordinarily can fill vacancies without a shareholder vote, under applicable laws new Trustees will retire effective December 31, 2010 in
accordance with the retirement policy set by the Trustees. The Board is seeking
to add two independent Trustees to maintain the number of Trustees at eight
going forward. All eight membersmay not be appointed if after such appointment two-thirds of the current BoardTrustees would not have been elected by shareholders, which would be the case if Ms. Etienne and two new members will
stand for election at the Meeting and, if approved, all ten members will serve
on the Board until two of those members retire effective December 31, 2010.
PROPOSAL 2: APPROVAL OF AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENTS - PERFORMANCE FEE (JANUS FORTY FUND, JANUS FUND, JANUS
GLOBAL OPPORTUNITIES FUND, JANUS OVERSEAS FUND AND JANUS TWENTY
FUND ONLY)
WHY IS THE BOARD PROPOSING MOVING TO A PERFORMANCE-BASED FEE SCHEDULE FOR
CERTAIN FUNDS?
The Board believes that a fee schedule that adjusts based upon the positive
or negative performance of a Fund, relative to its benchmark index, better
aligns the interests of the portfolio manager and Janus Capital with those of
the Fund's shareholders. Currently, each Fund pays an advisory fee at a fixed
annual rate. As proposed, the rate of the investment advisory fee payable to
Janus Capital would decrease when a Fund does not perform well over a certain
time period, relative to its benchmark index, and would increase during periods
when the Fund outperforms its benchmark index.
2
Janus Capital believes that the proposed advisory fee structure will enable it
to maintain the quality of services it provides to each Fund and to attract and
retain talented investment personnel.
WHAT EFFECT WILL MOVING TO A PERFORMANCE-BASED FEE SCHEDULE FOR CERTAIN
FUNDS HAVE UPON THE INVESTMENT ADVISORY FEE RATE EACH FUND PAYS TO JANUS
CAPITAL?
It is not possible to predict the effect of the performance adjustment on
future overall compensation paid by a Fund to Janus Capital, since any
adjustment will depend on the cumulative performance of the Fund relativeMr. Poliner were appointed to the approved Fund benchmark index, as well as future changes to the size of the Fund
over the specified performance period. That being said, the proxy statement
contains information to help you evaluate the impact of this proposed change in
the fee structure.
PROPOSAL 3: APPROVAL OF AMENDED INVESTMENT ADVISORY AGREEMENT - BENCHMARK
CHANGE (JANUS GLOBAL REAL ESTATE FUND ONLY)
WHY IS JANUS CAPITAL PROPOSING TO CHANGE JANUS GLOBAL REAL ESTATE FUND'S
BENCHMARK INDEX?
At the time Janus Global Real Estate Fund was launched in 2007, the Fund's
current benchmark index, the FTSE EPRA/NAREIT Developed Index ("Developed
Index"), was the most appropriate benchmark index available for purposes of
comparative analysis of the Fund's performance, as both the Developed Index and
the Fund included exposure to global markets. The Fund, however, also included
exposure to emerging markets, but at that time, there was no comparable
benchmark index available with emerging markets exposure. Recently, FTSE Group
(FTSE) created the FTSE EPRA/NAREIT Global Index ("Global Index"), which
broadens the exposure offered by the Developed Index by including exposure to
emerging markets. Since Janus Global Real Estate Fund's strategy allows the
portfolio manager to invest in emerging market securities, and the Fund's
portfolio manager expects to continue investing in such securities, Janus
Capital proposed, and the Board of Trustees agreed, that the Global Index is a
more appropriate benchmark index for purposes of measuring the Fund's
performance. As of December 31, 2009, [ %] of the Fund's investments were in
emerging markets securities. This change in benchmark index requires shareholder
approval because the benchmark index is used as part of the calculation to
determine the performance fee paid by the Fund to Janus Capital.
WILL THE CHANGE IN THE BENCHMARK INDEX FOR JANUS GLOBAL REAL ESTATE FUND
RESULT IN A CHANGE TO THE INVESTMENT OBJECTIVE OR STRATEGIES OF THE FUND?
No. The investment objective will remain the same, which is to seek total
return through a combination of capital appreciation and current income. The
Fund expects to maintain its current investment parameters of investing at least
80% of its net assets plus the amount of any borrowings for investment purposes,
in equity and debt securities of real estate-related companies, which can be
U.S. and non-U.S. real estate companies. In addition, the Fund will continue to
concentrate 25% or more of its net assets in securities
3
of issuers in real estate or real estate-related industries. With respect to the
Fund's investments in non-U.S. real estate companies, the Fund expects that,
under normal market conditions, it will maintain investments in issuers from
several different developed countries, including the U.S, and also will continue
to be able to invest up 15% of its net assets in emerging markets.
WHAT EFFECT WILL THE BENCHMARK INDEX CHANGE FOR JANUS GLOBAL REAL ESTATE
FUND HAVE UPON THE INVESTMENT ADVISORY FEE RATE THE FUND PAYS TO JANUS CAPITAL?
Janus Global Real Estate Fund pays Janus Capital a fee that adjusts up or
down based on the Fund's performance compared to its benchmark index,
essentially called a performance fee. The benchmark index change will not alter
the base fee component of the investment advisory fee, which is an annualized
rate of 0.75% of the average daily closing net asset value of the Fund. Whether
the change in the benchmark index to the Global Index results in an increase or
decrease in the performance fee component of the advisory fees that otherwise
would have been paid by the Fund depends on whether the Fund's future
performance compares more favorably with the Global Index or the Developed
Index. As discussed in the Proxy Statement, based on a pro forma analysis of the
Fund's past performance over comparable periods under identical assumptions,
Janus Capital would have been paid the same amount regardless of which index was
used to calculate the performance fee component. While it is not possible to
predict the effect of the performance adjustment on future overall compensation
paid by the Fund to Janus Capital, since any adjustment will depend on the
future cumulative performance of the Fund relative to the approved Fund
benchmark index, as well as future changes to the size of the Fund over the
specified period of time, this proxy statement contains information to help you
evaluate the impact of this change.
PROPOSAL 4: APPROVAL OF AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
(JANUS GLOBAL OPPORTUNITIES FUND ONLY)
WHY AM I BEING ASKED TO APPROVE AN AMENDMENT TO THE INVESTMENT ADVISORY
AGREEMENT FOR JANUS GLOBAL OPPORTUNITIES FUND?
As further explained below and in Proposal 5, Janus Capital believes it is
in the best interest of Janus Global Opportunities Fund to transition the Fund's
investment management to Perkins Investment Management LLC ("Perkins") to serve
as subadviser to the Fund. In order to do this, however, modifications must be
made to the investment advisory agreement currently in place between the Fund
and Janus Capital that will allow Janus Capital to engage Perkins, or any other
eligible entity, as the Fund's subadviser. The modifications will also set out
that the obligation to compensate Perkins, or any other subadviser, is the
responsibility of Janus Capital, not the Fund.
WILL THE AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT FOR JANUS GLOBAL
OPPORTUNITIES FUND INCREASE THE FUND'S INVESTMENT ADVISORY FEE RATE?
No. The investment advisory fee rate paid by the Fund will not increase as
a result of the amendment to the investment advisory agreement. Please keep in
mind that shareholders of the Fund are, however, being asked to approve a
performance-based
4
investment advisory fee, payable by the Fund to Janus Capital, as described
above and in Proposal 2.c.Board. Accordingly, if shareholders of the Fund approve the
performance-based investment fee structure under Proposal 2.c., Janus Capital's
fee rate will adjust up or down based on the Fund's future performance.
PROPOSAL 5: APPROVAL OF SUBADVISORY AGREEMENT (JANUS GLOBAL OPPORTUNITIES FUND
ONLY)
WHY AM I BEING ASKED TO APPROVE A SUBADVISORY AGREEMENT FOR JANUS GLOBAL
OPPORTUNITIES FUND?
As Janus Capital continues its goal of moving toward a more cohesive
operating platform, it periodically reviews its mutual fund line-up to ensure
that all funds are being properly positioned based on their primary investment
strategies. As a result, in an effort to take advantage of the broad investment
expertise within Janus Capital and Perkins and, in particular, Perkins' value
investment capability, Janus Capital believes it is in the best interest of
Janus Global Opportunities Fund to transition the Fund's investment approach to
a more traditional value focus, and recommended to the Board of Trustees that
Perkins become the subadviser to the Fund. However, because the Fund is
registered under the Investment Company Act of 1940, as amended, (the "1940
Act"), which generally requires that any investment advisory agreement,
including a subadvisory agreement, be approved by a fund's shareholders prior to
becoming effective, you are being asked to approve a subadvisory agreement
between Janus Capital, on behalfelect Ms. Etienne and Mr. Poliner and each currently serving Trustee as Independent Trustees (1) to return the Board to its normal size and (2) to provide the Board with flexibility going forward to replace Trustees as needed without the time and expense of unnecessary proxy solicitations.
Information about the Trustee nominees, including age, principal occupations during the past five years, and other information, such as the nominees’ experience, qualifications, attributes, or skills, is set forth in the Proxy Statement.
Additional Information
What is the recommendation of the Fund, and Perkins.
WILL ADDING PERKINS AS A SUBADVISER TO JANUS GLOBAL OPPORTUNITIES FUND
INCREASE THE FUND'S INVESTMENT ADVISORY FEE?
No. The investment advisory fee rate paid by the Fund will not increase as
a resultBoard of adding Perkins as subadviser to the Fund. Janus Capital, and not the
Fund, will pay Perkins a subadvisory fee for its services provided to the Fund.
Shareholders of the Fund are, however, being asked to approve a performance-
based investment advisory fee structure payable by the Fund to Janus Capital, as
described above and in Proposal 2.c. If shareholders of the Fund approve the
performance-based investment advisory fee under Proposal 2.c., then Perkins'
subadvisory fee rate will also adjust up or down in line with the performance
fee paid by the Fund to Janus Capital, because under the terms of the proposed
subadvisory agreement, Janus Capital will pay 50% of the advisory fee it
receives from the Fund to Perkins.
WILL ADDING PERKINS AS A SUBADVISER TO JANUS GLOBAL OPPORTUNITIES FUND
AFFECT THE MANAGEMENT OF THE FUND?
No. The Fund's current Portfolio Manager will continue to manage the Fund
although as an employee of Perkins rather than Janus Capital. Janus Capital will
continue to serve as investment adviser, overseeing Perkins.
5
HOW WILL ADDING PERKINS AS A SUBADVISER TO JANUS GLOBAL OPPORTUNITIES FUND
AFFECT THE FUND'S INVESTMENT STRATEGIES?
The engagement of Perkins as the Fund's subadviser will result in certain
changes, including changes to the Fund's investment objective and investment
strategies. In an effort to take advantage of Perkins' value investment
capabilities, the Fund will be moving from a combination growth/value
orientation to a traditional value orientation. Specifically, while the Fund
will continue to invest in common stocks of companies of any size located
throughout the world, including emerging markets, the Fund will seek to invest
in companies that are temporarily misunderstood by the investment community or
that demonstrate special situations or turnarounds. Pursuant to the "value"
strategy, the Fund's portfolio manager will generally look for companies with
(i) a low price relative to assets, earnings, and/or cash flows or business
franchise; (ii) products and services that give them a competitive advantage;
and (iii) quality balance sheets and strong management. As a part of the new
value strategy, the Fund's investment objective will change from long-term
growth of capital to capital appreciation.
Further, in connection with moving to the traditional value investing
strategy, the portfolio manager of the Fund anticipates increasing the number of
holdings in the portfolio from a range of 25 to 40 holdings to a range of 70 to
100 holdings, thus reclassifying the Fund from "non-diversified" to
"diversified" (as defined under the 1940 Act), meaning it can invest a greater
percentage of its assets in more companies. The portfolio manager believes that
expanding the range of holdings will increase the Fund's opportunity for
investments and will align the product with Perkins' value portfolio process.
Moving to a larger range of holdings could increase the expenses of the Fund,
such as additional trading costs. The Fund will also change its name to "Perkins
Global Value Fund." The Fund will continue to be managed against the MSCI World
Index (as the primary benchmark) and the MSCI All Country World Index (as the
secondary benchmark). Pending shareholder approval of Perkins as the subadviser
to the Fund, all changes are expected to become effective on or about July 1,
2010.
6
A comparison of the Fund currently and as proposed to be changed, is
provided below:
CURRENT PROPOSED
------------------------ ------------------------
Fund Name............... Janus Global Perkins Global Value
Opportunities Fund Fund
Portfolio Manager....... Gregory R. Kolb No change
Investment objective.... Long-term growth of Capital appreciation
capital
Investment strategies... Invests in common stocks Invests in common stocks
of companies located of companies of any size
throughout the world, located through the
including emerging world, including
markets. Seeks emerging markets.
attractively valued Focuses on companies
companies that are that have fallen out of
improving their free favor, temporarily
cash flow or who are misunderstood by the
special situations investment community or
companies or temporarily demonstrate special
out of favor. Applies situations or
"bottom up" approach turnarounds. Seeks
companies with low price
relative to
assets/earnings/ cash
flows or business
franchise, competitive
advantage and/or quality
balance sheets and
strong management
Benchmarks: Primary..... MSCI World Index No change
Secondary.. MSCI All Country World No change
Index
Holdings Range.......... 25-40 70-100
Diversification
Classification (under
the 1940 Act)......... Non-diversified Diversified
ADDITIONAL INFORMATION
WHAT IS THE RECOMMENDATION OF THE BOARD OF TRUSTEES?
Trustees?
The Board of Trustees recommends that you vote "FOR"“FOR” the proposal(s)
applicableproposal.
1
Who is eligible to your Fund.
WHAT WILL HAPPEN IF SHAREHOLDERS OF A FUND DO NOT APPROVE THE APPLICABLE
PROPOSAL TO AMEND THE INVESTMENT ADVISORY AGREEMENT FOR THEIR FUND
If shareholders of a Fund do not approve one or more of the proposals
applicable to the Fund, the Fund will continue to be managed pursuant to the
terms of the investment advisory currently in place for the Fund and Board of
Trustees will take such action as it deems to be in the best interest of the
Fund, including potentially soliciting additional proxies.
7
WHO IS ELIGIBLE TO VOTE?
vote?
Shareholders who owned shares of a Fund at the close of business on [ , 2010]April 5, 2016 (the "Record Date"“Record Date”) will be entitled to be present and vote at the Meetings.Meeting. Those shareholders are entitled to one vote for each whole dollar (and a proportionate fractional vote for each fractional dollar) of net asset value owned on all matters presented at the MeetingsMeeting regarding their respective Fund.
HOW DO
How do I VOTE MY SHARES?
vote my shares?
You can vote in any one of four ways:
- BY MAIL,
Whichever method you choose, please take the time to read the full text of the Proxy Statement before you vote.
It is important that shareholders respond to ensure that there is a quorum for eachthe Meeting. If we do not receive your response within a few weeks, you may be contacted by [ ],Computershare Fund Services (“Computershare”), the proxy solicitor engaged by Janus Capital, who will remind you to vote your shares and help you return your proxy. If we do not receive sufficient votes to approve athe proposal by the date of eitherthe Meeting, we may adjourn the Meeting with respect to that proposal to a later date so that we can continue to seek additional votes. Submitting your vote promptly will help to save costs associated with additional solicitations.
IF
If I SEND MY VOTE IN NOW AS REQUESTED, CANsend my vote in now as requested, can I CHANGE IT LATER?
change it later?
Yes. You may revoke your proxy vote at any time before it is voted at the Meeting by: (i) delivering a written revocation to the Secretary of the FundTrust at 151 Detroit Street, Denver, Colorado 80206; (ii) submitting a subsequently executed proxy vote; or (iii) attending the Meeting and voting in person. Even if you plan to attend the Meeting, we ask that you return your proxy. This will help us ensure that an adequate number of shares are present at the Meeting for consideration of the proposal.
WHAT IS THE REQUIRED VOTE TO APPROVE EACH PROPOSAL?
What is the required vote to approve the proposal?
Election of the Trustees will be determined by the affirmative vote of a plurality (the greatest number of affirmative votes) of the shares of all Funds of the Trust voting in person or by proxy at the Meeting.
Approval of each remaining proposal (Proposals 2 through 5) will require
the affirmative vote of a "majority of the outstanding voting securities" of the
Fund (voting separately) within the meaning of the 1940 Act. A "majority of the
outstanding voting
8
securities" means the lesser of (i) 67% or more of the shares of the Fund
present at the Meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or (ii) more than 50% of the
outstanding shares (a "1940 Act Majority").
Quorum for consideration of athe proposal at eachthe Meeting is thirty percent of the outstanding shares entitled to vote of (i) all Funds (Proposal 1), and (ii)
the applicable FundFunds.
Who should I call for (Proposals 2, 3, 4 and 5).
Additionally, for Janus Global Opportunities Fund, implementation of the
subadvisory agreement being proposed for approval in Proposal 5 will be
contingent on approval by shareholders of the Fund of both Proposals 4 and 5
withinadditional information about this Proxy Statement.
WHO SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY STATEMENT?
Statement?
Please call [ ],Computershare, the proxy solicitor for the Funds,engaged by Janus Capital, at
[1- ].
9
_________, 2010
1-866-492-0863.
2
May 5, 2016
JANUS INVESTMENT FUND
Janus Adaptive Global Allocation Fund Janus Asia Equity Fund Janus Balanced Fund Janus Contrarian Fund Janus Janus Emerging Markets Fund Janus Enterprise Fund Janus Flexible Bond Fund Janus Forty Fund Janus Janus Global Allocation Fund – Conservative Janus Global Allocation Fund – Growth Janus Global Allocation Fund – Moderate Janus Global Bond Fund Janus Global Life Sciences Fund Janus Global Real Estate Fund Janus Global Research Fund Janus Janus Global Technology Fund Janus Janus Government Money Market Fund Janus Growth and Income Fund Janus High-Yield Fund Janus International Equity Fund | Janus Money Market Fund Janus Multi-Sector Income Fund Janus Overseas Fund Janus Real Return Fund Janus Research Fund Janus Short-Term Bond Fund Janus Triton Fund Janus Twenty Fund Janus Venture Fund INTECH Volatility Fund INTECH Global Income Managed Volatility Fund INTECH International Managed Volatility Fund INTECH INTECH U.S. Managed Volatility Fund Perkins Global Value Fund Perkins International Value Fund Perkins Large Cap Value Fund Perkins Mid Cap Value Fund Perkins Select Value Fund Perkins Small Cap Value Fund Perkins Value Plus Income Fund |
151 DETROIT STREET
DENVER, COLORADODetroit Street
Denver, Colorado 80206
JOINT SPECIAL MEETINGSMEETING OF SHAREHOLDERS
This is a joint proxy statement ("(“Proxy Statement"Statement”) for the Janus funds listed above (each, a "Fund"“Fund” and collectively, the "Funds"“Funds”), each a series of Janus Investment Fund (the "Trust"“Trust”). Proxies for twoa joint Special MeetingsMeeting of Shareholders of each Fund are being solicited by the Board of Trustees of the Trust (the "Board,"“Board,” the "Board“Board of Trustees,"” or the "Trustees"“Trustees”) to approve the following proposals, as applicable,proposal that havehas already been approved by the Board:
FIRST SPECIAL MEETING
Proposal 1. For the Trust, to elect teneight Trustees, each of whom is considered "independent."
10
SECOND SPECIAL MEETING
Proposal 2. To approve an amended and restated investment advisory
agreement between the Fund and Janus Capital Management LLC
("Janus Capital") to change the investment advisory fee rate
from a fixed rate to a rate that adjusts up or down based upon
the Fund's performance relative to its benchmark index for the
following Funds:
a. Janus Forty Fund
b. Janus Fund
c. Janus Global Opportunities Fund
d. Janus Overseas Fund
e. Janus Twenty Fund
Proposal 3. For Janus Global Real Estate Fund only, to approve an
amendment to the Fund's investment advisory agreement, which
changes the Fund's benchmark index for purposes of calculating
the performance-based investment advisory fee.
Proposal 4. For Janus Global Opportunities Fund only, to approve an
amended and restated investment advisory agreement between the
Fund and Janus Capital to allow Janus Capital to engage a
subadviser for the Fund.
Proposal 5. For Janus Global Opportunities Fund only, to approve a
subadvisory agreement between Janus Capital, the Fund's
investment adviser, and Perkins Investment Management LLC
("Perkins"), that appoints Perkins as subadviser to the Fund.
Unless otherwise indicated, the first Special Meeting of Shareholders of
the Trust and the second“independent.”
3
The joint Special Meeting of Shareholders of the Trust
(together with any adjournments or postponements thereof) are each referred to
herein as the "Meeting" and together, the "Meetings."
The first Special Meeting of Shareholders will be held at the JW Marriott Hotel, 150 Clayton Lane, Denver, Colorado 80206, on [ , 2010]June 14, 2016 at [9:309:00 a.m.] Mountain Time, or at such later time as may be necessary due to adjournments or postponements thereof. The second Special Meeting of
Shareholders will be also held at the JW Marriott Hotel on [ , 2010] at
[10:00 a.m.] Mountain Time, or at such later time as may be necessary due to
adjournments or postponements thereof.thereof (the “Meeting”). Any shareholder of record who owned shares of a Fund as of the close of business on [ , 2010]April 5, 2016 (the "Record
Date"“Record Date”), will receive notice of the MeetingsMeeting and will be entitled to vote at the Meetings.
Meeting.
At eachthe Meeting, you will be asked to vote on the proposalsproposal applicable to the Fund of which you held shares as of the Record Date. You should read the entire Proxy Statement before voting. If you have any questions, please call our proxy solicitor, [ ],Computershare Fund Services (“Computershare”), at [1- ].1-866-492-0863. This Proxy Statement, Notice of Special Meetings,Meeting, and
11
and contract owners on or about [ May 5, 2016.
The Funds provide annual and semiannual reports to their shareholders that highlight relevant information, including investment results and a review of portfolio changes. Additional copies of each Fund’s most recent annual report and any more recent semiannual report are available, without charge, by calling a Janus representative at 1-877-335-2687 (or 1-800-525-3713 if you hold shares directly with Janus Capital Management LLC (“Janus Capital”)), 2010].
THE FUNDS PROVIDE ANNUAL AND SEMIANNUAL REPORTS TO THEIR SHAREHOLDERS THAT
HIGHLIGHT RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF
PORTFOLIO CHANGES. ADDITIONAL COPIES OF EACH FUND'S MOST RECENT ANNUAL REPORT
AND ANY MORE RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING
A JANUS REPRESENTATIVE AT [1-800-525-3713]via the Internet at janus.com/info (or janus.com/reports if you hold shares directly with Janus Capital), VIA THE INTERNET AT [JANUS.COM], OR
BY SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST ATor by sending a written request to the Secretary of the Trust at 151 DETROIT
STREET, DENVER, COLORADODetroit Street, Denver, Colorado 80206.
ELECTION OF TRUSTEES
(All
(All Janus funds)
INTRODUCTION
At the Meeting, shareholders of all Funds will be asked to elect teneight individuals to constitute the Trust'sTrust’s Board of Trustees. All nominees, other than Raudline Etienne and Gary A. Poliner, are currently Trustees of the Trust and have served in that capacity since originally elected or appointed. Ms. Etienne and Mr. Poliner were unanimously approved by the Board to stand for election, upon a recommendation from the Trust’s Nominating and Governance Committee.
The tenFunds are not required to hold annual meetings or to elect Trustees annually. Since the last Trustee election in 2010, the Board has sought to maintain its size at eight members, with each serving as a Trustee who is not an “interested” person (as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Trust or Janus Capital, the Funds’ investment adviser, (an “Independent Trustee”). Currently, the Board only has six members, all of whom are Independent Trustees. While the Board ordinarily can fill vacancies without a shareholder vote, under applicable laws new Trustees may not be appointed if after such appointment two-thirds of the Trustees would not have been elected by shareholders, which would be the case if Ms. Etienne and Mr. Poliner were appointed
4
to the Board. Accordingly, you are being asked to elect Ms. Etienne and Mr. Poliner and each currently serving Trustees as Independent Trustees (1) to return the Board to its normal size and (2) to provide the Board with flexibility going forward to replace Trustees as needed without the time and expense of unnecessary proxy solicitations.
The eight nominees for election as Trustees who receive the greatest number of votes from shareholders voting in person or by proxy at the Meeting will be elected as Trustees of the Trust. These teneight nominees were selected after careful consideration by the Trust'sTrust’s Nominating and Governance Committee, a committee consisting entirely of Independent Trustees, who are not "interested" persons (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Trust or
Janus Capital (the "Independent Trustees") and the nominations were approved by all of the current Independent Trustees. EightSix of the teneight nominees currently serve as Trustees of the Trust. Each nominee has consented to serve as a Trustee and to being named in this Proxy Statement. The persons named as proxies on the enclosed proxy card(s) will vote for the election of the nominees named below unless authority to vote for any or all of the nominees is withheld.
If elected, each Trustee will serve as a Trustee until the next meeting of the shareholders, if any, called for the purpose of electing Trustees or until the election and qualification of a successor. If a Trustee sooner dies, resigns, retires (required at end of calendar year in which the Trustee turns age 72)75), or is removed as provided in the organizational documents of the Trust, the Board may, in its discretion and subject to the 1940 Act, select another person to fill the vacant position. If any or all of the nominees should become unavailable for election at the Meeting due to events not now known or anticipated, the personpersons named as proxies will vote for such other nominee or nominees as the current Independent Trustees may recommend.
The Funds are not required, and do not intend, to hold annual shareholder meetings for the purpose of electing Trustees. However, under the terms of a
settlement reached between Janus Capital and the Securities and Exchange
Commission (the "SEC," or the "Staff") in August 2004, commencing in 2005 and
not less than every fifth calendar year thereafter, the Funds are obligated to
hold a meeting of shareholders to elect Trustees.
12
Trust'sTrust’s organizational documents. Also, if at any time less than a majority of the Trustees holding office hashave been elected by the Trust'sTrust’s shareholders, the Trustees then in office will promptly call a shareholder meeting for the purpose of electing Trustees.
The nominees for Trustees and their backgrounds are shown on the following pages. This information includes each nominee'snominee’s name, age, principal occupation(s) and other information about the nominee'snominee’s professional background, including other directorships the nominee holds or held, during the past five years. The address of each nominee is 151 Detroit Street, Denver, Colorado 80206. All nominees listed below, other than John H. Cammack and John P.
McGonigle, are currently Trustees of the Trust and have served in that capacity
since originally elected or appointed. In addition, eachEach nominee, other than John H. CammackRaudline Etienne and John P. McGonigle,Gary A. Poliner, is currently a trustee of Janus Aspen Series ("JAS"(“JAS”), another registered investment company advised by Janus Capital (JAS and the Trust, are collectively referred to herein as the "Janus funds"“Janus Funds”). Collectively, the Janus fundsFunds consist of 5258 series as of DecemberMarch 31, 2009.
2016.
5
Each Trustee or nominee is not an "interested"“interested” person of the Trust, as that term is defined in the 1940 Act.
| Name, Age, and Position(s) with the Trust | Length of Served for the Trust | Number of Funds in Fund Complex Overseen or to be Overseen by Nominee | Principal Occupation(s) and Other Directorships Held by Nominee During Past Five Years | |||||
Alan A. Brown DOB: Trustee | 1/13-Present | 58 | Executive Vice President, Institutional Markets, of Dividend Capital Group (private equity real estate investment management firm) (since | |||||
William D. Cvengros DOB: 1948 Trustee | 1/11-Present | 58 | Managing Member and Chief Executive Officer of SJC Capital, LLC (a personal investment company and consulting firm) (since 2002). Formerly, Venture Partner for The Edgewater Funds (a middle market private equity firm) (2002-2004); Chief Executive Officer and President of PIMCO Advisors Holdings L.P. (a publicly traded investment management firm) (1994-2000); and Chief Investment Officer of Pacific Life Insurance Company (a mutual life insurance and annuity company) (1987-1994). Advisory Board Member, Innovate Partners Emerging Growth and Equity Fund I (early stage venture capital fund) (since 2014) and Managing Trustee of National Retirement Partners Liquidating Trust (since 2013). Formerly, Chairman, National Retirement Partners, Inc. | |||||
6
| Name, Age, and Position(s) with the Trust | Length of Time Served for the Trust | Number of Funds in Fund Complex Overseen or to be Overseen by Nominee | Principal Occupation(s) and Other Directorships Held by Nominee During Past Five Years | |||||
Raudline Etienne DOB: 1965 Nominee | N/A | 58 | Senior Advisor, Albright Stonebridge Group LLC (global strategy firm) (since 2016). Formerly, Senior Vice President (2011-2015), Albright Stonebridge Group LLC; and Deputy Comptroller and Chief Investment Officer, New York State Common Retirement Fund (public pension fund) (2008-2011). Director of Brightwood Capital Advisors, LLC (since 2014). | |||||
William F. McCalpin DOB: 1957 Chairman Trustee | 1/ 6/02-Present | 58 | Managing Director, Holos | |||||
Gary A. Poliner DOB: 1953 Nominee | N/A | 58 | Retired. Formerly, President (2010-2013) and Executive Vice President and Chief |
7
| Name, Age, and Position(s) with the Trust | Length of Time Served for the Trust | Number of Funds Fund Complex Overseen or to be Overseen by Nominee | Principal Occupation(s) and Other Directorships Held by Nominee During Past Five Years | |||||
James T. Rothe DOB: 1943 Trustee | 1/ | 58 | Co-founder and Managing | |||||
William D. Stewart DOB: 1944 Trustee | 6/ | 58 | Retired. Formerly, Corporate Vice President and | |||||
Linda S. Wolf DOB: 1947 Trustee | 11/ | 58 | Retired. Formerly, Chairman |
General Information Regarding the Board of Janus Capital Funds Plc ("JCF"), an
offshore product, consisting of 17 funds. Including JCF and the 52 funds
comprising the Janus funds, Mr. Mullen oversees 69 funds.
GENERAL INFORMATION REGARDING THE BOARD OF TRUSTEES
Trustees
The Trust is governed by the Board of Trustees, which is responsible for and oversees the management and operations of the Trust and each of the Funds on behalf of Fund shareholders. Each member of the Board is an Independent Trustee, including the Board'sBoard’s Chairman. The Board'sBoard’s responsibilities include, but are not limited to, oversight of the Funds'Funds’ officers and service providers, including Janus Capital, which is responsible for the Trust'sTrust’s day-to-day operations. The Trustees approve all of the agreements entered into with the Funds'Funds’ service providers, including the investment management agreements with Janus Capital and the Funds' sub-advisors.Funds’ subadvisers. The Trustees
8
are also responsible for determining or changing the Funds'Funds’ investment objectives, policies, and available investment techniques, as well as for overseeing the Funds'Funds’ Chief Compliance Officer. In carrying out these responsibilities, the Trustees are assisted by the Trust'sTrust’s independent auditor (who reports directly to the Trust'sTrust’s Audit Committee), independent counsel, an independent fee consultant, and other expertsspecialists as appropriate, all of whom are selected by the Trustees. The Trustees also meet regularly with and without representatives of Janus Capital or its affiliates present.
The Trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a Board-
approvedBoard-approved charter that delineates the specific responsibilities of that committee. For example, the Board as a whole is responsible for oversight of the annual process by which the Board considers and approves each Fund'sFund’s investment advisory agreement with Janus Capital, but specific matters related to oversight of the Fund'sFunds’ independent auditors have been delegated by the Board to its Audit Committee, subject to approval of the Audit Committee'sCommittee’s recommendations by the Board. The members and responsibilities of each Board committee are summarized below. In addition to serving on certain committees, the Chairman of the Board ("(“Board Chairman"Chairman”) is responsible for presiding at all meetings of the Board, and has other duties as may be assigned by the Trustees from time to time. The Board Chairman also serves as the Board'sBoard’s liaison to Janus Capital with respect to all matters related to the Funds that are not otherwise delegated to the chair of
15
Funds,Funds; (2) the manner in which the Funds'Funds’ shares are marketed and distributeddistributed; and (3) the responsibilities entrusted to Janus Capital and its affiliates to oversee the Trust'sTrust’s day-to-day operations, including the management of each Fund'sFund’s portfolio and the distribution of Fund shares. On an annual basis, the Board conducts a self-evaluation that considers, among other matters, whether the Board and its committees are functioning effectively and whether, given the size and composition of the Board and each ifof its committees, the Trustees are able to oversee effectively the number of Janus Funds in the complex.
There were six regular meetings and fourteenfour special meetings of the Trustees held during the Trust's previous 12-months12 months ended December 31, 2009.2015. Each Trustee attended most if not all of thethese meetings with few exceptions during that 12-month period. Since the Trust is not required to convene annual shareholder meetings, there is no policy requiring Trustee attendance at such meetings.
The Board of Trustees proposed for election at the Meeting will be comprised of teneight trustees. The SECSecurities and Exchange Commission (“SEC”) has adopted rules that require at least 75% of the board members of a fund to be "independent"“independent” in order for the fund to take advantage of certain exemptive rules under the 1940 Act. If the slate of nominees is approved by shareholders, 100% of the Board of Trustees will continue to be "independent."
COMMITTEES OF THE BOARD OF TRUSTEES
“independent.”
9
Committees of the Board of Trustees
The Board of Trustees has sevensix standing committees that perform specialized functions: an Audit Committee, a Brokerage Committee, an Investment Oversight Committee, a Legal and Regulatory Committee, a Money Market Committee, a Nominating and Governance Committee, and a Pricing Committee. Each committee is comprised entirely of Independent Trustees and has a written charter that delineates its duties and powers. Each committee reviews and evaluates matters as specified in its charter and makes recommendations to the Trustees as it deems appropriate. Each committee may utilize the resources of counsel to the Independent Trustees and the Trust, independent auditors and other experts. The committees normally meet in conjunction with regular meetings of the Trustees but may convene at other times (in person or by telephone) as deemed appropriate or necessary. The membership and chairperson of each committee is appointed by the Trustees upon recommendation of the Trust'sTrust’s Nominating and Governance Committee.
Audit Committee. The Audit Committee reviews the Trust'sTrust’s financial reporting process, the system of internal controls over financial reporting, disclosure controls and procedures, Form N-CSR filings, and the audit process. The Committee'sCommittee’s review of the audit process includes, among other things, the recommendation of the appointment and compensation of the Trust'sTrust’s independent auditor, which performs the audits of the Funds'Funds’ financial statements, oversight of the independent auditor, and pre-approval of all audit and non-audit services. The Committee receives annual representations from the Trust'sTrust’s independent auditor as to its independence. Currently, the members of the 16
Jerome S. ControWilliam D. Cvengros (Chairman), John W. McCarter, Jr. and Dennis B. Mullen.William D. Stewart. The Committee held foursix meetings during the 12-months12 months ended December 31, 2009.
2015.
Brokerage Committee. The Brokerage Committee reviews and makes recommendations regarding matters related to the Trust'sTrust’s use of brokerage commissions and placement of Fund portfolio transactions, including policies regarding the allocation of brokerage commissions, directed brokerage, "step-
out"“step-out” arrangements and client commission arrangements. Currently, the members of the Brokerage Committee are: Alan A. Brown (Chairman), James T. Rothe, (Chairman), Jerome S. Contro and Martin H. Waldinger.William D. Stewart. The Committee held four meetings during the 12-months12 months ended December 31, 2009.
2015.
Investment Oversight Committee. The Investment Oversight Committee oversees the investment activities of the Funds. The Committee meets regularly with investment personnel at Janus Capital and any sub-advisersubadviser to a Fund to review the investment performance and strategies of the Funds in light of their stated investment objectives and policies. The Committee reviews various matters related to the operations of the Trust’s money market funds, including compliance with the Trust’s Money Market Fund Procedures and Rule 2a-7 under the 1940 Act. Currently, the members of the Investment Oversight Committee are: Dennis B. Mullen (Chairman), Jerome S.
Contro, William F. McCalpin John W. McCarter, Jr.(Chairman), Alan A. Brown, William D. Cvengros, James T. Rothe, William D. Stewart, Martin H. Waldinger and Linda S. Wolf. Mr. Cvengros serves as the Lead Trustee for money
10
market matters. The Committee held five meetings during the 12-months12 months ended December 31, 2009.
2015.
Legal and Regulatory Committee. The Legal and Regulatory Committee oversees compliance with various procedures adopted by the Trust, reviews certain regulatory filings made with the SEC, and oversees, among other matters, the implementation and administration of the Trust'sTrust’s Proxy Voting Guidelines. Currently, the members of the Legal and Regulatory Committee are: Linda S. Wolf (Chairman), Alan A. Brown, and William F. McCalpin and William D. Stewart.McCalpin. The Committee held eight meetings during the 12-months12 months ended December 31, 2009.
Money Market Committee. The Money Market Committee reviews various matters
related to the operations of the Trust's money market funds, including
compliance with the Trust's Money Market Fund Procedures and Rule 2a-7 under the
1940 Act. Currently the members of the Money Market Committee are: Jerome S.
Contro (Chairman), James T. Rothe and Martin H. Waldinger. The Committee held
five meetings during the 12-months ended December 31, 2009.
2015.
Nominating and Governance Committee. The Nominating and Governance Committee identifies and recommends individuals for Trustee membership, consults with Fund management and the Board Chairman in planning Trustee meetings, and oversees the administration of, and ensures compliance with, the Governance Procedures and Guidelines adopted by the Trustees, which includes review of, and proposed changes to, Trustee compensation. In addition, the Nominating and Governance Committee leads the Trustees’ annual self-assessment process. Currently, the members of the Nominating and Governance Committee are: John W. McCarter, Jr.James T. Rothe (Chairman), William F. McCalpin, and Dennis B Mullen.Linda S. Wolf. The Committee held seveneight meetings during the 12-months12 months ended December 31, 2009.
2015.
Pricing Committee. The Pricing Committee determines the fair value of restricted and other securities for which market quotations are not readily available,
17
Funds'Funds’ securities. Currently, the members of the Pricing Committee are: William D. Stewart (Chairman), James T. Rothe, and Linda S. Wolf. The Committee held twenty-
onefive meetings during the 12-months12 months ended December 31, 2009.
PROCESS FOR IDENTIFYING AND EVALUATING TRUSTEE NOMINEES AND NOMINEE
QUALIFICATIONS
2015.
Process for Identifying and Evaluating Trustee Nominees and Nominee Qualifications
The Nominating and Governance Committee of the Board is responsible for identifying and nominating candidates for appointment as Trustees. As stated in the Committee'sCommittee’s charter, (1) the principal criterion for selection of candidates for the Board is the candidate'scandidate’s ability to contribute to the overall functioning of the Board and to carry out the responsibilities of a Trustee.Trustee, and (2) the Trustees should, collectively, represent a broad cross section of backgrounds, functional disciplines, and experience. In considering a potential candidate'scandidate’s qualifications to serve as a Trustee, the Committee may also take into account a variety of other diverse criteria, including, but not limited to (i) knowledge of the investment company industry,industry; (ii) relevant experience,experience; (iii) educational background,background; (iv) reputation for high ethical standards and personal and professional integrity,integrity; (v) financial, technical or other expertise,expertise; (vi) time commitment to the performance of duties of a Trustee,Trustee; (vii) stature commensurate with the responsibility of representing Fund shareholders,shareholders; and (viii) if a candidate is nominated for an Independent Trustee position, that the person meets the
11
independence criteria established by the 1940 Act and the Governance Procedures and Guidelines adopted by the Trustees.
Consistent with the Trust'sTrust’s organizational documents and procedures adopted by the Committee, the Committee will consider Trustee nominations made by shareholders. Shareholders of a Fund may submit names of potential candidates for consideration by the Committee by submitting their recommendations to the Trust'sTrust’s Secretary, at the address of the principal executive office of the Trust, in accordance with procedures adopted by the Committee. A copy of such procedures is included as Appendix 1 to the Nominating and Governance Committee Charter attached to this Proxy Statement asAppendix A.
A.
The Committee may use any process it deems appropriate for identifying and evaluating candidates for service as a Trustee, which may include, without limitation, personal interviews, background checks, written submissions by the candidates, third party references and the use of consultants, including professional recruiting firms.firms, which the Committee utilized to assist its efforts to identify and evaluate potential nominees during its most recent search. The Committee will evaluate nominees for a particular vacancy using the same process regardless of whether the nominee is submitted by a Fund shareholder or identified by some other means. On an annual basis, the Board conducts a self-evaluation that considers, among other matters, the contributions of individual Trustees, whether the Board has an appropriate size and the right mix of characteristics, experiences and skills, and whether the age distribution and diversity among the Trustees is appropriate.
After completion of its process to identify and evaluate Trustee nominees, and after giving due consideration to all factors it deemed appropriate, the Committee approved for nomination, and recommended that the Trustees approve for nomination, the ten
18
nominee'snominee’s background is detailed above. The Committee and the Trustees considered the totality of the information available to them, and took into account the specific experience, qualifications, attributes or skills discussed below to conclude that each nominee should serve as a Trustee, in light of the Trust'sTrust’s business and structure. In reaching these conclusions, the Committee and the Trustees, in the exercise of their reasonable business judgment, evaluated each nominee based on the criteria described above, and reviewed the specific experience, qualifications, attributes or skills that each nominee presented, none of which by itself was considered dispositive.
John H. Cammack: service
Alan A. Brown: Service as HeadExecutive Vice President and as Chief Marketing Officer of Third Party Distributiona leading investment management firm, a corporate and member of
the Operating Steering Committee forfund director, and as an executive with a large mutual fund complex, service on two
not-for-profit boards and chairman of the Mutual Fund Education Alliance.
Jerome S. Contro: General Partner in private equity real estate investment firms, service on
multiple corporate boards,management firm, and a Fund Independent Trustee since 2005.
2013.
William D. Cvengros: Service as Chief Executive Officer and President of a leading publicly traded investment management firm, Chief Investment Officer of a
12
major life insurance company, a corporate and fund director, and in various capacities with private investment firms, and a Fund Independent Trustee since 2011.
Raudline Etienne: Service as Deputy Controller and Chief Investment Officer of a large public pension fund and Senior Vice President and Senior Adviser to a global strategy firm.
William F. McCalpin: service Service as Chief Executive Officer of an impact investment firm, Chief Operating Officer of a large private family foundation, Chairman and Director of an unaffiliated fund complex, and a Fund Independent Trustee since 2002 and Independent Chairman of the Board of Trustees since 2008.
John P. McGonigle: service in multiple capacities with a leading financial
services firm, including
Gary A. Poliner: Service as Head of Mutual FundsPresident, and Asset Management,Vice President and as an
independent trusteeChief Risk Officer, of a money market fund.
John W. McCarter, Jr.: President and CEO of large non-profit organization,
service on multiple corporate and non-profit boards, andlife insurance company, a Fund Independent
Trustee since 2002.
Dennis B. Mullen: Chairman of the Board and CEO of NASDAQ-listed company, director of off-shoreprivate companies, and service as director and Chairman and Director of unaffiliated fund complex, and a Fund Independent Trustee since 1971
and Independent Chairman of the Board of Trustees from 2004 to 2007.
complexes.
James T. Rothe: Co-founder and Managing Director of a private investment firm, former business school professor, service as a corporate director, and a Fund Independent Trustee since 1997.
William D. Stewart: Corporate vice-president Service as a corporate vice president of a NASDAQ-listed industrial manufacturer and a Fund Independent Trustee since 1984.
Martin H. Waldinger: service as CEO of a homeowner association management
company, and a Fund Independent Trustee since 1969.
Linda S. Wolf: service Service as Chairman and CEOChief Executive Officer of a global advertising firm, service on multiple corporate and non-profitnonprofit boards, and a Fund Independent Trustee since 2005.
19
BOARD OVERSIGHT OF RISK MANAGEMENT
Board Oversight of Risk Management
Janus Capital, as part of its responsibilities for the day-to-day operations of the Funds, is responsible for day-to-day risk management for the Funds. The Board, as part of its overall oversight responsibilities for the Fund'sFunds’ operations, oversees Janus Capital'sCapital’s risk management efforts with respect to the Funds. The Board, inIn the exercise of its reasonable business judgment, the Board also separately considers potential risks that may impact the Funds. The Board discharges its oversight duties and considers potential risks in a number of different ways, including, but not limited to, receiving reports on a regular basis, either directly or through an appropriate committee, from Janus Capital and its officers. Reports received include those from, among others, Janus Capital'sCapital’s (1) senior managers responsible for oversight of global risk; (2) senior managers responsible for oversight of portfolio construction and trading risk; (3) Chief Compliance Officer,Officer; and (4) Director of Internal Audit. At the time these reports are presented, the Board or the committee receiving the report will, as it deems necessary, invite the presenter to participate in an executive session to discuss matters outside the presence of any other officers or representatives of Janus Capital or its affiliates. The Board also receives reports from other entities and individuals unaffiliated with Janus Capital, including reports from the Funds'Funds’ other service providers and from independent consultants hired by the Board.
13
Various Board committees also will consider particular risk items as the committee addresses items and issues specific to the jurisdiction of that committee. For example, the Pricing Committee will consider valuation risk as part of its regular oversight responsibilities, and similarly, the Brokerage Committee will consider counter-partycounterparty risk associated with the Funds'Funds’ portfolio transactions. The Board also may be apprised of particular risk management matters in connection with its general oversight and approval of various Fund matters brought before the Board.
The Board has appointed a Chief Compliance Officer for the Funds ("(“Fund CCO"CCO”) who (1) reports directly to the Board and (2) provides a comprehensive written report annually and presents quarterly at the Board'sBoard’s regular meetings. The Fund CCO, who also serves as Janus Capital'sCapital’s Chief Compliance Officer, discusses relevant risk issues that may impact the Funds and/or Janus Capital'sCapital’s services to the Funds, and routinely meets with the Board in private without representatives of Janus Capital or its affiliates present. The Fund CCO also provides the Board with updates on the application of the Funds'Funds’ compliance policies and procedures, including how these procedures are designed to mitigate risk and what, if any, changes have been made to enhance the procedures. The Fund CCO may also report to the Board on anad hocbasis in the event that he identifies issues associated with the Funds'Funds’ compliance policies and procedures that could expose the Funds'Funds to additional risk or adversely impact the ability of Janus Capital to provide services to the Funds.
The Board believes that its leadership structure permits it to effectively discharge its oversight responsibilities with the respect to the Funds'Funds’ risk management process.
20
SHARE OWNERSHIP
The
Under the Trust’s Governance Procedures and Guidelines, the Trustees believe that each Trustee shouldare expected to invest in one or more Janus
funds (but not necessarily all) funds advised by Janus Capital for which he or she servesthey serve as Trustee, to the extent the Trustee isthey are directly eligible to do so. TheThese investments may include amounts held under a deferred compensation plan that are valued based on “shadow investments” in such funds. Such investments, including the amount of such investment,
and the Janus fund(s) in which a Trustee determines to invest, isfunds, are dictated by the Trustee'seach Trustee’s individual financial circumstances and investment goals.
Appendix B to this Proxy Statement sets forth
As of December 31, 2015, the numberTrustees and nominees owned securities of sharesthe Funds in the dollar range shown in the following table. The last column of the table reflects each Trustee’s and nominee’s aggregate dollar range of equity securities of each Fund owned directly or beneficiallyall
14
mutual funds advised by Janus Capital and overseen by the Trustees (58 funds as of , 2009 by each Trustee and the nominees for election at the
Meeting. [In addition, asDecember 31, 2015).
| Name of Trustee/Nominee | Dollar Range of Equity Securities in the Funds | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Janus Funds | ||||||||
| Independent Trustees | ||||||||||
William F. McCalpin | Janus Asia Equity Fund Janus Balanced Fund Janus Enterprise Fund Janus Global Allocation Fund – Growth Janus Global Life Sciences Fund Janus Global Real Estate Fund Janus Global Research Fund Janus Global Technology Fund Janus International Equity Fund Janus Money Market Fund Janus Overseas Fund Janus Short-Term Bond Fund Perkins Value Plus Income Fund | $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 $1-$10,000 $10,001-$50,000 $50,001-$100,000 $1-$10,000 $10,001-$50,000 Over $100,000 $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 | Over $100,000 | (1) | ||||||
Alan A. Brown | Janus Overseas Fund Janus Triton Fund | $10,001-$50,000 $50,001-$100,000 | Over $100,000 | |||||||
William D. Cvengros | Janus Enterprise Fund Janus Global Allocation Fund – Growth Janus Global Life Sciences Fund Janus Global Real Estate Fund Janus Research Fund Janus Triton Fund Janus Venture Fund | Over $100,000 $10,001-$50,000 Over $100,000 Over $100,000 $1-$10,000 Over $100,000 Over $100,000 | Over $100,000 | |||||||
James T. Rothe | Janus Balanced Fund Janus Enterprise Fund Janus Flexible Bond Fund Janus Global Allocation Fund – Conservative Janus Global Life Sciences Fund Janus Global Research Fund Janus Money Market Fund Janus Research Fund Janus Triton Fund | Over $100,000 Over $100,000 Over $100,000 Over $100,000 $50,001-$100,000 Over $100,000 Over $100,000 $50,001-$100,000 $10,001-$50,000 | Over $100,000 | (1) | ||||||
William D. Stewart | INTECH U.S. Core Fund Janus Contrarian Fund Janus Flexible Bond Fund Janus Global Life Sciences Fund Janus Global Research Fund Janus Growth and Income Fund Janus Money Market Fund Janus Triton Fund | $10,001-$50,000 Over $100,000 $1-$10,000 Over $100,000 $1-$10,000 $50,001-$100,000 Over $100,000 $50,001-$100,000 | Over $100,000 | |||||||
Linda S. Wolf | Janus Contrarian Fund Janus Flexible Bond Fund Janus Global Life Sciences Fund Janus Global Research Fund Janus Triton Fund | Over $100,000 Over $100,000 Over $100,000 Over $100,000 Over $100,000 | Over $100,000 | (1) | ||||||
15
| Name of Trustee/Nominee | Dollar Range of Equity Securities in the Funds | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Janus Funds | ||||||||
| Trustee Nominees | ||||||||||
Raudline Etienne | Janus Global Allocation Fund – Moderate Janus Global Real Estate Fund Janus Research Fund | $10,001-$50,000 $1-$10,000 $1-$10,000 | $10,001-$50,000 | |||||||
Gary A. Poliner | None | None | ||||||||
| (1) | Ownership shown includes amounts held under a deferred compensation plan that are valued based on “shadow investments” in one or more funds. |
Compensation of [ ], the nominees, Trustees and executive
officers of the Funds, individually and collectively as a group, owned less than
1% of the outstanding shares of each Fund. In addition, as of [ ], the
nominees, Trustees and executive officers of the Funds, individually and
collectively as a group, owned less than 1% of the outstanding shares of each
Fund.
COMPENSATION OF TRUSTEES
The Trust pays each Independent Trustee an annual retainer plus a fee for each regular in-person meeting of the Trustees attended, a fee for in-person meetings of committees attended if convened on a date other than that of a regularly scheduled meeting, and a fee for telephone meetings of the Trustees and committees. In addition, committee chairs and the Chairman of the Board of Trustees receive an additional supplemental retainer. Each current Independent Trustee also receives fees from other Janus funds for serving as Trustee of those funds and those amounts are included below. Janus Capital pays persons who are directors, officers, or employees of Janus Capital or any affiliate thereof, or any Trustee not considered an "independent"“independent” Trustee, for their services as Trustees or officers. All of the Trustees or nominees are "independent."“independent;” therefore, none of the Trustees are paid by Janus Capital. The Trust and other funds managed by Janus Capital may pay all or a portion of the compensation and related expenses of the Funds'Funds’ Chief Compliance Officer and compliance staff, as authorized from time to time by the Trustees.
The Trust'sTrust’s Nominating and Governance Committee, which consists solely of Independent Trustees, annually reviews and recommends to the Independent Trustees any changes to compensation paid by the Funds to the Independent Trustees. The Independent Trustees also meet at least annually to review their fees in connection with the recommendations of the Nominating and Governance Committee, to ensure that such fees continue to be appropriate in light of the Trustees'Trustees’ responsibilities as well as in relation to fees paid to trustees of other similarly situated mutual fund complexes.
The following table shows the aggregate compensation paid to each current Independent Trustee by the Trust for the fiscal years ended June 30, 2015 and September 30, 2015, as well as the total compensation paid by all of the Janus Funds during the calendar year 2009.2015. None of the Trustees receives any pension or retirement benefits from the Funds or the Janus Funds. The Trustees have established a deferred compensation plan under which the Trusteesa Trustee may elect to defer receipt of all,
16
or a portion, of the compensation they earnearned for their services to the Funds, in lieu of receiving current payments of such compensation. Any 21
dollar amountdollaramount has been invested in shares of one or more funds advised by Janus Capital ("Shadow
Investments"(“shadow investments”).
| Name of Person, Position | Aggregate Compensation | Total Compensation from the Janus Funds for December 31, 2015(2)(3) | ||||||
| Independent Trustees | ||||||||
William F. McCalpin, Chairman and Trustee(4)(5) | $ | 373,339 | $ | 382,000 | ||||
Alan A. Brown, Trustee(5) | $ | 263,913 | $ | 269,000 | ||||
William D. Cvengros, Trustee(5) | $ | 267,139 | $ | 272,000 | ||||
James T. Rothe, Trustee(5) | $ | 267,803 | $ | 279,000 | ||||
William D. Stewart, Trustee(5) | $ | 259,017 | $ | 267,000 | ||||
Linda S. Wolf, Trustee(5) | $ | 272,798 | $ | 282,000 | ||||
| Trustee Nominees | ||||||||
Raudline Etienne* | N/A | N/A | ||||||
Gary A. Poliner† | N/A | N/A | ||||||
| * | Raudline Etienne was appointed consultant to the Trustees effective June 2, 2014. During the calendar year ended December 31, 2015, Ms. Etienne received total compensation of $264,000 from the Janus Funds for serving as an independent consultant to the Trustees. |
| † | Gary A. Poliner was appointed consultant to the Trustees effective January 1, 2016 and did not receive compensation from the Janus Funds during the calendar year ended December 31, 2015. |
| (1) | Includes compensation for service on behalf of 47 Funds. |
| (2) | For all Trustees, includes compensation for service on the boards of two Janus trusts comprised of 58 portfolios. |
| (3) | Total Compensation received from the Janus Funds includes any amounts deferred under the deferred compensation plan. The deferred compensation amounts for the year are as follows: William F. |
| (4) | Aggregate Compensation received from the Funds and Total Compensation received from all Janus Funds |
| (5) | Aggregate Compensation received from the Funds and Total Compensation received from all Janus Funds includes additional compensation paid for service as chair of, or as Lead Trustee for, one or more committees of the Board of Trustees during certain periods. |
Officers of the Board of Trustees.
(5) Aggregate Compensation received from the Funds and Total Compensation
received from all Janus funds includes additional compensation paid for
service as chair of one or more committees of the Board of Trustees.
OFFICERS OF THE TRUST
Trust
The officers of the Trust and their principal occupations are set forth inAppendix CB to this Proxy Statement.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE
"FOR" EACH NOMINEE.
22
PROPOSAL 2
APPROVE AMENDED AND RESTATED INVESTMENT
ADVISORY AGREEMENT
RELATED TO INTRODUCTION OF PERFORMANCE INCENTIVE
INVESTMENT ADVISORY FEE STRUCTURE
(JANUS FORTY FUND, JANUS FUND, JANUS GLOBAL OPPORTUNITIES FUND,
JANUS OVERSEAS FUND AND JANUS TWENTY FUND ONLY)
INTRODUCTION
On December 11, 2009, the Board of Trustees approved amendments to the
investment advisory agreements between Janus Capital and each of Janus Forty
Fund, Janus Fund, Janus Global Opportunities Fund, Janus Overseas Fund and Janus
Twenty Fund (for purposes of this Proposal 2, each of Janus Forty Fund, Janus
Fund, Janus Global Opportunities Fund, Janus Overseas Fund and Janus Twenty Fund
is referred to as a "Fund" and collectively, the "Funds"). Each amendment
changes the annual rate of compensation paid to Janus Capital as your Fund's
investment adviser from a fixed rate of 0.64% to a rate that adjusts up or down
based on the Fund's performance relative to its benchmark index (the "Proposed
Amended Advisory Agreement"). This change in fee structure requires shareholder
approval.
The Board of Trustees authorized the submission of the Proposed
Amended Advisory Agreements to shareholders of the Funds for their approval, as
described further below. Shareholders of Janus Forty Fund will vote on Proposal
2.a.; shareholders of Janus Fund will vote on Proposal 2.b.; shareholders of
Janus Global Opportunities Fund will vote on Proposal 2.c.; shareholders of
Janus Overseas Fund will vote on Proposal 2.d.; and shareholders of Janus Twenty
Fund will vote on Proposal 2.e. A form of a Proposed Amended Advisory Agreement
is attached to this Proxy Statement as Appendix D.
The proposal to implement a performance-based advisory fee is designed to
more closely align Janus Capital's interests with those of the Funds'
shareholders. The premise of a performance fee is essentially that an investment
adviser should earn more if it is performing well for Fund shareholders and
should earn less if it is underperforming. To assess the performance of the
investment adviser, a Fund's performance is measured against the performance of
the Fund's primary benchmark. This means that it is the relative outperformance
or underperformance of a Fund compared to its benchmark, and not the Fund's
absolute performance, that causes the advisory fee to be adjusted up or down. As
a result, if the performance-based advisory fee is approved for your Fund, the
investment advisory fee paid by your Fund to Janus Capital will decrease when
the Fund is not performing well relative to its benchmark index, and increase
during periods when the Fund outperforms its benchmark index. The section
entitled "Comparison of the Current and Proposed Amended Advisory Agreements"
below provides a detailed description of how the proposed performance-based
advisory fee would be calculated for your Fund, and also includes examples
showing the investment advisory fees your Fund would have paid if the proposed
performance-fee had been in place during the Fund's most recent fiscal year.
23
The Board of Trustees has previously approved performance-based advisory
fees for a number of other Janus funds, and, for the reasons described below,
believes that moving to a fee that adjusts up or down based on a Fund's
performance better aligns the interest of Janus Capital, each Fund's investment
adviser, with those of the Fund's shareholders. At the same time, Janus Capital
believes that the proposed advisory fee structure will enable it to maintain the
quality of services to the Funds and to attract and retain talented investment
personnel.
BOARD CONSIDERATION, APPROVAL AND RECOMMENDATION
At a meeting of the Trustees held on December 11, 2009, the Trustees, each
of whom are Independent Trustees meaning he or she is not an "interested
person" (as defined by the 1940 Act) of the Trust ("Independent Trustees"),
voted unanimously to approverecommend that you vote “FOR” each Proposed Amended Advisory Agreementnominee.
17
MANAGEMENT AND OTHER SERVICE PROVIDERS
Investment Adviser and authorized the submission of each Proposed Amended Advisory Agreement to each
Fund's shareholders for approval. If approved, the Proposed Amended Advisory
Agreements will be in effect until February 1, 2011, and may continue in effect
thereafter from year to year if such continuation is specifically approved at
least annually by either the Board of Trustees or the affirmative vote of a 1940
Act Majority and, in either event, by the vote of a majority of the Independent
Trustees.
Over the past few years, the Independent Trustees and their independent fee
consultant, in consultation with independent legal counsel to the Independent
Trustees, have continued to explore the possibility of modifying the fee
structure for certain Janus funds to provide for a Base Fee Rate (as defined
below under "Comparison of the Current and Proposed Amended Advisory Agreements
- Proposed Performance Fee Structure") for each of those funds at the same rate
as its current advisory fee rate, and a performance-based adjustment that would
increase or decrease the fee based on whether the fund's total return
performance exceeds or lags a stated relevant benchmark index.
Working with Administrator. Janus Capital, to develop a performance structure that was
acceptable to Janus Capital, the Independent Trustees were seeking to provide a
closer alignment of the interests of Janus Capital with those of the Funds and
their shareholders. They believe that the fee structure proposed for the Funds
will achieve that objective. Included as part of their analysis of the overall
performance fee structure, the Trustees, in consultation with their independent
fee consultant, considered the appropriate performance range maximum and minimum
that would result in the Performance Adjustment of up to 0.15% (positive or
negative) of a Fund's average daily net assets during the applicable performance
measurement period. The Trustees reviewed information provided by Janus Capital
and prepared by their independent fee consultant with respect to an appropriate
deviation of excess/under returns relative to a Fund's benchmark index, taking
into consideration expected tracking error of the Fund, expected returns and
potential risks and economics involved for Janus Capital and the Fund's
shareholders. The Trustees also reviewed the structure of performance fees
applied by other Janus funds.
24
As described below, the Performance Adjustment that will be added to or
subtracted from the Base Fee Rate as a result of a Fund's performance, relative
to its benchmark index, is a variable rate of up to 0.15% of average net assets
during the performance measurement period. Importantly, the performance is
computed after deducting a Fund's operating expenses (including advisory fees),
which means that, in order to receive any upward adjustment from the Base Fee
Rate, Janus Capital must deliver a total return after expenses that exceeds the
return of the benchmark index, which does not incur any expenses.
The Trustees determined that the benchmark index specified in each Proposed
Amended Advisory Agreement for purposes of computing the Performance Adjustment
is appropriate for the applicable Fund based on a number of factors, including
that each index is broad-based and is composed of securities of the types in
which the Fund may invest. The Trustees believe that divergence between a Fund's
performance and performance of the index can be attributed, in part, to the
ability of the portfolio managers in making investment decisions within the
parameters of the Fund's investment objective and investment policies and
restrictions.
The time periods to be used in determining any Performance Adjustment were
also judged to be of appropriate length to ensure proper correlation and to
prevent fee adjustments from being based upon random or insignificant
differences between the performance of a Fund and of its benchmark index. In
that regard, the Trustees concluded that it would be appropriate for there to be
no adjustment to the Base Fee Rate forlocated at least the first 12 months and up to 18
months after the effective date of the performance-based fees structure outlined
in each Proposed Amended Advisory Agreement and that, once implemented, the
Performance Adjustment should reflect only a Fund's performance subsequent to
that effective date. Moreover, the Trustees believed that, upon reaching the
thirty-sixth month after the effective date, the performance measurement period
should be fully implemented, and that the Performance Adjustment should
thereafter be based upon a 36-month rolling performance measurement period.
In considering the Proposed Amended Advisory Agreements, and the
performance fee structure reflected in the Agreements, the Independent Trustees
met in executive session and were advised by their independent legal counsel.
The Independent Trustees received and reviewed a substantial amount of
information provided by Janus Capital in response to requests of the Independent
Trustees and their counsel. They also considered information provided by their
independent fee consultant.
In considering whether to approve the Proposed Amended Advisory Agreements,
the Board of Trustees noted that, except for the performance-based fee
structure, the Proposed Amended Advisory Agreements are substantially similar to
the Current Advisory Agreements, which were most recently approved by them at a
meeting held on December 11, 2009. The Board took into account the services
provided by Janus Capital in its capacity as investment adviser to the Funds and
concluded that the services provided were acceptable. Certain of these
considerations are discussed in more detail below. Based on their evaluation of
that information and other factors, on December 11,
25
2009, the Independent Trustees approved the Proposed Amended Advisory Agreement
for each Fund, subject to shareholder approval.
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees reviewed the nature, extent and quality of the services
provided by Janus Capital, taking into account the investment objective and
strategies of each Fund and the knowledge the Trustees gained from their regular
meetings with management on at least a quarterly basis, and their ongoing review
of information related to the Funds. In addition, the Trustees reviewed the
resources and key personnel of Janus Capital, especially those who provide
investment management services to the Funds. The Trustees also considered other
services provided to the Funds by Janus Capital. Janus Capital also advised the
Board of Trustees that it expects that there will be no diminution in the scope
and quality of advisory services provided to the Funds as a result of the
Proposed Amended Advisory Agreements.
The Trustees concluded that the Proposed Amended Advisory Agreement for
each Fund was not expected to adversely affect the nature, extent or quality of
services provided to the Fund, and that the Fund would continue to benefit from
services provided under the Proposed Amended Advisory Agreement. They also
concluded that the quality of Janus Capital's services to each Fund has been
adequate. In reaching their conclusions, the Trustees considered: (i)
information provided by Janus Capital for their consideration of the Proposed
Amended Advisory Agreements; (ii) the key factors identified in materials
provided to the Trustees by their independent counsel; and (iii) the
reasonableness of the fees payable by shareholders of each Fund. They also
concluded that Janus Capital's financial condition was sound.
COSTS OF SERVICES PROVIDED
The Trustees considered the fee structure under the Proposed Amended
Advisory Agreements, as well as the overall fee structure of the Funds. The
Trustees examined the fee information and expenses for the Funds in comparison
to information for other comparable funds, as provided by Lipper.
The Trustees considered the structure by which Janus Capital would be paid
for their services, including the implementation of the new performance-based
fee structure for each Fund. The Trustees also considered the overall fees of
each Fund for services provided to the Fund.
The Trustees concluded that the estimated overall expense ratio of certain
of the Funds was comparable to or more favorable than the median expense ratio
of its peers, and that the fees that the Fund will pay to Janus Capital are
reasonable in relation to the nature and quality of the services to be provided,
taking into consideration (1) the fees charged by other advisers for managing
comparable mutual funds with similar strategies, and (2) the impact of the
performance-based fee structure, as applicable.
26
PERFORMANCE OF THE FUNDS
The Trustees considered the performance results of the Funds over various
time periods. They reviewed information comparing each Fund's performance with
the performance of comparable funds and peer groups identified by Lipper, and
with each Fund's benchmark index. They concluded that the performance of the
Funds was acceptable under current market conditions. [Although the performance
of the Funds lagged benchmark indices for certain periods,] the Trustees also
concluded that the manner in which Janus Capital addressed those instances of
underperformance was appropriate.
OTHER BENEFITS FROM THE RELATIONSHIP WITH JANUS CAPITAL
The Trustees also considered benefits that would accrue to the Funds from
their relationship with Janus Capital. The Trustees concluded that, other than
the services to be provided by Janus Capital pursuant to the Proposed Amended
Advisory Agreements and the fees to be paid by the Funds for such services, the
Funds and Janus Capital may potentially benefit from their relationship with one
another in other ways. They also concluded that success of the relationship
between the Funds and Janus Capital could attract other business to Janus
Capital or to other Janus funds, and that the success of Janus Capital could
enhance the firm's ability to serve the Funds. They also concluded that Janus
Capital may potentially benefit from the receipt of proprietary and third-party
research products and services to be acquired through commissions paid on
portfolio transactions of the Funds or other funds in the Janus complex, and
that the Funds may potentially benefit from Janus Capital's receipt of those
products and services, as well as research products and services acquired
through commissions paid by other clients of Janus Capital. The Trustees further
concluded that Janus Capital's use of "soft" commission dollars to obtain
proprietary and third-party research products and services was consistent with
regulatory requirements and guidelines and was likely to benefit the Funds.
After full consideration of the above factors, as well as other factors,
the Trustees concluded that approving the Proposed Amended Advisory Agreement
for each Fund was in the best interest of the Fund and its shareholders. The
Trustees, each of whom is an Independent Trustees, voted to approve the Proposed
Amended Advisory Agreements and to recommend them to shareholders for their
approval.
INFORMATION CONCERNING THE ADVISER
Janus Capital, 151 Detroit Street, Denver, Colorado 80206-4805,80206, serves as the investment adviser to the Funds pursuant to a separate investment advisory
agreement between the Trust, on behalf of each Fund, and Janus Capital, each
dated July 1, 2004 (except the agreement on behalf of Janus Forty Fund which is
dated July 6, 2009) (each, a "Current Advisory Agreement" and collectively, the
"Current Advisory Agreements"). Janus Capital is a direct subsidiary of Janus
Capital Group Inc. ("JCGI"), a publicly traded company with principal operations
in financial asset management businesses that had $159.7 billion in assets under
management as of December 31,
27
2009. JCGI owns approximately 95% of Janus Capital, with the remaining 5% held
by Janus Management Holdings Corporation. Certain employees of Janus Capital
and/or its affiliates serve as officers of the Trust. Certain officers of the
Trust are shareholders of JCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of December 31, 2009, the Janus funds that Janus Capital
advises consisted of 52 portfolios offering a broad range of investment
objectives, including those with similar investment objectives as the Funds (see
attached Appendix E for further information). Janus Capital also serves as
subadviser for a number of private-label mutual funds and provides separate
account advisory services for institutional accounts.
Principal Executive Officers and Directors of the Adviser. The principal
executive officers and directors of Janus Capital and their principal
occupations are included in Appendix F to this Proxy Statement.
COMPARISON OF THE CURRENT AND PROPOSED AMENDED ADVISORY AGREEMENTS
Except for the change in fee structure to a performance-based advisory fee
and the dates of execution, the terms of the Current Advisory Agreements and the
Proposed Amended Advisory Agreements are the same. A summary of these agreements
is provided below.
Advisory Services. The terms of the advisory services are the same under
the Current Advisory Agreements and the Proposed Amended Advisory Agreements.
Janus Capital provides each Fund with continuing investment management
services. Janus Capital is responsible for the day-to-day management of each
Fund and for providing continuous investment advice regarding the purchase and
sale of securities held by the Fund, subject to (i) the Trust's Amended and
Restated Agreement and Declaration of Trust and Amended and Restated Bylaws;
(ii) the investment objectives, policies and restrictions set forth in the
Trust's registration statement; (iii) the provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended; and (iv) such other policies and
instructions as the Trustees may from time to time determine. Shareholders of
Janus Global Opportunities Fund should refer to Proposals 4 and 5 in this Proxy
Statement regarding the proposed delegation by Janus Capital of certain
responsibilities to a subadviser.
Janus Capital provides office space for each Fund and pays the salaries,
fees, and expenses of all Fund officers (sharing certain expenses and salaries
for the Funds' Chief Compliance Officer and other compliance-related personnel
as authorized by the Trustees from time to time). Janus Capital provides certain
administrative services to each Fund as described under "Fund Service Providers"
and is responsible for the other business affairs of each Fund. Janus Capital is
authorized to delegate to others to perform certain administrative and other
services.
28
Each Fund pays all expenses incidental to its organization, operations and
business not specifically assumed by Janus Capital, including custodian and
transfer agency fees and expenses, brokerage commissions and dealer spreads, and
other expenses in connection with the execution of portfolio transactions, legal
and accounting expenses, interest, taxes, a portion of trade association or
other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating the sale of Fund shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Funds' distributor, and Janus
Services LLC ("Janus Services"), the Funds' transfer agent, each a wholly-owned
subsidiary of Janus Capital, and a description of any fees paid by each Fund to
Janus Distributors and Janus Services, is included under "Fund Service
Providers" in this Proxy Statement.
Liability. Each Fund's Current Advisory Agreement and Proposed Amended
Advisory Agreement provides that Janus Capital shall not be liable for any error
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties under the
agreement, and except to the extent otherwise provided by law.
Termination of the Agreement. Each Fund's Current Advisory Agreement and
Proposed Amended Advisory Agreement continues in effect until February 1, 2011,
and from year to year thereafter, so long as such continuance is specifically
approved at least annually by a majority of the Fund's Independent Trustees, and
by either a majority of the outstanding voting securities of the Fund or the
Board of Trustees. The "majority of outstanding voting securities" means the
lesser of (i) 67% or more of the shares of a Fund present at the Meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (ii) more than 50% of the outstanding shares (a "1940 Act Majority").
The Current Advisory Agreements and the Proposed Amended Advisory
Agreements each: (i) may be terminated, without penalty, by a Fund 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, including a majority of the Independent
Trustees, and, to the extent required by the 1940 Act, the vote of a 1940 Act
Majority.
Additional Information. The date of the Current Advisory Agreement between
Janus Capital and each Fund, the date it was last considered and reviewed by the
29
Trustees, the date when it was last approved by the shareholders of each Fund,
and the reason it was last submitted for shareholder approval are set forth
below:
DATE LAST DATE LAST
DATE OF CURRENT CONSIDERED BY SUBMITTED
FUND AGREEMENT TRUSTEES TO SHAREHOLDERS REASON
---- ----------------- ----------------- ----------------- -----------------
Janus Forty July 6, 2009 December 11, 2009
Fund...........
Janus Fund....... July 1, 2004 as December 11, 2009
amended February
1, 2006 and June
14, 2006
Janus Global July 1, 2004 as December 11, 2009
Opportunities amended February
Fund........... 1, 2006 and June
14, 2006
Janus Overseas July 1, 2004 as December 11, 2009
Fund........... amended February
1, 2006 and June
14, 2006
Janus Twenty July 1, 2004 as December 11, 2009
Fund........... amended February
1, 2006 and June
14, 2006
The implementation of each Proposed Amended Advisory Agreement for a Fund
is contingent upon shareholder approval of that Fund.
Compensation. Pursuant to its Current Advisory Agreement, each Fund pays
Janus Capital an investment advisory fee for its services, which is calculated
daily and paid monthly. The investment advisory fee paid by each Fund to Janus
Capital under its Current Advisory Agreement is calculated at an annual fixed
rate of 0.64% of a Fund's average daily net asset value.
Under each Fund's Proposed Amended Advisory Agreement, the advisory fee
paid would consist of an annual base fee and a performance fee adjustment. The
base fee would be the same as the current fixed rate at 0.64%, but would be
subject to an adjustment up or down based on the Fund's performance relative to
its respective benchmark index, as discussed in further detail below.
Janus Capital has contractually agreed to waive the advisory fee payable by
each Fund listed below in an amount equal to the amount, if any, that the Fund's
normal operating expenses in any fiscal year, including the investment advisory
fee, but excluding any performance adjustments to management fees, the
distribution and shareholder servicing fees, applicable to Class A Shares, Class
C Shares, Class R
30
Shares, and Class S Shares, the administrative fees applicable to Class D
Shares, Class R Shares, Class S Shares, and Class T Shares, brokerage
commissions, interest, dividends, taxes, and extraordinary expenses (including,
but not limited to, acquired fund fees and expenses), exceed the annual rate
shown below:
FUND EXPENSE LIMIT (%)
---- -----------------
Janus Forty Fund................................ 0.78%
Janus Fund...................................... 0.78%
Janus Overseas Fund............................. 0.92%
The application of an expense limit, if any, will have a positive effect
upon a Fund's performance and may result in an increase in the performance
adjustment to a Fund's investment advisory fee rate. Unless terminated, revised,
or extended, each Fund's expense limit will be in effect until February 16,
2011.
Proposed Performance Fee Structure. Under the Proposed Amended Advisory
Agreements, the proposed investment advisory fee to be paid to Janus Capital by
each Fund will consist of two components: (1) a base fee calculated by applying
the current contractual fixed-rate advisory fee rate of 0.64% to a Fund's
average daily net assets during the previous month ("Base Fee Rate"), plus or
minus (2) a performance-fee adjustment ("Performance Adjustment") calculated by
applying a variable rate of up to 0.15% (positive or negative) to the Fund's
average daily net assets during the applicable performance measurement period.
The performance measurement period generally will be the previous 36 months,
although no Performance Adjustment will be made until the applicable Proposed
Amended Advisory Agreement has been in effect for at least 12 months for Janus
Fund and Janus Global Opportunities Fund; 15 months for Janus Overseas Fund; or
18 months for Janus Forty Fund and Janus Twenty Fund. When the Proposed Amended
Advisory Agreement has been in effect for at least 12 months (15 months for
Janus Overseas Fund and 18 months for Janus Forty Fund and Janus Twenty Fund),
but less than 36 months, the performance measurement period will be equal to the
time that has elapsed since the Proposed Amended Advisory Agreement took effect.
The Base Fee Rate is calculated and accrued daily. The Performance Adjustment is
calculated monthly in arrears and is accrued evenly each day throughout the
month. The investment advisory fee is paid monthly in arrears.
The Performance Adjustment may result in an increase or decrease in the
investment advisory fee rate paid by a Fund, depending upon the investment
performance of the Fund relative to its benchmark index over the performance
measurement period. No Performance Adjustment is applied unless the difference
between the Fund's investment performance and the cumulative investment record
of the Fund's benchmark index is 0.50% or greater (positive or negative) during
the applicable performance measurement period. Because the Performance
Adjustment is tied to a Fund's performance relative to its benchmark index (and
not its absolute performance), the Performance Adjustment could increase Janus
Capital's fee even if the Fund's shares lose value during the performance
measurement period and could decrease Janus Capital's fee even if the Fund's
shares increase in value during the performance measurement period. For purposes
of computing the Base Fee Rate and the Performance Adjustment, net assets
31
are averaged over different periods (average daily net assets during the
previous month for the Base Fee Rate versus average daily net assets during the
performance measurement period for the Performance Adjustment). Performance of a
Fund is calculated net of expenses, whereas a Fund's benchmark index does not
have any fees or expenses. Reinvestment of dividends and distributions is
included in calculating both the performance of a Fund and the Fund's benchmark
index. Under extreme circumstances involving underperformance by a rapidly
shrinking Fund, the dollar amount of the Performance Adjustment could be more
than the dollar amount of the Base Fee Rate. In such circumstances, Janus
Capital would reimburse the applicable Fund.
With the exception of Janus Twenty Fund, the investment performance of a
Fund's Class A Shares (waiving the upfront sales load) ("Class A Shares") will
be used for purposes of calculating the Fund's Performance Adjustment. After
Janus Capital determines whether a particular Fund's performance was above or
below its benchmark index by comparing the investment performance of the Fund's
Class A Shares against the cumulative investment record of that Fund's benchmark
index, Janus Capital will apply the same Performance Adjustment (positive or
negative) across each other class of shares of the Fund.
For Janus Twenty Fund, the investment performance of the Fund's Class T
Shares (formerly Class J Shares) will be used for purposes of calculating the
Fund's Performance Adjustment. After Janus Capital determines whether Janus
Twenty Fund's performance was above or below its benchmark index by comparing
the investment performance of the Fund's Class T Shares against the cumulative
investment record of the Fund's benchmark index, Janus Capital will apply the
same Performance Adjustment (positive or negative) across any other class of
shares of Janus Twenty Fund.
The Trustees may determine that a class of shares of a Fund other than
Class A Shares (Class T Shares for Janus Twenty Fund), is the most appropriate
for use in calculating the Performance Adjustment. If a different class of
shares is substituted in calculating the Performance Adjustment, the use of that
successor class of shares may apply to the entire performance measurement period
so long as the successor class was outstanding at the beginning of such period.
If the successor class of shares was not outstanding for all or a portion of the
performance measurement period, it may only be used in calculating that portion
of the Performance Adjustment attributable to the period during which the
successor class was outstanding, and any prior portion of the performance
measurement period would be calculated using the class of shares previously
designated. Any change to the class of shares used to calculate the Performance
Adjustment is subject to applicable law. The Trustees would notify you of any
such change.
Each Fund's benchmark index is identified below. The Trustees may from time
to time determine that another securities index is a more appropriate benchmark
index for purposes of evaluating the performance of that Fund. In that event,
the Trustees will approve the substitution of a successor index for the Fund's
benchmark index. However, the calculation of the Performance Adjustment for any
portion of the performance measurement period prior to the adoption of the
successor index will still be based upon
32
the Fund's performance compared to its former benchmark index. Any change to a
Fund's benchmark index for purposes of calculating the Performance Adjustment is
subject to applicable law. It is currently the position of the Staff of the SEC
that any changes to a Fund's benchmark index will require shareholder approval.
If there is a change in the Staff's position, the Trustees intend to notify
shareholders if they determine that a change in a Fund's benchmark index is
appropriate.
While it is not possible to predict the effect of the Performance
Adjustment on future overall compensation to Janus Capital since it will depend
on the performance of each Fund relative to the record of its benchmark index
and future changes to the size of each Fund, below is information to help you
evaluate the potential impact of this change.
If the average daily net assets of a Fund remain constant during a 36-month
performance measurement period, current net assets will be the same as average
net assets over the performance measurement period, and the maximum Performance
Adjustment will be equivalent to 0.15% of current net assets. When current net
assets vary from average net assets over the 36-month performance measurement
period, the Performance Adjustment, as a percentage of current assets, may vary
significantly, including at a rate more or less than 0.15%, depending upon
whether the net assets of the Fund had been increasing or decreasing (and the
amount of such increase or decrease) during the performance measurement period.
Note that if net assets for a Fund were increasing during the performance
measurement period, the total performance fee paid, measured in dollars, would
be more than if that Fund had not increased its net assets during the
performance measurement period.
Suppose, for example, that the Performance Adjustment was being computed
after the assets of a Fund had been shrinking. Applying the monthly Base Fee
Rate of 1/12(th) of 0.64% of average daily net assets during the previous month,
assume that average daily net assets during the 36-month performance measurement
period were $500 million, but that average daily net assets during the preceding
month were just $200 million.
The Base Fee Rate would be computed as follows:
$200 million x 0.64% / 12 = $106,667
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.375% of $200 million.
If the Fund had outperformed its benchmark index, the advisory fee rate for
that month would be a Base Fee Rate of $106,667, plus a Performance Adjustment
of $62,500, for a total fee of $169,167, which is approximately 1/12th of 1.01%
of $200 million.
If the Fund had underperformed its benchmark index, the advisory fee rate
for that month would be a Base Fee Rate of $106,667, minus a Performance
Adjustment of
33
$62,500, for a total fee of $44,167, which is approximately 1/12th of 0.26% of
$200 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
1.01% in the case of outperformance, or approximately 1/12th of 0.26% in the
case of underperformance. Under extreme circumstances involving underperformance
by a rapidly shrinking Fund, the dollar amount of the Performance Adjustment
could be more than the dollar amount of the Base Fee Rate. In such
circumstances, Janus Capital would reimburse the Fund.
By contrast, the Performance Adjustment would be a smaller percentage of
current assets if the net assets of the Fund were increasing during the
performance measurement period. Suppose, for example, that the Performance
Adjustment was being computed after the assets of the Fund had been growing.
Assume its average daily net assets during the 36-month performance measurement
period were $500 million, but that average daily net assets during the preceding
month were $800 million.
The Base Fee Rate would be computed as follows:
$800 million x 0.64% / 12 = $426,667
If the Fund outperformed or underperformed its benchmark index by an amount
which triggered the maximum Performance Adjustment, the Performance Adjustment
would be computed as follows:
$500 million x 0.15% / 12 = $62,500, which is approximately 1/12th of
0.094% of $800 million.
If the Fund had outperformed its benchmark index, the advisory fee rate for
that month would be a Base Fee Rate of $426,667, plus a Performance Adjustment
of $62,500, for a total fee of $489,167, which is approximately 1/12th of 0.73%
of $800 million.
If the Fund had underperformed its benchmark index, the advisory fee rate
for that month would be a Base Fee Rate of $426,667, minus a Performance
Adjustment of $62,500, for a total fee of $364,167, which is approximately
1/12th of 0.55% of $800 million.
Therefore, the total advisory fee rate for that month, as a percentage of
average net assets during the preceding month, would be approximately 1/12th of
0.73% in the case of outperformance, or approximately 1/12th of 0.55% in the
case of underperformance.
If approved for a Fund, the Proposed Amended Advisory Agreement, including
the performance-based advisory fee structure, described in this Proposal is
expected to become effective on or about [July 1, 2010]. However, as noted
above, no Performance Adjustment will be made until the Proposed Amended
Advisory Agreement has been in effect for at least 12 months in the case of
Janus Fund and Janus Global Opportunities Fund; 15 months in the case of Janus
Overseas Fund; or 18 months in the case of Janus Forty Fund and Janus Twenty
Fund. Until such time, only the Fund's Base Fee Rate will apply.
34
The proposed Base Fee Rate for each Fund (which is the same as the current
annual investment advisory fee rate paid by each Fund to Janus Capital) and each
Fund's benchmark index are shown in the following table:
BASE FEE RATE
FUND BENCHMARK INDEX (ANNUAL FEE RATE)
---- ---------------------------- -----------------
Janus Forty Fund............ Russell 1000(R) Growth
Index(1) 0.64%
Janus Fund.................. Russell 1000(R) Growth
Index(1) 0.64%
Janus Global Opportunities
Fund...................... MSCI World IndexSM (2) 0.64%
Janus Overseas Fund......... MSCI All Country World
ex-U.S. Index(SM) (3) 0.64%
Janus Twenty Fund........... Russell 1000(R) Growth
Index(1) 0.64%
--------
(1) The Russell 1000(R) Growth Index measures the performance of those Russell
1000(R) companies with higher price-to-book ratios and higher forecasted
growth values.
(2) The Morgan Stanley Capital International ("MSCI") World Index(SM) is a
market capitalization weighted index composed of companies representative of
the market structure of developed market countries in North America, Europe,
and the Asia/Pacific Region. The index includes reinvestment of dividends,
net of foreign withholding taxes.
(3) The MSCI All Country World ex-U.S. Index(SM) is an unmanaged, free float-
adjusted, market capitalization weighted index composed of stocks of
companies located in countries throughout the world, excluding the United
States. It is designed to measure equity market performance in global
developed and emerging markets outside the United States. The index includes
reinvestment of dividends, net of foreign withholding taxes.
COMPARISON OF CURRENT AND PRO FORMA ADVISORY FEES DURING THE PREVIOUS FISCAL
YEAR
The following table shows: (1) the dollar amount of the actual advisory
fees paid by each Fund, before and after all applicable waivers, for the fiscal
year ended October 31, 2009 (July 31, 2009 for Janus Forty Fund); (2) the dollar
amount of the pro forma advisory fees that would have been paid by each Fund,
before and after all applicable waivers, if the proposed performance-based fee
structure had been in effect during such fiscal year; and (3) for each Fund, the
difference between (i) the amount of the pro forma advisory fees, net of
waivers, that would have been paid under the performance-based fee structure and
(ii) the amount of the actual advisory fees paid, net of waivers, expressed as a
percentage of the actual advisory fees' amount. Such percentage difference is
positive when the amount of the pro forma advisory fees would have been larger
than the amount of the actual advisory fees paid by a Fund, and negative when
the amount of the pro forma advisory fees would have been smaller than the
amount of the actual advisory fees paid by the Fund. For purposes of pro forma
calculations, it is assumed that the Performance Adjustment would have been in
effect during the entire fiscal year ended October 31, 2009 (July 31, 2009 for
Janus Forty Fund)
35
and that it would have been calculated over the full preceding 36-month
performance measurement period.
For Janus Fund and Janus Overseas Fund, any advisory fee waivers shown
reflect the period July 6, 2009 through October 31, 2009 as there was no
agreement in place to waive such fees for these Funds prior to that date.
For Janus Forty Fund, any advisory fee waivers prior to July 6, 2009
reflect fee waivers in effect for Janus Adviser Forty Fund, the predecessor Fund
to Janus Forty Fund that had a different expense limit agreement than the one
currently in effect for Janus Forty Fund. If the expense limit currently in
effect for Janus Forty Fund would have been in effect during the period July 31,
2008 to July 6, 2009, the amounts shown in the table below that include waivers
would be different. Janus Twenty Fund and Janus Global Opportunities Fund do not
have any agreements in effect for waivers of the advisory fee paid to Janus
Capital.
Actual Advisory Fees Pro Forma Advisory Fees*
-------------------------------------- ------------------------------------- Difference
ACTUAL ACTUAL Pro Forma Pro Forma Between Pro
ADVISORY FEE ADVISORY Advisory Advisory Forma and
BEFORE FEE AFTER Fee Before Pro Forma Fee After Actual
WAIVER WAIVER WAIVER Waiver Waiver Waiver Advisory Fee
FUND ($) (000'S) ($) (000'S) ($) (000'S) ($) (000's) ($) (000's) ($) (000's) After Waiver
---- ------------ ----------- ----------- ----------- ----------- ----------- ------------
Janus Forty Fund...... 28,103 1,561 26,542 31,658 1,561 30,097 13.40%
Janus Fund............ 46,943 2 46,941 47,293 2 47,291 0.75%
Janus Global
Opportunities Fund.. 543 N/A 543 604 N/A 604 11.30%
Janus Overseas Fund... 38,344 43 38,301 47,295 43 47,252 23.37%
Janus Twenty Fund..... 49,894 N/A 49,894 61,377 N/A 61,377 23.01%
--------
* As described in this Proxy Statement, any Performance Adjustment included in
calculating the Pro Forma Advisory Fees for each Fund, except Janus Forty
Fund, is based on the investment performance of the Fund's Class T Shares
(formerly named Class J Shares), versus the Fund's benchmark index over the
36-month period ended October 31, 2009.
Any Performance Adjustment included in calculating the Pro Forma Advisory
Fees for Janus Forty Fund is based on the investment performance of the Fund's
Class A Shares versus the Fund's benchmark index over the 36-month period ended
July 31, 2009. Janus Forty Fund's Class A Shares on July 6, 2009 after the
reorganization of Class A Shares of Janus Adviser Forty Fund ("JAD predecessor
fund") into Class A Shares of Janus Forty Fund. As a result, for the applicable
period prior to July 6, 2009, the Performance Adjustment is based on the
investment performance of the JAD predecessor fund's Class A Shares calculated
using the fees and expenses of the JAD predecessor fund's Class A Shares, net of
any fee and expense limitations or waivers.
Although the Performance Adjustment for Janus Fund, Janus Global
Opportunities Fund and Janus Overseas Fund, when implemented, will be calculated
based on the performance of that Fund's Class A Shares (load-waived), the pro
forma numbers for these Funds in this Proxy Statement are based on the
performance of Class T Shares. This is because Class A Shares of these Funds did
not commence operations until July 6, 2009, and therefore, a pro forma
calculation could only assume that the performance fee
36
had been in effect for the period July 6, 2009 through October 31, 2009 (the end
of the fiscal year) rather than a three-year period ended October 31, 2009. (A
rolling three year period is how the Fund's management fee will be calculated
once it reaches three years from implementation of the performance fee.) Class T
Shares was selected as the class to use for calculating the pro forma numbers
given the similarities in fees between Class T Shares and Class A Shares (load-
waived). Although using Class A Shares to calculate the pro forma management fee
may result in a different result than Class T Shares, the pro forma numbers
provided in this proxy statement should give you a good understanding of the
impact of performance fees on your Fund and what the management fee would have
been if a performance fee were in effect for your Fund for the three-year period
ended October 31, 2009. Regardless of whether Class A Shares or Class T Shares
is used to calculate the pro forma management fee, the management fee that will
be paid by your Fund if a performance fee is approved will depend on the
performance of the Fund compared to its benchmark for the period beginning on or
about July 1, 2010. Your management fee would begin adjusting up or down
beginning July 1, 2011 or later, as described in this Proxy Statement.
2.A. JANUS FORTY FUND
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for Janus Forty Fund. The examples assume that the
average daily net assets of the Fund remain constant during a 36-month
performance measurement period. The Performance Adjustment would be a smaller
percentage of current assets if the net assets of the Fund were increasing
during the performance measurement period, and a greater percentage of current
assets if the net assets of the Fund were decreasing during the performance
measurement period. All numbers in the examples are rounded to the nearest
hundredth percent. The net assets of the Fund as of the fiscal years ended July
31, 2008 and July 31, 2009 were $6,972,320,122 and $5,470,535,332, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12(th)
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 8.50% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Class A Shares (waiving the upfront
sales load) compared to the investment record of the Russell 1000(R) Growth
Index.
EXAMPLE 1: Fund Outperforms its Benchmark by 8.50%
If the Fund has outperformed the Russell 1000(R) Growth Index by 8.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of 0.15% 1/12(th) of 0.79%
37
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund has tracked the performance of the Russell 1000(R) Growth Index
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% .00% 1/12(th) of 0.64%
EXAMPLE 3: Fund Underperforms its Benchmark by 8.50%
If the Fund has underperformed the Russell 1000(R) Growth Index by 8.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of -0.15% 1/12(th) of 0.49%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any applicable fee waivers. For purposes of pro forma
calculations, it is assumed that the Performance Adjustment would have been in
effect during the entire fiscal year ended July 31, 2009, and that it would have
been calculated over a full 36-month performance measurement period. The fees
and expenses shown were determined based upon average net assets as of the
fiscal year ended July 31, 2009. For the 36-month period ended July 31, 2009,
the Fund outperformed the Russell 1000(R) Growth Index and the fiscal year-end
average daily net assets were higher than the trailing 36-month average daily
net assets, resulting in the pro forma management fee shown in the Annual Fund
Operating Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
Annual fund operating expenses are paid out of the Fund'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 examples show, these costs are borne indirectly by all
shareholders.
The Fund has entered into an expense waiver agreement with Janus Capital.
In the expense waiver agreement, Janus Capital has agreed to reduce annual Fund
operating expenses to the extent that total operating expenses exceed a specific
percentage of average daily net assets, subject to certain limitations described
in the expense waiver agreement. Additional details with respect to the expense
waiver agreement are described in the footnotes to the Annual Fund Operating
Expenses table listed below.
38
As a result of the expense waiver agreement, the Annual Total Operating Expenses
may be less than the amount listed in the table below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT) (1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS A CLASS C CLASS I CLASS R CLASS S CLASS T
------- ------- ------- ------- ------- -------
Maximum Sales Charge (load)
Imposed on Purchases (as a
% of offering price)....... 5.75%(2) None None None None None
Maximum Deferred Sales Charge
(load) (as a % of the lower
original purchase price or
redemption proceeds)....... None(3) 1.00%(4) None None None None
Redemption Fee............... None None None None None None
Exchange Fee................. None None None None None None
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)(5)
ACQUIRED
DISTRIBUTION/ FUND(9) TOTAL ANNUAL
MANAGEMENT SERVICE OTHER FEES AND OPERATING
FEE(6) (12B-1) FEES (7) EXPENSES(8) EXPENSES EXPENSES(10)
---------- ---------------- ----------- -------- ------------
JANUS FORTY FUND
Class A Shares
Current........... 0.64% 0.25% 0.14% 0.02% 1.05%
Pro Forma......... 0.71% 0.25% 0.14% 0.02% 1.12%
Class C Shares
Current........... 0.64% 1.00% 0.17% 0.02% 1.83%
Pro Forma......... 0.71% 1.00% 0.17% 0.02% 1.90%
Class I Shares
Current........... 0.64% N/A 0.03% 0.02% 0.69%
Pro Forma......... 0.71% N/A 0.03% 0.02% 0.76%
Class R Shares
Current........... 0.64% 0.50% 0.27% 0.02% 1.43%
Pro Forma......... 0.71% 0.50% 0.27% 0.02% 1.50%
Class S Shares
Current........... 0.64% 0.25% 0.26% 0.02% 1.17%
Pro Forma......... 0.71% 0.25% 0.26% 0.02% 1.24%
Class T Shares
Current........... 0.64% N/A 0.27% 0.02% 0.93%
Pro Forma......... 0.71% N/A 0.27% 0.02% 1.00%
39
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS, AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund, under both the current fee structure and the proposed fee
structure, with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and reinvest
all dividends and distributions without a sales charge. The examples also assume
that your investment has a 5% return each year and that the Fund's operating
expenses without waivers remain the same. The pro forma calculations assume that
the Performance Adjustment had been in effect for a 36-month period as of the
end of the last fiscal year (July 31, 2009). Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS FORTY FUND
Class A Shares
Current............................ $676 $890 $1,121 $1,784
Pro Forma.......................... 683 911 1,156 1,860
Class C Shares
Current............................ 286 576 990 2,148
Pro Forma.......................... 293 597 1,026 2,222
Class I Shares
Current............................ 70 221 384 859
Pro Forma.......................... 78 243 422 942
Class R Shares
Current............................ 146 452 782 1,713
Pro Forma.......................... 153 474 818 1,791
Class S Shares
Current............................ 119 372 644 1,420
Pro Forma.......................... 126 393 681 1,500
Class T Shares
Current............................ 95 296 515 1,143
Pro Forma.......................... 102 318 552 1,225
40
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS FORTY FUND
Class A Shares
Current........................... $676 $890 $1,121 $1,784
Pro Forma......................... 683 911 1,156 1,860
Class C Shares
Current........................... 186 576 990 2,148
Pro Forma......................... 193 597 1,026 2,222
Class I Shares
Current........................... 70 221 384 859
Pro Forma......................... 78 243 422 942
Class R Shares
Current........................... 146 452 782 1,713
Pro Forma......................... 153 474 818 1,791
Class S Shares
Current........................... 119 372 644 1,420
Pro Forma......................... 126 393 681 1,500
Class T Shares
Current........................... 95 296 515 1,143
Pro Forma......................... 102 318 552 1,225
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) Sales charge may be waived for certain investors, as described in the
Shareholder's Guide in the Fund's prospectus.
(3) A contingent deferred sales charge of up to 1.00% may be imposed on certain
redemptions of Class A Shares bought without an initial sales charge and
then redeemed within 12 months of purchase. This sales charge is not
reflected in the table or the example.
(4) A contingent deferred sales charge of 1.00% applies on Class C Shares
redeemed within 12 months of purchase. The contingent deferred sales charge
may be waived for certain investors.
(5) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
(6) The "Management Fee" is the investment advisory fee rate paid by the Fund
to Janus Capital. Any Performance Adjustment included in calculating the
Pro Forma Management Fee as shown for each class of shares of the Fund is
based on the investment performance of the Fund's Class A Shares versus the
Russell 1000(R) Growth Index over the 36-month period ended July 31, 2009.
Once the Performance Adjustment is determined, it is applied across each
other class of shares of the Fund.
(7) Includes a shareholder servicing fee of up to 0.25% for Class C Shares.
Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(8) For Class A Shares, Class C Shares and Class I Shares, Other Expenses may
include administrative fees charged by intermediaries for the provision of
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
41
provided on behalf of shareholders of the Funds. For Class R Shares, Class
S Shares and Class T Shares, Other Expenses include an annual
administrative fee rate of 0.25% of the average daily net assets of each
class to compensate Janus Services LLC for providing, or arranging for the
provision of, administrative services, including recordkeeping,
subaccounting, order processing for omnibus or networked accounts, or other
shareholder services provided on behalf of retirement plan participants,
pension plan participants, or other underlying investors investing through
institutional channels.
(9) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's "ratio of gross expenses to average net assets" appearing in the
Fund's financial statements, which reflect the operating expenses of the
Fund and does not include Acquired Fund fees and expenses.
(10) Total Annual Fund Operating Expenses do not reflect the application of a
contractual expense waiver by Janus Capital. Janus Capital has
contractually agreed to waive the Fund's total annual fund operating
expenses (excluding any performance adjustments to management fees,
distribution and shareholder servicing fees (applicable to Class A Shares,
Class C Shares, Class R Shares, and Class S Shares), administrative fees
payable pursuant to the Transfer Agency Agreement (applicable to Class R
Shares, Class S Shares, and Class T Shares), brokerage commissions,
interest, dividends, taxes, and extraordinary expenses including, but not
limited to, acquired fund fees and expenses) to the extent such operating
expenses exceed 0.78% of average daily net assets on the fiscal year ending
date in which the agreement is in effect. Because a fee waiver will have a
positive effect upon the Fund's performance, a fund that pays a
performance-based investment advisory fee may experience a performance
adjustment that is considered favorable to Janus Capital as a result of a
fee waiver that is in place during the period when the performance
adjustment applies. The current agreement will be in effect until February
16, 2011, unless terminated, revised or extended. Additionally, the current
agreement does not contain any provisions allowing for the recoupment of
any fees waived. Based on information in the table above, with the waiver,
assuming Net Annual Fund Operating Expenses would have been included in the
table above, those expenses are as follows: Class A Shares - 1.05% (pro
forma - 1.12%); Class C Shares - 1.80% (pro forma - 1.87%); Class I
Shares - 0.69%; (pro forma - 0.76%) Class R Shares - 1.43% (pro
forma - 1.50%); Class S Shares - 1.17% (pro forma - 1.24%); and Class T
Shares - 0.93% (pro forma - 1.00%).
* The Pro Forma numbers shown for each class of shares of the Fund include a
pro forma management fee calculated as described in the text and related
footnotes that accompany the fee table above.
2.B. JANUS FUND
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for Janus Fund. The examples assume that the average
daily net assets of the Fund remain constant during a 36-month performance
measurement period. The Performance Adjustment would be a smaller percentage of
current assets if the net assets of the Fund were increasing during the
performance measurement period, and a greater percentage of current assets if
the net assets of the Fund were decreasing during the performance measurement
period. All numbers in the examples are rounded to the nearest hundredth
percent. The net assets of the Fund as of the fiscal years ended October 31,
2008 and October 31, 2009 were $7,528,294,073 and $8,221,025,987, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12(th)
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 4.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment
42
performance of the Fund's Class A Shares (waiving the upfront sales load)
compared to the investment record of the Russell 1000(R) Growth Index.
EXAMPLE 1: Fund Outperforms its Benchmark by 4.00%
If the Fund has outperformed the Russell 1000(R) Growth Index by 4.00%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of 0.15% 1/12(th) of 0.79%
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund has tracked the performance of the Russell 1000(R) Growth Index
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 0.00% 1/12(th) of 0.64%
EXAMPLE 3: Fund Underperforms its Benchmark by 4.00%
If the Fund has underperformed the Russell 1000(R) Growth Index by 4.00%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of -0.15% 1/12(th) of 0.49%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any applicable fee waivers. For purposes of pro forma
calculations, it is assumed that the Performance Adjustment would have been in
effect during the entire fiscal year ended October 31, 2009, and that it would
have been calculated over a full 36-month performance measurement period. The
fees and expenses shown were determined based upon average net assets as of the
fiscal year ended October 31, 2009. For the 36-month period ended October 31,
2009, the Fund outperformed the Russell 1000(R) Growth Index and the fiscal
year-end average daily net assets were lower than the trailing 36-month average
daily net assets, resulting in the pro forma management fee shown in the Annual
Fund Operating Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
43
Annual fund operating expenses are paid out of the Fund'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 examples show, these costs are borne indirectly by all
shareholders.
The Fund has entered into an expense waiver agreement with Janus Capital.
In the expense waiver agreement, Janus Capital has agreed to reduce annual Fund
operating expenses to the extent that total operating expenses exceed a specific
percentage of average daily net assets, subject to certain limitations described
in the expense waiver agreement. Additional details with respect to the expense
waiver agreement are described in the footnotes to the Annual Fund Operating
Expenses table listed below. As a result of the expense waiver agreement, the
Annual Total Operating Expenses may be less than the amount listed in the table
below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT) (1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS A CLASS C CLASS D CLASS I CLASS R CLASS S CLASS T
------- ------- ------- ------- ------- ------- -------
Maximum Sales Charge
(load) Imposed on
Purchases (as a % of
offering price)...... 5.75%(2) None None None None None None
Maximum Deferred Sales
Charge (load) (as a %
of the lower original
purchase price or
redemption
proceeds)............ None(3) 1.00%(4) None None None None None
Redemption Fee......... None None None None None None None
Exchange Fee........... None None None None None None None
44
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS) (5)
ACQUIRED
DISTRIBUTION/ FUND(9) TOTAL ANNUAL
MANAGEMENT SERVICE (12B-1) OTHER FEES AND OPERATING
FEE(6) FEES(7) EXPENSES(8) EXPENSES EXPENSES(10)
---------- --------------- ----------- -------- ------------
JANUS FUND
Class A Shares
Current.......... 0.64% 0.25% 0.18% 0.01% 1.08%
Pro Forma........ 0.64% 0.25% 0.18% 0.01% 1.08%
Class C Shares
Current.......... 0.64% 1.00% 0.25% 0.01% 1.90%
Pro Forma........ 0.64% 1.00% 0.25% 0.01% 1.90%
Class D Shares(11)
Current.......... 0.64% N/A 0.18% 0.01% 0.83%
Pro Forma........ 0.64% N/A 0.18% 0.01% 0.83%
Class I Shares
Current.......... 0.64% N/A 0.09% 0.01% 0.74%
Pro Forma........ 0.64% N/A 0.09% 0.01% 0.74%
Class R Shares
Current.......... 0.64% 0.50% 0.31% 0.01% 1.46%
Pro Forma........ 0.64% 0.50% 0.31% 0.01% 1.46%
Class S Shares
Current.......... 0.64% 0.25% 0.31% 0.01% 1.21%
Pro Forma........ 0.64% 0.25% 0.31% 0.01% 1.21%
Class T Shares(12)
Current.......... 0.64% N/A 0.31% 0.01% 0.96%
Pro Forma........ 0.64% N/A 0.31% 0.01% 0.96%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS, AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund, under both the current fee structure and the proposed fee
structure, with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and reinvest
all dividends and distributions without a sales charge. The examples also assume
that your investment has a 5% return each year and that the Fund's operating
expenses without waivers remain the same. The pro forma calculations assume that
the Performance Adjustment had been in effect for a
45
36-month period as of the end of the last fiscal year (October 31, 2009).
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS FUND
Class A Shares
Current........................... $679 $899 $1,136 $1,816
Pro Forma......................... 679 899 1,136 1,816
Class C Shares
Current........................... 293 597 1,026 2,222
Pro Forma......................... 293 597 1,026 2,222
Class D Shares
Current........................... 85 265 460 1,025
Pro Forma......................... 85 265 460 1,025
Class I Shares
Current........................... 76 237 411 918
Pro Forma......................... 76 237 411 918
Class R Shares
Current........................... 149 462 797 1,746
Pro Forma......................... 149 462 797 1,746
Class S Shares
Current........................... 123 384 665 1,466
Pro Forma......................... 123 384 665 1,466
Class T Shares
Current........................... 98 306 531 1,178
Pro Forma......................... 98 306 531 1,178
46
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS FUND
Class A Shares
Current........................... $679 $899 $1,136 $1,816
Pro Forma......................... 679 899 1,136 1,816
Class C Shares
Current........................... 193 597 1,026 2,222
Pro Forma......................... 193 597 1,026 2,222
Class D Shares
Current........................... 85 265 460 1,025
Pro Forma......................... 85 265 460 1,025
Class I Shares
Current........................... 76 237 411 918
Pro Forma......................... 76 237 411 918
Class R Shares
Current........................... 149 462 797 1,746
Pro Forma......................... 149 462 797 1,746
Class S Shares
Current........................... 123 384 665 1,466
Pro Forma......................... 123 384 665 1,466
Class T Shares
Current........................... 98 306 531 1,178
Pro Forma......................... 98 306 531 1,178
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) Sales charge may be waived for certain investors, as described in the
Shareholder's Guide in the Fund's prospectus.
(3) A contingent deferred sales charge of up to 1.00% may be imposed on certain
redemptions of Class A Shares bought without an initial sales charge and
then redeemed within 12 months of purchase. This sales charge is not
reflected in the example.
(4) A contingent deferred sales charge of 1.00% applies on Class C Shares
redeemed within 12 months of purchase. The contingent deferred sales charge
may be waived for certain investors.
(5) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
(6) The "Management Fee" is the investment advisory fee rate paid by the Fund
to Janus Capital. Any Performance Adjustment included in calculating the
Pro Forma Management Fee as shown for each class of shares of the Fund is
based on the investment performance of the Fund's Class T Shares versus the
Russell 1000(R) Growth Index over the 36-month period ended October 31,
2009. Once the Performance Adjustment is determined, it is applied across
each other class of shares of the Fund.
47
(7) Includes a shareholder servicing fee of up to 0.25% for Class C Shares.
Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(8) For Class A Shares, Class C Shares and Class I Shares, Other Expenses may
include administrative fees charged by intermediaries for the provision of
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of shareholders of the Funds. For Class R Shares, Class
S Shares, and Class T Shares, Other Expenses include an annual
administrative fee of 0.25% of the average daily net assets of each class
to compensate Janus Services LLC for providing, or arranging for the
provision of, administrative services, including recordkeeping,
subaccounting, order processing for omnibus or networked accounts, or other
shareholder services provided on behalf of retirement plan participants,
pension plan participants, or other underlying investors investing through
institutional channels. For Class D Shares, Other Expenses include an
administrative fee of 0.12% of the average daily net assets of Class D
Shares for shareholder services provided by Janus Services LLC.
(9) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's "ratio of gross expenses to average net assets" appearing in the
Fund's financial statements, which reflect the operating expenses of the
Fund and does not include Acquired Fund fees and expenses.
(10) Total Annual Fund Operating Expenses do not reflect the application of a
contractual expense waiver by Janus Capital. Effective July 6, 2009, Janus
Capital has contractually agreed to waive the Fund's total annual fund
operating expenses (excluding any performance adjustments to management
fees, distribution and shareholder servicing fees (applicable to Class A
Shares, Class C Shares, Class R Shares, and Class S Shares), administrative
fees payable pursuant to the Transfer Agency Agreement (applicable to Class
D Shares, Class R Shares, Class S Shares, and Class T Shares), brokerage
commissions, interest, dividends, taxes, and extraordinary expenses
including, but not limited to, acquired fund fees and expenses) to the
extent such operating expenses exceed 0.78% of average daily net assets on
the fiscal year ending date in which the agreement is in effect. Because a
fee waiver will have a positive effect upon the Fund's performance, a fund
that pays a performance-based investment advisory fee may experience a
performance adjustment that is considered favorable to Janus Capital as a
result of a fee waiver that is in place during the period when the
performance adjustment applies. The current agreement will be in effect
until February 16, 2011, unless terminated, revised or extended.
Additionally, the current agreement does not contain any provisions
allowing for the recoupment of any fees waived. Based on information in the
table above, with the waiver, assuming Net Annual Fund Operating Expenses
would have been included in the table above, those expenses are as follows:
Class A Shares - 1.04% (pro forma - 1.04%); Class C - Shares 1.79% (pro
forma - 1.79%); Class D Shares - 0.83% (pro forma - 0.83%); Class I
Shares - 0.74% (pro forma - 0.74%); Class R Shares - 1.46% (pro
forma - 1.46%); Class S Shares - 1.21% (pro forma - 1.21%); and Class T
Shares - 0.96% (pro forma - 0.96%).
(11) Class D Shares launched on February 16, 2010. The fees and expenses shown
are estimated based on the Fund's assets as of 10/31/2009.
(12) Formerly named Class J Shares
* The Pro Forma numbers shown for each class of shares of the Fund include a
pro forma management fee calculated as described in the text and related
footnotes that accompany the fee table above.
2.C. JANUS GLOBAL OPPORTUNITIES FUND
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for Janus Global Opportunities Fund. The examples assume
that the average daily net assets of the Fund remain constant during a 36-month
performance measurement period. The Performance Adjustment would be a smaller
percentage of current
48
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are rounded to the nearest hundredth percent. The net
assets of the Fund as of the fiscal years ended October 31, 2008 and October 31,
2009 were $85,624,514 and $99,017,213, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12(th)
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 7.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Class A Shares (waiving the upfront
sales load) compared to the investment record of the Morgan Stanley Capital
International ("MSCI") World Index(SM).
EXAMPLE 1: Fund Outperforms its Benchmark by 7.00%
If the Fund has outperformed the MSCI World Index(SM) by 7.00% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of 0.15% 1/12(th) of 0.79%
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund's performance has tracked the performance of the MSCI World
Index(SM) during the preceding 36 months, the Fund would calculate the
investment advisory fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 0.00% 1/12(th) of 0.64%
EXAMPLE 3: Fund Underperforms its Benchmark by 7.00%
If the Fund has underperformed the MSCI World Index(SM) by 7.00% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of -0.15% 1/12(th) of 0.49%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure.. For
purposes of pro forma calculations, it is assumed that the Performance
Adjustment would have been in effect during the entire fiscal year ended October
31, 2009, and that it would have been
49
calculated over a full 36-month performance measurement period. The fees and
expenses shown were determined based upon average net assets as of the fiscal
year ended October 31, 2009. For the 36-month period ended October 31, 2009, the
Fund outperformed the MSCI World Index(SM) and the fiscal year-end average daily
net assets were lower than the trailing 36-month average daily net assets,
resulting in the pro forma management fee shown in the Annual Fund Operating
Expenses table below. The performance numbers do not take into account any
changes made to the Fund's investment objective and strategies as described in
Proposal 5 in this Proxy Statement. It is not possible to predict the impact of
such changes on the Fund's management fee or total expense ratio.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
Annual fund operating expenses are paid out of the Fund'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 examples show, these costs are borne indirectly by all
shareholders.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)(1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS A CLASS C CLASS D CLASS I CLASS S CLASS T
------- ---------- ---------- ---------- ---------- -------------
Maximum Sales Charge (load)
Imposed on Purchases (as a
% of offering price)...... 5.75%(2) None None None None None
Maximum Deferred Sales
Charge (load) (as a % of
the lower original
purchase price or
redemption proceeds)...... None(3) 1.00%(4) None None None None
Redemption Fee on Shares
held for 90 days or less
(as a % of amount
redeemed)................. None None 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6)
Exchange Fee................ None None None(6) None(6) None(6) None(6)
50
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)(7)
DISTRIBUTION/ ACQUIRED TOTAL
SERVICE FUND(11) ANNUAL
MANAGEMENT (12B-1) OTHER FEES AND OPERATING
FEE(8) FEES (9) EXPENSES(10) EXPENSES EXPENSES
---------- ------------- ------------ -------- ---------
JANUS GLOBAL
OPPORTUNITIES FUND
Class A Shares
Current............ 0.64% 0.25% 0.49% 0.01% 1.39%
Pro Forma.......... 0.71% 0.25% 0.49% 0.01% 1.46%
Class C Shares
Current............ 0.64% 1.00% 0.49% 0.01% 2.14%
Pro Forma.......... 0.71% 1.00% 0.49% 0.01% 2.21%
Class D Shares(12)
Current............ 0.64% N/A 0.61% 0.01% 1.26%
Pro Forma.......... 0.71% N/A 0.61% 0.01% 1.33%
Class I Shares
Current............ 0.64% N/A 0.49% 0.01% 1.14%
Pro Forma.......... 0.71% N/A 0.49% 0.01% 1.21%
Class S Shares
Current............ 0.64% 0.25% 0.74% 0.01% 1.64%
Pro Forma.......... 0.71% 0.25% 0.74% 0.01% 1.71%
Class T Shares(13)
Current............ 0.64% N/A 0.74% 0.01% 1.39%
Pro Forma.......... 0.71% N/A 0.74% 0.01% 1.46%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES AS SHOWN IN THE TABLES ABOVE.
These examples are intended to help you compare the cost of investing in the
Fund, under both the current fee structure and the proposed fee structure, with
the cost of investing in other mutual funds. The examples assume that you invest
$10,000 in the Fund for the time periods indicated and reinvest all dividends
and distributions without a sales charge. The examples also assume that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. The pro forma calculations assume that the Performance
Adjustment had been in effect for a 36-month period as of
51
the end of the last fiscal year (October 31, 2009). Although your actual costs
may be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS GLOBAL OPPORTUNITIES FUND
Class A Shares
Current............................ $708 $ 990 $1,292 $2,148
Pro Forma.......................... 715 1,010 1,327 2,221
Class C Shares
Current............................ 317 670 1,149 2,472
Pro Forma.......................... 324 691 1,185 2,544
Class D Shares
Current............................ 128 400 692 1,523
Pro Forma.......................... 135 421 729 1,601
Class I Shares
Current............................ 116 362 628 1,386
Pro Forma.......................... 123 384 665 1,466
Class S Shares
Current............................ 167 517 892 1,944
Pro Forma.......................... 174 539 928 2,019
Class T Shares
Current............................ 142 440 761 1,669
Pro Forma.......................... 149 462 797 1,746
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS GLOBAL OPPORTUNITIES FUND
Class A Shares
Current........................... $708 $ 990 $1,292 $2,148
Pro Forma......................... 715 1,010 1,327 2,221
Class C Shares
Current........................... 217 670 1,149 2,472
Pro Forma......................... 224 691 1,185 2,544
Class D Shares
Current........................... 128 400 692 1,523
Pro Forma......................... 135 421 729 1,601
52
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class I Shares
Current........................... 116 362 628 1,386
Pro Forma......................... 123 384 665 1,466
Class S Shares
Current........................... 167 517 892 1,944
Pro Forma......................... 174 539 928 2,019
Class T Shares
Current........................... 142 440 761 1,669
Pro Forma......................... 149 462 797 1,746
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) Sales charge may be waived for certain investors, as described in the
Shareholder's Guide in the Fund's prospectus.
(3) A contingent deferred sales charge of up to 1.00% may be imposed on certain
redemptions of Class A Shares bought without an initial sales charge and
then redeemed within 12 months of purchase. This sales charge is not
reflected in the example.
(4) A contingent deferred sales charge of 1.00% applies on Class C Shares
redeemed within 12 months of purchase. The contingent deferred sales charge
may be waived for certain investors.
(5) The redemption fee may be waived in certain circumstances.
(6) An exchange of Shares from the Fund held for 90 days or less may be subject
to the 2.00% redemption fee.
(7) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
(8) The "Management Fee" is the investment advisory fee rate paid by the Fund
to Janus Capital. Any Performance Adjustment included in calculating the
Pro Forma Management Fee as shown for each class of shares of the Fund is
based on the investment performance of the Fund's Class T Shares versus the
MSCI World Index(SM) over the 36-month period ended October 31, 2009. Once
the Performance Adjustment is determined, it is applied across each other
class of shares of the Fund.
(9) Includes a shareholder servicing fee of up to 0.25% for Class C Shares.
Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(10) For Class A Shares, Class C Shares and Class I Shares, Other Expenses may
include administrative fees charged by intermediaries for the provision of
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of shareholders of the Funds. For Class S Shares and
Class T Shares, Other Expenses include an annual administrative fee of
0.25% of the average daily net assets of each class to compensate Janus
Services LLC for providing, or arranging for the provision of,
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of retirement plan participants, pension plan
participants, or other underlying investors investing through institutional
channels. For Class D Shares, Other Expenses include an administrative fee
of 0.12% of the average daily net assets of Class D Shares for shareholder
services provided by Janus Services LLC.
(11) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's "ratio of gross expenses to average net assets" appearing in the
Fund's financial statements, which reflect the operating expenses of the
Fund and does not include Acquired Fund fees and expenses.
53
(12) Class D Shares launched on February 16, 2010. The fees and expenses shown
are estimated based on the Fund's assets as of 10/31/2009.
(13) Formerly named Class J Shares.
* The Pro Forma numbers shown for each class of shares of the Fund include a
pro forma management fee calculated as described in the text and related
footnotes that accompany the fee table above.
2.D. JANUS OVERSEAS FUND
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for Janus Overseas Fund. The examples assume that the
average daily net assets of the Fund remain constant during a 36-month
performance measurement period. The Performance Adjustment would be a smaller
percentage of current assets if the net assets of the Fund were increasing
during the performance measurement period, and a greater percentage of current
assets if the net assets of the Fund were decreasing during the performance
measurement period. All numbers in the examples are rounded to the nearest
hundredth percent. The net assets of the Fund as of the fiscal years ended
October 31, 2008 and October 31, 2009 were $4,345,023,588 and $9,774,584,698,
respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12(th)
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 7.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Class A Shares (waiving the upfront
sales load) compared to the investment record of the MSCI All Country World ex-
U.S. Index(SM).
EXAMPLE 1: Fund Outperforms its Benchmark by 7.00%
If the Fund has outperformed the MSCI All Country World ex-U.S. Index(SM)
by 7.00% during the preceding 36 months, the Fund would calculate the investment
advisory fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of 0.15% 1/12(th) of 0.79%
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund's performance has tracked the performance of the MSCI All
Country World ex-U.S. Index(SM) during the preceding 36 months, the Fund would
calculate the investment advisory fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 0.00% 1/12(th) of 0.64%
54
EXAMPLE 3: Fund Underperforms its Benchmark by 7.00%
If the Fund has underperformed the MSCI All Country World ex-U.S. Index(SM)
by 7.00% during the preceding 36 months, the Fund would calculate the investment
advisory fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of -0.15% 1/12(th) of 0.49%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure, without
giving effect to any applicable fee waivers. For purposes of pro forma
calculations, it is assumed that the Performance Adjustment would have been in
effect during the entire fiscal year ended October 31, 2009, and that it would
have been calculated over a full 36-month performance measurement period. The
fees and expenses shown were determined based upon average net assets as of the
fiscal year ended October 31, 2009. For the 36-month period ended October 31,
2009, the Fund outperformed the MSCI All Country World ex-U.S. Index(SM) and the
fiscal year-end average daily net assets were lower than the trailing 36-month
average daily net assets, resulting in the pro forma management fee shown in the
Annual Fund Operating Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
Annual fund operating expenses are paid out of the Fund'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 examples show, these costs are borne indirectly by all
shareholders.
The Fund has entered into an expense waiver agreement with Janus Capital.
In the expense waiver agreement, Janus Capital has agreed to reduce annual Fund
operating expenses to the extent that total operating expenses exceed a specific
percentage of average daily net assets, subject to certain limitations described
in the expense waiver agreement. Additional details with respect to the expense
waiver agreement are described in the footnotes to the Annual Fund Operating
Expenses table listed below.
55
As a result of the expense waiver agreement, the Annual Total Operating Expenses
may be less than the amount listed in the table below.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT) (1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS A CLASS C CLASS D CLASS I CLASS R CLASS S CLASS T
------- ------- ------------- ------------- ------------- ------------- -------------
Maximum Sales Charge
(load) Imposed on
Purchases (as a %
of offering
price)............ 5.75%(2) None None None None None None
Maximum Deferred
Sales Charge
(load) (as a % of
the lower original
purchase price or
redemption
proceeds)......... None(3) 1.00%(4) None None None None None
Redemption Fee on
Shares held for 90
days or less (as a
% of amount
redeemed)......... None None 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6)
Exchange Fee........ None None None(6) None(6) None(6) None(6) None(6)
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS) (7)
DISTRIBUTION/ TOTAL
SERVICE ANNUAL
MANAGEMENT (12B-1) OTHER OPERATING
FEE(8) FEES(9) EXPENSES(10) EXPENSES(12)
---------- ------------- ------------ ------------
JANUS OVERSEAS FUND
Class A Shares
Current.................. 0.64% 0.25% 0.11% 1.00%
Pro Forma................ 0.79% 0.25% 0.11% 1.15%
Class C Shares
Current.................. 0.64% 1.00% 0.37% 2.01%
Pro Forma................ 0.79% 1.00% 0.37% 2.16%
Class D Shares(11)
Current.................. 0.64% N/A 0.18% 0.82%
Pro Forma................ 0.79% N/A 0.18% 0.97%
Class I Shares
Current.................. 0.64% N/A 0.06% 0.70%
Pro Forma................ 0.79% N/A 0.06% 0.85%
56
DISTRIBUTION/ TOTAL
SERVICE ANNUAL
MANAGEMENT (12B-1) OTHER OPERATING
FEE(8) FEES(9) EXPENSES(10) EXPENSES(12)
---------- ------------- ------------ ------------
Class R Shares
Current.................. 0.64% 0.50% 0.30% 1.44%
Pro Forma................ 0.79% 0.50% 0.30% 1.59%
Class S Shares
Current.................. 0.64% 0.25% 0.30% 1.19%
Pro Forma................ 0.79% 0.25% 0.30% 1.34%
Class T Shares(12)
Current.................. 0.64% N/A 0.31% 0.95%
Pro Forma................ 0.79% N/A 0.31% 1.10%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS, AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund, under both the current fee structure and the proposed fee
structure, with the cost of investing in other mutual funds. The examples assume
that you invest $10,000 in the Fund for the time periods indicated and reinvest
all dividends and distributions without a sales charge. The examples also assume
that your investment has a 5% return each year and that the Fund's operating
expenses without waivers remain the same. The pro forma calculations assume that
the Performance Adjustment had been in effect for a 36-month period as of the
end of the last fiscal year (October 31, 2009). Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS OVERSEAS FUND
Class A Shares
Current............................ $671 $875 $1,096 $1,729
Pro Forma.......................... 685 919 1,172 1,892
Class C Shares
Current............................ 304 630 1,083 2,338
Pro Forma.......................... 319 676 1,159 2,493
Class D Shares
Current............................ 85 265 460 1,025
Pro Forma.......................... 99 309 536 1,190
Class I Shares
Current............................ 72 224 390 871
Pro Forma.......................... 87 271 471 1,049
57
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class R Shares
Current............................ 147 456 787 1,724
Pro Forma.......................... 162 502 866 1,889
Class S Shares
Current............................ 121 378 654 1,443
Pro Forma.......................... 136 425 734 1,613
Class T Shares
Current............................ 97 303 525 1,166
Pro Forma.......................... 112 350 606 1,340
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS OVERSEAS FUND
Class A Shares
Current........................... $671 $875 $1,096 $1,729
Pro Forma......................... 685 919 1,172 1,892
Class C Shares
Current........................... 204 630 1,083 2,338
Pro Forma......................... 219 676 1,159 2,493
Class D Shares
Current........................... 85 265 460 1,025
Pro Forma......................... 99 309 536 1,190
Class I Shares
Current........................... 72 224 390 871
Pro Forma......................... 87 271 471 1,049
Class R Shares
Current........................... 147 456 787 1,724
Pro Forma......................... 162 502 866 1,889
Class S Shares
Current........................... 121 378 654 1,443
Pro Forma......................... 136 425 734 1,613
Class T Shares
Current........................... 97 303 525 1,166
Pro Forma......................... 112 350 606 1,340
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) Sales charge may be waived for certain investors, as described in the
Shareholder's Guide in the Fund's prospectus.
58
(3) A contingent deferred sales charge of up to 1.00% may be imposed on certain
redemptions of Class A Shares bought without an initial sales charge and
then redeemed within 12 months of purchase. This sales charge is not
reflected in the example.
(4) A contingent deferred sales charge of 1.00% applies on Class C Shares
redeemed within 12 months of purchase. The contingent deferred sales charge
may be waived for certain investors.
(5) The redemption fee may be waived in certain circumstances.
(6) An exchange of Shares from the Fund held for 90 days or less may be subject
to the 2.00% redemption fee.
(7) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
(8) The "Management Fee" is the investment advisory fee rate paid by the Fund
to Janus Capital. Any Performance Adjustment included in calculating the
Pro Forma Management Fee as shown for each class of shares of the Fund is
based on the investment performance of the Fund's Class T Shares versus the
MSCI All Country World ex-U.S. Index(SM) over the 36-month period ended
October 31, 2009. Once the Performance Adjustment is determined, it is
applied across each other class of shares of the Fund.
(9) Includes a shareholder servicing fee of up to 0.25% for Class C Shares.
Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(10) For Class A Shares, Class C Shares and Class I Shares, Other Expenses may
include administrative fees charged by intermediaries for the provision of
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of shareholders of the Funds. For Class R Shares, Class
S Shares, and Class T Shares, Other Expenses include an annual
administrative fee of 0.25% of the average daily net assets of each class
to compensate Janus Services LLC for providing, or arranging for the
provision of, administrative services, including recordkeeping,
subaccounting, order processing for omnibus or networked accounts, or other
shareholder services provided on behalf of retirement plan participants,
pension plan participants, or other underlying investors investing through
institutional channels. For Class D Shares, Other Expenses include an
administrative fee of 0.12% of the average daily net assets of Class D
Shares for shareholder services provided by Janus Services LLC. Other
expenses also include acquired fund fees and expenses. The amount is less
than 0.01% and is included in Other Expenses. "Acquired Fund" means any
underlying fund (including, but not limited to, exchange-traded funds) in
which the Fund invests or has invested during the period. Total Annual Fund
Operating Expenses shown may not correlate to the Fund's "ratio of gross
expenses to average net assets" appearing in the Fund's financial
statements, which reflect the operating expenses of the Fund and does not
include Acquired Fund fees and expenses.
(11) Total Annual Fund Operating Expenses do not reflect the application of a
contractual expense waiver by Janus Capital. Effective July 6, 2009, Janus
Capital has contractually agreed to waive the Fund's total annual fund
operating expenses (excluding any performance adjustments to management
fees, distribution and shareholder servicing fees (applicable to Class A
Shares, Class C Shares, Class R Shares, and Class S Shares), administrative
fees payable pursuant to the Transfer Agency Agreement (applicable to Class
D Shares, Class R Shares, Class S Shares, and Class T Shares), brokerage
commissions, interest, dividends, taxes, and extraordinary expenses
including, but not limited to, acquired fund fees and expenses) to the
extent such operating expenses exceed 0.92% of average daily net assets on
the fiscal year ending date in which the agreement is in effect. Because a
fee waiver will have a positive effect upon the Fund's performance, a fund
that pays a performance-based investment advisory fee may experience a
performance adjustment that is considered favorable to Janus Capital as a
result of a fee waiver that is in place during the period when the
performance adjustment applies. The current agreement will be in effect
until February 16, 2011, unless terminated, revised or extended.
Additionally, the current agreement does not contain any provisions
allowing for the recoupment of any fees waived. Based on information in the
table above, with the waiver, assuming Net Annual Fund Operating Expenses
would have been included in the table above, those expenses are as follows:
Class A Shares - 1.00% (pro forma - 1.15%); Class C Shares - 1.92% (pro
forma - 2.07%); Class D Shares - 0.82% (pro forma - 0.97%); Class I
Shares - 0.70% (pro forma - 0.85%); Class R Shares - 1.44% (pro
forma - 1.59%); Class S Shares - 1.19% (pro forma - 1.34%); and Class T
Shares - 0.95% (pro forma - 1.10%).
59
(12) Class D Shares launched on February 16, 2010. The fees and expenses shown
are estimated based on the Fund's assets as of 10/31/2009.
(13) Formerly named Class J Shares.
* The Pro Forma numbers shown for each class of shares of the Fund include a
pro forma management fee calculated as described in the text and related
footnotes that accompany the fee table above.
2.E. JANUS TWENTY FUND
HYPOTHETICAL EXAMPLE
The following hypothetical examples illustrate the application of the
Performance Adjustment for Janus Twenty Fund. The examples assume that the
average daily net assets of the Fund remain constant during a 36-month
performance measurement period. The Performance Adjustment would be a smaller
percentage of current assets if the net assets of the Fund were increasing
during the performance measurement period, and a greater percentage of current
assets if the net assets of the Fund were decreasing during the performance
measurement period. All numbers in the examples are rounded to the nearest
hundredth percent. The net assets of the Fund as of the fiscal years ended
October 31, 2008 and October 31, 2009 were $7,671,238,968 and $9,016,257,486,
respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12(th)
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 8.50% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Class T Shares compared to the
investment record of the Russell 1000(R) Growth Index.
EXAMPLE 1: Fund Outperforms its Benchmark by 8.50%
If the Fund has outperformed the Russell 1000(R) Growth Index by 8.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of 0.15% 1/12(th) of 0.79%
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund's performance has tracked the performance of the Russell
1000(R) Growth Index during the preceding 36 months, the Fund would calculate
the investment advisory fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 0.00% 1/12(th) of 0.64%
60
EXAMPLE 3: Fund Underperforms its Benchmark by 8.50%
If the Fund has underperformed the Russell 1000(R) Growth Index by 8.50%
during the preceding 36 months, the Fund would calculate the investment advisory
fee as follows:
PERFORMANCE ADJUSTMENT TOTAL ADVISORY FEE RATE
BASE FEE RATE RATE FOR THAT MONTH
------------------------ ------------------------ ------------------------
1/12(th) of 0.64% 1/12(th) of -0.15% 1/12(th) of 0.49%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure and proposed performance-based fee structure.
For purposes of pro forma calculations, it is assumed that the Performance
Adjustment would have been in effect during the entire fiscal year ended October
31, 2009, and that it would have been calculated over a full 36-month
performance measurement period. The fees and expenses shown were determined
based upon average net assets as of the fiscal year ended October 31, 2009. For
the 36-month period ended October 31, 2009, the Fund outperformed the Russell
1000(R) Growth Index and the fiscal year-end average daily net assets were lower
than the trailing 36-month average daily net assets, resulting in the pro forma
management fee shown in the Annual Fund Operating Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees. The Fund is a no-load
investment, so you will generally not pay any shareholder fees when you buy or
sell shares of the Fund.
Annual fund operating expenses are paid out of the Fund'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 examples show, these costs are borne indirectly by all
shareholders.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT) (1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS D CLASS T
------- -------
Maximum Sales Charge (load) Imposed on Purchases
(as a % of offering price).................... None None
Maximum Deferred Sales Charge (load) (as a % of
the lower original purchase price or
redemption proceeds).......................... None None
Redemption Fee.................................. None None
Exchange Fee.................................... None None
61
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS) (2)
TOTAL
ACQUIRED FUND ANNUAL
MANAGEMENT OTHER (5) FEES AND OPERATING
FEE(3) EXPENSES(4) EXPENSES EXPENSES
---------- ----------- ------------- ---------
JANUS TWENTY FUND
Class D Shares(6)
Current.................. 0.64% 0.16% 0.01% 0.81%
Pro Forma................ 0.78% 0.16% 0.01% 0.95%
Class T Shares(7)
Current.................. 0.64% 0.29% 0.01% 0.94%
Pro Forma................ 0.78% 0.29% 0.01% 1.08%
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES AS SHOWN IN THE TABLES ABOVE.
These examples are intended to help you compare the cost of investing in the
Fund, under both the current fee structure and the proposed fee structure, with
the cost of investing in other mutual funds. The examples assume that you invest
$10,000 in the Fund for the time periods indicated. Since no sales load applies,
the results apply whether or not you redeem your shares at the end of the
periods shown. The examples also assume that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. The pro forma
calculations assume that the Performance Adjustment had been in effect for a 36-
month period as of the end of the last fiscal year (October 31, 2009). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS TWENTY FUND
Class D Shares
Current............................ $ 83 $259 $450 $1,002
Pro Forma.......................... 97 303 525 1,166
Class T Shares
Current............................ 96 300 520 1,155
Pro Forma.......................... 110 343 595 1,317
62
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS TWENTY FUND
Class D Shares
Current............................ $ 83 $259 $450 $1,002
Pro Forma.......................... 97 303 525 1,166
Class T Shares
Current............................ 96 300 520 1,155
Pro Forma.......................... 110 343 595 1,317
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce the custodian and transfer agent expenses.
(3) The "Management Fee" is the investment advisory fee rate paid by the Fund to
Janus Capital. Any Performance Adjustment included in calculating the Pro
Forma Management Fee as shown for each class of shares of the Fund is based
on the investment performance of the Fund's Class T Shares versus the
Russell 1000(R) Growth Index over the 36-month period ended October 31,
2009. Once the Performance Adjustment is determined, it is applied across
each other class of shares of the Fund.
(4) For Class T Shares, Other Expenses include an annual administrative fee of
0.25% of the average daily net assets of each class to compensate Janus
Services LLC for providing, or arranging for the provision of,
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of retirement plan participants, pension plan
participants, or other underlying investors investing through institutional
channels. For Class D Shares, Other Expenses include an administrative fee
of 0.12% of the average daily net assets of Class D Shares for shareholder
services provided by Janus Services LLC.
(5) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's "ratio of gross expenses to average net assets" appearing in the
Fund's financial statements, which reflect the operating expenses of the
Fund and does not include Acquired Fund fees and expenses.
(6) Class D Shares launched on February 16, 2010. The fees and expenses shown
are estimated based on the Fund's assets as of 10/31/2009.
(7) Formerly named Class J Shares.
* The Pro Forma numbers shown for the Fund include a pro forma management fee
calculated as described in the text and related footnotes that accompany the
fee table above.
REQUIRED VOTE
Approval of each Proposed Amended Advisory Agreement requires the
affirmative vote of a 1940 Act Majority of the Fund to which it applies. If
shareholders of a Fund do not approve the proposal applicable to their Fund, the
Current Advisory Agreement for that Fund will remain in effect and the Board of
Trustees will take such further action as it deems to be in the best interest of
the Fund and its shareholders.
63
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND
THAT YOU VOTE "FOR" APPROVAL OF THE
PROPOSED AMENDED ADVISORY AGREEMENT FOR YOUR FUND.
PROPOSAL 3
APPROVE AN AMENDMENT TO AN INVESTMENT ADVISORY AGREEMENT WHICH CHANGES THE
FUND'S BENCHMARK INDEX
FOR PURPOSES OF CALCULATING THE PERFORMANCE-BASED INVESTMENT ADVISORY FEE
(JANUS GLOBAL REAL ESTATE FUND ONLY)
INTRODUCTION
Janus Global Real Estate Fund's investment objective is to seek total
return through a combination of capital appreciation and current income. The
Fund (for purposes of this Proposal 3, the "Fund" refers to Janus Global Real
Estate Fund) seeks to meet this objective by investing at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in equity and
debt securities of real estate-related companies which can be U.S. and non-U.S.
real estate companies. In addition, the Fund concentrates 25% or more of its net
assets in securities of issuers in real estate or real estate-related
industries. With respect to the Fund's investments in non-U.S. real estate
companies, the Fund expects that, under normal market conditions, it will
maintain investments in issuers from several different developed countries and
emerging markets, and may invest up to 15% of its net assets in emerging
markets. The risks of investing in real estate-related securities and foreign
securities, including those in emerging markets, are described in the Fund's
prospectus.
The Fund's primary benchmark index is currently the FTSE EPRA/NAREIT
Developed Index (the "Developed Index" or, the "Current Index"), a benchmark
that does not have exposure to emerging markets. Because the Fund currently
invests in emerging markets and expects to continue to do so, on December 11,
2009, the Fund's Board of Trustees approved a change in the Fund's primary
benchmark index to the FTSE EPRA/NAREIT Global Index (the "Global Index" or, the
"Proposed Index"), a recently launched benchmark that has emerging markets
exposure. Since the Fund has a performance fee structure, meaning the investment
advisory fee rate varies depending on how the Fund has performed compared to its
benchmark index, the Fund's benchmark index is described in the Fund's
investment advisory agreement ("Current Advisory Agreement") and is used to
measure the Fund's performance and calculate the advisory fee paid to Janus
Capital. Any change to the Fund's primary benchmark index is considered a
material change to the Fund's investment advisory agreement, and requires both
Trustee and shareholder approval. The Board of Trustees has approved an
amendment to the Current Advisory Agreement between the Fund and Janus Capital
(the "Proposed Advisory Agreement") to reflect the change in benchmark index and
also has authorized the submission of the Proposed Advisory Agreement to the
Fund's shareholders for approval. Essentially, the investment advisory fee rate
paid by the Fund currently is adjusted down or up based upon the Fund's
performance relative to the
64
Developed Index. Under the proposal, the fee would instead be adjusted based
upon the Fund's performance relative to the Global Index. This means that if the
Proposal is approved, the Fund's benchmark index will change from an index that
is composed of listed real estate securities in the developed real estate
markets of North American, European, and Asia to an index that is a global
market capitalization weighted index composed of listed real estate securities
in the North American, European, Asian, and South American real estate markets,
including both developed and emerging markets.
At the time the Fund was launched in 2007, the Developed Index was the most
appropriate globally diverse real estate index available despite lacking
exposure to emerging markets. Since that time, however, FTSE Group ("FTSE") has
expanded its Global Real Estate Series Index to offer another the Global Index
that includes exposure to emerging markets. As of December 31, 2009, [ %] of
the Fund's investments were in emerging market securities. Given the longer-term
expectation of the Fund's portfolio manager to continue investing in emerging
market securities, Janus Capital proposed, and the Board of Trustees agreed,
that the Global Index, with its exposure to emerging markets, is a more
appropriate benchmark to use for purposes of calculating the performance-based
fee adjustment applied to the advisory fee paid by the Fund to Janus Capital.
If approved, the Proposed Advisory Agreement will take effect on or about
[July 1, 2010] or as soon as practicable after shareholder approval is obtained.
The Proposed Advisory Agreement will remain in effect through February 1, 2011,
and thereafter, only as long as its continuance is approved at least annually by
(i) the vote of a majority of the Independent Trustees, and (ii) the vote of
either a majority of the Trustees or a 1940 Act Majority of the outstanding
shares of the Fund. If the Proposed Advisory Agreement is not approved, the
Current Advisory Agreement will continue in effect through February 1, 2011, and
thereafter only as long as its continuance is approved at least annually as
described above.
Except for the proposed change to the performance benchmark index, the
Proposed Advisory Agreement is substantially similar to the Current Advisory
Agreement. A copy of the Proposed Advisory Agreement is included as Appendix G.
BOARD CONSIDERATION, APPROVAL AND RECOMMENDATION
On December 11, 2009, the Board of Trustees, including all of the
Independent Trustees, upon the recommendation of Janus Capital, voted
unanimously to approve an amendment to the investment advisory agreement for the
Fund to change the benchmark index from the FTSE EPRA/NAREIT Developed Index to
the FTSE EPRA/NAREIT Global Index, subject to shareholder approval.
If the proposed amendment to the investment advisory agreement is approved
by Fund shareholders, the Developed Index would continue to be used to measure
benchmark index performance for any portion of a Performance Period through the
end of the calendar month in which shareholder approval is obtained, and the
Global
65
Index would be used for any portion of a Performance Period commencing after
that month.
In approving the change in the benchmark index for the Fund, the Trustees
considered various information provided by Janus Capital, including, among other
information: (1) comparative data showing the dollar amount of the pro forma
advisory fee that would have been paid by the Fund, before and after all
applicable waivers, for the period using either the Developed Index or the
Global Index as the benchmark index and based upon a Performance Period
beginning on ; (2) this comparative pro forma advisory fee data shown
net of any applicable fee waivers; (3) a chart that compared the returns of the
Developed Index and Global Indexes from the Fund's inception through ,
which showed that the returns of the Fund have corresponded more closely to
those of the Global Index over the period; (4) a chart that compared the
calendar year performance of both the Developed Index and the Global Index for
the past five years, which showed that the two benchmarks have performed
differently at times over that period; and (5) the Fund's past and expected
investment in foreign securities.
The Trustees also met in executive session with their independent legal
counsel to review and discuss the proposed change in the benchmark index, and
considered information and analysis provided by the Trustees' independent fee
consultant. Based on its consideration of all information it deemed relevant,
the Board of Trustees concluded that the Global Index, which includes exposure
to emerging markets, is a more appropriate Benchmark Index for evaluating the
Fund's performance.
INFORMATION CONCERNING THE ADVISER
Janus Capital, 151 Detroit Street, Denver, Colorado 80206-4805, serves as
investment adviser to the Funds. Janus Capital is a direct subsidiary of Janus
Capital Group Inc. ("JCGI"), a publicly traded company with principal operations
in financial asset management businesses that had $159.7 billion in assets under
management as of December 31, 2009. JCGI owns approximately 95% of Janus
Capital, with the remaining 5% held by Janus Management Holdings Corporation.
Certain employees of Janus Capital and/or its affiliates serve as officers of
the Trust. Certain officers of the Trust are shareholders of JCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of December 31, 2009, the Janus funds that Janus Capital
advises consisted of portfolios offering a broad range of investment
objectives, including those with similar investment objectives as the Funds (see
attached Appendix E for further information). Janus Capital also serves as
subadviser for a number of private-label mutual funds and provides separate
account advisory services for institutional accounts.
Principal Executive Officers and Directors of the Adviser. The principal
executive officers and directors of Janus Capital and their principal
occupations are included in Appendix F to this Proxy Statement.
66
Principal Executive Officers of the Trust. The officers of the Trust and
their principal occupations are set forth in Appendix C to this Proxy Statement.
COMPARISON OF THE CURRENT ADVISORY AGREEMENT AND PROPOSED ADVISORY AGREEMENT
Other than the change to the benchmark index and date of execution, the
terms of the Current Advisory Agreement and the Proposed Advisory Agreement are
the same.
Advisory Services. The terms of the advisory services are the same under
the Current Advisory Agreement and the Proposed Advisory Agreement.
Janus Capital provides the Fund with continuing investment management
services. Janus Capital is responsible for the day-to-day management of the Fund
and for providing continuous investment advice regarding the purchase and sale
of securities held by the Fund, subject to (i) the Trust's Amended and Restated
Agreement and Declaration of Trust and Amended and Restated Bylaws; (ii) the
investment objectives, policies and restrictions set forth in the Fund's
registration statements; (iii) the provisions of the 1940 Act and the Internal
Revenue Code of 1986, as amended; and (iv) such other policies and instructions
as the Trustees may from time to time determine.
Janus Capital provides office space for the Fund and pays the salaries,
fees, and expenses of all Fund officers (sharing certain expenses and salaries
for the Fund's Chief Compliance Officer and other compliance-related personnel
as authorized by the Trustees from time to time). Janus Capital is also
authorized to perform or delegate to others, to perform certain administrative
and other services and is responsible for the other business affairs of the
Fund. Janus Capital also provides certain administrative services to the Fund as
described under "Additional Information About the Fund - Other Fund Service
Providers" in this Proxy Statement.
The Fund pays all expenses incidental to its organization, operations and
business not specifically assumed by Janus Capital, including custodian and
transfer agency fees and expenses, brokerage commissions and dealer spreads, and
other expenses in connection with the execution of portfolio transactions, legal
and accounting expenses, interest, taxes, a portion of trade association or
other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating sale of Fund shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Fund's distributor, and Janus
Services LLC ("Janus Services"), the Fund's transfer agent, each a wholly-owned
subsidiary of Janus Capital, and a description of any fees paid by the Fund to
Janus Distributors and Janus Services, is included under "Additional Information
About the Fund - Other Fund Service Providers" in this Proxy Statement.
Liability. The Fund's Current Advisory Agreement and Proposed Advisory
Agreement provides that Janus Capital shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission taken with respect to the Fund, except for willful
misfeasance, bad faith or gross
67
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under the agreement, and except to the extent
otherwise provided by law.
Termination of the Agreement. The Fund's Current Advisory Agreement and
Proposed Advisory Agreement continues in effect from year to year so long as
such continuance is specifically approved annually by a majority of the Fund's
Independent Trustees, and by either a 1940 Act Majority or the Board of
Trustees, cast in person at a meeting called for such purpose. A "1940 Act
Majority" refers to the vote of a "majority of the outstanding voting
securities" of a Fund within the meaning of the Investment Company Act of 1940,
as amended, or in other words, the lesser of (i) 67% or more of the shares of a
Fund present at the Meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or (ii) more than 50% of the
outstanding shares.
The Fund's Current Advisory Agreement and Proposed Advisory Agreement: (i)
may be terminated, without penalty, by the Fund 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 Fund, including a majority of the Independent
Trustees, and, to the extent required by the 1940 Act, the vote of a 1940 Act
Majority.
The Current Advisory Agreement for the Fund was initially approved by the
Trustees, including all of the Independent Trustees, on [ , 200 ]. The
Current Advisory Agreement was last submitted to a vote of shareholders
on in connection with the launch of the Fund.
The implementation of the Proposed Advisory Agreement is contingent upon
shareholder approval. The Current Advisory Agreement will be in effect until it
terminates in accordance with its terms. If approved, the Proposed Advisory
Agreement will be in effect for an initial term ending on February 1, 2011, and
may continue in effect thereafter from year to year if such continuation is
specifically approved at least annually by either the Board of Trustees or the
affirmative vote of a 1940 Act Majority and, in either event, by the vote of a
majority of the Independent Trustees.
Compensation. Under both the Current Advisory Agreement and the Propose
Advisory Agreement, the Fund pays Janus Capital an investment advisory fee that
consists of two components: (i) a base management fee at the annual rate of
0.75% of the Fund's average daily net assets during the previous month ("Base
Fee Rate"), plus or minus (ii) a performance-fee adjustment ("Performance
Adjustment") calculated by applying a variable rate of up to 0.15% (positive or
negative) to the Fund's average daily net assets during the applicable
performance measurement period. The performance measurement period generally
will be the previous 36 months, although no Performance Adjustment is made for
at least 12 months following commencement of operations of the Fund. The Fund
commenced operations on December 1, 2007 as a series of another Janus trust and
was merged into the Trust effective July 6, 2009. The Fund's performance
measurement period started effective December 1, 2007 with the first calculation
68
of a Performance Adjustment occurring on December 1, 2008 for the prior 12-month
performance measurement period. After December 1, 2008 and until month 36 (or
December 2010) the performance measurement period is equal to the time that has
elapsed. Effective December 2010, the performance measurement period is a
rolling 36 month period. The Base Fee Rate is calculated and accrued daily. The
Performance Adjustment is calculated monthly in arrears and is accrued evenly
each day throughout the month. The investment advisory fee is paid monthly in
arrears.
Under both the Current Advisory Agreement and the Proposed Advisory
Agreement, the Performance Adjustment may result in an increase or decrease in
the investment advisory fee rate paid by the Fund, depending upon the investment
performance of the Fund relative to its benchmark index over the performance
measurement period. No Performance Adjustment is applied unless the difference
between the Fund's investment performance and the cumulative investment record
of the Fund's benchmark index is 0.50% or greater (positive or negative) during
the applicable performance measurement period. Because the Performance
Adjustment is tied to the Fund's performance relative to its benchmark index
(and not its absolute performance), the Performance Adjustment could increase
Janus Capital's fee even if the Fund's shares lose value during the performance
measurement period and could decrease Janus Capital's fee even if the Fund's
shares increase in value during the performance measurement period. For purposes
of computing the Base Fee Rate and the Performance Adjustment, net assets are
averaged over different periods (average daily net assets during the previous
month for the Base Fee Rate versus average daily net assets during the
performance measurement period for the Performance Adjustment). Performance of
the Fund is calculated net of expenses, whereas the Fund's benchmark index does
not have any fees or expenses. Reinvestment of dividends and distributions is
included in calculating both the performance of the Fund and the Fund's
benchmark index. Under extreme circumstances involving underperformance by a
rapidly shrinking fund, the dollar amount of the Performance Adjustment could be
more than the dollar amount of the Base Fee Rate. In such circumstances, Janus
Capital would reimburse the Fund.
The application of an expense limit, if any, will have a positive effect
upon a Fund's performance and may result in an increase in the Performance
Adjustment. It is possible that the cumulative dollar amount of additional
compensation ultimately payable to Janus Capital may, under some circumstances,
exceed the cumulative dollar amount of management fees waived by Janus Capital.
The investment performance of the Fund's Class A Shares (waiving the
upfront sales charge) ("Class A Shares") is used for purposes of calculating the
Fund's Performance Adjustment. After Janus Capital determines whether a
particular Fund's performance was above or below its benchmark index by
comparing the investment performance of the Fund's Class A Shares against the
cumulative investment record of that Fund's benchmark index, Janus Capital
applies the same Performance Adjustment (positive or negative) across each other
class of shares of the Fund.
The Trustees may determine that a class of shares of a Fund other than
Class A Shares is the most appropriate for use in calculating the Performance
Adjustment. If a
69
different class of shares is substituted in calculating the Performance
Adjustment, the use of that successor class of shares may apply to the entire
performance measurement period so long as the successor class was outstanding at
the beginning of such period. If the successor class of shares was not
outstanding for all or a portion of the performance measurement period, it may
only be used in calculating that portion of the Performance Adjustment
attributable to the period during which the successor class was outstanding, and
any prior portion of the performance measurement period would be calculated
using the class of shares previously designated. Any change to the class of
shares used to calculate the Performance Adjustment is subject to applicable
law. The Trustees would notify you of any such change.
Pursuant to the Current Advisory Agreement, the investment advisory fee is
adjusted based on the Fund's performance relative to the Developed Index. Under
the Proposed Advisory Agreement, the investment advisory fee will instead be
adjusted based to the Fund's performance relative to the Global Index. The
Developed Index is a global market capitalization weighted index composed of
listed real estate securities in the Northern American, European, and Asian real
estate markets. The Global Index is a global market capitalization weighted
index composed of listed real estate securities in the North American, European,
Asian, and South American real estate markets including both developed and
emerging markets.
If Proposal 3 is approved, the Proposed Advisory Agreement will become
effective on or about July 1, 2010 or as soon as practicable after shareholder
approval is obtained. For performance measurement periods prior to the effective
date of the Proposed Advisory Agreement, the Developed Index will be used for
purposes of evaluating the Fund's performance and calculating the investment
advisory fee. For performance measurement periods after that date, the Global
Index will be used for that purpose, and will be implemented on a transitional
basis described under "Implementation of the Change in the Benchmark Index". If
shareholders do not approve the Proposed Advisory Agreement, the Performance
Adjustment will continue to be measured based on the Fund's performance relative
to the Developed Index in accordance with the terms of the Current Advisory
Agreement.
The Trustees may from time to time determine that another securities index
is a more appropriate benchmark index for purposes of evaluating the Fund's
performance. In that event, the Trustees will approve the substitution of a
successor index for the Fund's benchmark index. However, the calculation of the
Performance Adjustment for any portion of the performance measurement period
prior to the adoption of the successor index will still be based upon the Fund's
performance compared to its former benchmark index. Any change to the Fund's
benchmark index for purposes of calculating the Performance Adjustment is
subject to applicable law. It is currently the position of the Staff of the SEC
that any changes to the Fund's benchmark index will require shareholder
approval. If there is a change in the Staff's position, the Trustees will notify
the shareholders of such change in position at such time as the Trustees
determine to implement a change in the Fund's benchmark index.
70
For the fiscal year ended July 31, 2009, the Fund did not pay Janus Capital
any investment advisory fee because the fee was waived in connection with an
expense limitation agreement between Janus Capital and the Fund that limits
operating expenses of the Fund to a certain limit. (Effective August 1, 2009,
the Fund changed its fiscal year end from July 31 to September 30 and as of
September 30, Janus Capital's advisory fee continued to be waived.)
IMPACT OF PROPOSED CHANGE TO THE BENCHMARK INDEX ON THE INVESTMENT ADVISORY FEE
RATE
While it is not possible to predict the effect of the Performance
Adjustment on future overall compensation to Janus Capital since it will depend
on the performance of the Fund relative to the record of its benchmark index and
future changes to the size of the Fund, below is information to help you
evaluate the impact of this change.
The following table shows: (1) the dollar amount of the pro forma advisory
fee that would have been paid by the Fund, before and after all applicable
waivers, for the fiscal year ended July 31, 2009 using the current Developed
Index as the benchmark index; (2) the dollar amount of the pro forma advisory
fee that would have been paid by the Fund, before and after all applicable
waivers, using the proposed Global Index as the benchmark index; and (3) the
difference between the amount of the pro forma advisory fees of each index, net
of any waivers. Such percentage difference is positive when the amount of the
pro forma Global Index advisory fees would have been larger than the amount of
the pro forma Developed Index advisory fees and negative when the amount of the
pro forma Global Index advisory fees would have been smaller than the amount of
the pro forma Developed Index advisory fees.
For purposes of pro forma calculations, it is assumed that the Performance
Adjustment would have been in effect during the entire fiscal year ended July
31, 2009 and that it would have been calculated over the preceding 20-month
performance measurement period (the time period from the Fund's commencement of
operations).
DIFFERENCE DIFFERENCE
BETWEEN BETWEEN
PRO FORMA ADVISORY FEE PRO FORMA ADVISORY FEES PRO FORMA PRO FORMA
BASED UPON CURRENT INDEX BASED UPON PROPOSED INDEX CURRENT AND CURRENT AND
------------------------------------------ ------------------------------------------- PROPOSED PROPOSED
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE INDEX INDEX
BEFORE AFTER BEFORE AFTER ADVISORY ADVISORY
WAIVER ($) WAIVER ($) WAIVER ($) WAIVER* ($) WAIVER* ($) WAIVER* ($) FEES ($) FEES (%)
------------ ---------- ------------ ------------ ----------- ------------ ----------- -----------
44,102 44,102 0 43,815 43,815 0 0 0.00%
As reflected above in the table, the Fund would have paid the same amount
to Janus Capital had the proposed Global Index been in place during this
hypothetical period, as compared to the current Developed Index during the same
hypothetical period.
It is important to remember that under the terms of the Proposed Advisory
Agreement, the change in the Fund's benchmark index will actually occur on a
gradual basis over the 36-month period following shareholder approval of the
Proposed
71
Advisory Agreement. Please refer to "Implementation of the Change in the
Benchmark Index."
COMPARISON OF PROPOSED AND CURRENT BENCHMARK INDICES
If the proposal is approved by shareholders, the Fund will change its
benchmark index from the current index, the Developed Index to the proposed
index, the Global Index. The Global Index is a global market capitalization
weighted index composed of listed real estate securities in the North American,
European, Asian, and South American real estate markets including both developed
and emerging markets. As of December 31, 2009, emerging markets constituted
% of the Global Index. The Developed Index is a global market capitalization
weighted index composed of listed real estate securities in the Northern
American, European, and Asian real estate markets. Janus Capital's research is
global in nature and Janus Capital has continued to find compelling investment
opportunities for the Fund outside the United States. Janus Capital believes the
Global Index better reflects the investment universe of the Fund, as the Global
Index measures the performance of global real-estate-related securities with
emerging markets exposure and is therefore believed to be more appropriate for
evaluating the Fund's performance.
The following chart shows how the monthly returns of the Fund, the
Developed Index, and the Global Index have performed for the period of December
1, 2007, inception date, through January 31, 2010.
[INSERT PERFORMANCE CHART]
Fund returns presented above include reinvestment of dividends,
distributions, and capital gains, and are net of Fund expenses. The Fund's
portfolio may differ significantly from the securities held in the indices. The
indices are not available for direct investment, therefore their performance
does not reflect the expenses associated with the management of an actual
portfolio. The Fund's past performance does not necessarily indicate how it will
perform in the future.
The following chart compares the calendar year performance of both the
Developed Index and the Global Index for the past five years. The chart shows
how the two benchmarks have performed differently at times over this period.
[INSERT BAR CHART]
IMPLEMENTATION OF THE CHANGE IN THE BENCHMARK INDEX
If the Proposal is approved, the change in the Fund's benchmark index will
be implemented on a prospective basis beginning on or about [July 1, 2010] or as
soon as practicable following the date of shareholder approval. However, because
the Performance Adjustment is based upon a rolling 36-month performance
measurement period, comparisons to the Global Index will not be fully
implemented until 36 months after the
72
effective date of the Proposed Advisory Agreement. During this transition
period, the Fund's returns will be compared to a blended index return that
reflects the performance of the current Developed Index for the portion of the
performance measurement period prior to adoption of the proposed Global Index,
and the performance of the Global Index for the remainder of the period. For
periods following the first full 36-month performance measuring period, the
performance measurement period would reflect one less month of the Developed
Index's performance. At the conclusion of the transition period, the performance
of the Developed Index would be eliminated from the Performance Adjustment
calculation, and the calculation would include only the performance of the
Global Index.
CALCULATION OF THE PERFORMANCE ADJUSTMENT
If the average daily net assets of the Fund remain constant during a 36-
month performance measurement period, current net assets will be the same as
average net assets over the performance measurement period and the maximum
Performance Adjustment will be equivalent to 0.15% of current net assets. When
current net assets vary from average net assets over the 36-month performance
measurement period, the Performance Adjustment, as a percentage of current
assets, may vary significantly, including at a rate more or less than 0.15%,
depending upon whether the net assets of the Fund had been increasing or
decreasing (and the amount of such increase or decrease) during the performance
measurement period. Note that if net assets for the Fund were increasing during
the performance measurement period, the total performance fee paid, measured in
dollars, would be more than if the Fund had not increased its net assets during
the performance measurement period.
The following hypothetical examples illustrate the application of the
Performance Adjustment for the Fund. The examples assume that the average daily
net assets of the Fund remain constant during a 36-month performance measurement
period. The Performance Adjustment would be a smaller percentage of current
assets if the net assets of the Fund were increasing during the performance
measurement period, and a greater percentage of current assets if the net assets
of the Fund were decreasing during the performance measurement period. All
numbers in the examples are rounded to the nearest hundredth percent. The net
assets of the Fund as of the previous fiscal years ended July 31, 2008 and July
31, 2009 were $6.69 million and $11.25 million, respectively.
The monthly maximum positive or negative Performance Adjustment of 1/12th
of 0.15% of average net assets during the prior 36 months occurs if the Fund
outperforms or underperforms its benchmark index by 4.00% over the same period.
The Performance Adjustment is made in even increments for every 0.50% difference
in the investment performance of the Fund's Class A Shares (waiving the upfront
sales charge) compared to the investment record of its benchmark index.
73
EXAMPLE 1: Fund Outperforms its Benchmark by 4.00%
If the Fund has outperformed its benchmark index by 4.00% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
------------- --------------------------- -----------------------
1/12th of 0.75% 1/12th of 0.15% 1/12th of 0.90%
EXAMPLE 2: Fund Performance Tracks its Benchmark
If the Fund has tracked the performance of its benchmark index during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
------------- --------------------------- -----------------------
1/12th of 0.75% 0.00% 1/12th of 0.75%
EXAMPLE 3: Fund Underperforms its Benchmark by 4.00%
If the Fund has underperformed its benchmark index by 4.00% during the
preceding 36 months, the Fund would calculate the investment advisory fee as
follows:
TOTAL ADVISORY FEE RATE
BASE FEE RATE PERFORMANCE ADJUSTMENT RATE FOR THAT MONTH
------------- --------------------------- -----------------------
1/12th of 0.75% 1/12th of -0.15% 1/12th of 0.60%
COMPARISON OF CURRENT AND PRO FORMA EXPENSES
The following tables describe the shareholder fees and annual fund
operating expenses that you may pay if you buy and hold shares of the Fund under
the current fee structure applying the current Developed Index and the pro forma
fee structure applying the proposed Global Index, without giving effect to any
fee waivers. For purposes of pro forma calculations, it is assumed that the
Global index was in place during the entire period from November 28, 2007,
inception date to July 31, 2009 (most recent fiscal year end) and is based upon
an initial 20-month performance measurement period. The fees and expenses shown
were determined based upon net assets as of July 31, 2009. For the November 28,
2007 to July 31, 2009 period, the Fund overperformed the Developed Index and the
July 31, 2009 daily net assets were higher than the trailing 20-month average
daily net assets, resulting in the management fee shown in the Annual Fund
Operating Expenses table below. For the December 28, 2007 to July 31, 2009
period, the Fund underperformed the Global Index and the July 31, 2009 daily net
assets were higher than the trailing 20-month average daily net assets,
resulting in the pro forma management fee shown in the Annual Fund Operating
Expenses table below.
Shareholder fees are those paid directly from your investment and may
include sales loads, redemption fees or exchange fees.
Annual fund operating expenses are paid out of the Fund's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing,
74
accounting and other services. You do not pay these fees directly but, as the
examples show, these costs are borne indirectly by all shareholders.
The Trust, on behalf of the Fund, has entered into an expense waiver
agreement with Janus Capital. In the expense waiver agreement, Janus Capital has
agreed to reduce certain annual fund operating expenses to the extent that total
operating expenses exceed a specific percentage of average daily net assets,
subject to certain limitations described in the expense waiver agreement.
Additional details with respect to the expense waiver agreement are described in
the footnotes to the Annual Fund Operating Expenses table listed below. As a
result of the expense waiver agreement, the actual Total Annual Operating
Expenses may be less than the amount listed in the table.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)(1)
(CURRENT AND PRO FORMA STRUCTURE)
CLASS A CLASS C CLASS D CLASS I CLASS S CLASS T
------- ------- ------- ------- ------- -------
Maximum Sales Charge
(load) Imposed on
Purchases (as a % of
offering price)....... 5.75%(2) None None None None None
Maximum Deferred Sales
Charge (load) (as a %
of the lower original
purchase price or
redemption proceeds).. None(3) 1.00%(4) None None None None
Redemption Fee on Shares
held for 90 days or
less (as a % of amount
redeemed)............. None None None 2.00%(5)(6) 2.00%(5)(6) 2.00%(5)(6)
Exchange Fee............ None None None None(6) None(6) None(6)
75
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)(7)
ACQUIRED TOTAL ANNUAL
MANAGEMENT DISTRIBUTION OTHER FUND(11) FEES OPERATING
FEE(8) (12B-1) FEES(9) EXPENSES(10) AND EXPENSES EXPENSES(12)
---------- --------------- ------------ ------------- ------------
JANUS GLOBAL REAL ESTATE FUND
Class A Shares
Current.................... 0.83% 0.25% 5.13% 0.01% 6.22%
Pro Forma based on Proposed
Index................... 0.74% 0.25% 5.13% 0.01% 6.13%
Class C Shares
Current.................... 0.83% 1.00% 5.02% 0.01% 6.86%
Pro Forma based on Proposed
Index................... 0.74% 1.00% 5.02% 0.01% 6.77%
Class D Shares
Current.................... 0.83% N/A 4.97% 0.01% 5.81%
Pro Forma based on Proposed
Index................... 0.74% N/A 4.97% 0.01% 5.72%
Class I Shares
Current.................... 0.83% N/A 4.85% 0.01% 5.69%
Pro Forma based on Proposed
Index................... 0.74% N/A 4.85% 0.01% 5.60%
Class S Shares
Current.................... 0.83% 0.25% 5.26% 0.01% 6.35%
Pro Forma based on Proposed
Index................... 0.74% 0.25% 5.26% 0.01% 6.26%
Class T Shares
Current.................... 0.83% N/A 5.10% 0.01% 5.94%
Pro Forma based on Proposed
Index................... 0.74% N/A 5.10% 0.01% 5.85%
76
EXAMPLES:
THE FOLLOWING EXAMPLES ARE BASED ON EXPENSES WITHOUT WAIVERS, AS SHOWN IN
THE TABLES ABOVE. These examples are intended to help you compare the cost of
investing in the Fund, under both the Current Advisory Agreement and the
Proposed Advisory Agreement, with the cost of investing in other mutual funds.
The examples assume that you invest $10,000 in the Fund for the time periods
indicated and reinvest all dividends and distributions without a sales charge.
The examples also assume that your investment has a 5% return each year and that
the Fund's operating expenses without waivers remain the same. The pro forma
calculations assume that the Performance Adjustment had been in effect for a 20-
month period (commencement of operations of the Fund) as of the end of the last
fiscal year ended July 31, 2009. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS GLOBAL REAL ESTATE FUND
Class A Shares
Current.......................... $1,158 $2,302 $3,418 $6,092
Pro Forma based on Proposed
Index......................... 1,149 2,279 3,383 6,036
Class C Shares
Current.......................... 680 2,001 3,274 6,255
Pro Forma based on Proposed
Index......................... 771 1,978 3,238 6,200
Class D Shares
Current.......................... 579 1,722 2,847 5,580
Pro Forma based on Proposed
Index......................... 570 1,698 2,809 5,518
Class I Shares
Current.......................... 567 1,689 2,796 5,498
Pro Forma based on Proposed
Index......................... 558 1,665 2,758 5,435
Class S Shares
Current.......................... 631 1,867 3,070 5,937
Pro Forma based on Proposed
Index......................... 622 1,843 3,033 5,879
Class T Shares
Current.......................... 591 1,757 2,901 5,668
Pro Forma based on Proposed
Index......................... 583 1,733 2,863 5,607
77
IF YOU DO NOT REDEEM YOUR SHARES:*
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
JANUS GLOBAL REAL ESTATE FUND
Class A Shares
Current.......................... $1,158 $2,302 $3,418 $6,092
Pro Forma based on Proposed
Index......................... 1,149 2,279 3,383 6,036
Class C Shares
Current.......................... 780 2,001 3,274 6,255
Pro Forma based on Proposed
Index......................... 671 1,978 3,238 6,200
Class D Shares
Current.......................... 579 1,722 2,847 5,580
Pro Forma based on Proposed
Index......................... 570 1,698 2,809 5,518
Class I Shares
Current.......................... 567 1,689 2,796 5,498
Pro Forma based on Proposed
Index......................... 558 1,665 2,758 5,435
Class S Shares
Current.......................... 631 1,867 3,070 5,937
Pro Forma based on Proposed
Index......................... 622 1,843 3,033 5,879
Class T Shares
Current.......................... 591 1,757 2,901 5,668
Pro Forma based on Proposed
Index......................... 583 1,733 2,863 5,607
--------
(1) Your financial intermediary may charge you a separate or additional fee for
purchases and redemptions of Shares.
(2) Sales charge may be waived for certain investors, as described in the
Shareholder's Guide in the Fund's prospectus.
(3) A contingent deferred sales charge of up to 1.00% may be imposed on certain
redemptions of Class A Shares bought without an initial sales charge and
then redeemed within 12 months of purchase. This sales charge is not
reflected in the example.
(4) A contingent deferred sales charge of 1.00% applies on Class C Shares
redeemed within 12 months of purchase. The contingent deferred sales charge
may be waived for certain investors.
(5) The redemption fee may be waived in certain circumstances.
(6) An exchange of Shares from the Fund held for 90 days or less may be subject
to the 2.00% redemption fee.
(7) All expenses are shown without the effect of expense offset arrangements.
Pursuant to such arrangements, credits realized as a result of uninvested
cash balances are used to reduce custodian and transfer agent expenses.
78
(8) The "Management Fee" is the investment advisory fee rate paid by the Fund
to Janus Capital. Any Performance Adjustment included in calculating the
Pro Forma Management Fee as shown for each class of shares of the Fund is
based on the investment performance of the Fund's Class A Shares (waving
the upfront sales charge) versus the FTSE EPRA/NAREIT Developed Index and
the FTSE EPRA/NAREIT Global Index, as applicable, over the 20-month period
ended July 31, 2009. Once the Performance Adjustment is determined, it is
applied across each other class of shares of the Fund.
(9) Includes a shareholder servicing fee of up to 0.25% for Class C Shares.
Because the 12b-1 fee is charged as an ongoing fee, over time the fee will
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(10) For Class A Shares, Class C Shares and Class I Shares, Other Expenses may
include administrative fees charged by intermediaries for the provision of
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of shareholders of the Funds. For Class S Shares and
Class T Shares, Other Expenses include an annual administrative fee of
0.25% of the average daily net assets of each class to compensate Janus
Services LLC for providing, or arranging for the provision of,
administrative services, including recordkeeping, subaccounting, order
processing for omnibus or networked accounts, or other shareholder services
provided on behalf of retirement plan participants, pension plan
participants, or other underlying investors investing through institutional
channels. For Class D Shares, Other Expenses include an administrative fee
of 0.12% of the average daily net assets of Class D Shares for shareholder
services provided by Janus Services LLC.
(11) "Acquired Fund" means any underlying fund (including, but not limited to,
exchange-traded funds) in which the Fund invests or has invested during the
period. Total Annual Fund Operating Expenses shown may not correlate to the
Fund's "ratio of gross expenses to average net assets" appearing in the
Fund's financial statements, which reflect the operating expenses of the
Fund and does not include Acquired Fund fees and expenses.
(12) Total Annual Fund Operating Expenses do not reflect the application of a
contractual expense waiver by Janus Capital. Janus Capital has
contractually agreed to waive the Fund's total annual fund operating
expenses (excluding any performance adjustments to management fees,
distribution and shareholder servicing fees (applicable to Class A Shares,
Class C Shares, and Class S Shares), administrative fees payable pursuant
to the Transfer Agency Agreement (applicable to Class S Shares, Class T
Shares and Class D Shares), brokerage commissions, interest, dividends,
taxes, and extraordinary expenses including, but not limited to, acquired
fund fees and expenses) to the extent such operating expenses exceed 1.25%
of average daily net assets on the fiscal year ending date in which the
agreement is in effect. Because a fee waiver will have a positive effect
upon the Fund's performance, a fund that pays a performance-based
investment advisory fee may experience a performance adjustment that is
considered favorable to Janus Capital
79
as a result of a fee waiver that is in place during the period when the
performance adjustment applies. The current agreement will be in effect
until February 16, 2011, unless terminated, revised or extended.
Additionally, the current agreement does not contain any provisions
allowing for the recoupment of any fees waived.
* The Pro Forma numbers shown for each class of shares of the Fund include a pro
forma management fee calculated as described in the text and related footnotes
that accompany the fee table above.
REQUIRED VOTE
Approval of the Proposed Advisory Agreement requires the affirmative vote
of a 1940 Act Majority of the Fund. If shareholders of the Fund do not approve
the Proposal, the Current Advisory Agreement will continue in effect and the
Board of Trustees will take such further action as it deems to be in the best
interest of the Fund and its shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
APPROVAL OF THE PROPOSED ADVISORY AGREEMENT.
80
PROPOSALS 4 AND 5 - GENERAL INFORMATION
(JANUS GLOBAL OPPORTUNITIES FUND ONLY)
PROPOSAL 4 - APPROVE AN AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST AND JANUS CAPITAL
PROPOSAL 5 - APPROVE A SUBADVISORY AGREEMENT BETWEEN JANUS CAPITAL AND PERKINS
INTRODUCTION
As Janus Capital continues its goal of looking to gain efficiencies and
move toward a more cohesive operating platform, it periodically reviews its
mutual fund line up to ensure that all funds are being properly positioned based
on their primary investment strategies. As a result, in an effort to take
advantage of the broad investment expertise within Janus Capital and, in
particular, Perkins' value investment capability, Janus Capital believes it is
in the best interest of Janus Global Opportunities Fund (for purposes of
Proposals 4 and 5, the "Fund" refers to Janus Global Opportunities Fund) to
transition the Fund's investment approach to a more traditional value focus and
recommended to the Board of Trustees that Perkins become the subadviser to the
Fund.
Janus Capital discussed the matter with the Board of Trustees and presented
the Trustees with its analysis, findings, and recommendations at the Board
meetings held on November 9, 2009 and December 11, 2009. After a thorough
consideration of the process undertaken by Janus Capital and the information,
analysis, and recommendations presented, the Trustees concluded that engaging
Perkins to serve as subadviser to the Fund under the terms of the proposed
subadvisory agreement ("Proposed Subadvisory Agreement") was in the best
interest of the Fund. The Board approved the Proposed Subadvisory Agreement
between Janus Capital and Perkins and recommended that it be submitted to the
Fund's shareholders for approval as required under the 1940 Act (Proposal 5). If
approved, the Proposed Subadvisory Agreement will be executed and will take
effect on or about [July 1, 2010]. Adding a subadviser to the Fund does not
impact the investment advisory fee rate paid by the Fund, as Janus Capital, and
not the Fund, will have responsibility for paying a subadviser for its services.
For a detailed description of the specific factors considered by the Board of
Trustees, see the discussion below under the caption "Board Consideration,
Approval and Recommendation." A form of the Proposed Subadvisory Agreement is
attached to this Proxy Statement as Appendix H.
In order to engage a subadviser for the Fund, the Fund's investment
advisory agreement with Janus Capital must permit Janus Capital to delegate
responsibilities to a subadviser. The Fund's current investment advisory
agreement with Janus Capital ("Current Advisory Agreement") does not provide for
this delegation and changing it to permit the delegation could be interpreted as
a material change requiring shareholder approval. As a result, you are being
asked to approve an amended and restated Investment Advisory Agreement that will
allow Janus Capital to engage a subadviser for the Fund (the "Proposed Amended
Advisory Agreement") (see Proposal 4). Under the
81
terms of the Proposed Amended Advisory Agreement, Janus Capital will have
discretion to engage Perkins, or any other qualified entity, as the subadviser
to the Fund, pending Trustee and shareholder approval, and Janus Capital will
have the obligation to compensate any subadviser for the Fund. The Trustees have
approved the Proposed Amended Advisory Agreement and are submitting the Proposed
Amended Advisory Agreement to you for your approval. A form of the Proposed
Amended Advisory Agreement is attached to this Proxy Statement as Appendix I.
With the exception of the changes discussed in Proposal 4, all other terms of
the Current Advisory Agreement remain the same. See Proposal 2.c. for other
proposed changes to the Current Advisory Agreement that are not contingent upon
Proposals 4 or 5.
The Proposed Amended Advisory Agreement will not change the investment
advisory fee payable to Janus Capital by the Fund. You should note, however,
that if shareholders of the Fund approve the performance-based investment
advisory fee structure described under Proposal 2.c. the advisory fee rate
payable by the Fund to Janus Capital will adjust up or down based on the Fund's
performance. Similarly, the subadvisory fee paid by Janus Capital to any
subadviser would adjust up or down, as Janus Capital expects to pay any
subadviser a percentage of the advisory fee Janus Capital receives from the
Fund.
In connection with the transition of the day-to-day management of the Fund
to Perkins, pending shareholder approval, the Fund will experience additional
changes, including changes to the Fund's investment strategies and investment
objective. The Fund's portfolio manager, Greg Kolb, will continue to manage the
Fund and will become an employee of Perkins. In an effort to take advantage of
Perkins' value investment capabilities, the Fund will be moving from a
combination growth/value orientation to a traditional value orientation.
Specifically, while the Fund will continue to invest in common stocks of
companies of any size located throughout the world, including emerging markets,
the Fund will seek to invest in companies that are temporarily misunderstood by
the investment community or that demonstrate special situations or turnarounds.
Pursuant to the "value" strategy, the Fund's portfolio manager will generally
look for companies with (i) a low price relative to assets, earnings, and/or
cash flows or business franchise; (ii) products and services that give them a
competitive advantage; and (iii) quality balance sheets and strong management.
As a part of the new value strategy, the Fund's investment objective will change
from long-term growth of capital to capital appreciation.
Further, in connection with moving to a traditional value investing
strategy, the portfolio manager of the Fund anticipates increasing the number of
holdings in the portfolio from a range of 25 to 40 holdings to a range of 70 to
100 holdings. The portfolio manager believes expanding the range of holdings
will increase the Fund's opportunity for investments and will align the product
with Perkins' value portfolio process. Moving to a larger range of holding could
increase the expenses of the Fund. The Fund will also be reclassified from a
non-diversified Fund to a diversified Fund, as defined in the 1940 Act. The Fund
will change its name to "Perkins Global Value Fund." Pending
82
shareholder approval of Perkins as subadviser to the Fund, these changes will
become effective on or about [July 1, 2010].
BOARD CONSIDERATION, APPROVAL AND RECOMMENDATION
The Trustees of the Trust, all of whom are Independent Trustees and none of
whom has ever been affiliated with Janus Capital or Perkins, considered the
Proposed Amended Advisory Agreement and the Proposed Subadvisory Agreement for
the Fund. In the course of their consideration of the Proposed Amended Advisory
Agreement and the Proposed Subadvisory Agreement, the Trustees met in executive
session and were advised by their independent legal counsel. The Trustees
received and reviewed a substantial amount of information provided by Janus
Capital and Perkins in response to requests of the Trustees and their counsel.
The Trustees also considered information provided by their independent fee
consultant. Based on their evaluation of that information and other factors, on
December 11, 2009, the Independent Trustees approved the Proposed Amended
Advisory Agreement and the Proposed Subadvisory Agreement for the Fund, subject
to shareholder approval. In considering the Proposed Amended Advisory Agreement
and the Proposed Subadvisory Agreement and reaching their conclusions, the
Trustees reviewed and analyzed various factors that they determined were
relevant, including the factors described below.
Among other things, the Trustees considered:
(a) the representation of Janus Capital that there is not expected to
be any diminution in the nature, extent and quality of services provided to
the Fund and its shareholders;
(b) the experience of Perkins as an asset management firm with the
capabilities, resources and personnel necessary to provide subadvisory
services to the Fund;
(c) the proposed responsibilities of Perkins and the services to be
provided by it;
(d) the experience of Perkins in managing other Janus funds, including
funds with similar investment objectives and strategies;
(e) the retention of the current portfolio manager for the day-to-day
management of the Fund;
(f) that the subadvisory fees to be paid to Perkins by Janus Capital
appear to represent reasonable compensation in light of the services to be
provided;
(g) the terms and conditions of the Proposed Amended Advisory
Agreement and the Proposed Subadvisory Agreement;
Certain of these considerations are discussed in more detail below.
83
NATURE, EXTENT AND QUALITY OF SERVICES
The Trustees' analysis of the nature, extent, and quality of Perkins'
proposed services to the Fund took into account the investment objective and
strategies of the Fund and the knowledge the Trustees gained from their regular
meetings with Perkins throughout prior years with respect to other Janus funds
managed by Perkins. In addition, the Trustees reviewed Perkins' resources and
key personnel, especially those who would be providing investment management
services to the Fund. The Trustees also considered other services to be provided
to the Fund by Perkins. Janus Capital advised the Board of Trustees that it
expects that there will be no diminution in the scope and quality of advisory
services provided to the Fund as a result of the implementation of the Proposed
Amended Advisory Agreement or the Proposed Subadvisory Agreement.
The Trustees concluded that the subadvisory relationship and arrangement
was not expected to adversely affect the nature, extent or quality of services
provided to the Fund, and that the Fund was likely to benefit from services
provided under the Proposed Subadvisory Agreement. They also concluded that the
quality of Perkins' services to the other Janus funds for which Perkins serves
as subadviser has been satisfactory. In reaching their conclusions, the Trustees
considered: (i) information provided by Janus Capital and Perkins in connection
with the Trustees' consideration of the Proposed Amended Advisory Agreement and
the Proposed Subadvisory Agreement; (ii) the key factors identified in materials
previously provided to the Trustees by their independent counsel; (iii) that the
current portfolio manager will continue to handle the day-to-day management
responsibilities for the Fund; and (iv) the nature of the proposed changes in
the overall investment strategies of the Fund. They also concluded that Perkins'
financial condition was sound.
COSTS OF SERVICES TO BE PROVIDED
The Trustees considered fee structure and the subadvisory fee rate under
the Proposed Amended Advisory Agreement and the Proposed Subadvisory Agreement,
respectively, as well as the overall fee structure of the Fund. The Trustees
examined the fee information and estimated expenses for the Fund in comparison
to information for other comparable funds, as provided by Lipper, Inc.
("Lipper"), an independent provider of investment company data.
The Trustees considered the methodology used by Perkins in determining
compensation payable to its portfolio managers and the competition for
investment management talent, and information provided by representatives of
Perkins with respect to how the implementation of performance-based fees may
impact that methodology and its ability to retain key employees. The Trustees
also considered that, other than the potential impact of performance fees, there
will be no change to the overall fees paid by the Fund or services provided to
the Fund.
The Trustees concluded that the fee to by paid by Janus Capital to Perkins
was reasonable in relation to the nature and quality of the services to be
provided, taking into account the fees charged by other advisers and subadvisers
for managing comparable
84
mutual funds with similar strategies and the fees Perkins charges to other Janus
funds or clients with similar investment strategies. The Trustees also concluded
that the estimated overall expense ratio for each class of shares of the Fund,
taking into account any expense limitation, was comparable to or more favorable
than the median expense ratios of its peers, and that the fees that the Fund
will pay to Janus Capital (a portion of which Janus Capital will pay to Perkins)
are reasonable in relation to the nature and quality of the services to be
provided, taking into consideration (1) the fees charged by other advisers and
subadvisers for managing comparable mutual funds with similar strategies and (2)
the impact of the performance-based fee structure.
INVESTMENT PERFORMANCE
The Trustees considered the performance results of the Fund over various
time periods. They reviewed the information comparing the Fund's performance
with the performance of comparable funds and peer groups identified by Lipper,
and with the Fund's benchmark index. They concluded that the performance of the
Fund was acceptable under current market conditions. The Trustees' also noted
Perkins' considerable investment management experience, capabilities and
resources. They also noted the past performance of other Janus mutual funds
which are managed by Perkins, and other accounts having similar investment
objectives and strategies, but were unable to predict what effect, if any, the
engagement of Perkins as subadviser would have on the future performance of the
Funds.
BENEFITS DERIVED FROM THE RELATIONSHIP WITH JANUS CAPITAL AND PERKINS
The Trustees also considered benefits that would accrue to the Fund from
its relationship with Janus Capital and Perkins. The Trustees concluded that,
other than the services to be provided by Janus Capital and Perkins pursuant to
the Proposed Amended Advisory Agreement and the Proposed Subadvisory Agreement,
respectively, and the fee to be paid directly and indirectly by the Fund for
such services, the Fund, and Janus Capital, and Perkins may potentially benefit
from their relationship with one another in other ways. They also concluded that
success of their relationship could attract other business to Janus Capital and
Perkins or to other Janus funds, and that the success of Janus Capital and
Perkins could enhance each firm's ability to serve the Fund.
After full consideration of the above factors, as well as other factors,
the Trustees concluded that approving the Proposed Amended Advisory Agreement
and the Proposed Subadvisory Agreement was in the best interest of the Fund and
its shareholders. The Trustees voted to approve the Proposed Amended Advisory
Agreement and the Proposed Subadvisory Agreement and to recommend each to
shareholders for their approval.
85
PROPOSAL 4
APPROVE AN AMENDMENT TO THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST AND
JANUS CAPITAL
INFORMATION CONCERNING THE ADVISER
Janus Capital, 151 Detroit Street, Denver, Colorado 80206-4805, serves as
investment adviser to Janus Global Opportunities Fund pursuant to the Current
Advisory Agreement dated July 1, 2004 , as amended February 1, 2006 and June 16,
2006, Janus Capital is a direct subsidiary of Janus Capital Group Inc. ("JCGI"),
a publicly traded company with principal operations in financial asset
management businesses that had $159.7 billion in assets under management as of
December 31, 2009. JCGI owns approximately 95% of Janus Capital, with the
remaining 5% held by Janus Management Holdings Corporation. Certain employees of
Janus Capital and/or its affiliates serve as officers of the Trust. Certain
officers of the Trust are shareholders of JCGI.
Janus Capital (together with its predecessors) has served as an investment
adviser since 1970. As of December 31, 2009, the Janus funds that Janus Capital
advises consisted of 52 portfolios offering a broad range of investment
objectives, including those with similar investment objectives as the Funds (see
attached Appendix E for further information). Janus Capital also serves as
subadviser for a number of private-label mutual funds and provides separate
account advisory services for institutional accounts.
Principal Executive Officers and Directors of the Adviser. The principal
executive officers and directors of Janus Capital and their principal
occupations are included in Appendix F to this Proxy Statement.
SUMMARY OF THE CURRENT ADVISORY AGREEMENT AND THE PROPOSED AMENDED ADVISORY
AGREEMENT
Except for the change to permit Janus Capital to engage a subadviser for
the Fund and the dates of execution, the terms of the Current Advisory Agreement
and the Proposed Amended Advisory Agreement are the same. A summary of the
Current Advisory Agreement and the Proposed Amended Advisory Agreement is
provided below. A form of the Proposed Amended Advisory Agreement is attached to
this Proxy Statement as Appendix I; the description of the Proposed Amended
Advisory Agreement is qualified in its entirety by reference to Appendix I.
Additional changes to the Current Advisory Agreement are described in Proposal
2.c.
DESCRIPTION OF THE CURRENT ADVISORY AGREEMENT
Advisory Services. Janus Capital provides the Fund with continuing
investment management services. Janus Capital is responsible for the day-to-day
management of the Fund and for providing continuous investment advice regarding
the purchase and sale of securities held by the Fund, subject to (i) the Trust's
Amended and Restated Agreement and Declaration of Trust and Amended and Restated
Bylaws; (ii) the
86
investment objectives, policies and restrictions set forth in the Fund's
registration statements; (iii) the provisions of the 1940 Act and the Internal
Revenue Code of 1986, as amended; and (iv) such other policies and instructions
as the Trustees may from time to time determine. If Proposal 5 is approved,
certain of these responsibilities would transition to Perkins.
Janus Capital provides office space for the Fund and pays the salaries,
fees, and expenses of all Fund officers (sharing certain expenses and salaries
for the Fund's Chief Compliance Officer and other compliance-related personnel
as authorized by the Trustees from time to time). Janus Capital provides certain
administrative services to the Fund as described under "Fund Service Providers"
and is responsible for the other business affairs of the Fund. Janus Capital is
authorized to delegate to others to perform certain administrative and other
services.
The Fund pays all expenses incidental to its organization, operations and
business not specifically assumed by Janus Capital, including custodian and
transfer agency fees and expenses, brokerage commissions and dealer spreads, and
other expenses in connection with the execution of portfolio transactions, legal
and accounting expenses, interest, taxes, a portion of trade association or
other investment company organization dues and expenses, registration fees,
expenses of shareholders' meetings, reports to shareholders, fees and expenses
of Independent Trustees, and other costs of complying with applicable laws
regulating the sale of Fund shares. Information concerning services provided by
Janus Distributors LLC ("Janus Distributors"), the Fund's distributor, and Janus
Services LLC ("Janus Services"), the Fund's transfer agent, each a wholly-owned
subsidiary of Janus Capital, and a description of any fees paid by the Fund to
Janus Distributors and Janus Services, is included under "Fund Service
Providers" in this Proxy Statement.
Liability. The Fund's Current Advisory Agreement provides that Janus
Capital shall not be liable for any error of judgment or mistake of law or for
any loss arising out of any investment or for any act or omission taken with
respect to the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under the agreement, and except to the extent
otherwise provided by law.
Termination of the Agreement. The Fund's Current Advisory Agreement
continues in effect until February 1, 2011, and from year to year thereafter so
long as such continuance is specifically approved at least annually by a
majority of the Fund's Independent Trustees, and by either a majority of the
outstanding voting securities of the Fund or the Board of Trustees. The
"majority of outstanding voting securities" means the lesser of (i) 67% or more
of the shares of the Fund present at the Meeting, if the holders of more than
50% of the outstanding shares are present or represented by proxy, or (ii) more
than 50% of the outstanding shares (a "1940 Act Majority").
The Current Advisory Agreement: (i) may be terminated, without penalty, by
the Fund 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
87
vote of a majority of the Trustees, including a majority of the Independent
Trustees, and, to the extent required by the 1940 Act, the vote of a 1940 Act
Majority.
Compensation. The Current Advisory Agreement provides that Janus Capital
is entitled to a compensation for services provided thereunder at the annual
rate of 0.64% of the Fund's average daily net assets. The fee is computed daily
and paid monthly. As previously noted, as a shareholder of the Fund, you will
also be asked to approve changing this fixed-rate fee to a fee that adjusts up
or down based on the Fund's performance relative to its benchmark index, the
MSCI World Index(SM).
Additional Information. The date of the Current Advisory Agreement, dated
July 1, 2004, as amended February 1, 2006 and June 16, 2006, was last submitted
for shareholder approval on . The Current Advisory Agreement was last
re-approved by the Board of Trustees at a meeting held on December 11, 2009. In
conjunction with their approval of the continuance of the Current Advisory
Agreement, the Board noted that at the same meeting they also approved the
Proposed Subadvisory Agreement and related Proposed Amended Advisory Agreement
and that such new agreement and amendment would not take effect unless approved
by shareholders. A discussion of the Board's considerations and recommendations
concerning the Proposed Subadvisory Agreement and the Proposed Amended Advisory
Agreement at the December 11, 2009 board meeting are discussed above.
The implementation of the Proposed Amended Advisory Agreement for the Fund
is contingent upon shareholder approval.
DESCRIPTION OF THE PROPOSED AMENDED ADVISORY AGREEMENT
Other than described below, the Proposed Amended Advisory Agreement does
not change, amend, or modify and other terms of the Current Advisory Agreement.
The same services will be provided under the Current Advisory Agreement; all or
some of those services would be provided by a subadviser rather than Janus
Capital.
The Current Advisory does not currently contemplate permitting Janus
Capital to engage a subadviser for the Fund. Because shareholders are being
asked to consider appointing Perkins as subadviser to the Fund (please refer to
Proposal 5), it is necessary to amend the Current Advisory Agreement to allow
for the engagement of a subadviser. Under the terms of the Proposed Amended
Advisory Agreement, Janus Capital would have the authority to engage Perkins, or
any other qualified subadviser, for the Fund and would be responsible for
compensating such subadviser, subject to Trustee and shareholder approval.
REQUIRED VOTE
Approval of the Proposed Amended Advisory Agreement requires the
affirmative vote of a 1940 Act Majority of the Fund. If shareholders of the Fund
do not approve the Proposal and/or the Proposed Subadvisory Agreement under
Proposal 5, Janus Capital will continue to be the sole adviser of the Fund under
the terms of the Current Advisory
88
Agreement and the Board of Trustees will take such further action as it deems to
be in the best interest of the Fund and its shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
APPROVAL OF THE PROPOSED AMENDED ADVISORY AGREEMENT.
PROPOSAL 5
APPROVE A SUBADVISORY AGREEMENT BETWEEN
JANUS CAPITAL AND PERKINS
INFORMATION CONCERNING THE SUBADVISER
Perkins is principally located at 311 S. Wacker Drive, Suite 6000, Chicago,
Illinois 60606. Perkins is a subsidiary of Janus Capital and is registered as an
investment adviser with the SEC. Perkins and its predecessor have been in the
investment management business since 1984. Perkins also serves as investment
adviser or subadviser to separately managed accounts and other registered
investment companies, and currently serves as subadviser to other Janus value
equity mutual funds. Janus Capital owns approximately 78% of Perkins. As of
December 31, 2009, Perkins had $ in assets under management. Perkins acts as
investment adviser or subadviser to other investment companies with investment
objectives and strategies similar to those of the Fund. Information on those
similar investment companies is set forth in Appendix J to this Proxy Statement.
Portfolio Manager. Gregory R. Kolb, CFA, is Executive Vice President and
Portfolio Manager of the Fund, which he has co-managed or managed since May
2005. Mr. Kolb will continue to be responsible for the day-to-day management of
the Fund under the Proposed Subadvisory Agreement with Perkins. It is
anticipated that Mr. Kolb will become an employee of Perkins if shareholders
approve the engagement of Perkins as the Fund's subadviser, and will be
integrated into the Perkins investment team where he will be supported in his
investment process by Perkins research analysts. Mr. Kolb is also Portfolio
Manager of other Janus accounts. Mr. Kolb joined Janus Capital in 2001 as an
equity research analyst.
Principal Executive Officers and Directors of the Subadviser. Information
regarding the principal executive officers and directors of Perkins and their
principal occupations are included in Appendix K to this Proxy Statement.
SUMMARY OF THE CURRENT ADVISORY AGREEMENT AND THE PROPOSED SUBADVISORY AGREEMENT
A form of the Proposed Subadvisory Agreement is attached to this Proxy
Statement as Appendix H. The following descriptions of the Current Advisory
Agreement and the Proposed Subadvisory Agreement are only summaries. You should
refer to Appendix H for the text of the Proposed Subadvisory Agreement; the
description of the Proposed Subadvisory Agreement is qualified in its entirety
by reference to Appendix H.
89
DESCRIPTION OF THE CURRENT ADVISORY AGREEMENT
Janus Capital currently serves as investment adviser to the Fund pursuant
to the terms of the Current Advisory Agreement. The Current Advisory Agreement
continues in effect from year to year so long as such continuance is
specifically approved annually by either the Board of Trustees or the
affirmative vote of a 1940 Act Majority and, in either event, by the vote of a
majority of the Independent Trustees. The Current Advisory Agreement: (i) may be
terminated, without penalty, by the Fund or Janus Capital on 60 days' written
notice; (ii) terminates automatically in the even of an assignment; and (iii)
generally, may not be amended without the approval by vote of a majority of the
Trustees, including a majority of the Independent Trustees, and, to the extent
required by the 1940 Act, the vote of a 1940 Act Majority.
The Current Advisory Agreement was last re-approved by the Board of
Trustees at a meeting held on December 11, 2009. In conjunction with their
approval of the continuance of the Current Advisory Agreement, the Board noted
that at the same meeting they also approved the Proposed Subadvisory Agreement
and that such new agreement would not take effect unless approved by
shareholders. A discussion of the Board's considerations and recommendations
concerning the Proposed Subadvisory Agreement at the December 11, 2009 board
meeting are discussed above.
The Current Advisory Agreement provides that Janus Capital is entitled to a
compensation for services provided thereunder at the annual rate of 0.64% of the
Fund's average daily net assets. The fee is computed daily and paid monthly. As
previously noted, as a shareholder of the Fund, you will also be asked to
approve changing this fixed-rate fee to a fee that adjusts up or down based on
the Fund's performance relative to its benchmark index, the MSCI World
Index(SM).
DESCRIPTION OF THE PROPOSED SUBADVISORY AGREEMENT
Subadvisory Services. Under the terms of the Proposed Subadvisory
Agreement between Janus Capital and Perkins, subject to the direction and
control of Janus Capital and the Board of Trustees, Perkins will: (i) manage the
investment operations of the Fund; (ii) keep Janus Capital fully informed as to
the valuation of assets of the Fund, its condition, investment decisions and
consideration; (iii) maintain all books and records required under federal
securities law relating to day-to-day portfolio management of the Fund; (iv)
perform certain limited related administrative functions; and (v) provide the
Trustees and Janus Capital with economic, operational, and investment data and
reports. Additionally, Perkins will determine what securities and other assets
of the Fund will be acquired, held, disposed of or loaned, in conformity with
the investment objectives, policies, and restrictions established by the
Trustees and set forth in the Trust's registration statement.
Compensation. In return for the services to be provided under the Proposed
Subadvisory Agreement, Perkins will be entitled to receive a subadvisory fee,
paid by Janus Capital, that is accrued daily and payable monthly at an annual
rate equal to 50% of the investment advisory fee otherwise payable by the Fund
to Janus Capital
90
(calculated after any applicable performance fee adjustments, fee waiver, and
expense reimbursements). If the Proposed Subadvisory Agreement were currently in
effect, Janus Capital would pay Perkins an annual fee rate of 0.32% of average
daily net assets (net of any fee waivers, expense reimbursements or performance
fee adjustments).
The engagement of Perkins as subadviser to the Fund will have no effect on
the terms of the Current Advisory Agreement, other than requiring the requested
changes to engage a subadviser (as described in Proposal 4). Perkins'
subadvisory fee will be paid directly by Janus Capital; however, shareholders of
the Fund should note that, if they approve the performance-based investment
advisory fee structure under Proposal 2.c. regarding the fee paid by the Fund to
Janus Capital, Perkins' subadvisory fee rate will also adjust up or down in line
with the performance fee, as Janus Capital will pay 50% of the advisory fee it
receives from the Fund to Perkins.
During the most recent fiscal year ended October 31, 2009, the Fund paid
$543,001 in advisory fees to Janus Capital. If the Proposed Subadvisory
Agreement had been in effect, Perkins would have received $271,500 (net of
waivers) in subadvisory fees for that fiscal year, all paid by Janus Capital.
The following table summarizes the pro forma subadvisory fees based on the
average net assets of the Fund that would have been paid by Janus Capital to
Perkins if the Proposed Subadvisory Agreement had been in effect for the fiscal
year ended October 31, 2009. This information assumes that the Performance
Adjustment (as described further under Proposal 2.c.) would have been in effect
during the fiscal year and that it would have been calculated over the 36-month
period ended October 31, 2009. The last column indicates the percentage increase
or decrease of the fee that Perkins would have received had the proposed
performance-based fee arrangement been in effect during the period.
AVERAGE NET ASSETS PRO FORMA % INCREASE (+)
(000'S) SUBADVISORY FEES OR DECREASE (-)
------------------ ---------------- ---------------
$84,969,130 $302,190 11.30%
Liability. The Proposed Subadvisory Agreement provides that Perkins, and
any affiliate of Perkins performing services for the Fund contemplated
thereunder (including any managers, members, owners, directors, and officers of
Perkins and such affiliates), shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission taken with respect to the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of their respective duties, or by
reason of reckless disregard or their respective obligations and duties under
the Proposed Subadvisory Agreement, and except to the extent otherwise provided
by law.
Term of the Agreement. If approved, the Proposed Subadvisory Agreement
will be in effect for an initial term ending on February 1, 2011, and may
continue in effect thereafter from year to year if such continuance is
specifically approved at least annually by either the Board of Trustees or the
affirmative vote of a 1940 Act Majority and, in either event, by the vote of a
majority of the Independent Trustees.
91
Termination of the Agreement. The Proposed Subadvisory Agreement
terminates automatically in the event of its assignment or upon the termination
of the Current Advisory Agreement. The Proposed Subadvisory Agreement may be
terminated at any time, without penalty, either by the shareholders of the Fund
acting by vote of at least a majority of its outstanding voting securities, or
by the Trustees, provided in either case that 90 days' advance written notice of
termination be given to Perkins at its principal place of business. The Proposed
Subadvisory Agreement may also be terminated (i) by Janus Capital or by Perkins
at any time, without penalty, by giving 90 days' advance written notice of
termination of the other party, or (ii) by Janus Capital or the Trust, without
advance notice, if Perkins becomes unable to discharge its duties and
obligations under the Proposed Subadvisory Agreement.
REQUIRED VOTE
Approval of the Proposed Subadvisory Agreement requires the affirmative
vote of a 1940 Act Majority of the Fund. It is also contingent on shareholder
approval of Proposal 4 in this Proxy Statement. If shareholders of the Fund do
not approve the Proposal and/or Proposal 4, Janus Capital will continue to be
the sole adviser of the Fund under the terms of the Current Advisory Agreement
and the Board of Trustees will take such further action as it deems to be in the
best interest of the Fund and its shareholders.
THE INDEPENDENT TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
APPROVAL OF THE PROPOSED SUBADVISORY AGREEMENT.
92
FUND SERVICE PROVIDERS
[TO BE UPDATED]
ADMINISTRATOR. Janus Capital serves as administrator to the Funds,
performing internal accounting, recordkeeping, blue sky monitoring and
registration functions. Janus Capital may be reimbursed by the Funds for certain
administrative and clerical functions Janus Capital provides to the Funds, as
well as for reasonable costs it incurs in performing certain functions. Janus
Capital intends to continue to provide the same administrative services after
implementation of the proposed amended advisory agreements (discussed in
Proposals 2, 3 and 4), and the proposed subadvisory agreement (discussed in
Proposal 5).
DISTRIBUTOR. Funds.
Distributor. Janus Distributors, a wholly-owned subsidiary of Janus Capital, located at 151 Detroit Street, Denver, Colorado 80206, serves as distributor of the Fund pursuant to an Amended and Restated Distribution
Agreement between the Trust and Janus Distributors. According to plans adopted
pursuant to Rule 12b-1 under the 1940 Act for Class A Shares, Class C Shares,
Class R Shares and Class S Shares, Janus Distributors receives a 12b-1
distribution fee from each such class of shares that is used to pay for
activities that are primarily intended to result in sales of shares. Class A
Shares and Class S Shares pay Janus Distributors a 12b-1 distribution fee at the
annual rate of up to 0.25% of the average daily net assets of Class A Shares and
Class S Shares. Class C Shares pay a 12b-1 distribution fee to Janus
Distributors of up to 1.00% (0.75% distribution fee and 0.25% service fee) of
the average daily net assets of Class C Shares. Class R Shares pay a 12b-1
distribution fee to Janus Distributors of up to 0.50% of the average daily net
assets of Class R Shares. Janus Distributors may retain some or all of the fees
it receives from Class A, C, R and S Shares, or may pass it through to financial
intermediaries in payment for distribution and/or administrative services. Janus
Distributors intends to continue to provide the same services after
implementation of the proposed amended advisory agreements (discussed in
Proposals 2, 3 and 4), and the proposed subadvisory agreement (discussed in
Proposal 5).
Fees paid by Class A Shares, Class C Shares, Class R Shares, and Class S
Shares of each Fund offering such shares to Janus Distributors (substantially
all of which Janus Distributors paid out as compensation to broker-dealers and
other service providers) for the fiscal year or period ended October 31, 2009 or
July 31, 2009, as applicable, are shown in the table below.
Transfer Agent. Janus Services P.O. Box 173375, Denver, Colorado 80207-
3375,LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, located at 151 Detroit Street, Denver, Colorado 80206, serves as the Fund's transfer 94
pursuant to an Amended and Restated Transfer Agency Agreement ("Transfer
Agency Agreement") between Janus Services and the Trust. Pursuant to the Transfer Agency Agreement, each class of shares of the Fund reimburses Janus
Services for out-of-pocket expenses incurred by Janus Services in connection
with services rendered. In addition, Janus Services may receive an
administrative services fee at an annual rate of up to 0.25% of the average
daily net assets of Class R Shares and Class S Shares of each Fund for providing
or procuring administrative services to investors in Class R Shares and Class S
Shares of the Funds. Janus Services expects to use a significant portion of this
fee to compensate retirement plan service providers, broker-dealers, bank trust
departments, financial advisors, and other financial intermediaries for
providing these services. Services provided by these financial intermediaries
may include, but are not limited to, recordkeeping, subaccounting, processing
and aggregating purchase and redemption transactions, providing periodic
statements, forwarding prospectuses, shareholder reports, and other materials to
existing customers, and other administrative services.
Class D Shares of the Funds pay an annual administrative fee of 0.12% of
average daily net assets of Class D Shares to Janus Services. These
administrative fees are paid by the Class D Shares of each Fund for shareholder
services provided by Janus Services.
Class T Shares of the Funds pay an annual administrative fee of 0.25% of
net assets of Class T Shares for administrative services, including
recordkeeping, subaccounting, or other shareholder services provided by
intermediaries on behalf of the shareholders of the Funds. These administrative
fees are paid by Class T Shares of the Funds to Janus Services LLC, which uses
such fees to reimburse intermediaries. Janus Services or its affiliates may also
pay administrative fees to the extent the fees charged by intermediaries exceed
the 0.25% of net assets charged to the Funds.
In addition, for services provided, including, but not limited to,
establishing and maintaining shareholder accounts, recording ownership of shares
on the Trust's books, mailing shareholder reports, recording reinvestment of
dividends and distributions, and coordinating with banks, broker-dealers and
other financial intermediaries who represent Fund shareholders, Janus Services
may receive from Class L Shares of Perkins Mid Cap Value Fund and Perkins Small
Cap Value Fund, an asset-weighted average annual fee based upon the proportion
of the Fund's net assets sold directly and the proportion of the Fund's net
assets sold through financial intermediaries. The applicable annual fee rates
are 0.12% of the daily closing net asset value of Class L shares sold directly
to shareholders and 0.25% of the daily closing net asset value of Class L shares
sold through financial intermediaries. Janus Services intends to continue to
provide the same services after implementation of the proposed amended advisory
agreements (discussed in Proposals 2, 3 and 4), and the Proposed Subadvisory
Agreement (discussed in Proposal 5).
95
Fees paid by Class R Shares, Class S Shares, and Class T Shares of the
Funds to Janus Services (substantially all of which Janus Services paid out as
compensation to broker-dealers and service providers) for the fiscal year or
period ended October 31, 2009 or July 31, 2009, as applicable, are shown in the
following table.
FEES PAID TO
JANUS SERVICES
FUND NAME* ($) (000'S)
---------- --------------
INTECH Risk-Managed Core Fund(1)
Class S Shares..................................... 4
INTECH Risk-Managed Growth Fund(2)
Class S Shares..................................... 100
Class T Shares..................................... --(3)
INTECH Risk-Managed International Fund(2)
Class S Shares..................................... 4
Class T Shares................................... --(3)
INTECH Risk-Managed Value Fund(2)
Class S Shares................................... --(4)
Class T Shares................................... --(3)
Janus Balanced Fund(1)
Class R Shares................................... 32
Class S Shares................................... 388
Janus Contrarian Fund(1)
Class R Shares................................... 2
Class S Shares................................... 4
Janus Enterprise Fund(1)
Class R Shares................................... 34
Class S Shares................................... 174
Janus Flexible Bond Fund(1)
Class R Shares................................... 2
Class S Shares................................... 55
Janus Forty Fund(2)
Class R Shares................................... 246
Class S Shares................................... 5,958
Class T Shares................................... --(3)
Janus Fund(1)
Class R Shares................................... --(4)
Class S Shares................................... 69
Janus Global Life Sciences Fund(1)
Class S Shares................................... --(4)
Janus Global Opportunities Fund(1)
Class S Shares................................... --(4)
96
FEES PAID TO
JANUS SERVICES
FUND NAME* ($) (000'S)
---------- --------------
Janus Global Real Estate Fund(2)
Class S Shares................................... --(4)
Class T Shares................................... --(3)
Janus Global Research Fund(1)
Class S Shares................................... --(4)
Janus Global Technology Fund(1)
Class S Shares................................... --(4)
Janus Growth and Income Fund(1)
Class R Shares................................... 1
Class S Shares................................... 54
Janus High-Yield Fund(1)
Class R Shares................................... --(4)
Class S Shares................................... 4
Janus International Equity Fund(2)
Class R Shares................................... 1
Class S Shares................................... 7
Class T Shares................................... --(3)
Janus International Equity Fund(2)
Class S Shares................................... --(4)
Class T Shares................................... --(3)
Janus Long/Short Fund(2)
Class R Shares................................... --(4)
Class S Shares................................... 1
Class T Shares................................... --(3)
Janus Modular Portfolio Construction Fund(2)
Class S Shares................................... --(5)
Class T Shares................................... --(3)
Janus Orion Fund(1)
Class R Shares................................... 1
Class S Shares................................... 8
Janus Overseas Fund(1)
Class R Shares................................... 77
Class S Shares................................... 1,087
Janus Research Core Fund(1)
Class R Shares................................... 1
Class S Shares................................... 20
Janus Research Fund(1)
Class S Shares................................... --(4)
97
FEES PAID TO
JANUS SERVICES
FUND NAME* ($) (000'S)
---------- --------------
Janus Short-Term Bond Fund(1)
Class S Shares................................... 2
Janus Smart Portfolio - Conservative(1)
Class S Shares................................... --(4)
Janus Smart Portfolio - Growth(1)
Class S Shares................................... --(4)
Janus Smart Portfolio - Moderate(1)
Class S Shares................................... --(4)
Janus Triton Fund(1)
Class R Shares................................... --(4)
Class S Shares................................... 2
Janus Worldwide Fund(1)
Class R Shares................................... --(4)
Class S Shares................................... 50
Perkins Large Cap Value Fund(2)
Class S Shares................................... --(6)
Class T Shares................................... --(3)
Perkins Mid Cap Value Fund(1)
Class R Shares................................... 52
Class S Shares................................... 321
Perkins Small Cap Value Fund(1)
Class R Shares................................... 3
Class S Shares................................... 20
--------
(1) For the period July 6, 2009 to October 31, 2009. As of October 31, 2009,
Janus Services did not receive any administrative fees from Class D Shares
or Class T Shares of the Fund.
(2) For fiscal year ended July 31, 2009.
(3) Class T Shares commenced operations on July 6, 2009. Amount is less than
$1,000.
(4) Amount is less than $1,000.
(5) September 3, 2008 (effective date) to July 31, 2009.
(6) December 31, 2008 (effective date) to July 31, 2009.
* Certain Funds do not offer Class R Shares.
98
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Based on the Audit Committee'sCommittee’s recommendation, the Board of Trustees, all of whom are Independent Trustees, selected PricewaterhouseCoopers LLP ("PWC"(“PwC”) as the Trust'sTrust’s independent registered public accounting firm during the Trust'sTrust’s current fiscal years. In accordance with Independence Standards Board Standard No. 1 ("(“ISB No. 1"1”), PWCPwC has confirmed to the Trust'sTrust’s Audit Committee that it is an independent registered accounting firm with respect to the Funds. Representatives of PWCPwC will be available at the Meeting to answer appropriate questions concerning the Trust'sTrust’s financial statements and will have an opportunity to make a statement if they so choose.
As
The Funds have differing fiscal year ends (June 30 and September 30). The figures below are the independent registered public accounting firmaggregate fees billed in each of the last two years for the Trust, PWC
performs auditFunds with both June 30 and September 30 fiscal year ends.
Audit Fees
The aggregate fees billed for professional services rendered by PwC for the Trust, including the audit of the Trust'sFunds’ annual financial statements reviewsor services that are normally provided by PwC in connection with statutory and regulatory filings or engagements for the fiscal years ending in 2015 and 2014 were $2,571,376 and $1,706,787, respectively.
Audit-Related Fees
The aggregate fees billed for assurance and related services by PwC that are reasonably related to the performance of the Trust's annual reports,audit of the Funds’ financial statements and are not reported under “Audit Fees” above for the fiscal years ending in 2015 and 2014 were $56,396 and $87,882, respectively.
The nature of the services comprising the fees disclosed under this category includes the review of semiannual reports quarterly portfolio holdingsto shareholders.
Tax Fees
The aggregate fees billed for professional services rendered by PwC for tax compliance, tax advice, and tax planning for the fiscal years ending in 2015 and 2014 were $746,667 and $529,584, respectively.
18
The nature of the services comprising the fees disclosed under this category includes tax compliance, tax planning, tax advice, and corporate actions review.
All Other Fees
The aggregate fees billed for products and services provided by PwC, other than the services reported in “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” above, for the fiscal years ending in 2015 and 2014 were $261,047 and $0, respectively.
The nature of the services comprising the fees disclosed under this category includes the review of semiannual reports to shareholders, an annual study and evaluation of internal accounting controls, training, registration statement amendments. PWC
may alsoreview, and Qualified Foreign Individual Investor (“QFII”) services.
Pre-Approval of Certain Services
The Trust’s Audit Committee Charter requires the Audit Committee to pre-approve any engagement of PwC (i) to provide other audit-related,audit or non-audit and tax-related services to the Funds.
The Trust's Audit Committee must pre-approve all audit andTrust or (ii) to provide non-audit services provided by PWC to the Funds. The Trust's Audit Committee has adopted
policies and procedures to, among other purposes, provide a framework for the
Audit Committee's consideration of any non-audit services provided by PWC. The
policies and procedures require that any audit and non-audit services provided
to the Funds by PWC and any non-audit service provided by PWC to Janus Capital andor entities controlling, controlled by, or under common control with Janus Capital that provide ongoing services to the Funds (collectively, "Fund“Fund Service Providers"Providers”) that relate directly to the operations and financial reporting of a
Fund ("Covered Services") are subject to approval by the Audit Committee before
such service is provided. The Chairman of the Audit Committee (or, in his
absence, any Audit Committee member) is authorized to grant such pre-approval in
the interim between regularly scheduled meetings of the Audit Committee. In such
case, the Chairman must report the pre-approval to the Audit Committee no later
than its next meeting.
Pre-approval of non-audit services provided by PWC to the Trust and Fund
Service Providers is not required if: (i) the services were not recognized by
Janus Capital at the time of, if the engagement as non-audit services; (ii) for non-
audit services provided to the Trust, the aggregate fees paid for all such non-
audit services provided to the Trust are no more than 5% of the total fees paid
by the Trust to the independent auditor during the fiscal years in which the
non-audit services are provided; (iii) for non-audit services provided to Fund
Service Providers, the aggregate fees for all such non-audit services provided
are no more than 5% of the total fees paid by the Trust and Fund Service
Provides during the fiscal years of the Trust in which the non-audit services
are provided; and (iv) such services are promptly brought to the attention of
the Audit Committee by Janus Capital, and the Audit Committee or its delegate
approves them prior to the completion of the audit (the "de minimis exception").
In circumstances where the Trust's Audit Committee did not pre-approve
certain non-audit services that were rendered by PWC to any Fund Service
Provider that did not
99
relate directly to the operations and financial reporting of a Janus Fund ("Non-
Covered Service"), the Trust's Audit Committee will consider whether the
provision of the such non-audit service by PWC is compatible with maintaining
PWC's independence in auditing the Funds, taking into account representations
from PWC, in accordance with ISB No. 1, regarding its independence from the
Funds and their related entities. There were no non-audit services provided to a
Fund Service Provider by PWC that were not pre-approved by the Audit Committee.
Audit Fees. In each of the fiscal years ended October 31, 2009 and October
31, 2008, the aggregate Audit Fees billed by PWC for professional services
rendered for the audits of the financial statements of each Fund, or services
that are normally provided by PWC in connection with statutory and regulatory
filings or engagements for those fiscal years for the Trust, are shown in the
table below.
2009(A) 2008(A)
------- --------
$890,255 $503,825
--------
(A) Aggregate amounts may reflect rounding.
Audit-Related Fees. In each of the fiscal years ended October 31, 2009 and
October 31, 2008, there were no Audit-Related Fees billed by PWC for services
rendered for assurance and related services to each Fund that are reasonably
related to the performance of the audit or review of the Funds' financial
statements, but not reported as Audit Fees.
In each of the fiscal years ended October 31, 2009 and October 31, 2008,
the aggregate Audit-Related Fees that were billed by PWC that were required to
be approved by the Audit Committee for services rendered on behalf of the Fund
Service Providers for assurance and related services that relate directly to the
operations of the Audit or review of the Funds' financial statements, but not
reported as Audit Fees, are shown in the table below.
2009(A) 2008(A)
------- --------
$158,971 $299,768
--------
(A) Aggregate amounts may reflect rounding.
Fees included in the audit-related category consist of assurance and
related services (e.g., due diligence services) that are traditionally performed
by the independent registered public accounting firm. These audit-related
services include due diligence related to mergers and acquisitions and
semiannual financial statement and proxy statement disclosure review.
No amounts were approved by the Audit Committee pursuant to the de minimis
exception for the fiscal years ended October 31, 2009 and October 31, 2008 for
the Trust. There were no amounts that were required to be approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
October 31, 2009 and October 31, 2008 for the Trust, on behalf of the Fund
Service Providers, that relate directly to the operations and financial
reporting of each Fund.
100
Tax Fees. In each of the fiscal years ended October 31, 2009 and October
31, 2008, the aggregate Tax Fees billed by PWC for professional services
rendered for tax compliance, tax advice, corporate actions review, and tax
planning for the Funds are shown in the table below.
2009(A) 2008(A)
------- --------
$130,240 $275,440
--------
(A) Aggregate amounts may reflect rounding.
In each of the fiscal years ended October 31, 2009 and October 31, 2008,
the aggregate Tax Fees billed by PWC that were required to be approved by the
Audit Committee for professional services rendered on behalf of the Fund Service
Providers for tax compliance, tax advice, and tax planning that relaterelates directly to the operations and financial reporting of the Funds are shown in the table
below.
2009(A) 2008(A)
------- -------
$0 $0
--------
(A) Aggregate amounts may reflect rounding.
Fees included in the Tax Fees category consist of allTrust, except for those non-audit services performed by
professional staff of PWC's tax division, except those services relatedthat were subject to the audit. Typically, this category includes feespre-approval exception under Rule 2-01 of Regulation S-X (the “Pre-Approval Exception”). The Chairman of the Audit Committee or, if the Chairman is unavailable, another member of the Audit Committee who is an Independent Trustee, may grant the pre-approval. All such delegated pre-approvals must be presented to the Audit Committee no later than the next Audit Committee meeting.
None of the services rendered by PwC to the Funds or to Janus Capital (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) or any Fund Service Providers for tax compliance, tax planning,the fiscal years ending in 2015 and tax advice. Tax fees include amounts for tax advice related to mergers and
acquisitions and requests for ruling or technical advice from taxing
authorities.
No amounts2014 were approvedpre-approved by the Audit Committee pursuant to the de minimis
exceptionPre-Approval Exception.
Non-Audit Fees
The aggregate non-audit fees billed by PwC for services rendered to the Trust, and rendered to Janus Capital (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Providers for the fiscal years ended October 31, 2009ending in 2015 and October 31, 2008 for2014 were $685,341 and $472,648, respectively.
The Audit Committee has considered whether the Trust. There were no amountsprovision of non-audit services that were requiredrendered to be approvedJanus Capital (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
October 31, 2009another investment adviser), and October 31, 2008 for the Trust, on behalf of the Fund Service Providers that relate directly to the operations and financial
reporting of each Fund.
All Other Fees. In each of the fiscal years ended October 31, 2009 and
October 31, 2008, there were no Other Fees billed by PWC for other non-audit
services rendered to the Funds.
In each of the fiscal years ended October 31, 2009 and October 31, 2008,
there were no Other Fees billed by PWC that were required to be approved by the
Audit Committee for other non-audit services rendered on behalf of the Fund
Service Providers that relate directly to the operations and financial reporting
of the Funds.
No amounts were approved by the Audit Committeenot pre-approved pursuant to the de minimis
exceptions for the fiscal years ended October 31, 2009 and October 31, 2008 for
the Trust. There were no amounts that were required to be approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended
October 31, 2009 and October 31, 2008 for the Trust, on behalfparagraph (c)(7)(ii) of the Fund
Service Providers that relate directly to the operations and financial reportingRule 2-01 of each Fund.
101
For the fiscal years ended October 31, 2009 and October 31, 2008 for the
Trust, the aggregate fees billed by PWC of $0 and $0, respectively, for non-
audit services rendered on behalf of the Funds, Janus Capital and Fund Service
Providers relating to Covered and Non-Covered Services are shown in the table
below.
2009(A) 2008(A)
---------------------------------------- ----------------------------------------
COVERED SERVICES NON-COVERED SERVICES COVERED SERVICES NON-COVERED SERVICES
---------------- -------------------- ---------------- --------------------
$0 $0 $0 $0
--------
(A) Aggregate amounts may reflect rounding.
102
19
ADDITIONAL INFORMATION ABOUT THE MEETINGS
QUORUM AND VOTING
MEETING
Each holder of a whole or fractional share shall be entitled to one vote for each whole dollar and a proportionate fractional vote for each fractional dollar of net asset value of shares held in such shareholder'sshareholder’s name as of the Record Date. If you are not the owner of record, but your shares are instead held for your benefit by a financial intermediary such as a retirement plan service provider, broker-dealer, bank trust department, insurance company, or other financial intermediary, that financial intermediary may request that you provide instruction on how to vote the shares you beneficially own. Your financial intermediary will provide you with additional information.
Thirty percent of the shares entitled to vote of (i) all Funds (Proposal
1), and (ii) the applicable Fund (all classes of a Fund voting together)
(Proposals 2, 3, 4 and 5) shall be a quorum for the transaction of business by
that Fund at the Meeting. Any lesser number is sufficient for adjournments. Quorum with respect to the proposal is described in greater detail below. In the event that the necessary quorum to transact business or the vote required to approve athe proposal is not obtained at athe Meeting, the persons named as proxies may propose one or more adjournments of the Meeting, in accordance with applicable law, to permit further solicitation of proxies.proxies with respect to the proposal. Any such adjournment as to athe proposal will require the affirmative vote of the holders of a majority of the shares of a Fund,the Funds, present in person or by proxy at the Meeting. TheIf a quorum is not present, the persons named as proxies will vote the proxies for a Fundthe Funds (excluding broker non-
votesnon-votes and abstentions) in favor of adjournment if they determine additional solicitation is warranted and in the interest of shareholders of the Fund.
"Broker non-votes"Funds.
“Broker non-votes” are shares held by a broker or nominee for which an executed proxy is received by a Fund, but are not voted because instructions have not been received from beneficial owners or persons entitled to vote, and the broker or nominee does not have discretionary voting power. AbstentionsFor purposes of voting on the proposal, abstentions and "broker non-votes" are“broker non-votes” will be counted as shares eligible to vote at each Meeting inpresent for purposes of determining whether a quorum is present, but do not represent votes cast with
respect to adjournment or a proposal. For purposes of voting on a proposal,
abstentions and "broker non-votes" will not be counted in favor of, but will have no other effect on Proposal 1,the proposal, for which the required vote is a plurality (the greatest number) of votes cast. For all other Proposals, and assuming the
presence
Proposal 1: Election of a quorum, abstentions and "broker non-votes" will have the effect of
a vote against the Proposal. Therefore, if your shares are held through a broker
or other nominee, it is important for you to instruct the broker or nominee how
to vote your shares.
PROPOSAL 1: ELECTION OF TRUSTEES
Trustees
Shareholders of each Fundthe Funds will vote together. The presence in person or by proxy of the holders of record of 30%thirty percent of the Funds' aggregate total shares outstanding and entitled to vote of all Funds constitutes a quorum at the Meeting with respect to this Proposal.
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PROPOSAL 2: APPROVAL OF AMENDED INVESTMENT ADVISORY AGREEMENTS - PERFORMANCE FEE
Shareholders of Janus Forty
Fund Janus Fund, Janus Global Opportunities
Fund, Janus Overseas Fund and Janus Twenty Fund will vote separately on Proposal
2 (all classes of a Fund voting together). The presence in person or by proxy of
the holders of record of 30% of each applicable Fund's shares outstanding and
entitled to vote at the Meeting constitutes a quorum with respect to this
Proposal. Approval of the Proposal will require the affirmative vote of a 1940
Act Majority of a Fund's shareholders eligible to vote at the Meeting.
PROPOSAL 3: APPROVAL OF AMENDED INVESTMENT ADVISORY AGREEMENT - BENCHMARK CHANGE
Shareholders of Janus Global Real Estate Fund (all classes of the Fund
voting together) will vote on Proposal 3. The presence in person or by proxy of
the holders of record of 30% of the Fund's shares outstanding and entitled to
vote at the Meeting constitutes a quorum with respect to this Proposal. Approval
of the Proposal will require the affirmative vote of a 1940 Act Majority of the
Fund's shareholders eligible to vote at the Meeting.
PROPOSAL 4: APPROVAL OF AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
Shareholders of Janus Global Opportunities Fund will vote on Proposal 4
(all classes of the Fund voting together). The presence in person or by proxy of
the holders of record of 30% of each applicable Fund's shares outstanding and
entitled to vote at the Meeting constitutes a quorum with respect to this
Proposal. Approval of the Proposal will require the affirmative vote of a 1940
Act Majority of a Fund's shareholders eligible to vote at the Meeting.
PROPOSAL 5: APPROVAL OF SUBADVISORY AGREEMENT
Shareholders of Janus Global Opportunities Fund will vote on Proposal 5
(all classes of the Fund voting together). The presence in person or by proxy of
the holders of record of 30% of each applicable Fund's shares outstanding and
entitled to vote at the Meeting constitutes a quorum with respect to this
Proposal. Approval of the Proposal will require the affirmative vote of a 1940
Act Majority of a Fund's shareholders eligible to vote at the Meeting.
SHARE OWNERSHIP
Share Ownership
The number of outstanding shares and net assets of each class of each Fund, as applicable, as of the close of business on the Record Date, is attachedincluded inAppendix LC to this Proxy Statement.
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Beneficial owners of 5% or more of the outstanding shares of each class of each Fund are shownprovided inAppendix MD to this Proxy Statement. To the best knowledge of the Trust, no person or entity beneficially owned more than 5% of the outstanding shares of any class of a Fund
104
M. To the best knowledgeD.
Solicitation of the Trust, the entities
shown in Appendix M, unless otherwise indicated, are not the beneficial owners
of such shares.
As of the Record Date, the officers and Trustees as a group owned less than
1% of the outstanding shares of each Fund.
SOLICITATION OF PROXIES
Proxies
The cost of preparing, printing,the preparation of these proxy materials and mailing the proxy card(s) and this
Proxy Statement,their distribution, and all other costs incurred with the solicitation of proxies, including any additional solicitation made by letter, telephone, or otherwise, will be allocated between Janus Capital andpaid by the Funds. Janus Capital will pay
the costs associated with engagement of the solicitor and solicitation of
proxies for Proposals 1, 3, 4 and 5. Solicitation of proxies related to Proposal
2 will be borne by those Funds voting on that Proposal, pursuant to a
methodology agreed upon by the Trustees and Janus Capital.
In addition to solicitation by mail, officers and representatives of the Trust, officers and employees of Janus Capital or its affiliates, and certain financial services firms and their representatives, without extra compensation, or a solicitor, may conduct additional solicitations personally, by telephone, or by any other means available.
Janus Capital has engaged [ ],Computershare, a professional proxy solicitation firm, to assist in the solicitation of proxies at anfor the Funds. The aggregate costs for engaging Computershare are estimated cost of
$[ ], plus [an out-of-pocket] expenses.to be approximately $1.2 million. Among other things, [ ]Computershare will be: (i) required to maintain the confidentiality of all shareholder information; (ii) prohibited from selling or otherwise disclosing shareholder information to any third party; and (iii) required to comply with applicable telemarketing laws.
Brokers, banks, and other fiduciaries may be required to forward soliciting material to their principals on behalf of a Fund and to obtain authorization for the execution of proxies. For those services, they will be reimbursed by [Janus
Capital or the Funds]Funds for their expenses, to the extent that [Janus Capital or
the Funds] would have directly borne those expenses.
As the date of the MeetingsMeeting approaches, certain shareholders whose votes have not been received may receive telephone calls from a representative of [ ].Computershare. Authorization to permit [ ]Computershare to execute proxies may be obtained by telephonic or electronically transmitted instructions from shareholders of each Fund. Proxies that are obtained telephonically will be recorded in accordance with the procedures described below. The Funds believe that these procedures are reasonably designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the Computershare representative is required to ask for certain identifying information from each shareholder's full name, address and title (ifshareholder. Then the representative will ask the shareholder is authorized to act on behalf of an entity, such as a corporation),
and to confirm that the shareholder has received the Proxy Statement or notice
of proxy and proxy card(s) in the mail or electronically. If the information
solicited agrees with the information provided to the representative, then the
representative has the responsibility to explain the process, read
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the proposal listed on the proxy card,vote their shares by telephone, and ask for the shareholder'sshareholder’s instructions on the proposal(s). Although the representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote. The representative may read anythe recommendation set forth in this Proxy Statement. The representative will record the shareholder'sshareholder’s instructions. Within 72 hours, the shareholder will be sent a
21
confirmation of his or her vote asking the shareholder to call [ ]1-866-492-0863 immediately if his or her instructions are not accurately reflected in the confirmation.
Telephone Touch-Tone Voting. Shareholders may provide their voting instructions through telephone touch-tone voting by following the instructions on the proxy card(s). Shareholders will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their telephone call.
Internet Voting. Shareholders may provide their voting instructions through Internet voting by following the instructions on the proxy card(s). Shareholders who vote via the Internet, in addition to confirming their voting instructions prior to submission and terminating their Internet session, will, upon request, receive an e-mail confirming their voting instructions.
If a shareholder wishes to participate in the Meeting but does not wish to give a proxy by telephone or via the Internet, the shareholder may still submit the proxy card(s) originally sent with the Proxy Statement in the postage-paid envelope provided or otherwise mailed or provided to the shareholder, or attend the Meeting in person. Shareholders requiring additional information regarding the proxy or replacement proxy card(s) may contact [ ]Computershare at [1-
].1-866-492-0863. Any proxy given by a shareholder is revocable until voted at the Meeting.
Revoking a Proxy.Proxy. Any shareholder submitting a proxy has the power to revoke it at any time before it is exercised at the Meeting by submitting to the Secretary of the Trust at 151 Detroit Street, Denver, Colorado 80206, a written notice of revocation or a subsequently executed proxy, or by attending the Meeting and voting in person. All properly executed and unrevoked proxies received in time for the Meeting will be voted as specified in the proxy or, if no specification is made, will be voted "FOR"“FOR” the proposal(s), as described in this Proxy Statement.
Shares Held by Accounts of Insurance Companies. Shares of the Funds may be held by certain separate accounts of insurance companies to fund benefits payable under certain variable annuity contracts and variable life insurance policies. Your insurance company may request that you provide it with voting instructions for your beneficially held shares of any such separate account. If you do not provide voting instructions to your insurance company, it may vote all of the shares held in that separate account in the same proportions as the voting actually received from its other variable contract holders for that separate account.
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FUND TRANSACTIONS
All orders
Shareholder Proposals for the purchase or sale of a Fund's portfolio securities are
placed on behalf of the Fund by Janus Capital or its agent. INTECH Investment
Management LLC, subadviser to INTECH Risk-Managed Core Fund, INTECH Risk-Managed
Growth Fund, INTECH Risk-Managed International Fund and INTECH Risk-Managed
Value Fund, has authority to place trades on behalf of those Funds. With respect
to Perkins Large Cap Value Fund, Perkins Mid Cap Value Fund, and Perkins Small
Cap Value Fund, Janus Capital places portfolio transactions solely upon the
direction of those Funds' subadviser, Perkins. The Funds do not allocate
portfolio transactions to broker-dealers on the basis of the sale of Fund
shares, although brokerage firms whose customers purchase shares of a Fund may
execute transactions for the Fund and receive brokerage commissions.
During the most recent fiscal year, no Fund paid any commissions to a
broker-dealer affiliated with Janus Capital.
LEGAL MATTERS
Information regarding material pending legal proceedings involving Janus
Capital or the Trust is attached as Appendix N to this Proxy Statement.
SHAREHOLDER PROPOSALS FOR SUBSEQUENT MEETINGS
Subsequent Meetings
The Funds are not required, and do not intend, to hold annual shareholder meetings. Under the terms of a settlement reached between Janus Capital and the
SEC in August 2004, commencing in 2005 and not less than every fifth calendar
year thereafter, the Trust is obligated to hold a meeting of shareholders to
elect Trustees. Shareholder meetings may be called from time to time as described in the Amended and Restated Agreement and Declaration of Trust and the Amended and Restated Bylaws of the Trust.
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Under the proxy rules of the SEC, shareholder proposals that meet certain conditions may be included in a Fund'sFund’s proxy statement for a particular meeting. Those rules currently require that for future meetings, the shareholder must be a record or beneficial owner of Fund shares either (i) with a value of at least $2,000 or (ii) in an amount representing at least 1% of the Fund'sFund’s securities to be voted at the time the proposal is submitted and for one year prior thereto, and must continue to own such shares through the date on which the meeting is held. Another requirement relates to the timely receipt by a Fund of any such proposal. Under those rules, a proposal must have been submitted within a reasonable time before the Fund began to print and mail this Proxy Statement in order to be included in this Proxy Statement. A proposal submitted for inclusion in a Fund'sFund’s proxy material for the next special meeting after the meeting to which this Proxy Statement relates must be received by athe Fund within a reasonable time before the Fund begins to print and mail the proxy materials for that meeting.
A shareholder wishing to submit a proposal for inclusion in a proxy statement subsequent to the Meetings,Meeting, if any, should send the written proposal to the Secretary of the Trust at 151 Detroit Street, Denver, Colorado 80206, within a reasonable time before 107
MeetingsMeeting must have been received within a reasonable time before the Funds began to mail this Proxy Statement. The timely submission of a proposal does not guarantee its inclusion in the proxy materials.
SHAREHOLDER COMMUNICATIONS
The Trustees provide for shareholders to send written communications to the Trustees via regular mail. Written communications to the Trustees, or to an individual Trustee, should be sent to the attention of the Trust'sTrust’s Secretary at the address of the Trust'sTrust’s principal executive office. All such communications received by the Trust'sTrust’s Secretary shall be promptly forwarded to the individual Trustee to whom they are addressed or to the full Board of Trustees, as applicable. If a communication does not indicate a specific Trustee, it will be sent to the Chairperson of the Nominating and Governance Committee and the independent counsel to the Trustees for further distribution, as deemed appropriate by such persons. The Trustees may further develop and refine this process as deemed necessary or desirable.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
Reports to Shareholders and Financial Statements
The annual report to shareholders of the Funds, including financial statements of each Fund, has previously been sent to shareholders. THE FUNDS
PROVIDE ANNUAL AND SEMIANNUAL REPORTS TO THEIR SHAREHOLDERS THAT HIGHLIGHT
RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF PORTFOLIO
CHANGES. ADDITIONAL COPIES OF THE FUNDS' MOST RECENT ANNUAL REPORT AND ANY MORE
RECENT SEMIANNUAL REPORT ARE AVAILABLE, WITHOUT CHARGE, BY CALLING A JANUS
REPRESENTATIVE AT [1-800-525-3713]The Funds provide annual and semiannual reports to their shareholders that highlight relevant information,including investment results and a review of portfolio changes. Additional copies of the Funds’ most recent annual report and any more recent semiannual report are available, without charge, by calling a Janus representative at 1-877-335-2687(or 1-800-525-3713 if you hold shares directly with Janus Capital), VIA THE INTERNET AT [JANUS.COM]via the Internet at janus.com/info (or janus.com/reports if you hold shares directly with
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Janus Capital), OR BY
SENDING A WRITTEN REQUEST TO THE SECRETARY OF THE TRUST ATor by sending a written request to the Secretary of the Trust at 151 DETROIT STREET,
DENVER, COLORADODetroit Street, Denver, Colorado 80206.
To avoid sending duplicate copies of materials to households, the Funds may mail only one copy of each report or this Proxy Statement to shareholders having the same last name and address on the Funds'Funds’ records. The consolidation of these mailings benefits the Funds through reduced mailing expenses. If a shareholder wants to receive multiple copies of these materials or to receive only one copy in the future, the shareholder should contact the Funds'Funds’ transfer agent, Janus Services, at1-800-525-3713 or notify the Funds'Funds’ transfer agent in writing at P.O. Box 173375, Denver, Colorado 80207-3375.
OTHER MATTERS TO COME BEFORE THE MEETINGS
55932, Boston, Massachusetts 02205-5932.
Other Matters to Come Before the Meeting
The Board of Trustees is not aware of any matters that will be presented for action at the MeetingsMeeting other than the mattersmatter described in this Proxy Statement. Should any other mattersmatter requiring a vote of shareholders arise, the proxy in the accompanying form will confer upon the person or persons entitled to vote the shares represented by such proxy the discretionary authority to vote the shares as to any other matters, in accordance with their best judgment in the interest of the Trust and/or Funds.
108
PLEASE COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY CARD(S) OR VOTE BY
INTERNET OR TELEPHONE PROMPTLY. NO POSTAGE IS REQUIRED IF YOU MAIL YOUR PROXY
CARD(S) IN THE UNITED STATES.
Please complete, sign, and return the enclosed proxy card(s) or vote by Internet or telephone promptly. No postage is required if you mail your proxy card(s) in the United States.
By order of the Board of Trustees,
/s/ Robin C. Beery
Robin C. Beery
/s/ Bruce L. Koepfgen
Bruce L. Koepfgen
President and Chief Executive Officer of
Janus Investment Fund
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LIST OF APPENDICES
APPENDIX A: Nominating and Governance Committee Charter
APPENDIX B: Nominee Ownership
APPENDIX C: Principal Executive Officers of the Trust and Their Principal
Occupations
APPENDIX D: Form of Proposed Amended Advisory Agreement (Performance Based Fees)
APPENDIX E: Other Funds Managed by Janus Capital with Similar Investment
Objectives
APPENDIX F: Principal Executive Officers and Directors of Janus Capital and
Their Principal Occupations
APPENDIX G: Form of Proposed Amended Advisory Agreement (Benchmark Change)
APPENDIX H: Form of Proposed Subadvisory Agreement
APPENDIX I: Form of Proposed Amended Advisory Agreement (Engaging a Sub-Adviser)
APPENDIX J: Other Funds Managed by Perkins with Similar Investment Objectives
APPENDIX K: Principal Executive Officers and Directors of Perkins and Their
Principal Occupations
APPENDIX L: Number of Outstanding Shares and Net Assets
APPENDIX M: 5% Beneficial Owners of Outstanding Shares
APPENDIX N: Legal Matters
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APPENDIX A: | Nominating and Governance Committee Charter | |
APPENDIX B: | Principal Officers of the Trust and Their Principal Occupations | |
APPENDIX C: | Number of Outstanding Shares | |
APPENDIX D: | 5% Beneficial Owners of Outstanding Shares |
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NOMINATING AND GOVERNANCE COMMITTEE CHARTER
JANUS ASPEN SERIES
JANUS INVESTMENT FUND
(Adopted
(Adopted December 5, 2000; Revised December 10, 2001; December 10, 2002;
September 16, 2003; March 16, 2004; June 15, 2004; June 14, 2005; June 14, 2006;
June 20, 2008; July 6, 2009)
2009; June 24, 2010; June 23, 2011; June 21, 2012)
I. PURPOSE
The Nominating and Governance Committee (the "Committee"“Committee��) is a committee of the Board of Trustees ("Trustees"(“Board” or “Trustees”) of each of Janus Aspen Series and Janus Investment Fund (each a "Trust"“Trust” and, together, the "Trusts"“Trusts” and each series thereof, a “Fund”). Its primary functions are to:
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II. COMPOSITION
The Committee shall be comprised of three or more Independent Trustees, who shall be designated by a majority vote of the Trustees. Independent Trustees are those Trustees of the Trusts who are not "interested persons"“interested persons” of the Trusts, as defined by the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”), and who meet the standards for independence set forth in the Procedures and Guidelines.
The members and Chair of the Committee shall be elected by the Trustees annually and serve until their respective successors shall be duly elected and qualified.
III. MEETINGS
The Committee shall meet four times annually, or more frequently as circumstances dictate. Special meetings (including telephone meetings) may be called by the Chair or a majority of the members of the Committee upon reasonable notice to the other members of the Committee. The presence in person or by telephone of a majority of the number of Committee members shall constitute a quorum at any meeting. If a quorum is not present, the member(s) of the Committee who is/are present may select any other Independent Trustee(s) to serve on the Committee for such meeting to constitute a quorum. The Committee may ask management and representatives of the Trusts’ servicing agents to attend meetings and provide pertinent information as appropriate.
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IV. RESPONSIBILITIES AND DUTIES
In performing its duties, the Committee will maintain effective working relationships with the Trustees and management. To effectively perform his or her role, each Committee member will obtain an understanding of the detailed responsibilities of Committee membership. Each Committee member will also achieve an understanding of the Trusts'Trusts’ separation of duties and responsibilities among the investment adviser, sub-adviser(s), if any, custodian, transfer agent, fund accounting function and principal accounting officer, and the risks associated with such responsibilities. The duties and responsibilities of a Committee member shall be in addition to his or her duties as a Trustee and include responsibility to prepare for, attend to the extent possible, and actively participate in Committee meetings. Members may pursue training related to their responsibilities.
A. Trustee Nominations, Elections, and Training
The Committee shall:
1. Identify and nominate candidates for appointment as Trustees of the
Trusts. The principal criterion for selection of candidates is their
ability to contribute to the overall functioning of the Boards and to carry
out the responsibilities of the Trustees. The Trustees, collectively,
should represent a broad cross section of backgrounds, functional
disciplines, and experience. In addition, in considering a potential
candidate's qualifications to serve as a Trustee of a Trust, the Committee
may take into account a wide variety of criteria, including, but not
limited to:
(a) The candidate's knowledge in matters related to the
investment company industry;
(b) The candidate's relevant experience, including as a director
or senior officer of public or private companies, or service as a
director/trustee of a registered investment company;
(c) The candidate's educational background;
(d) The candidate's reputation for high ethical standards and
personal and professional integrity;
(e) Any specific financial, technical or other expertise
possessed by the candidate, and the extent to which such expertise
would complement the Trustees' existing mix of skills and
qualifications;
(f) The candidate's willingness to serve, and willingness and
ability to commit the time necessary for the performance of the duties
of a Trustee, including high attendance at regular and special
meetings and participation in committee activities as needed;
(g) The candidate must exhibit stature commensurate with the
responsibility of representing Fund shareholders;
| 1. | Identify and nominate candidates for appointment as Trustees of the Trusts. The principal criterion for selection of candidates is their ability to contribute to the overall functioning of the Boards and to carry out the responsibilities of the Trustees. The Trustees, collectively, should represent a broad cross section of backgrounds, functional disciplines, and experience. In addition, in considering a potential candidate’s qualifications to serve as a Trustee of a Trust, the Committee may take into account a wide variety of criteria, including, but not limited to: |
| (a) | The candidate’s knowledge in matters related to the investment company industry, any professional licenses, designations, or certifications currently or previously held; |
| (b) | The candidate’s relevant experience, including as a director or senior officer of public or private companies, or service as a director/trustee of a registered investment company; |
| (c) | The candidate’s educational background; |
| (d) | The candidate’s reputation for high ethical standards and personal and professional integrity; |
| (e) | Any specific financial, technical or other expertise possessed by the candidate, and the extent to which such expertise would complement the Trustees’ existing mix of skills and qualifications; |
| (f) | The candidate’s willingness to serve, and willingness and ability to commit the time necessary for the performance of the duties of a Trustee, including high attendance at regular and special meetings and participation in committee activities as needed; |
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(h) If the nomination is for an "independent" trustee, the
candidate must not be considered an "interested" person of the Fund,
Janus Capital Management LLC ("Janus Capital") or any sub-adviser to a
Fund, as defined under the 1940 Act;
(i) The candidate must otherwise be qualified under applicable
laws and regulations to serve as a trustee of the applicable Trust;
and
(j) Such other criteria as the Committee determines to be
relevant in light of the existing composition of the Board, number of
Board members and any anticipated vacancies or other factors.
| (g) | The candidate must exhibit stature commensurate with the responsibility of representing Fund shareholders; |
| (h) | If the nomination is for an “independent” trustee, the candidate must not be considered an “interested” person of the Fund, Janus Capital Management LLC (“Janus Capital”), or any sub-adviser to a Fund or Janus Distributors LLC, as defined under the 1940 Act; |
| (i) | The candidate must otherwise be qualified under applicable laws and regulations to serve as a trustee of the applicable Trust; and |
| (j) | Such other criteria as the Committee determines to be relevant in light of the existing composition of the Board, number of Board members and any anticipated vacancies or other factors. |
Although Janus Capital, current Trustees, current shareholders of a Fund and any other person or entity that may be deemed necessary or desirable by the Committee, may submit to the Committee suggested candidates for Trustees, neither the Committee nor the Independent Trustees as a group shall consider those candidates on a preferential basis as opposed to other possible candidates. Shareholders may submit the name of a candidate for consideration by the Committee by submitting their recommendations to the Trusts'Trusts’ Secretary in accordance with the Procedures for Consideration of Trustee Candidates Submitted by Shareholders ("(“Shareholder Nomination Procedures"Procedures”) attached as Appendix 1. The Trusts'Trusts’ Secretary will forward all such recommendations to the ChairmanChair of the Committee (or his designee) promptly upon receipt, and, for shareholder recommendations, in accordance with the Shareholder Nomination Procedures.
The Committee may use any process it deems appropriate for the purpose of evaluating candidates, which process may include, without limitation, personal interviews, background checks, written submissions by the candidates and third party references. The Committee shall be empowered to use Trust assets to retain consultants and other professionals to assist in the process of evaluating candidates. There is no difference in the manner by which the Committee will evaluate nominees when the nominee is submitted by a shareholder.
The Committee reserves the right to make the final selection regarding the nomination of any Trustee of a Trust and to recommend such nomination to the Independent Trustees of the applicable Trust.
2. Review periodically the composition and size of the Board of
Trustees to determine whether it may be appropriate to add individuals with
backgrounds or skill sets different from those of the current Trustees.
3. Oversee arrangements for orientation of new Independent Trustees,
continuing education for the Independent Trustees, and an annual evaluation
of the performance of the Independent Trustees in accordance with the
Procedures and Guidelines.
| 2. | Review periodically the composition and size of the Board of Trustees to determine whether it may be appropriate to add individuals with backgrounds or skill sets different from those of the current Trustees. |
| 3. | Oversee arrangements for orientation of new Independent Trustees, continuing education for the Independent Trustees, and an annual evaluation |
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| of the performance of the Independent Trustees in accordance with the Procedures and Guidelines. |
B. Committee Nominations and Functions
The Committee shall:
1. Identify and recommend individuals for membership on all
committees, recommend individuals to chair committees, and review committee
assignments at least annually.
2. Review as necessary the responsibilities of each committee, whether
there is a continuing need for each committee, whether there is a need for
additional committees, and whether committees should be combined or
reorganized.
| 1. | Identify and recommend individuals for membership on all committees, recommend individuals to chair committees, and review committee assignments at least annually. |
| 2. | Review as necessary the responsibilities of each committee, whether there is a continuing need for each committee, whether there is a need for additional committees, and whether committees should be combined or reorganized. |
C. Governance Oversight
The Committee shall:
1. Oversee the governance processes and activities of the Trustees to
assure conformity to the Procedures and Guidelines.
2. Recommend an Independent Trustee of the Trust for appointment by
the Trustees as Chairman of the Trustees, as described in each Trust's
Declaration of Trust or Trust Instrument, or by-laws. The Chairman of the
Trustees may perform the following functions:
(a) Act as the primary contact between Janus Capital and the
Trustees, undertaking to meet or confer periodically with members of
the Janus Capital executive team regarding matters related to the
operations and performance of the Trusts;
(b) Coordinate the Trustees' use of outside resources, including
consultants or other professionals;
(c) Coordinate an annual schedule of portfolio reports to the
Trustees;
(d) Conduct the Trustee meetings;
(e) Confer with Janus Capital personnel and counsel for the
Independent Trustees in planning agendas for regular board and
committee meetings; and
(f) Perform such other duties as the Independent Trustees may
determine from time to time.
3. Review annually the Procedures and Guidelines, and recommend
changes, if any, to the Trustees.
| 1. | Oversee the governance processes and activities of the Trustees to assure conformity to the Procedures and Guidelines. |
| 2. | Recommend an Independent Trustee of the Trust for appointment by the Trustees as Chair of the Trustees, as described in each Trust’s Declaration of Trust or Trust Instrument, or by-laws. The Chair of the Trustees may perform the following functions: |
| (a) | Act as the primary contact between Janus Capital and the Trustees, undertaking to meet or confer periodically with members of the Janus Capital executive team regarding matters related to the operations and performance of the Trusts; |
| (b) | Coordinate the Trustees’ use of outside resources, including consultants or other professionals; |
| (c) | Coordinate an annual schedule of portfolio reports to the Trustees; |
| (d) | Conduct the Trustee meetings; |
| (e) | Confer with Janus Capital personnel and counsel for the Independent Trustees in planning agendas for regular board and committee meetings; and |
| (f) | Perform such other duties as the Independent Trustees may determine from time to time. |
| 3. | Review annually the Procedures and Guidelines, and recommend changes, if any, to the Trustees. |
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D. Trustee Meeting Planning
The Committee shall consult with management in planning Trustee meetings and may from time to time recommend agenda items, or request presentations from particular service providers, consultants, or portfolio managers, either to the Committee or the Trustees.
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E. Other Responsibilities and Duties
The Committee shall:
1. Review annually the compensation of the Independent Trustees and
determine whether to recommend to the Trustees any change in the schedule
of compensation. The Committee may also recommend that the Trustees
authorize the payment of supplemental compensation to any one or more
Independent Trustees in view of special responsibilities assumed, services
rendered or any other appropriate factors.
2. Authorize and oversee investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be empowered to
use Trust assets to retain independent counsel, consultants, and other
professionals to assist in the conduct of any investigation. Janus Capital
will report the use of Trust assets for such purpose quarterly to the
Trustees.
3. Review this Charter at least annually and recommend changes, if
any, to the Trustees.
4. Perform any other activities consistent with this Charter, each
Trust's Declaration of Trust or Trust Instrument, by-laws, and governing
law as the Committee or the Trustees deem necessary or appropriate.
5. Maintain minutes of its meetings and report to the Trustees.
| 1. | Review annually the compensation of the Independent Trustees and determine whether to recommend to the Trustees any change in the schedule of compensation. The Committee may also recommend that the Trustees authorize the payment of supplemental compensation to any one or more Independent Trustees in view of special responsibilities assumed, services rendered or any other appropriate factors. |
| 2. | Authorize and oversee investigations into any matters within the Committee’s scope of responsibilities. The Committee shall be empowered to use Trust assets to retain independent counsel, consultants, and other professionals to assist in the conduct of any investigation or to advise the Committee. Janus Capital will report any use of Trust assets for such purpose quarterly to the Trustees. |
| 3. | Review this Charter at least annually and recommend changes, if any, to the Trustees. |
| 4. | Perform any other activities consistent with this Charter, each Trust’s Declaration of Trust or Trust Instrument, by-laws, and governing law as the Committee or Trustees deem necessary or appropriate. |
| 5. | Report its significant activities to the Trustees and make such recommendations with respect to the foregoing matters as the Committee may consider necessary or appropriate. |
| 6. | Maintain minutes of its meetings. |
A-5
APPENDIX
Appendix 1
JANUS INVESTMENT FUND
JANUS ASPEN SERIES
(EACH A "TRUST," AND TOGETHER, THE "TRUSTS," AND EACH
SERIES OF A TRUST, A "FUND"
(each a “Trust,” and together, the “Trusts,” and each
series of a Trust, a “Fund”)
PROCEDURES FOR CONSIDERATION OF TRUSTEE CANDIDATES SUBMITTED BY SHAREHOLDERS
(ADOPTED MARCH
(Adopted March 16, 2004; REVISED JULYRevised July 6, 2009)
2009; Revised June 24, 2010; June 23, 2011)
The Trusts'Trusts’ Nominating and Governance Committee ("Committee"(“Committee”) is responsible for identifying and nominating candidates for appointment as Trustees of the Trusts. Shareholders of a Fund may submit names of potential candidates for nomination as Trustee of a Trust in accordance with these Procedures.
A candidate for nomination as Trustee of a Trust submitted by a shareholder will not be deemed to be properly submitted to the Committee for the Committee'sCommittee’s consideration unless the following qualifications have been met and procedures followed:
1. A shareholder of a Fund who wishes to nominate a candidate for election to a Trust'sTrust’s Board of Trustees ("(“Nominating Shareholder"Shareholder”) must submit any such recommendation in writing via regular mail to the attention of the Secretary of the Trust, at the address of the principal executive offices of the Trust ("(“Shareholder Recommendation"Recommendation”).
2. The Shareholder Recommendation must include: (i) the class or series and number of all shares of the Fund owned beneficially or of record by the Nominating Shareholder at the time the recommendation is submitted and the dates on which such shares were acquired, specifying the number of shares owned beneficially; (ii) a full listing of the proposed candidate'scandidate’s education, experience (including knowledge of the investment company industry, any professional licenses, designations or certifications currently or previously held, any non-profit activities relevant to board services, experience as a director or senior officer of public or private companies, and directorships on other boards or other boards of other registered investment companies), current employment, date of birth, business and residence address, and the names and addresses of at least three professional references; (iii) information as to whether the candidate is or may be an "interested person"“interested person” (as such term is defined in the Investment Company Act of 1940, as amended) of the Fund, Janus Capital Management LLC, or any sub-
advisersub-adviser to a Fund, and, if believed not to be an "interested“interested person,"” information regarding the candidate that will be sufficient for the Fund to make such determination; (iv) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee of the Trust, if elected; (v) a description of all arrangements or understandings between the Nominating
A-6
Shareholder, the candidate and/or any other person or persons (including their names) pursuant to which the Shareholder Recommendation is being made, and if none, so specify; (vi) the class or series and number of all shares of the Fund owned of record or beneficially by thea candidate,
A-6
3. The Committee may require the Nominating Shareholder to furnish such other information as it may reasonably require or deem necessary to verify any information furnished pursuant to paragraph 2 above or to determine the qualifications and eligibility of the candidate proposed by the Nominating Shareholder to serve as a Trustee of a Trust. If the Nominating Shareholder fails to provide such other information in writing within sevenfourteen days of receipt of written request from the Committee, the recommendation of such candidate as a nominee will be deemed not properly submitted for consideration, and the Committee is not required to consider such candidate.
Unless otherwise specified by the Committee chairmanchair (or his designee) or by outside counsel to the independent Trustees, the Secretary of the Trust (or her designee) will promptly forward all Shareholder Recommendations to the Committee chairmanchair (or his designee) and the outside counsel to the independent Trustees of the Trust, indicating whether the Shareholder Recommendation has been properly submitted pursuant to these Procedures.
Recommendations for candidates as Trustees of a Trust will be evaluated, among other things, in light of whether the number of Trustees is expected to change and whether the Trustees expect any vacancies. When the Committee is not actively recruiting new Trustees, Shareholder Recommendations will be kept on file until active recruitment is under way.
A-7
APPENDIX B PRINCIPAL OFFICERS OF
NOMINEE OWNERSHIP
The following table sets forth, as of December 31, 2009, the dollar range
of equity securities beneficially owned by each Trustee and nominee in the
Funds, as well as the aggregate dollar range of equity securities beneficially
owned by the Trustees and nominees in all mutual funds advised by Janus Capital
and overseen or to be overseen by the Trustees and nominees (52 funds as of
December 31, 2009).
AGGREGATE DOLLAR
RANGE EQUITY
SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
TRUSTEE IN JANUS
NAME OF TRUSTEE DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS FUNDS
--------------- --------------------------------------------------------- ---------------------
INDEPENDENT TRUSTEES
William F. McCalpin...... INTECH Risk-Managed Core Fund $10,001-$50,000 Over $100,000
Janus Balanced Fund $10,001-$50,000
Janus Contrarian Fund $10,001-$50,000
Janus Enterprise Fund $10,001-$50,000
Janus Global Life Sciences Fund $1-$10,000
Janus Global Research Fund $10,001-$50,000
Janus Global Technology Fund $1-$10,000
Janus Money Market Fund $50,001-$100,000
Janus Overseas Fund $10,001-$50,000
Janus Smart Portfolio - Growth $10,001-$50,000
Janus Worldwide Fund $1-$10,000
Perkins Mid Cap Value Fund $10,001-$50,000
Jerome S. Contro......... Janus Flexible Bond Fund Over $100,000 Over $100,000(1)
Janus Government Money Market Fund Over $100,000
Janus High Yield Fund Over $100,000
Janus Long/Short Fund Over $100,000
Janus Overseas Fund $50,001-$100,000
Janus Research Core Fund $50,001-$100,000
Janus Smart Over $100,000
Portfolio - Conservative
Perkins Mid Cap Value Fund $50,001-$100,000
John W. McCarter, Jr..... INTECH Risk-Managed Core Fund $10,001-$50,000 Over $100,000
Janus Contrarian Fund $10,001-$50,000
Janus Enterprise Fund $10,001-$50,000
Janus Fund $10,001-$50,000
Janus Growth and Income Fund $50,001-$100,000
Janus High Yield Fund $50,001-$100,000
Janus Orion Fund $50,001-$100,000
Janus Overseas Fund $10,001-$50,000
Janus Research Core Fund $50,001-$100,000
Janus Research Fund $10,001-$50,000
Dennis B. Mullen......... Janus Contrarian Fund Over $100,000 Over $100,000(1)
Janus Enterprise Fund Over $100,000
Janus Forty Fund $50,001-$100,000
Janus Fund $50,001-$100,000
Janus Global Life Sciences Fund Over $100,000
Janus Global Research Fund Over $100,000
Janus Global Technology Fund Over $100,000
B-1
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
TRUSTEE IN JANUS
NAME OF TRUSTEE DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS FUNDS
--------------- --------------------------------------------------------- ---------------------
Janus Orion Fund Over $100,000
Janus Overseas Fund Over $100,000
Janus Research Fund Over $100,000
Janus Triton Fund Over $100,000
Janus Twenty Fund $50,001-$100,000
Janus Worldwide Fund $50,001-$100,000
James T. Rothe........... INTECH Risk-Managed Core Fund $10,001-$50,000 Over $100,000
Janus Contrarian Fund Over $100,000
Janus Enterprise Fund $50,001-$100,000
Janus Flexible Bond Fund $10,001-$50,000
Janus Global Research Fund $50,001-$100,000
Janus Money Market Fund $50,001-$100,000
Janus Orion Fund $50,001-$100,000
Janus Smart $50,001-$100,000
Portfolio - Conservative
William D. Stewart....... INTECH Risk-Managed Core Fund $50,001-$100,000 Over $100,000
Janus Flexible Bond Fund $1-$10,000
Janus Global Research Fund $10,001-$50,000
Janus Money Market Fund Over $100,000
Janus Overseas Fund Over $100,000
Janus Smart Portfolio - Growth $1-$10,000
Janus Smart Portfolio - Moderate $10,001-$50,000
Martin H. Waldinger...... Janus Contrarian Fund Over $100,000 Over $100,000(1)
Janus Global Research Fund Over $100,000
Janus Overseas Fund Over $100,000
Janus Research Core Fund Over $100,000
Linda S. Wolf............ Janus Fund Over $100,000 Over $100,000(1)
Janus Global Research Fund Over $100,000
Janus Growth and Income Fund Over $100,000
Janus Overseas Fund Over $100,000
Janus Twenty Fund Over $100,000
TRUSTEE NOMINEES
John H. Cammack(2)....... Janus Global Life Sciences Fund $1-$10,000 Over $100,000
Janus Global Research Fund $1-$10,000
Janus Global Technology Fund $1-$10,000
Janus Short-Term Bond $50,001-$100,000
Janus Triton Fund $1-$10,000
John P. McGonigle........ Janus Overseas Fund Over $100,000 Over $100,000
--------
(1) Ownership shown includes amounts held under a deferred compensation plan
that are valued based on "shadow investments" in one or more funds.
(2) Ownership is as of February 8, 2010.
B-2
APPENDIX C TRUST OFFICERS AND THEIR PRINCIPAL OCCUPATIONS
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Ashwin Alankar 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Janus Global Allocation Fund – Conservative | 9/14-Present | Senior Vice President and | |||
Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund – Moderate | 9/14-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund – Growth | 9/14-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Adaptive Global Allocation Fund | 6/15-Present | |||||
Andrew Acker 151 Detroit Street Denver, CO 80206 DOB: | Executive Vice President and Co-Portfolio Manager Janus Global Life Sciences Fund | 5/07-Present | Vice President and Research Analyst of Janus Capital, and Portfolio Manager for other Janus accounts. | |||
Jean Barnard 151 Detroit Street Denver, CO 80206 DOB: 1970 | Executive Vice President and Co-Portfolio Manager Janus Fund | 1/16-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Patrick Brophy 151 Detroit Street Denver, CO 80206 DOB: 1965 | Executive Vice President and Portfolio Manager Janus Global Real Estate Fund | 11/07-Present | Portfolio Manager for other Janus accounts. | |||
Jeremiah Buckley 151 Detroit Street Denver, CO 80206 DOB: 1976 | Executive Vice President and Co-Portfolio Manager Janus Growth and Income Fund | 7/14-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Executive Vice President and Co-Portfolio Manager Janus Balanced Fund | 12/15-Present | |||||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-1
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Enrique Chang 151 Detroit Street Denver, CO 80206 DOB: 1962 | Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund – Conservative | 1/14-Present | President, Head of Investments for Janus Capital (since 2016) and Portfolio Manager for other Janus accounts. Formerly, Chief Investment Officer Equities and Asset Allocation for Janus Capital(2013-2016). During the five years prior to 2013, Mr. Chang was Chief Investment Officer and Executive Vice President for American Century Investments. | |||
Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund – Moderate | 1/14-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Global Allocation Fund – Growth | 1/14-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Adaptive Global Allocation Fund | 6/15-Present | |||||
Jonathan D. Coleman 151 Detroit Street Denver, CO 80206 DOB: 1971 | Executive Vice President and Portfolio Manager Janus Triton Fund | 5/13-Present | Executive Vice President of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Co-Chief Investment Officer of Janus Capital (2006-2013). | |||
Executive Vice President and Portfolio Manager Janus Venture Fund | 5/13-Present | |||||
Brian Demain 151 Detroit Street Denver, CO 80206 DOB: 1977 | Executive Vice President and Portfolio Manager Janus Enterprise Fund | 11/07-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Christopher H. Diaz 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Global Bond Fund | 5/11-Present | Portfolio Manager for other Janus accounts. Formerly, Portfolio Manager for ING (2000-2011). | |||
Denny Fish 151 Detroit Street Denver, CO 80206 DOB: 1971 | Executive Vice President and Co-Portfolio Manager Janus Global Technology Fund | 1/16-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
John S. Fujiwara 151 Detroit Street Denver, CO 80206 DOB: 1960 | Executive Vice President and Co-Portfolio Manager Janus Diversified Alternatives Fund | 12/12-Present | Portfolio Manager for other Janus accounts. Formerly, Senior Principal at Absolute Plus Management, LLC(2006-2012). | |||
William H. Gross 151 Detroit Street Denver, CO 80206 DOB: 1944 | Executive Vice President and Lead Portfolio Manager Janus Global Unconstrained Bond Fund | 10/14-Present | Portfolio Manager for other Janus accounts. Formerly, Managing Director, Chief Investment Officer, and a founding partner of Pacific Investment Management Company LLC (“PIMCO”) (1971-2014). | |||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-2
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Brinton Johns 151 Detroit Street Denver, CO 80206 DOB: 1973 | Executive Vice President and Co-Portfolio Manager Janus Global Technology Fund | 1/14-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Michael Keough 151 Detroit Street Denver, CO 80206 DOB: 1978 | Executive Vice President and Co-Portfolio Manager Janus Flexible Bond Fund | 12/15-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
John Kerschner 151 Detroit Street Denver, CO 80206 DOB: 1967 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Research Analyst for Janus Capital. | |||
Daniel Kozlowski 151 Detroit Street Denver, CO 80206 DOB: 1971 | Executive Vice President and Portfolio Manager Janus Contrarian Fund | 7/11-Present | Portfolio Manager for other Janus accounts. Formerly, Portfolio Manager of Plaisance Capital LLC (2008-2011). | |||
John Lloyd 151 Detroit Street Denver, CO 80206 DOB: 1975 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Research Analyst for Janus Capital. | |||
Ethan Lovell 151 Detroit Street Denver, CO 80206 DOB: 1967 | Executive Vice President and Co-Portfolio Manager Janus Global Life Sciences Fund | 1/16-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
George P. Maris 151 Detroit Street Denver, CO 80206 DOB: 1968 | Executive Vice President and Portfolio Manager Janus Global Select Fund Executive Vice President and Portfolio Manager Janus Overseas Fund | 8/12-Present 1/16-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Portfolio Manager for Northern Trust (2008-2011). | |||
Julian McManus 151 Detroit Street Denver, CO 80206 DOB: 1970 | Executive Vice President and Co-Portfolio Manager Janus International Equity Fund | 6/10-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Seth Meyer 151 Detroit Street Denver, CO 80206 DOB: 1976 | Executive Vice President and Co-Portfolio Manager Janus Multi-Sector Income Fund | 2/14-Present | Portfolio Manager of other Janus accounts and Research Analyst for Janus Capital. | |||
Executive Vice President and Co-Portfolio Manager Janus High-Yield Fund | 12/15-Present | |||||
Ryan Myerberg 151 Detroit Street Denver, CO 80206 DOB: 1979 | Executive Vice President and Co-Portfolio Manager Janus Global Bond Fund | 12/15-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-3
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Marc Pinto 151 Detroit Street Denver, CO 80206 DOB: 1961 | Executive Vice President and Co-Portfolio Manager Janus Balanced Fund | 5/05-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Executive Vice President and Co-Portfolio Manager Janus Growth and Income Fund | 11/07-Present | |||||
Executive Vice President and Portfolio Manager Janus Twenty Fund | 5/13-Present | |||||
A. Douglas Rao 151 Detroit Street Denver, CO 80206 DOB: 1974 | Executive Vice President and Co-Portfolio Manager Janus Forty Fund | 6/13-Present | Portfolio Manager for other Janus accounts. Formerly, Partner and Portfolio Manager for Chautauqua Capital Management (2012-2013) and Portfolio Manager for Marsico Capital Management, LLC(2007-2012). | |||
Mayur Saigal 151 Detroit Street Denver, CO 80206 DOB: 1975 | Executive Vice President and Co-Portfolio Manager Janus Real Return Fund | 10/13-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Executive Vice President and Co-Portfolio Manager Janus Balanced Fund | 12/15-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Flexible Bond Fund | 12/15-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Short-Term Bond Fund | 12/15-Present | |||||
Nick Schommer 151 Detroit Street Denver, CO 80206 DOB: 1978 | Executive Vice President and Co-Portfolio Manager Janus Forty Fund | 1/16-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
Guy Scott 151 Detroit Street Denver, CO 80206 DOB: 1966 | Executive Vice President and Co-Portfolio Manager Janus International Equity Fund | 6/10-Present | Portfolio Manager for other Janus accounts and Research Analyst for Janus Capital. | |||
J. Bradley Slingerlend 151 Detroit Street Denver, CO 80206 DOB: 1978 | Executive Vice President and Co-Portfolio Manager Janus Global Technology Fund | 5/11-Present | Portfolio Manager for other Janus accounts. | |||
J. Eric Thorderson 151 Detroit Street Denver, CO 80206 DOB: 1961 | Executive Vice President and Portfolio Manager Janus Government Money Market Fund | 2/99-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Executive Vice President and Portfolio Manager Janus Money Market Fund | 2/04-Present | |||||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-4
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Darrell Watters 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Flexible Bond Fund | 5/07-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. | |||
Executive Vice President and Co-Portfolio Manager Janus Short-Term Bond Fund | 5/07-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus High-Yield Fund | 7/08-Present | |||||
Executive Vice President and Co-Portfolio Manager Perkins Value Plus Income Fund | 7/10-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Real Return Fund | 10/12-Present | |||||
Executive Vice President and Co-Portfolio Manager Janus Balanced Fund | 12/15-Present | |||||
Andrew B. Weisman 151 Detroit Street Denver, CO 80206 DOB: 1959 | Executive Vice President and Co-Portfolio Manager Janus Diversified Alternatives Fund | 12/12-Present | Chief Investment Officer Liquid Alternatives Group and Senior Vice President of Janus Capital; Director of the Janus Global Diversified Risk Premia Master Fund Ltd; and Portfolio Manager for other Janus accounts. Formerly, Chief Executive Officer of WR Managed Accounts LLC(2008-2012). | |||
Carmel Wellso 151 Detroit Street Denver, CO 80206 DOB: 1964 | Executive Vice President and Co-Portfolio Manager Janus International Equity Fund | 6/10-Present | Vice President and Director of Research of Janus Capital; and Portfolio Manager for other Janus accounts. Formerly, Research Analyst for Janus Capital(2008-2014). | |||
Executive Vice President Janus Global Research Fund | 12/14-Present | |||||
Executive Vice President Janus Research Fund | 12/14-Present | |||||
Burton H. Wilson 151 Detroit Street Denver, CO 80206 DOB: 1963 | Executive Vice President and Co-Portfolio Manager Janus Fund | 5/11-Present | Vice President of Janus Capital and Portfolio Manager for other Janus accounts. Formerly, Assistant Director of Equity Research (2009-2014), and Portfolio Manager (2006-2011) for Janus Global Technology Fund. | |||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-5
Name, Address, and Age | Positions Held with the Trust | Term of Office* and Length of Time Served | Principal Occupations During the Past Five Years | |||
Hiroshi Yoh #36-02 AXA Tower 8 Shenton Way Singapore 068811 DOB: 1963 | Executive Vice President and Portfolio Manager Janus Asia Equity Fund | 7/11-Present | Director of Janus Capital Singapore Pte. Limited and Portfolio Manager for other Janus accounts. Formerly, Chief Investment Officer and a portfolio manager with Tokio Marine Asset Management International Pte. Ltd., a Singapore-based asset management firm (1999-2011). | |||
Executive Vice President and Portfolio Manager Janus Emerging Markets Fund | 8/12-Present | |||||
Stephanie Grauerholz 151 Detroit Street Denver, CO 80206 DOB: 1970 | Chief Legal Counsel and Secretary Vice President | 1/06-Present 3/06-Present | Senior Vice President and Chief | |||
Bruce L. Koepfgen 151 Detroit Street Denver, CO 80206 DOB: | President and | 7/14-Present | President of Janus Capital Group Inc. and Janus | |||
| * | Officers are elected at least annually by the Trustees for a one-year term and may also be elected from time to time by the Trustees for an interim period. |
B-6
Name, Address, and Age | Positions Held with the Trust | Term of | Principal Occupations During the Past Five Years | |||
David R. Kowalski 151 Detroit Street Denver, CO 80206 DOB: 1957 | Vice President, Chief Compliance Officer, and Anti-Money Laundering Officer | 6/02-Present | Senior Vice President and Chief Compliance Officer of Janus Capital, Janus Distributors LLC, and Janus Services LLC; |
Jesper Nergaard 151 Detroit Street Denver, CO 80206 DOB: 1962 | Chief Vice President, Treasurer, and | 3/05-Present 2/05-Present | Vice President of Janus Capital | |||
| * | Officers are elected at least annually by the Trustees for a one-year term and |
B-7
APPENDIX D
JANUS INVESTMENT FUND
FORMC
NUMBER OF [AMENDED AND RESTATED]
INVESTMENT ADVISORY AGREEMENT
JANUS [ ] FUND
THIS [AMENDED AND RESTATED] INVESTMENT ADVISORY AGREEMENT (the "Agreement")
is made this [[]1st day of [February][July], [2006][2010]], between JANUS
INVESTMENT FUND, a Massachusetts business trust (the "Trust"), and JANUS CAPITAL
MANAGEMENT LLC, a Delaware limited liability company ("JCM").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus [ ] Fund (the "Fund"); and
WHEREAS, the Trust and JCM deem it mutually advantageous that JCM should be
appointed as investment adviser to the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Appointment. OUTSTANDING SHARES
The Trust hereby appoints JCM as investment adviser and
manager with respect to the Fund for the period and on the terms set forth in
this Agreement. JCM hereby accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Investment Advisory Services. JCM shall determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets with brokers, dealers or
others. JCM shall furnish continuous advice and recommendations to the Fund, and
have authority to act with respect thereto, as to the acquisition, holding, or
disposition of any or all of the securities or other assets which the Fund may
own or contemplate acquiring from time to time. JCM shall give due consideration
to the investment policies and restrictions and the other statements concerning
the Fund in the and registration statements under the 1940 Act and the 1933 Act,
and to the provisions of the Internal Revenue Code, as amended from time to
time, applicable to the Fund as a regulated investment company. In addition, JCM
shall cause its officers to attend meetings and furnish oral or written reports,
as the Trust may
D-1
reasonably require, in order to keep the Trustees and appropriate officers of
the Trust fully informed as to the condition of the investment portfolio of the
Fund.
3. Other Services. JCM is hereby authorized (to the extent the Trust has
not otherwise contracted) but not obligated (to the extent it so notifies the
Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund. JCM is specifically authorized, on
behalf of the Trust, to conduct relations with custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurance company separate accounts, insurers,
banks and such other persons in any such other capacity deemed by JCM to be
necessary or desirable. JCM shall generally monitor and report to Fund officers
the Fund's compliance with investment policies and restrictions as set forth in
the currently effective prospectus and statement of additional information
relating to the shares of the Fund under the 1933 Act. JCM shall make reports to
the Trustees of its performance of services hereunder upon request therefor and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable. JCM is
also authorized, subject to review by the Trustees, to furnish such other
services as JCM shall from time to time determine to be necessary or useful to
perform the services contemplated by this Agreement.
4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:
(a) to keep JCM continuously and fully informed as to the composition of
its investment portfolio and the nature of all of its assets and
liabilities from time to time;
(b) to furnish JCM with a certified copy of any financial statement or
report prepared for it by certified or independent public
accountants and with copies of any financial statements or reports
made to its shareholders or to any governmental body or securities
exchange;
(c) to furnish JCM with any further materials or information which JCM
may reasonably request to enable it to perform its function under
this Agreement; and
(d) to compensate JCM for its services and reimburse JCM for its
expenses incurred hereunder in accordance with the provisions
hereof.
5. Compensation. The Trust shall pay to JCM for its services pursuant to
this Agreement a [monthly base] fee[, calculated and payable for each day that
this Agreement is in effect,] of [1/365][1/12] of 0.64% of the [average] daily
closing net asset value of the Fund[ ("Base Fee"), adjusted by a performance fee
as set forth in Schedule A. For any period less than a month during which this
Agreement is in effect, the Base Fee shall be prorated according to the
proportion which such period bears to a full month of 28, 29, 30, or 31 days, as
the case may be.][(1/366 of 0.64% of the daily closing net asset value of the
Fund in a leap year). The fee shall be paid monthly.]
D-2
6. Expenses Borne by JCM. In addition to the expenses which JCM may incur
in the performance of its investment advisory functions and other services under
this Agreement, and the expenses which it may expressly undertake to incur and
pay under other agreements with the Trust or otherwise, JCM shall incur and pay
the following expenses relating to the Fund's operations without reimbursement
from the Fund:
(a) Reasonable compensation, fees and related expenses of the Trust's
officers and its Trustees, except for such Trustees who are not
"interested persons," as defined in the 1940 Act, of JCM, and except
as otherwise provided in Section 7; and
(b) Rental of offices of the Trust.
7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not "interested persons," as defined in the 1940 Act, of JCM; compensation
and related expenses of the Chief Compliance Officer of the Trust and compliance
staff, as authorized from time to time by the Trustees of the Trust;
compensation of the Fund's custodian, transfer agent, registrar and dividend
disbursing agent; legal, accounting, audit and printing expenses;
administrative, clerical, recordkeeping and bookkeeping expenses; brokerage
commissions and all other expenses in connection with execution of portfolio
transactions (including any appropriate commissions paid to JCM or its
affiliates for effecting exchange listed, over-the-counter or other securities
transactions); interest; all federal, state and local taxes (including stamp,
excise, income and franchise taxes); costs of stock certificates and expenses of
delivering such certificates to purchasers thereof; expenses of local
representation in Massachusetts; expenses of shareholders' meetings and of
preparing, printing and distributing proxy statements, notices, and reports to
shareholders; expenses of preparing and filing reports and tax returns with
federal and state regulatory authorities; all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer, or sale of shares of the Fund, including, but not limited
to, all costs involved in the registration or qualification of shares of the
Fund for sale in any jurisdiction, the costs of portfolio pricing services and
compliance systems, and all costs involved in preparing, printing and mailing
prospectuses and statements of additional information to Fund shareholders; and
all fees, dues and other expenses incurred by the Trust in connection with the
membership of the Trust in any trade association or other investment company
organization.
8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCM at its principal place of business. This Agreement may be terminated by
JCM at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Declaration of
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Trust, the Trust shall cease to use the name "Janus" in connection with the Fund
as soon as reasonably practicable following any termination of this Agreement if
JCM does not continue to provide investment advice to the Fund after such
termination.
9. Assignment. This Agreement shall terminate automatically in the event
of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until February 1,
[2007][2011], unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such continuance
is specifically approved at least annually by (a) the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and (b) either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to February 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if such
amendment is specifically approved (i) by a majority of the Trustees, including
a majority of the Trustees who are not interested persons (as that phrase is
defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement and,
if required by applicable law, (ii) by the affirmative vote of a majority of the
outstanding voting securities of the Fund (as that phrase is defined in Section
2(a)(42) of the 1940 Act).
12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.
13. Limitation of Personal Liability. All the parties hereto acknowledge
and agree that all liabilities of the Trust arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or holder of
shares of beneficial interest of the Trust shall be personally liable for any of
the foregoing liabilities. The Declaration of Trust describes in detail the
respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.
14. Limitation of Liability of JCM. JCM shall not be liable for any error
of judgment or mistake of law or for any loss arising out of any investment or
for any act or omission taken with respect to the Trust, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder and
except to the extent otherwise provided by law. As used in this Section 14,
"JCM" shall include any affiliate of JCM performing services for the Trust
contemplated hereunder and directors, officers and employees of JCM and such
affiliates.
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15. Activities of JCM. The services of JCM to the Trust hereunder are not
to be deemed to be exclusive, and JCM and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and
shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.
16. Certain Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested persons" when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreementtable shows, as of the amended date and year
first above written.
JANUS CAPITAL MANAGEMENT LLC
By:
------------------------------------
Name:
Title:
JANUS INVESTMENT FUND
By:
------------------------------------
Name:
Title:
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[SCHEDULE A
PERFORMANCE ADJUSTMENT]
[Beginning with the Base Fee payable for July 2010 and in [JANUS FUND AND
JANUS GLOBAL OPPORTUNITIES FUND - MONTH 13] [JANUS OVERSEAS FUND - MONTH 16]
[JANUS FORTY FUND AND JANUS TWENTY FUND - MONTH 19] thereafter, the Base Fee
shall be adjusted monthly based upon the investment performance of the Fund's
Class A Shares (waiving the upfront sales load) ("Class") in relation to the
cumulative investment record of the Fund's benchmark, the [JANUS FORTY FUND,
JANUS FUND, AND JANUS TWENTY FUND - RUSSELL 1000(R) GROWTH INDEX (THE "INDEX")]
[JANUS GLOBAL OPPORTUNITIES FUND - MORGAN STANLEY CAPITAL INTERNATIONAL WORLD
INDEX(SM) (THE "INDEX")] [JANUS OVERSEAS FUND - MORGAN STANLEY CAPITAL
INTERNATIONAL ALL COUNTRY WORLD EX-U.S. INDEX(SM) (THE "INDEX")], over the
"Performance Period" (such adjustment being referred to herein as the
"Performance Adjustment"). The "Performance Period" is defined as the shorter of
(a) the period from the date of this Agreement through the end of the month for
which the fee is being calculated, and (b) the 36 month period preceding the end
of the month for which the fee is being calculated.]
[The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Fund's
Class A Shares. If there is less than a 0.50% difference (plus or minus) between
the investment performance of the Class and the investment record of the Index,
the Fund pays JCM the Base Fee with no adjustment. If the difference between the
investment performance of the Class and the investment record of the Index is
0.50% or greater during any Performance Period, the Base Fee will be subject to
an upward or downward performance adjustment of [JANUS FUND - 1/12 OF 0.01875%]
[JANUS FORTY FUND AND JANUS TWENTY FUND - 1/12 OF 0.0088235%] [JANUS GLOBAL
OPPORTUNITIES FUND AND JANUS OVERSEAS FUND - 1/12 OF 0.0107143%] for every full
0.50% increment by which the Class outperforms or underperforms the Index. The
maximum percentage used in calculating the Performance Adjustment (positive or
negative) in any month is 1/12 of 0.15%. The Performance Adjustment is applied
against the Fund's average daily net assets during the Performance Period.]
[For purposes of computing the Base Fee and the Performance Adjustment, net
assets are averaged over different periods (average daily net assets during the
relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is calculated monthly in arrears
and is accrued evenly each day throughout the month. The investment advisory fee
is paid monthly in arrears.]
[The average daily net asset value of the Fund, or any class thereof, shall
be determined in the manner set forth in the Trust's Declaration of Trust,
Bylaws and registration statement, each as may be amended from time to time.]
[The investment performance of the Class will be the sum of:]
[(1) the change in the Class' net asset value ("NAV") per share during the
Performance Period; plus]
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[(2) the value of the Class' cash distributions per share accumulated to
the end of the Performance Period; plus]
[(3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of the
Performance Period;]
[expressed as a percentage of the Class' NAV per share at the beginning of the
Performance Period. For this purpose, the value of distributions per share of
realized capital gains, of dividends per share paid from investment income and
of capital gains taxes per share paid or payable on undistributed realized long-
term capital gains shall be treated as reinvested in shares of the Class at the
NAV in effect at the close of business on April 5, 2016, the record date for the paymentnumber of such distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and taxes.]
[The investment record of the Index will be the sum of:]
[(1) the change in the level of the Index during the Performance Period;
plus]
[(2) the value, computed consistently with the Index, of cash distributions
made by companies whose securities comprise the Index accumulated to the end of
the Performance Period; expressed as a percentage of the Index level at the
beginning of the Performance Period. For this purpose, cash distributions on the
securities which comprise the Index shall be treated as reinvested in the Index
at least as frequently as the endoutstanding shares of each calendar quarter following the payment
of the dividend.]
[The Trustees have initially designated the Class to be used for purposes of
determining the Performance Adjustment. From time to time, the Trustees may, by
vote of the Trustees of the Trust voting in person, including a majority of the
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such parties, determine that a class of shares
of theeach Fund, other than the Class is the most appropriate for use in calculating
the Performance Adjustment. If a different class of shares ("Successor Class")
is substituted in calculating the Performance Adjustment, the use of that
Successor Class of shares for purposes of calculating the Performance Adjustment
may apply to the entire Performance Period so long as such Successor Class was
outstanding at the beginning of such period. If the Successor Class of shares
was not outstanding for all or a portion of the Performance Period, it may only
be used in calculating that portion of the Performance Adjustment attributable
to the period during which such Successor Class was outstanding and any prior
portion of the Performance Period shall be calculated using the class of shares
previously designated.]
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APPENDIX E
OTHER FUNDS MANAGED BY JANUS CAPITAL WITH SIMILAR
INVESTMENT OBJECTIVES
The following table lists certain information regarding funds with similar
investment objectives for which applicable:
