Explanatory Note
This Form N-CSRS/A for Janus Investment Fund (the "Registrant") is being filed to revise the semi-annual report for Janus Henderson Global Unconstrained Bond Fund (the "Fund") solely with regard to the section entitled "Additional Information - Approval of Advisory Agreements" in the "Additional Information" section of the report. The sole purpose of this amendment is to incorporate information that was inadvertently omitted from that section. Other than the aforementioned revision, no other information or disclosures contained in the Registrant's Form N-CSRS filed on March 8, 2018 (Accession No. 0000277751-18-000030) are being amended by this Form N-CSRS/A.
United States Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
Investment Company Act file number 811-01879
Janus Investment Fund
(Exact name of registrant as specified in charter)
151 Detroit Street, Denver, Colorado 80206
(Address of principal executive offices) (Zip code)
Kathryn Santoro, 151 Detroit Street, Denver, Colorado 80206
(Name and address of agent for service)
Registrant's telephone number, including area code: 303-333-3863
Date of fiscal year end: 6/30
Date of reporting period: December 31, 2017
Item 1 - Reports to Shareholders
SEMIANNUAL REPORT December 31, 2017 | |||
Janus Henderson Adaptive Global Allocation Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | ||
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Table of Contents
Janus Henderson Adaptive Global Allocation Fund
Janus Henderson Adaptive Global Allocation Fund (unaudited)
PERFORMANCE OVERVIEW
Janus Henderson Adaptive Global Allocation Fund Class I Shares returned 8.20% for the 6-month period ended December 31, 2017. This compares with a return of 11.21% for its primary benchmark, the MSCI All Country World Index. The Fund’s secondary benchmark, the Adaptive Global Allocation 60-40 Index, an internally calculated index comprised of the MSCI All Country World Index (60%) and the Bloomberg Barclays Global Aggregate Bond Index (40%), returned 7.28%. Its tertiary benchmark, the Bloomberg Barclays Global Aggregate Bond Index, returned 1.58%.
MARKET ENVIRONMENT
Global financial markets enjoyed the tailwinds of synchronized economic growth across major regions during the period. Stocks benefited, too, from solid corporate earnings and, later in the period, the prospect of tax reform in the U.S. Emerging markets outperformed their developed market peers and among advanced economies, the U.S. and Japan tended to register higher returns than major European benchmarks. On a sector basis, technology and materials rose the most while the traditionally defensive consumer staples, health care and utilities sectors delivered the most muted gains.
Global bond markets rose as well. A key driver was spread compression in both investment-grade and high-yield corporate credits, with those of the former reaching a decade low. Treasury performance was more dispersed. The yield on the 2-year U.S. Treasury rose as the market coalesced around a third Federal Reserve (Fed) rate hike in 2017, which ultimately occurred in December. The 10-year note, after dipping to nearly 2% in September, saw spreads widen to 2.41% by period end and the yield on the 30-year slipped to 2.74%. German Bunds remained well bid as the European Central Bank (ECB) announced it would extend its asset purchasing program, albeit in smaller increments. In the UK, the Bank of England initiated its first rate hike since the Global Financial Crisis as inflation crested 3%.
PERFORMANCE DISCUSSION
For the six-month period, the Fund underperformed its primary benchmark but outperformed its secondary and tertiary benchmarks. Guided by the Fund’s option-markets sourced signals, a key contributor to performance was our allocation to global equities, which stood at 96% on June 30 and did not significantly move, finishing the period at 94%. Thus, the portfolio participated in a meaningful way in the rise of global markets during the second half of 2017. From a regional perspective, the key contributor was the U.S. with 41% allocated at the end of June and 51% at year’s end. The portfolio’s underweighting to a concentrated set of mega-cap stocks, which drove a considerable portion of the primary benchmark’s returns during the period, was a key detractor from performance.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
An aging bull market and a 10-year economic expansion have us, like many investors, wondering: How much longer can this rally continue? But signals from our Adaptive Multi-Asset Solutions team's proprietary options pricing model suggest a correction is not imminent.
Global stocks have enjoyed a good run, roughly tripling since the financial crisis. Options prices, which indicate the market’s assessment of short-term risk, signal limited upside, but do not forecast a looming downturn. On the contrary, the equity market appears fairly priced given a number of positive factors that could propel the current business cycle, including U.S. tax reform, still accommodative monetary policy in Europe and Japan, and an upward trajectory in global growth. Inflation also
Janus Investment Fund | 1 |
Janus Henderson Adaptive Global Allocation Fund (unaudited)
remains subdued, thanks to new technologies that improve efficiencies and keep prices in check.
In other words, barring unforeseen economic or political shocks, the global economic barometer is set to fair. We argue that some of this benign outlook is due to the options market’s expectation of an orderly unwinding of the ultra-accommodative monetary policies in the U.S. and Europe in the next few years.
The Fed is expected to continue raising interest rates gradually in 2018 and beyond, while slowly reducing its $4.5 trillion balance sheet. The ECB, which has yet to begin tightening, is focusing on tapering asset purchases first and will likely raise rates at a later date. This staggered approach could help global markets avoid a sudden liquidity crunch that would curtail growth, create a headwind for equities and cause global bond yields to spike – more reason to believe the current expansion can persist.
Thank you for investing in Janus Henderson Adaptive Global Allocation Fund.
2 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund (unaudited)
Fund At A Glance
December 31, 2017
5 Largest Equity Holdings - (% of Net Assets) | |
Vanguard Small-Cap | |
Exchange-Traded Funds (ETFs) | 8.4% |
Vanguard FTSE All-World ex-US ETF | |
Exchange-Traded Funds (ETFs) | 8.1% |
Vanguard FTSE Emerging Markets | |
Exchange-Traded Funds (ETFs) | 6.4% |
Vanguard FTSE All World ex-US Small-Cap | |
Exchange-Traded Funds (ETFs) | 4.5% |
Vanguard Financials | |
Exchange-Traded Funds (ETFs) | 4.1% |
31.5% | |
Asset Allocation - (% of Net Assets) | |||||
Investment Companies | 82.1% | ||||
Common Stocks | 14.4% | ||||
U.S. Government Agency Notes | 3.0% | ||||
Preferred Stocks | 0.0% | ||||
Other | 0.5% | ||||
100.0% | |||||
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of December 31, 2017
| As of June 30, 2017
|
Janus Investment Fund | 3 |
Janus Henderson Adaptive Global Allocation Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | ||||||||
Average Annual Total Return - for the periods ended December 31, 2017 |
|
| per the October 27, 2017 prospectuses | ||||||
|
| Fiscal | One | Since |
|
| Total Annual Fund | Net Annual Fund | |
Class A Shares at NAV |
| 8.11% | 16.98% | 5.82% |
|
| 1.62% | 1.06% | |
Class A Shares at MOP |
| 1.92% | 10.30% | 3.36% |
|
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Class C Shares at NAV | 7.72% | 16.03% | 5.02% |
|
| 2.36% | 1.81% | ||
Class C Shares at CDSC |
| 6.72% | 15.03% | 5.02% |
|
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Class D Shares(1) |
| 8.24% | 17.01% | 5.86% |
|
| 2.11% | 0.96% | |
Class I Shares |
| 8.20% | 17.17% | 6.07% |
|
| 1.50% | 0.81% | |
Class N Shares |
| 8.25% | 17.23% | 6.09% |
|
| 1.34% | 0.81% | |
Class S Shares |
| 8.08% | 16.73% | 5.66% |
|
| 1.85% | 1.31% | |
Class T Shares |
| 8.13% | 17.00% | 5.88% |
|
| 1.61% | 1.06% | |
MSCI All Country World Index(2) |
| 11.21% | 23.97% | 8.61% |
|
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Bloomberg Barclays Global Aggregate Bond Index (Hedged) |
| 1.58% | 3.04% | 3.42% |
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Adaptive Global Allocation 60/40 Index (Hedged) |
| 7.28% | 15.18% | 6.66% |
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Adaptive Global Allocation 70/30 Index (Hedged) |
| 8.25% | 17.33% | 7.16% |
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Morningstar Quartile - Class I Shares |
| - | 1st | 1st |
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Morningstar Ranking - based on total returns for World Allocation Funds |
| - | 98/459 | 92/430 |
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Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 800.668.0434 (or 800.525.3713 if you hold shares directly with Janus Henderson) or visit janushenderson.com/performance (or janushenderson.com/allfunds if you hold shares directly with Janus Henderson).
4 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund (unaudited)
Performance
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, contractually agreed to through November 1, 2018.
Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.
Janus Capital Management does not have prior experience managing an adaptive global allocation investment strategy. There is a risk that the Fund’s investments will correlate with stocks and bonds to a greater degree than anticipated, and that the proprietary options implied information model used to implement the Fund's investment strategy may not achieve the desired results. The Fund may underperform during up markets and be negatively affected in down markets. Diversification does not assure a profit or eliminate the risk of loss.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Until the earlier of three years from inception or the Fund’s assets meeting the first fee breakpoint, expenses previously waived or reimbursed may be recovered if the expense ratio falls below certain limits.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2017 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.
See “Useful Information About Your Fund Report.”
*The Fund’s inception date – June 23, 2015
(1) Closed to certain new investors.
(2) Effective on or about January 1, 2017, the Fund’s investment strategies and benchmark indices changed. These changes are intended to provide the Fund with more flexibility to invest across global equity investments and global fixed-income investments and at times, invest in commodity-linked investments, without having to allocate its investments across these asset classes in any fixed proportion. In addition, these changes limit the Fund’s use of derivatives. The changes to the Fund's benchmark indices are summarized below:
§ The Fund’s primary benchmark changed from the Adaptive Global Allocation 70/30 Index to the MSCI All Country World Index.
§ The Adaptive Global Allocation 60/40 Index was added as a secondary benchmark for the Fund.
§ The Fund will continue to retain the Bloomberg Barclays Global Aggregate Bond Index as an additional secondary benchmark.
Janus Investment Fund | 5 |
Janus Henderson Adaptive Global Allocation Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical | |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,081.10 | $5.35 |
| $1,000.00 | $1,020.06 | $5.19 | 1.02% | ||
Class C Shares | $1,000.00 | $1,077.20 | $9.27 |
| $1,000.00 | $1,016.28 | $9.00 | 1.77% | ||
Class D Shares | $1,000.00 | $1,082.40 | $4.67 |
| $1,000.00 | $1,020.72 | $4.53 | 0.89% | ||
Class I Shares | $1,000.00 | $1,082.00 | $4.51 |
| $1,000.00 | $1,020.87 | $4.38 | 0.86% | ||
Class N Shares | $1,000.00 | $1,082.50 | $3.99 |
| $1,000.00 | $1,021.37 | $3.87 | 0.76% | ||
Class S Shares | $1,000.00 | $1,080.80 | $5.98 |
| $1,000.00 | $1,019.46 | $5.80 | 1.14% | ||
Class T Shares | $1,000.00 | $1,081.30 | $4.98 |
| $1,000.00 | $1,020.42 | $4.84 | 0.95% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
6 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – 14.4% | |||||||
Aerospace & Defense – 0.1% | |||||||
Arconic Inc | 137 | $3,733 | |||||
BAE Systems PLC | 230 | 1,769 | |||||
Bombardier Inc* | 240 | 579 | |||||
CAE Inc | 197 | 3,660 | |||||
L3 Technologies Inc | 122 | 24,138 | |||||
Meggitt PLC | 1,172 | 7,587 | |||||
Raytheon Co | 151 | 28,365 | |||||
69,831 | |||||||
Air Freight & Logistics – 0% | |||||||
CH Robinson Worldwide Inc | 49 | 4,365 | |||||
Expeditors International of Washington Inc | 89 | 5,757 | |||||
FedEx Corp | 41 | 10,231 | |||||
United Parcel Service Inc | 94 | 11,200 | |||||
31,553 | |||||||
Airlines – 0% | |||||||
Alaska Air Group Inc | 89 | 6,542 | |||||
American Airlines Group Inc | 65 | 3,382 | |||||
ANA Holdings Inc | 100 | 4,174 | |||||
Deutsche Lufthansa AG | 35 | 1,286 | |||||
easyJet PLC | 125 | 2,470 | |||||
Japan Airlines Co Ltd | 200 | 7,827 | |||||
25,681 | |||||||
Auto Components – 0.1% | |||||||
Aisin Seiki Co Ltd | 100 | 5,620 | |||||
Aptiv PLC | 199 | 16,881 | |||||
BorgWarner Inc | 70 | 3,576 | |||||
Bridgestone Corp | 200 | 9,302 | |||||
Continental AG | 35 | 9,448 | |||||
Denso Corp | 100 | 6,005 | |||||
GKN PLC | 3,046 | 13,077 | |||||
Goodyear Tire & Rubber Co | 119 | 3,845 | |||||
NGK Spark Plug Co Ltd | 100 | 2,432 | |||||
NOK Corp | 100 | 2,329 | |||||
Nokian Renkaat OYJ | 79 | 3,578 | |||||
Sumitomo Electric Industries Ltd | 100 | 1,688 | |||||
Sumitomo Rubber Industries Ltd | 100 | 1,858 | |||||
Yokohama Rubber Co Ltd | 100 | 2,454 | |||||
82,093 | |||||||
Automobiles – 0.4% | |||||||
Daimler AG | 147 | 12,481 | |||||
Ford Motor Co | 12,054 | 150,554 | |||||
General Motors Co | 705 | 28,898 | |||||
Harley-Davidson Inc | 91 | 4,630 | |||||
Honda Motor Co Ltd | 300 | 10,287 | |||||
Isuzu Motors Ltd | 200 | 3,345 | |||||
Mazda Motor Corp | 300 | 4,026 | |||||
Mitsubishi Motors Corp | 700 | 5,059 | |||||
Nissan Motor Co Ltd | 800 | 7,979 | |||||
Renault SA | 246 | 24,722 | |||||
Suzuki Motor Corp | 100 | 5,793 | |||||
Toyota Motor Corp | 200 | 12,809 | |||||
Yamaha Motor Co Ltd | 100 | 3,275 | |||||
273,858 | |||||||
Banks – 0.4% | |||||||
Bank of America Corp | 381 | 11,247 | |||||
Bankia SA | 1,633 | 7,793 | |||||
Barclays PLC | 2,266 | 6,177 | |||||
BB&T Corp | 16 | 796 | |||||
Bendigo & Adelaide Bank Ltd | 3,916 | 35,576 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 7 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Banks – (continued) | |||||||
BOC Hong Kong Holdings Ltd | 1,000 | $5,058 | |||||
Canadian Imperial Bank of Commerce | 48 | 4,680 | |||||
Citigroup Inc | 161 | 11,980 | |||||
Commerzbank AG* | 754 | 11,308 | |||||
Hachijuni Bank Ltd | 200 | 1,143 | |||||
Hang Seng Bank Ltd | 300 | 7,438 | |||||
HSBC Holdings PLC | 461 | 4,753 | |||||
Huntington Bancshares Inc/OH | 1,481 | 21,563 | |||||
Japan Post Bank Co Ltd | 200 | 2,597 | |||||
JPMorgan Chase & Co | 186 | 19,891 | |||||
KeyCorp | 599 | 12,082 | |||||
Kyushu Financial Group Inc | 200 | 1,209 | |||||
Mebuki Financial Group Inc | 600 | 2,541 | |||||
Mediobanca SpA | 1,093 | 12,377 | |||||
Mitsubishi UFJ Financial Group Inc | 600 | 4,403 | |||||
Nordea Bank AB | 3,781 | 45,777 | |||||
Oversea-Chinese Banking Corp Ltd | 100 | 924 | |||||
Regions Financial Corp | 699 | 12,079 | |||||
Resona Holdings Inc | 800 | 4,782 | |||||
Royal Bank of Scotland Group PLC* | 213 | 794 | |||||
Seven Bank Ltd | 800 | 2,742 | |||||
Shinsei Bank Ltd | 100 | 1,722 | |||||
Societe Generale SA | 162 | 8,351 | |||||
Sumitomo Mitsui Financial Group Inc | 200 | 8,639 | |||||
Sumitomo Mitsui Trust Holdings Inc | 100 | 3,972 | |||||
Suruga Bank Ltd | 100 | 2,139 | |||||
Wells Fargo & Co | 174 | 10,557 | |||||
Zions Bancorporation | 36 | 1,830 | |||||
288,920 | |||||||
Beverages – 0.3% | |||||||
Anheuser-Busch InBev SA/NV | 59 | 6,580 | |||||
Asahi Group Holdings Ltd | 100 | 4,959 | |||||
Brown-Forman Corp | 138 | 9,476 | |||||
Coca-Cola Co | 261 | 11,975 | |||||
Coca-Cola European Partners PLC | 93 | 3,706 | |||||
Constellation Brands Inc | 97 | 22,171 | |||||
Davide Campari-Milano SpA | 1,659 | 12,824 | |||||
Dr Pepper Snapple Group Inc | 487 | 47,268 | |||||
Kirin Holdings Co Ltd | 100 | 2,516 | |||||
Molson Coors Brewing Co | 269 | 22,077 | |||||
Monster Beverage Corp* | 203 | 12,848 | |||||
PepsiCo Inc | 487 | 58,401 | |||||
214,801 | |||||||
Biotechnology – 0.2% | |||||||
Alexion Pharmaceuticals Inc* | 81 | 9,687 | |||||
Amgen Inc | 45 | 7,825 | |||||
Biogen Inc* | 44 | 14,017 | |||||
Celgene Corp* | 156 | 16,280 | |||||
Gilead Sciences Inc | 418 | 29,946 | |||||
Grifols SA | 754 | 22,045 | |||||
Incyte Corp* | 90 | 8,524 | |||||
Regeneron Pharmaceuticals Inc* | 14 | 5,263 | |||||
Shire PLC | 242 | 12,550 | |||||
Vertex Pharmaceuticals Inc* | 24 | 3,597 | |||||
129,734 | |||||||
Building Products – 0.1% | |||||||
Allegion PLC | 99 | 7,876 | |||||
AO Smith Corp | 300 | 18,384 | |||||
Assa Abloy AB | 102 | 2,117 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Building Products – (continued) | |||||||
Daikin Industries Ltd | 100 | $11,841 | |||||
Fortune Brands Home & Security Inc | 141 | 9,650 | |||||
Johnson Controls International plc | 154 | 5,869 | |||||
LIXIL Group Corp | 100 | 2,704 | |||||
58,441 | |||||||
Capital Markets – 0.4% | |||||||
3i Group PLC | 684 | 8,430 | |||||
Affiliated Managers Group Inc | 22 | 4,516 | |||||
BlackRock Inc | 24 | 12,329 | |||||
CI Financial Corp | 128 | 3,032 | |||||
CME Group Inc | 263 | 38,411 | |||||
Daiwa Securities Group Inc | 1,000 | 6,277 | |||||
Deutsche Boerse AG | 63 | 7,302 | |||||
Goldman Sachs Group Inc | 98 | 24,966 | |||||
Hong Kong Exchanges & Clearing Ltd | 300 | 9,164 | |||||
IGM Financial Inc | 257 | 9,028 | |||||
Intercontinental Exchange Inc | 230 | 16,229 | |||||
Investec PLC | 2,348 | 16,893 | |||||
Japan Exchange Group Inc | 100 | 1,733 | |||||
London Stock Exchange Group PLC | 270 | 13,822 | |||||
Nasdaq Inc | 267 | 20,514 | |||||
Nomura Holdings Inc | 300 | 1,772 | |||||
Northern Trust Corp | 288 | 28,768 | |||||
Partners Group Holding AG | 3 | 2,056 | |||||
Raymond James Financial Inc | 24 | 2,143 | |||||
S&P Global Inc | 39 | 6,607 | |||||
SBI Holdings Inc/Japan | 100 | 2,088 | |||||
Schroders PLC | 690 | 32,632 | |||||
Singapore Exchange Ltd | 1,400 | 7,774 | |||||
Thomson Reuters Corp | 231 | 10,070 | |||||
286,556 | |||||||
Chemicals – 0.6% | |||||||
Air Products & Chemicals Inc | 16 | 2,625 | |||||
Air Water Inc | 200 | 4,205 | |||||
Akzo Nobel NV | 188 | 16,442 | |||||
Albemarle Corp | 19 | 2,430 | |||||
Arkema SA | 60 | 7,290 | |||||
Asahi Kasei Corp | 200 | 2,577 | |||||
BASF SE | 40 | 4,389 | |||||
CF Industries Holdings Inc | 47 | 1,999 | |||||
Clariant AG* | 692 | 19,328 | |||||
Covestro AG | 116 | 11,926 | |||||
Daicel Corp | 100 | 1,138 | |||||
DowDuPont Inc | 239 | 17,022 | |||||
Eastman Chemical Co | 74 | 6,855 | |||||
Ecolab Inc | 82 | 11,003 | |||||
EMS-Chemie Holding AG | 19 | 12,684 | |||||
Evonik Industries AG | 306 | 11,479 | |||||
Givaudan SA | 3 | 6,922 | |||||
Incitec Pivot Ltd | 3,837 | 11,664 | |||||
International Flavors & Fragrances Inc | 57 | 8,699 | |||||
Johnson Matthey PLC | 38 | 1,571 | |||||
JSR Corp | 100 | 1,970 | |||||
K+S AG | 771 | 19,200 | |||||
Kansai Paint Co Ltd | 200 | 5,194 | |||||
Koninklijke DSM NV | 232 | 22,113 | |||||
Kuraray Co Ltd | 500 | 9,439 | |||||
LANXESS AG | 250 | 19,876 | |||||
LyondellBasell Industries NV | 190 | 20,961 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Chemicals – (continued) | |||||||
Methanex Corp | 47 | $2,848 | |||||
Mitsubishi Chemical Holdings Corp | 400 | 4,392 | |||||
Mitsui Chemicals Inc | 100 | 3,219 | |||||
Nissan Chemical Industries Ltd | 100 | 3,986 | |||||
Orica Ltd | 457 | 6,448 | |||||
Potash Corp of Saskatchewan Inc | 743 | 15,241 | |||||
PPG Industries Inc | 58 | 6,776 | |||||
Praxair Inc | 99 | 15,313 | |||||
Sherwin-Williams Co | 12 | 4,920 | |||||
Symrise AG | 644 | 55,208 | |||||
Teijin Ltd | 100 | 2,229 | |||||
Toray Industries Inc | 1,000 | 9,434 | |||||
Yara International ASA | 99 | 4,533 | |||||
395,548 | |||||||
Commercial Services & Supplies – 0.1% | |||||||
Babcock International Group PLC | 1,013 | 9,600 | |||||
Cintas Corp | 27 | 4,207 | |||||
G4S PLC | 1,933 | 6,948 | |||||
Republic Services Inc | 205 | 13,860 | |||||
Stericycle Inc* | 151 | 10,266 | |||||
44,881 | |||||||
Communications Equipment – 0.1% | |||||||
Cisco Systems Inc | 1,082 | 41,441 | |||||
F5 Networks Inc* | 101 | 13,253 | |||||
Juniper Networks Inc | 842 | 23,997 | |||||
Nokia OYJ | 1,859 | 8,682 | |||||
Telefonaktiebolaget LM Ericsson | 818 | 5,364 | |||||
92,737 | |||||||
Construction & Engineering – 0.1% | |||||||
Boskalis Westminster | 108 | 4,070 | |||||
Bouygues SA | 66 | 3,428 | |||||
Ferrovial SA | 393 | 8,906 | |||||
Fluor Corp | 276 | 14,255 | |||||
Jacobs Engineering Group Inc | 13 | 857 | |||||
Obayashi Corp | 100 | 1,209 | |||||
Skanska AB | 216 | 4,469 | |||||
SNC-Lavalin Group Inc | 22 | 999 | |||||
38,193 | |||||||
Construction Materials – 0% | |||||||
LafargeHolcim Ltd* | 193 | 10,877 | |||||
Martin Marietta Materials Inc | 22 | 4,863 | |||||
Vulcan Materials Co | 21 | 2,696 | |||||
18,436 | |||||||
Consumer Finance – 0.1% | |||||||
Acom Co Ltd* | 400 | 1,687 | |||||
AEON Financial Service Co Ltd | 100 | 2,323 | |||||
American Express Co | 206 | 20,458 | |||||
Capital One Financial Corp | 100 | 9,958 | |||||
Credit Saison Co Ltd | 300 | 5,461 | |||||
Navient Corp | 515 | 6,860 | |||||
46,747 | |||||||
Containers & Packaging – 0.1% | |||||||
Amcor Ltd/Australia | 369 | 4,433 | |||||
Avery Dennison Corp | 105 | 12,060 | |||||
Ball Corp | 152 | 5,753 | |||||
CCL Industries Inc | 536 | 24,770 | |||||
International Paper Co | 177 | 10,255 | |||||
Packaging Corp of America | 28 | 3,375 | |||||
Sealed Air Corp | 129 | 6,360 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Containers & Packaging – (continued) | |||||||
Toyo Seikan Group Holdings Ltd | 600 | $9,627 | |||||
WestRock Co | 157 | 9,924 | |||||
86,557 | |||||||
Distributors – 0.1% | |||||||
Genuine Parts Co | 224 | 21,282 | |||||
Jardine Cycle & Carriage Ltd | 100 | 3,040 | |||||
LKQ Corp* | 1,536 | 62,469 | |||||
86,791 | |||||||
Diversified Financial Services – 0.1% | |||||||
AMP Ltd | 145 | 586 | |||||
Berkshire Hathaway Inc* | 117 | 23,192 | |||||
Challenger Ltd/Australia | 196 | 2,141 | |||||
First Pacific Co Ltd/Hong Kong | 2,000 | 1,359 | |||||
Kinnevik AB | 579 | 19,534 | |||||
Mitsubishi UFJ Lease & Finance Co Ltd | 100 | 596 | |||||
ORIX Corp | 300 | 5,073 | |||||
Standard Life Aberdeen PLC | 1,270 | 7,481 | |||||
Wendel SA | 119 | 20,613 | |||||
80,575 | |||||||
Diversified Telecommunication Services – 0.5% | |||||||
AT&T Inc | 2,751 | 106,959 | |||||
BCE Inc | 39 | 1,874 | |||||
BT Group PLC | 864 | 3,163 | |||||
CenturyLink Inc | 2,670 | 44,536 | |||||
Deutsche Telekom AG | 185 | 3,281 | |||||
HKT Trust & HKT Ltd | 6,000 | 7,652 | |||||
Iliad SA | 14 | 3,354 | |||||
Koninklijke KPN NV | 1,371 | 4,782 | |||||
Nippon Telegraph & Telephone Corp | 300 | 14,119 | |||||
Orange SA | 135 | 2,342 | |||||
PCCW Ltd | 9,000 | 5,226 | |||||
Singapore Telecommunications Ltd | 6,100 | 16,286 | |||||
Spark New Zealand Ltd | 2,331 | 5,993 | |||||
Swisscom AG | 28 | 14,887 | |||||
Telefonica Deutschland Holding AG | 186 | 934 | |||||
Telefonica SA | 247 | 2,405 | |||||
Telenor ASA | 233 | 4,993 | |||||
Telia Co AB | 434 | 1,933 | |||||
TELUS Corp | 10 | 379 | |||||
TPG Telecom Ltd | 420 | 2,152 | |||||
Verizon Communications Inc | 1,183 | 62,616 | |||||
309,866 | |||||||
Electric Utilities – 0.3% | |||||||
Alliant Energy Corp | 156 | 6,647 | |||||
AusNet Services | 2,912 | 4,105 | |||||
Chubu Electric Power Co Inc | 500 | 6,211 | |||||
Chugoku Electric Power Co Inc | 300 | 3,221 | |||||
CK Infrastructure Holdings Ltd | 500 | 4,292 | |||||
CLP Holdings Ltd | 2,000 | 20,467 | |||||
Electricite de France SA | 99 | 1,235 | |||||
Emera Inc | 656 | 24,522 | |||||
Entergy Corp | 67 | 5,453 | |||||
Eversource Energy | 139 | 8,782 | |||||
FirstEnergy Corp | 72 | 2,205 | |||||
Fortum OYJ | 644 | 12,747 | |||||
HK Electric Investments & HK Electric Investments Ltd | 5,500 | 5,033 | |||||
Hydro One Ltd | 764 | 13,617 | |||||
Kansai Electric Power Co Inc | 100 | 1,224 | |||||
Kyushu Electric Power Co Inc | 100 | 1,048 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Electric Utilities – (continued) | |||||||
PG&E Corp | 70 | $3,138 | |||||
Pinnacle West Capital Corp | 89 | 7,581 | |||||
Red Electrica Corp SA | 78 | 1,749 | |||||
Southern Co | 47 | 2,260 | |||||
Terna Rete Elettrica Nazionale SpA | 3,551 | 20,618 | |||||
Tohoku Electric Power Co Inc | 400 | 5,117 | |||||
Xcel Energy Inc | 182 | 8,756 | |||||
170,028 | |||||||
Electrical Equipment – 0.1% | |||||||
AMETEK Inc | 273 | 19,784 | |||||
Emerson Electric Co | 10 | 697 | |||||
Mitsubishi Electric Corp | 100 | 1,662 | |||||
OSRAM Licht AG | 24 | 2,149 | |||||
Prysmian SpA | 25 | 815 | |||||
Rockwell Automation Inc | 117 | 22,973 | |||||
48,080 | |||||||
Electronic Equipment, Instruments & Components – 0.1% | |||||||
Alps Electric Co Ltd | 100 | 2,846 | |||||
Corning Inc | 667 | 21,337 | |||||
Hexagon AB | 347 | 17,361 | |||||
Hirose Electric Co Ltd | 100 | 14,623 | |||||
Hitachi High-Technologies Corp | 100 | 4,218 | |||||
Hitachi Ltd | 1,000 | 7,780 | |||||
Kyocera Corp | 200 | 13,070 | |||||
Nippon Electric Glass Co Ltd | 100 | 3,818 | |||||
Omron Corp | 100 | 5,957 | |||||
Shimadzu Corp | 100 | 2,271 | |||||
Yaskawa Electric Corp | 100 | 4,370 | |||||
Yokogawa Electric Corp | 100 | 1,912 | |||||
99,563 | |||||||
Energy Equipment & Services – 0.2% | |||||||
Baker Hughes a GE Co | 822 | 26,008 | |||||
Halliburton Co | 854 | 41,735 | |||||
Helmerich & Payne Inc | 86 | 5,559 | |||||
National Oilwell Varco Inc | 287 | 10,338 | |||||
Schlumberger Ltd | 699 | 47,106 | |||||
130,746 | |||||||
Equity Real Estate Investment Trusts (REITs) – 0.3% | |||||||
Alexandria Real Estate Equities Inc | 62 | 8,097 | |||||
American Tower Corp | 4 | 571 | |||||
Apartment Investment & Management Co | 38 | 1,661 | |||||
Ascendas Real Estate Investment Trust | 1,100 | 2,237 | |||||
Boston Properties Inc | 32 | 4,161 | |||||
CapitaLand Commercial Trust | 1,100 | 1,587 | |||||
CapitaLand Mall Trust | 3,800 | 6,050 | |||||
Crown Castle International Corp | 32 | 3,552 | |||||
Dexus | 998 | 7,578 | |||||
Duke Realty Corp | 56 | 1,524 | |||||
Essex Property Trust Inc | 21 | 5,069 | |||||
Extra Space Storage Inc | 8 | 700 | |||||
Federal Realty Investment Trust | 36 | 4,781 | |||||
Fonciere Des Regions | 14 | 1,586 | |||||
GGP Inc | 38 | 889 | |||||
H&R Real Estate Investment Trust | 434 | 7,376 | |||||
Hammerson PLC | 271 | 2,000 | |||||
ICADE | 6 | 590 | |||||
Iron Mountain Inc | 24 | 906 | |||||
Japan Prime Realty Investment Corp | 1 | 3,178 | |||||
Kimco Realty Corp | 55 | 998 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
12 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Equity Real Estate Investment Trusts (REITs) – (continued) | |||||||
Klepierre SA | 42 | $1,847 | |||||
Land Securities Group PLC | 132 | 1,790 | |||||
Macerich Co | 44 | 2,890 | |||||
Mid-America Apartment Communities Inc | 39 | 3,922 | |||||
Nippon Building Fund Inc | 8 | 39,145 | |||||
Nippon Prologis REIT Inc | 1 | 2,114 | |||||
Nomura Real Estate Master Fund Inc | 1 | 1,242 | |||||
Prologis Inc | 58 | 3,742 | |||||
Realty Income Corp | 203 | 11,575 | |||||
Regency Centers Corp | 42 | 2,906 | |||||
SBA Communications Corp* | 31 | 5,064 | |||||
Simon Property Group Inc | 18 | 3,091 | |||||
SL Green Realty Corp | 32 | 3,230 | |||||
Suntec Real Estate Investment Trust | 3,200 | 5,138 | |||||
UDR Inc | 209 | 8,051 | |||||
Unibail-Rodamco SE | 2 | 504 | |||||
Vicinity Centres | 2,929 | 6,222 | |||||
Vornado Realty Trust | 64 | 5,004 | |||||
Weyerhaeuser Co | 255 | 8,991 | |||||
181,559 | |||||||
Food & Staples Retailing – 0.3% | |||||||
Aeon Co Ltd | 100 | 1,689 | |||||
Carrefour SA | 323 | 6,989 | |||||
Colruyt SA | 105 | 5,461 | |||||
Costco Wholesale Corp | 78 | 14,517 | |||||
George Weston Ltd | 102 | 8,859 | |||||
ICA Gruppen AB | 195 | 7,078 | |||||
J Sainsbury PLC | 189 | 615 | |||||
Loblaw Cos Ltd | 180 | 9,771 | |||||
Metro Inc | 469 | 15,020 | |||||
Seven & i Holdings Co Ltd | 100 | 4,154 | |||||
Sysco Corp | 298 | 18,098 | |||||
Tesco PLC | 4,486 | 12,666 | |||||
Wal-Mart Stores Inc | 624 | 61,620 | |||||
166,537 | |||||||
Food Products – 0.7% | |||||||
Archer-Daniels-Midland Co | 315 | 12,625 | |||||
Campbell Soup Co | 125 | 6,014 | |||||
Conagra Brands Inc | 407 | 15,332 | |||||
Danone SA | 222 | 18,610 | |||||
General Mills Inc | 269 | 15,949 | |||||
Hershey Co | 803 | 91,149 | |||||
Hormel Foods Corp | 2,922 | 106,332 | |||||
JM Smucker Co | 171 | 21,245 | |||||
Kellogg Co | 859 | 58,395 | |||||
Kerry Group PLC | 267 | 29,940 | |||||
Kraft Heinz Co | 153 | 11,897 | |||||
McCormick & Co Inc/MD | 324 | 33,019 | |||||
Mondelez International Inc | 88 | 3,766 | |||||
Nisshin Seifun Group Inc | 100 | 2,016 | |||||
Orkla ASA | 1,021 | 10,827 | |||||
Saputo Inc | 74 | 2,660 | |||||
Tyson Foods Inc | 329 | 26,672 | |||||
WH Group Ltd | 2,500 | 2,818 | |||||
Wilmar International Ltd | 1,300 | 2,998 | |||||
472,264 | |||||||
Gas Utilities – 0% | |||||||
APA Group | 286 | 1,856 | |||||
Gas Natural SDG SA | 458 | 10,566 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 13 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Gas Utilities – (continued) | |||||||
Osaka Gas Co Ltd | 200 | $3,850 | |||||
Tokyo Gas Co Ltd | 100 | 2,284 | |||||
18,556 | |||||||
Health Care Equipment & Supplies – 0.4% | |||||||
Abbott Laboratories | 71 | 4,052 | |||||
Arjo AB* | 1,608 | 4,591 | |||||
Baxter International Inc | 45 | 2,909 | |||||
Boston Scientific Corp* | 105 | 2,603 | |||||
Cochlear Ltd | 52 | 6,941 | |||||
CYBERDYNE Inc* | 200 | 3,447 | |||||
Danaher Corp | 388 | 36,014 | |||||
Essilor International Cie Generale d'Optique SA | 487 | 67,147 | |||||
Getinge AB | 1,486 | 21,479 | |||||
Hoya Corp | 100 | 4,997 | |||||
IDEXX Laboratories Inc* | 114 | 17,827 | |||||
Koninklijke Philips NV | 335 | 12,672 | |||||
ResMed Inc | 29 | 2,456 | |||||
Smith & Nephew PLC | 745 | 12,889 | |||||
Sonova Holding AG | 180 | 28,111 | |||||
Straumann Holding AG | 10 | 7,060 | |||||
Sysmex Corp | 100 | 7,875 | |||||
Terumo Corp | 200 | 9,451 | |||||
Varian Medical Systems Inc* | 216 | 24,008 | |||||
Zimmer Biomet Holdings Inc | 45 | 5,430 | |||||
281,959 | |||||||
Health Care Providers & Services – 0.2% | |||||||
Anthem Inc | 38 | 8,550 | |||||
Fresenius Medical Care AG & Co KGaA | 247 | 26,012 | |||||
Fresenius SE & Co KGaA | 383 | 29,817 | |||||
Healthscope Ltd | 3,436 | 5,621 | |||||
Henry Schein Inc* | 52 | 3,634 | |||||
Laboratory Corp of America Holdings* | 59 | 9,411 | |||||
Medipal Holdings Corp | 200 | 3,917 | |||||
Patterson Cos Inc | 188 | 6,792 | |||||
Quest Diagnostics Inc | 176 | 17,334 | |||||
Ramsay Health Care Ltd | 153 | 8,355 | |||||
Suzuken Co Ltd/Aichi Japan | 100 | 4,115 | |||||
123,558 | |||||||
Health Care Technology – 0.1% | |||||||
Cerner Corp* | 394 | 26,552 | |||||
M3 Inc | 200 | 7,003 | |||||
33,555 | |||||||
Hotels, Restaurants & Leisure – 0.3% | |||||||
Accor SA | 51 | 2,629 | |||||
Chipotle Mexican Grill Inc* | 78 | 22,544 | |||||
Darden Restaurants Inc | 124 | 11,906 | |||||
Domino's Pizza Enterprises Ltd | 94 | 3,423 | |||||
Marriott International Inc/MD | 240 | 32,575 | |||||
McDonald's Corp | 55 | 9,467 | |||||
Merlin Entertainments PLC | 3,091 | 15,107 | |||||
MGM China Holdings Ltd | 2,000 | 6,050 | |||||
MGM Resorts International | 219 | 7,312 | |||||
Oriental Land Co Ltd/Japan | 100 | 9,118 | |||||
Sands China Ltd | 1,600 | 8,235 | |||||
Shangri-La Asia Ltd | 2,000 | 4,521 | |||||
SJM Holdings Ltd | 3,000 | 2,680 | |||||
Starbucks Corp | 336 | 19,296 | |||||
Wynn Macau Ltd | 1,200 | 3,781 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
14 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Hotels, Restaurants & Leisure – (continued) | |||||||
Wynn Resorts Ltd | 65 | $10,958 | |||||
169,602 | |||||||
Household Durables – 0.3% | |||||||
Barratt Developments PLC | 444 | 3,879 | |||||
Casio Computer Co Ltd | 100 | 1,439 | |||||
DR Horton Inc | 55 | 2,809 | |||||
Garmin Ltd | 103 | 6,136 | |||||
Leggett & Platt Inc | 1,171 | 55,892 | |||||
Lennar Corp | 510 | 32,252 | |||||
Newell Brands Inc | 210 | 6,489 | |||||
Nikon Corp | 100 | 2,012 | |||||
Panasonic Corp | 300 | 4,394 | |||||
SEB SA | 11 | 2,038 | |||||
Sekisui House Ltd | 3,300 | 59,557 | |||||
Techtronic Industries Co Ltd | 500 | 3,259 | |||||
180,156 | |||||||
Household Products – 0.4% | |||||||
Church & Dwight Co Inc | 809 | 40,588 | |||||
Clorox Co | 435 | 64,702 | |||||
Colgate-Palmolive Co | 1,148 | 86,617 | |||||
Kimberly-Clark Corp | 597 | 72,034 | |||||
Lion Corp | 100 | 1,888 | |||||
Procter & Gamble Co | 33 | 3,032 | |||||
Reckitt Benckiser Group PLC | 148 | 13,822 | |||||
Unicharm Corp | 100 | 2,600 | |||||
285,283 | |||||||
Independent Power and Renewable Electricity Producers – 0% | |||||||
Electric Power Development Co Ltd | 100 | 2,695 | |||||
Industrial Conglomerates – 0% | |||||||
CK Hutchison Holdings Ltd | 500 | 6,278 | |||||
General Electric Co | 450 | 7,852 | |||||
Jardine Strategic Holdings Ltd | 100 | 3,958 | |||||
NWS Holdings Ltd | 1,000 | 1,802 | |||||
Roper Technologies Inc | 29 | 7,511 | |||||
Smiths Group PLC | 119 | 2,380 | |||||
29,781 | |||||||
Information Technology Services – 0.7% | |||||||
Alliance Data Systems Corp | 35 | 8,872 | |||||
Amadeus IT Group SA | 343 | 24,685 | |||||
Atos SE | 105 | 15,282 | |||||
Capgemini SA | 15 | 1,775 | |||||
CGI Group Inc* | 530 | 28,803 | |||||
Cognizant Technology Solutions Corp | 91 | 6,463 | |||||
CSRA Inc | 731 | 21,872 | |||||
Fidelity National Information Services Inc | 1,683 | 158,353 | |||||
Fiserv Inc* | 260 | 34,094 | |||||
Fujitsu Ltd | 1,000 | 7,089 | |||||
Gartner Inc* | 301 | 37,068 | |||||
Global Payments Inc | 59 | 5,914 | |||||
International Business Machines Corp | 183 | 28,076 | |||||
Mastercard Inc | 43 | 6,508 | |||||
Nomura Research Institute Ltd | 100 | 4,646 | |||||
NTT Data Corp | 700 | 8,309 | |||||
Paychex Inc | 129 | 8,782 | |||||
PayPal Holdings Inc* | 219 | 16,123 | |||||
Total System Services Inc | 546 | 43,183 | |||||
Visa Inc | 149 | 16,989 | |||||
Wirecard AG | 25 | 2,791 | |||||
485,677 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Insurance – 0.4% | |||||||
Aegon NV | 183 | $1,166 | |||||
AIA Group Ltd | 400 | 3,411 | |||||
Allianz SE | 25 | 5,725 | |||||
American International Group Inc | 670 | 39,919 | |||||
Arthur J Gallagher & Co | 380 | 24,046 | |||||
Assurant Inc | 10 | 1,008 | |||||
Dai-ichi Life Holdings Inc | 100 | 2,064 | |||||
Direct Line Insurance Group PLC | 694 | 3,576 | |||||
Gjensidige Forsikring ASA | 88 | 1,660 | |||||
Hannover Rueck SE | 12 | 1,506 | |||||
Insurance Australia Group Ltd | 1,436 | 8,095 | |||||
Intact Financial Corp | 62 | 5,179 | |||||
Japan Post Holdings Co Ltd | 100 | 1,146 | |||||
Legal & General Group PLC | 3,123 | 11,494 | |||||
Loews Corp | 548 | 27,416 | |||||
Mapfre SA | 3,063 | 9,819 | |||||
Marsh & McLennan Cos Inc | 133 | 10,825 | |||||
MS&AD Insurance Group Holdings Inc | 100 | 3,386 | |||||
Poste Italiane SpA (144A) | 4,685 | 35,267 | |||||
Power Corp of Canada | 110 | 2,833 | |||||
Principal Financial Group Inc | 38 | 2,681 | |||||
RSA Insurance Group PLC | 2,136 | 18,198 | |||||
Sompo Holdings Inc | 100 | 3,856 | |||||
Swiss Life Holding AG* | 23 | 8,143 | |||||
T&D Holdings Inc | 100 | 1,711 | |||||
Tokio Marine Holdings Inc | 100 | 4,565 | |||||
Torchmark Corp | 302 | 27,394 | |||||
Unum Group | 49 | 2,690 | |||||
Willis Towers Watson PLC | 96 | 14,466 | |||||
283,245 | |||||||
Internet & Direct Marketing Retail – 0.2% | |||||||
Amazon.com Inc* | 13 | 15,203 | |||||
Expedia Inc | 136 | 16,289 | |||||
Netflix Inc* | 23 | 4,415 | |||||
Priceline Group Inc* | 30 | 52,132 | |||||
Start Today Co Ltd | 200 | 6,083 | |||||
TripAdvisor Inc* | 426 | 14,680 | |||||
108,802 | |||||||
Internet Software & Services – 0.2% | |||||||
Akamai Technologies Inc* | 464 | 30,179 | |||||
Alphabet Inc* | 24 | 25,282 | |||||
eBay Inc* | 480 | 18,115 | |||||
Facebook Inc* | 9 | 1,588 | |||||
Kakaku.com Inc | 200 | 3,383 | |||||
Mixi Inc | 100 | 4,492 | |||||
REA Group Ltd | 67 | 3,999 | |||||
Shopify Inc* | 31 | 3,135 | |||||
United Internet AG | 40 | 2,751 | |||||
VeriSign Inc* | 55 | 6,294 | |||||
Yahoo Japan Corp | 400 | 1,835 | |||||
101,053 | |||||||
Leisure Products – 0% | |||||||
Bandai Namco Holdings Inc | 100 | 3,272 | |||||
Hasbro Inc | 176 | 15,997 | |||||
Mattel Inc | 400 | 6,152 | |||||
Sega Sammy Holdings Inc | 200 | 2,478 | |||||
Yamaha Corp | 100 | 3,668 | |||||
31,567 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
16 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Life Sciences Tools & Services – 0.2% | |||||||
Agilent Technologies Inc | 144 | $9,644 | |||||
Illumina Inc* | 83 | 18,135 | |||||
IQVIA Holdings Inc* | 203 | 19,874 | |||||
Lonza Group AG* | 69 | 18,644 | |||||
Mettler-Toledo International Inc* | 41 | 25,400 | |||||
PerkinElmer Inc | 443 | 32,392 | |||||
Waters Corp* | 48 | 9,273 | |||||
133,362 | |||||||
Machinery – 0.2% | |||||||
Alstom SA | 42 | 1,743 | |||||
ANDRITZ AG | 264 | 14,906 | |||||
Atlas Copco AB - A SHS | 29 | 1,249 | |||||
Caterpillar Inc | 13 | 2,049 | |||||
CNH Industrial NV | 189 | 2,526 | |||||
Cummins Inc | 18 | 3,180 | |||||
Deere & Co | 73 | 11,425 | |||||
Dover Corp | 136 | 13,735 | |||||
Fortive Corp | 130 | 9,405 | |||||
GEA Group AG | 183 | 8,774 | |||||
Hino Motors Ltd | 100 | 1,297 | |||||
IMI PLC | 917 | 16,412 | |||||
KION Group AG | 23 | 1,984 | |||||
Kone OYJ | 122 | 6,546 | |||||
Kubota Corp | 200 | 3,917 | |||||
Metso OYJ | 83 | 2,831 | |||||
Mitsubishi Heavy Industries Ltd | 100 | 3,734 | |||||
Parker-Hannifin Corp | 7 | 1,397 | |||||
Volvo AB | 84 | 1,564 | |||||
Weir Group PLC | 73 | 2,084 | |||||
Xylem Inc/NY | 110 | 7,502 | |||||
118,260 | |||||||
Media – 0.6% | |||||||
Axel Springer SE | 159 | 12,387 | |||||
CBS Corp | 357 | 21,063 | |||||
Charter Communications Inc* | 132 | 44,347 | |||||
Comcast Corp | 432 | 17,302 | |||||
Dentsu Inc | 300 | 12,659 | |||||
Discovery Communications Inc* | 516 | 11,548 | |||||
DISH Network Corp* | 626 | 29,891 | |||||
Interpublic Group of Cos Inc | 975 | 19,656 | |||||
ITV PLC | 7,234 | 16,103 | |||||
News Corp | 1,025 | 16,615 | |||||
Omnicom Group Inc | 626 | 45,592 | |||||
RTL Group SA | 254 | 20,396 | |||||
SES SA | 188 | 2,929 | |||||
Shaw Communications Inc | 1,229 | 28,055 | |||||
Telenet Group Holding NV* | 305 | 21,232 | |||||
Viacom Inc | 338 | 10,414 | |||||
Vivendi SA | 474 | 12,744 | |||||
Walt Disney Co | 358 | 38,489 | |||||
WPP PLC | 672 | 12,176 | |||||
393,598 | |||||||
Metals & Mining – 0.3% | |||||||
Agnico Eagle Mines Ltd | 144 | 6,650 | |||||
Anglo American PLC | 226 | 4,723 | |||||
Antofagasta PLC | 928 | 12,579 | |||||
ArcelorMittal* | 121 | 3,918 | |||||
Barrick Gold Corp | 438 | 6,336 | |||||
BHP Billiton PLC | 706 | 14,448 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Metals & Mining – (continued) | |||||||
Boliden AB | 312 | $10,632 | |||||
Franco-Nevada Corp | 49 | 3,917 | |||||
Freeport-McMoRan Inc* | 241 | 4,569 | |||||
Glencore PLC* | 1,517 | 7,980 | |||||
Goldcorp Inc | 1,053 | 13,431 | |||||
JFE Holdings Inc | 100 | 2,403 | |||||
Kinross Gold Corp* | 1,893 | 8,164 | |||||
Kobe Steel Ltd* | 200 | 1,856 | |||||
Maruichi Steel Tube Ltd | 100 | 2,926 | |||||
Mitsubishi Materials Corp | 100 | 3,561 | |||||
Newmont Mining Corp | 635 | 23,825 | |||||
Nippon Steel & Sumitomo Metal Corp | 100 | 2,567 | |||||
Norsk Hydro ASA | 1,928 | 14,581 | |||||
Nucor Corp | 35 | 2,225 | |||||
Randgold Resources Ltd | 41 | 4,067 | |||||
Rio Tinto PLC | 149 | 7,862 | |||||
South32 Ltd | 883 | 2,400 | |||||
Sumitomo Metal Mining Co Ltd | 100 | 4,588 | |||||
Teck Resources Ltd | 87 | 2,275 | |||||
thyssenkrupp AG | 229 | 6,649 | |||||
179,132 | |||||||
Multiline Retail – 0.1% | |||||||
Dollar General Corp | 34 | 3,162 | |||||
Dollarama Inc | 70 | 8,747 | |||||
Isetan Mitsukoshi Holdings Ltd | 200 | 2,472 | |||||
J Front Retailing Co Ltd | 200 | 3,763 | |||||
Kohl's Corp | 76 | 4,121 | |||||
Marks & Spencer Group PLC | 1,151 | 4,881 | |||||
Marui Group Co Ltd | 100 | 1,827 | |||||
Nordstrom Inc | 266 | 12,603 | |||||
Target Corp | 154 | 10,048 | |||||
51,624 | |||||||
Multi-Utilities – 0.1% | |||||||
Ameren Corp | 117 | 6,902 | |||||
Atco Ltd/Canada | 147 | 5,263 | |||||
Canadian Utilities Ltd | 1,046 | 31,135 | |||||
CenterPoint Energy Inc | 197 | 5,587 | |||||
Centrica PLC | 3,383 | 6,263 | |||||
CMS Energy Corp | 198 | 9,365 | |||||
DTE Energy Co | 80 | 8,757 | |||||
E.ON SE | 176 | 1,908 | |||||
Innogy SE (144A) | 148 | 5,767 | |||||
Public Service Enterprise Group Inc | 12 | 618 | |||||
RWE AG | 89 | 1,815 | |||||
Sempra Energy | 67 | 7,164 | |||||
Suez | 14 | 246 | |||||
WEC Energy Group Inc | 37 | 2,458 | |||||
93,248 | |||||||
Oil, Gas & Consumable Fuels – 1.1% | |||||||
AltaGas Ltd | 2,514 | 57,249 | |||||
Anadarko Petroleum Corp | 495 | 26,552 | |||||
Andeavor | 66 | 7,546 | |||||
Apache Corp | 254 | 10,724 | |||||
ARC Resources Ltd | 1,130 | 13,262 | |||||
BP PLC | 2,971 | 20,949 | |||||
Cabot Oil & Gas Corp | 1,871 | 53,511 | |||||
Caltex Australia Ltd | 81 | 2,148 | |||||
Cameco Corp | 725 | 6,697 | |||||
Cenovus Energy Inc | 578 | 5,280 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
18 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Oil, Gas & Consumable Fuels – (continued) | |||||||
Chevron Corp | 205 | $25,664 | |||||
Cimarex Energy Co | 111 | 13,543 | |||||
ConocoPhillips | 300 | 16,467 | |||||
Crescent Point Energy Corp | 574 | 4,375 | |||||
Devon Energy Corp | 459 | 19,003 | |||||
Enagas SA | 176 | 5,034 | |||||
Enbridge Inc | 310 | 12,126 | |||||
Encana Corp | 57 | 761 | |||||
Eni SpA | 1,770 | 29,267 | |||||
EOG Resources Inc | 392 | 42,301 | |||||
EQT Corp | 734 | 41,779 | |||||
Exxon Mobil Corp | 291 | 24,339 | |||||
Hess Corp | 39 | 1,851 | |||||
Husky Energy Inc* | 271 | 3,827 | |||||
Inpex Corp | 200 | 2,503 | |||||
JXTG Holdings Inc | 300 | 1,939 | |||||
Kinder Morgan Inc/DE | 3,002 | 54,246 | |||||
Koninklijke Vopak NV | 227 | 9,956 | |||||
Lundin Petroleum AB* | 282 | 6,454 | |||||
Marathon Oil Corp | 673 | 11,394 | |||||
Marathon Petroleum Corp | 210 | 13,856 | |||||
Neste Oyj | 37 | 2,368 | |||||
Newfield Exploration Co* | 63 | 1,986 | |||||
Noble Energy Inc | 706 | 20,573 | |||||
Occidental Petroleum Corp | 344 | 25,339 | |||||
Oil Search Ltd | 505 | 3,071 | |||||
OMV AG | 68 | 4,308 | |||||
ONEOK Inc | 341 | 18,226 | |||||
Origin Energy Ltd* | 166 | 1,221 | |||||
Phillips 66 | 34 | 3,439 | |||||
Pioneer Natural Resources Co | 57 | 9,852 | |||||
PrairieSky Royalty Ltd | 81 | 2,066 | |||||
Range Resources Corp | 1,440 | 24,566 | |||||
Santos Ltd* | 194 | 823 | |||||
Statoil ASA | 738 | 15,793 | |||||
TOTAL SA | 151 | 8,330 | |||||
TransCanada Corp | 116 | 5,647 | |||||
Valero Energy Corp | 266 | 24,448 | |||||
Williams Cos Inc | 308 | 9,391 | |||||
Woodside Petroleum Ltd | 61 | 1,576 | |||||
727,626 | |||||||
Paper & Forest Products – 0% | |||||||
UPM-Kymmene OYJ | 51 | 1,582 | |||||
Personal Products – 0% | |||||||
Beiersdorf AG | 27 | 3,164 | |||||
Estee Lauder Cos Inc | 97 | 12,342 | |||||
15,506 | |||||||
Pharmaceuticals – 0.7% | |||||||
Allergan PLC | 95 | 15,540 | |||||
Astellas Pharma Inc | 600 | 7,622 | |||||
AstraZeneca PLC | 807 | 55,368 | |||||
Bayer AG | 301 | 37,432 | |||||
Bristol-Myers Squibb Co | 299 | 18,323 | |||||
Daiichi Sankyo Co Ltd | 200 | 5,210 | |||||
Eisai Co Ltd | 100 | 5,663 | |||||
GlaxoSmithKline PLC | 1,888 | 33,388 | |||||
Johnson & Johnson | 115 | 16,068 | |||||
Kyowa Hakko Kirin Co Ltd | 100 | 1,932 | |||||
Merck & Co Inc | 201 | 11,310 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Pharmaceuticals – (continued) | |||||||
Merck KGaA | 330 | $35,533 | |||||
Mitsubishi Tanabe Pharma Corp | 200 | 4,123 | |||||
Otsuka Holdings Co Ltd | 100 | 4,380 | |||||
Perrigo Co PLC | 37 | 3,225 | |||||
Pfizer Inc | 1,180 | 42,740 | |||||
Roche Holding AG | 397 | 100,444 | |||||
Santen Pharmaceutical Co Ltd | 200 | 3,140 | |||||
Shionogi & Co Ltd | 100 | 5,407 | |||||
Sumitomo Dainippon Pharma Co Ltd | 200 | 2,973 | |||||
Takeda Pharmaceutical Co Ltd | 500 | 28,312 | |||||
UCB SA | 76 | 6,022 | |||||
Zoetis Inc | 248 | 17,866 | |||||
462,021 | |||||||
Professional Services – 0.1% | |||||||
Bureau Veritas SA | 177 | 4,839 | |||||
Equifax Inc | 53 | 6,250 | |||||
IHS Markit Ltd* | 150 | 6,772 | |||||
Randstad Holding NV | 30 | 1,840 | |||||
Recruit Holdings Co Ltd | 100 | 2,484 | |||||
RELX PLC | 314 | 7,355 | |||||
Verisk Analytics Inc* | 91 | 8,736 | |||||
38,276 | |||||||
Real Estate Management & Development – 0.1% | |||||||
CapitaLand Ltd | 600 | 1,581 | |||||
CBRE Group Inc* | 67 | 2,902 | |||||
City Developments Ltd | 100 | 930 | |||||
Daiwa House Industry Co Ltd | 100 | 3,842 | |||||
Hang Lung Properties Ltd | 1,000 | 2,440 | |||||
Henderson Land Development Co Ltd | 1,000 | 6,591 | |||||
Hongkong Land Holdings Ltd | 300 | 2,112 | |||||
Hulic Co Ltd | 100 | 1,120 | |||||
Mitsubishi Estate Co Ltd | 300 | 5,213 | |||||
Mitsui Fudosan Co Ltd | 100 | 2,242 | |||||
New World Development Co Ltd | 4,000 | 6,010 | |||||
Swire Pacific Ltd | 1,000 | 9,256 | |||||
Swire Properties Ltd | 600 | 1,935 | |||||
Swiss Prime Site AG* | 10 | 923 | |||||
Tokyu Fudosan Holdings Corp | 300 | 2,168 | |||||
UOL Group Ltd | 200 | 1,326 | |||||
Vonovia SE | 56 | 2,772 | |||||
Wharf Holdings Ltd | 2,000 | 6,916 | |||||
60,279 | |||||||
Road & Rail – 0.1% | |||||||
Central Japan Railway Co | 100 | 17,899 | |||||
ComfortDelGro Corp Ltd | 1,900 | 2,810 | |||||
East Japan Railway Co | 100 | 9,750 | |||||
JB Hunt Transport Services Inc | 34 | 3,909 | |||||
Norfolk Southern Corp | 12 | 1,739 | |||||
Union Pacific Corp | 64 | 8,582 | |||||
West Japan Railway Co | 100 | 7,296 | |||||
51,985 | |||||||
Semiconductor & Semiconductor Equipment – 0.3% | |||||||
Advanced Micro Devices Inc* | 1,707 | 17,548 | |||||
Analog Devices Inc | 347 | 30,893 | |||||
Applied Materials Inc | 87 | 4,447 | |||||
ASM Pacific Technology Ltd | 400 | 5,564 | |||||
ASML Holding NV | 10 | 1,735 | |||||
Broadcom Ltd | 49 | 12,588 | |||||
Infineon Technologies AG | 565 | 15,430 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
20 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Semiconductor & Semiconductor Equipment – (continued) | |||||||
Intel Corp | 416 | $19,203 | |||||
KLA-Tencor Corp | 11 | 1,156 | |||||
Microchip Technology Inc | 119 | 10,458 | |||||
Micron Technology Inc* | 162 | 6,661 | |||||
NVIDIA Corp | 75 | 14,512 | |||||
Qorvo Inc* | 204 | 13,586 | |||||
Skyworks Solutions Inc | 12 | 1,139 | |||||
STMicroelectronics NV | 219 | 4,755 | |||||
Texas Instruments Inc | 8 | 836 | |||||
Xilinx Inc | 454 | 30,609 | |||||
191,120 | |||||||
Software – 0.5% | |||||||
Activision Blizzard Inc | 16 | 1,013 | |||||
Adobe Systems Inc* | 32 | 5,608 | |||||
ANSYS Inc* | 194 | 28,632 | |||||
Cadence Design Systems Inc* | 1,204 | 50,351 | |||||
Dassault Systemes SE | 81 | 8,602 | |||||
Electronic Arts Inc* | 94 | 9,876 | |||||
Intuit Inc | 162 | 25,560 | |||||
LINE Corp* | 100 | 4,090 | |||||
Microsoft Corp | 277 | 23,695 | |||||
Nexon Co Ltd* | 100 | 2,906 | |||||
Open Text Corp | 405 | 14,408 | |||||
Oracle Corp | 681 | 32,198 | |||||
Oracle Corp Japan | 200 | 16,586 | |||||
Red Hat Inc* | 12 | 1,441 | |||||
Sage Group PLC | 3,295 | 35,401 | |||||
salesforce.com Inc* | 79 | 8,076 | |||||
Symantec Corp | 670 | 18,800 | |||||
Synopsys Inc* | 471 | 40,148 | |||||
Ubisoft Entertainment SA* | 161 | 12,386 | |||||
339,777 | |||||||
Specialty Retail – 0.3% | |||||||
Advance Auto Parts Inc | 86 | 8,573 | |||||
AutoZone Inc* | 37 | 26,321 | |||||
CarMax Inc* | 104 | 6,670 | |||||
Dufry AG* | 120 | 17,846 | |||||
Foot Locker Inc | 191 | 8,954 | |||||
Hennes & Mauritz AB | 200 | 4,123 | |||||
Home Depot Inc | 121 | 22,933 | |||||
Industria de Diseno Textil SA | 81 | 2,817 | |||||
Kingfisher PLC | 2,627 | 11,974 | |||||
L Brands Inc | 91 | 5,480 | |||||
O'Reilly Automotive Inc* | 27 | 6,495 | |||||
Ross Stores Inc | 89 | 7,142 | |||||
Signet Jewelers Ltd | 86 | 4,863 | |||||
Tiffany & Co | 57 | 5,925 | |||||
TJX Cos Inc | 197 | 15,063 | |||||
Tractor Supply Co | 277 | 20,706 | |||||
Ulta Beauty Inc* | 30 | 6,710 | |||||
Yamada Denki Co Ltd | 1,200 | 6,604 | |||||
189,199 | |||||||
Technology Hardware, Storage & Peripherals – 0.2% | |||||||
Apple Inc | 143 | 24,200 | |||||
BlackBerry Ltd* | 858 | 9,585 | |||||
Brother Industries Ltd | 100 | 2,469 | |||||
Canon Inc | 100 | 3,725 | |||||
FUJIFILM Holdings Corp | 600 | 24,499 | |||||
HP Inc | 847 | 17,795 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Technology Hardware, Storage & Peripherals – (continued) | |||||||
Konica Minolta Inc | 100 | $963 | |||||
NEC Corp | 200 | 5,398 | |||||
NetApp Inc | 56 | 3,098 | |||||
Ricoh Co Ltd | 700 | 6,507 | |||||
Seagate Technology PLC | 156 | 6,527 | |||||
Western Digital Corp | 94 | 7,476 | |||||
112,242 | |||||||
Textiles, Apparel & Luxury Goods – 0.3% | |||||||
adidas AG | 49 | 9,780 | |||||
Asics Corp | 200 | 3,190 | |||||
Hanesbrands Inc | 942 | 19,697 | |||||
Hermes International | 41 | 21,944 | |||||
Luxottica Group SpA | 167 | 10,233 | |||||
Michael Kors Holdings Ltd* | 148 | 9,317 | |||||
NIKE Inc | 450 | 28,147 | |||||
PVH Corp | 100 | 13,721 | |||||
Ralph Lauren Corp | 129 | 13,376 | |||||
Tapestry Inc | 513 | 22,690 | |||||
Under Armour Inc* | 1,522 | 21,962 | |||||
Yue Yuen Industrial Holdings Ltd | 500 | 1,962 | |||||
176,019 | |||||||
Tobacco – 0% | |||||||
Imperial Brands PLC | 210 | 8,973 | |||||
Japan Tobacco Inc | 300 | 9,664 | |||||
Swedish Match AB | 7 | 276 | |||||
18,913 | |||||||
Trading Companies & Distributors – 0.1% | |||||||
Brenntag AG | 93 | 5,866 | |||||
Bunzl PLC | 336 | 9,393 | |||||
Ferguson PLC | 82 | 5,866 | |||||
ITOCHU Corp | 800 | 14,939 | |||||
Marubeni Corp | 300 | 2,179 | |||||
Mitsubishi Corp | 100 | 2,764 | |||||
Mitsui & Co Ltd | 200 | 3,249 | |||||
Travis Perkins PLC | 77 | 1,628 | |||||
45,884 | |||||||
Transportation Infrastructure – 0% | |||||||
Aeroports de Paris | 105 | 19,946 | |||||
Auckland International Airport Ltd | 454 | 2,083 | |||||
Getlink SE | 69 | 887 | |||||
22,916 | |||||||
Water Utilities – 0% | |||||||
American Water Works Co Inc | 69 | 6,313 | |||||
Severn Trent PLC | 554 | 16,161 | |||||
United Utilities Group PLC | 979 | 10,955 | |||||
33,429 | |||||||
Wireless Telecommunication Services – 0.1% | |||||||
KDDI Corp | 100 | 2,490 | |||||
Millicom International Cellular SA (SDR) | 24 | 1,621 | |||||
NTT DOCOMO Inc | 1,000 | 23,625 | |||||
Rogers Communications Inc | 237 | 12,078 | |||||
StarHub Ltd | 3,600 | 7,673 | |||||
Vodafone Group PLC | 1,660 | 5,243 | |||||
52,730 | |||||||
Total Common Stocks (cost $9,080,188) | 9,574,793 | ||||||
Preferred Stocks – 0% | |||||||
Automobiles – 0% | |||||||
Porsche Automobil Holding SE (cost $9,487) | 114 | 9,540 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
22 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Investment Companies – 82.1% | |||||||
Exchange-Traded Funds (ETFs) – 82.1% | |||||||
iShares 20+ Year Treasury Bond | 1,006 | $127,621 | |||||
iShares 7-10 Year Treasury Bond | 2,253 | 237,849 | |||||
iShares Agency Bond | 2,203 | 249,142 | |||||
iShares Currency Hedged MSCI Japan | 70,770 | 2,359,472 | |||||
iShares iBoxx $ High Yield Corporate Bond | 7,740 | 675,392 | |||||
iShares iBoxx $ Investment Grade Corporate Bond | 1,622 | 197,170 | |||||
iShares MSCI Canada | 14,347 | 425,245 | |||||
iShares MSCI Europe Financials | 8,060 | 187,879 | |||||
iShares MSCI Hong Kong | 10,097 | 256,666 | |||||
iShares MSCI Japan | 23,535 | 1,410,453 | |||||
iShares MSCI Spain Index Fund (ETF) | 32,549 | 1,066,631 | |||||
PowerShares QQQ Trust Series 1 | 14,041 | 2,187,026 | |||||
Vanguard Consumer Staples ETF | 4,986 | 728,155 | |||||
Vanguard Financials | 38,214 | 2,676,509 | |||||
Vanguard FTSE All World ex-US Small-Cap† | 25,184 | 3,002,688 | |||||
Vanguard FTSE All-World ex-US ETF | 97,914 | 5,357,854 | |||||
Vanguard FTSE Emerging Markets | 92,876 | 4,263,937 | |||||
Vanguard FTSE Europe† | 42,420 | 2,509,143 | |||||
Vanguard FTSE Pacific† | 29,214 | 2,129,701 | |||||
Vanguard Growth | 8,656 | 1,217,466 | |||||
Vanguard High Dividend Yield | 11,910 | 1,019,853 | |||||
Vanguard Industrials | 18,107 | 2,577,894 | |||||
Vanguard Information Technology | 9,908 | 1,632,145 | |||||
Vanguard International High Dividend Yield | 21,230 | 1,425,382 | |||||
Vanguard Materials | 3,210 | 438,807 | |||||
Vanguard Mid-Cap† | 16,034 | 2,481,743 | |||||
Vanguard Mortgage-Backed Securities | 4,539 | 238,025 | |||||
Vanguard S&P 500 | 10,374 | 2,544,638 | |||||
Vanguard Small-Cap | 37,856 | 5,595,117 | |||||
Vanguard Small-Cap Value | 16,926 | 2,247,434 | |||||
Vanguard Total International Bond | 6,867 | 373,359 | |||||
Vanguard Value† | 24,717 | 2,627,911 | |||||
Total Investment Companies (cost $50,720,537) | 54,468,307 | ||||||
U.S. Government Agency Notes – 3.0% | |||||||
Federal Home Loan Bank Discount Notes: | |||||||
0%, 1/2/18◊ (cost $1,999,833) | $2,000,000 | 2,000,000 | |||||
Total Investments (total cost $61,810,045) – 99.5% | 66,052,640 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.5% | 333,994 | ||||||
Net Assets – 100% | $66,386,634 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 23 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of | |||||
Investment | |||||
Country | Value | Securities | |||
United States | $57,982,027 | 87.8 | % | ||
Japan | 4,657,990 | 7.1 | |||
Canada | 885,514 | 1.3 | |||
United Kingdom | 580,365 | 0.9 | |||
Germany | 418,066 | 0.6 | |||
France | 293,601 | 0.4 | |||
Switzerland | 247,925 | 0.4 | |||
Sweden | 155,622 | 0.2 | |||
Hong Kong | 155,268 | 0.2 | |||
Australia | 130,434 | 0.2 | |||
Italy | 123,927 | 0.2 | |||
Spain | 95,819 | 0.1 | |||
Netherlands | 78,482 | 0.1 | |||
Singapore | 60,354 | 0.1 | |||
Norway | 52,387 | 0.1 | |||
Belgium | 39,295 | 0.1 | |||
Finland | 38,334 | 0.1 | |||
Ireland | 29,940 | 0.1 | |||
Austria | 19,214 | 0.0 | |||
New Zealand | 8,076 | 0.0 | |||
Total | $66,052,640 | 100.0 | % |
Schedule of Forward Foreign Currency Exchange Contracts, Open |
Counterparty/ Foreign Currency | Settlement Date | Foreign Currency Amount (Sold)/ Purchased | USD Currency Amount (Sold)/ Purchased | Market Value and Unrealized Appreciation/ (Depreciation) | ||||
Bank of America: | ||||||||
British Pound | 2/8/18 | (303,500) | $ | 408,092 | $ | (2,143) | ||
Canadian Dollar | 2/8/18 | (472,500) | 367,628 | (8,568) | ||||
Euro | 2/8/18 | (1,588,675) | 1,881,700 | (28,822) | ||||
Japanese Yen | 2/8/18 | (118,305,000) | 1,053,810 | 1,571 | ||||
(37,962) | ||||||||
Citibank NA: | ||||||||
Japanese Yen | 2/1/18 | (25,495,000) | 228,607 | 1,917 | ||||
HSBC Securities (USA), Inc.: | ||||||||
Swiss Franc | 2/8/18 | (271,000) | 274,494 | (4,535) | ||||
Total | $ | (40,580) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
24 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Schedule of Investments (unaudited)
December 31, 2017
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2017.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of December 31, 2017 | |||||
|
|
|
| Currency |
|
Asset Derivatives: | |||||
Forward foreign currency exchange contracts | $ 3,488 | ||||
| |||||
Liability Derivatives: | |||||
Forward foreign currency exchange contracts | $ 44,068 | ||||
The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2017.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended December 31, 2017 | |||||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | |||||||
Derivative | Currency |
| Equity |
| Total | ||
Forward foreign currency exchange contracts | $(217,236) | $ - | $(217,236) | ||||
Purchased options contracts | - | (84,943) | (84,943) | ||||
Written options contracts | - | 86,713 | 86,713 | ||||
Total | $(217,236) |
| $ 1,770 |
| $(215,466) | ||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | |||||||
Derivative | Currency |
| Equity |
| Total | ||
Forward foreign currency exchange contracts | $ 25,660 | $ - | $ 25,660 | ||||
Please see the "Net Realized Gain/(Loss) on Investments" and "Change in Unrealized Net Appreciation/Depreciation" sections of the Fund’s Statement of Operations.
Average Ending Monthly Market Value of Derivative Instruments During the Period Ended December 31, 2017 | |
| Market Value |
Forward foreign currency exchange contracts, sold | $ 5,343,899 |
Purchased options contracts, put | 69,299 |
Written options contracts, put | 30,966 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 25 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Schedule of Investments and Other Information (unaudited)
Adaptive Global Allocation 60/40 Index | Adaptive Global Allocation 60/40 Index is an internally-calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (60%) and the Bloomberg Barclays Global Aggregate Bond Index (Hedged) (40%). |
Adaptive Global Allocation 70/30 Index | Adaptive Global Allocation 70/30 Index is an internally-calculated, hypothetical combination of total returns from the MSCI All Country World IndexSM (70%) and the Bloomberg Barclays Global Aggregate Bond Index (Hedged) (30%). |
Bloomberg Barclays Global Aggregate Bond Index | Bloomberg Barclays Global Aggregate Bond Index is a broad-based measure of the global investment grade fixed-rate debt markets. |
MSCI All Country World IndexSM | MSCI All Country World IndexSM reflects the equity market performance of global developed and emerging markets. |
PLC | Public Limited Company |
SDR | Swedish Depositary Receipt |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. Unless otherwise noted, these securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2017 is $41,034, which represents 0.1% of net assets. |
* | Non-income producing security. |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2017, is $6,297,949. |
◊ | Zero coupon bond. |
26 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of December 31, 2017. See Notes to Financial Statements for more information. | ||||||
Valuation Inputs Summary | ||||||
Level 2 - | Level 3 - | |||||
Level 1 - | Other Significant | Significant | ||||
Quotes Prices | Observable Inputs | Unobservable Inputs | ||||
Assets | ||||||
Investments in Securities: | ||||||
Common Stocks | ||||||
Aerospace & Defense | $ | 56,236 | $ | 13,595 | $ | - |
Airlines | 9,924 | 15,757 | - | |||
Auto Components | 24,302 | 57,791 | - | |||
Automobiles | 184,082 | 89,776 | - | |||
Banks | 102,025 | 186,895 | - | |||
Beverages | 187,922 | 26,879 | - | |||
Biotechnology | 95,139 | 34,595 | - | |||
Building Products | 41,779 | 16,662 | - | |||
Capital Markets | 154,483 | 132,073 | - | |||
Chemicals | 98,603 | 296,945 | - | |||
Commercial Services & Supplies | 28,333 | 16,548 | - | |||
Communications Equipment | 78,691 | 14,046 | - | |||
Construction & Engineering | 15,112 | 23,081 | - | |||
Construction Materials | 7,559 | 10,877 | - | |||
Consumer Finance | 37,276 | 9,471 | - | |||
Containers & Packaging | 47,727 | 38,830 | - | |||
Distributors | 83,751 | 3,040 | - | |||
Diversified Financial Services | 23,192 | 57,383 | - | |||
Diversified Telecommunication Services | 214,111 | 95,755 | - | |||
Electric Utilities | 44,822 | 125,206 | - | |||
Electrical Equipment | 43,454 | 4,626 | - | |||
Electronic Equipment, Instruments & Components | 21,337 | 78,226 | - | |||
Equity Real Estate Investment Trusts (REITs) | 91,375 | 90,184 | - | |||
Food & Staples Retailing | 94,235 | 72,302 | - | |||
Food Products | 402,395 | 69,869 | - | |||
Gas Utilities | - | 18,556 | - | |||
Health Care Equipment & Supplies | 95,299 | 186,660 | - | |||
Health Care Providers & Services | 45,721 | 77,837 | - | |||
Health Care Technology | 26,552 | 7,003 | - | |||
Hotels, Restaurants & Leisure | 114,058 | 55,544 | - | |||
Household Durables | 103,578 | 76,578 | - | |||
Household Products | 266,973 | 18,310 | - | |||
Independent Power and Renewable Electricity Producers | - | 2,695 | - | |||
Industrial Conglomerates | 19,321 | 10,460 | - | |||
Information Technology Services | 392,297 | 93,380 | - | |||
Insurance | 150,445 | 132,800 | - | |||
Internet & Direct Marketing Retail | 102,719 | 6,083 | - | |||
Internet Software & Services | 81,458 | 19,595 | - | |||
Leisure Products | 22,149 | 9,418 | - | |||
Life Sciences Tools & Services | 114,718 | 18,644 | - | |||
Machinery | 48,693 | 69,567 | - | |||
Media | 254,917 | 138,681 | - | |||
Metals & Mining | 30,619 | 148,513 | - | |||
Janus Investment Fund | 27 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Schedule of Investments and Other Information (unaudited)
Level 2 - | Level 3 - | ||||||||||||
Level 1 - | Other Significant | Significant | |||||||||||
Quotes Prices | Observable Inputs | Unobservable Inputs | |||||||||||
Multiline Retail | $ | 29,934 | $ | 21,690 | $ | - | |||||||
Multi-Utilities | 40,851 | 52,397 | - | ||||||||||
Oil, Gas & Consumable Fuels | 500,596 | 227,030 | - | ||||||||||
Paper & Forest Products | - | 1,582 | - | ||||||||||
Personal Products | 12,342 | 3,164 | - | ||||||||||
Pharmaceuticals | 125,072 | 336,949 | - | ||||||||||
Professional Services | 21,758 | 16,518 | - | ||||||||||
Real Estate Management & Development | 5,014 | 55,265 | - | ||||||||||
Road & Rail | 14,230 | 37,755 | - | ||||||||||
Semiconductor & Semiconductor Equipment | 163,636 | 27,484 | - | ||||||||||
Software | 245,398 | 94,379 | - | ||||||||||
Specialty Retail | 145,835 | 43,364 | - | ||||||||||
Technology Hardware, Storage & Peripherals | 59,096 | 53,146 | - | ||||||||||
Textiles, Apparel & Luxury Goods | 128,910 | 47,109 | - | ||||||||||
Tobacco | - | 18,913 | - | ||||||||||
Trading Companies & Distributors | - | 45,884 | - | ||||||||||
Transportation Infrastructure | - | 22,916 | - | ||||||||||
Water Utilities | 6,313 | 27,116 | - | ||||||||||
Wireless Telecommunication Services | - | 52,730 | - | ||||||||||
All Other | 162,299 | - | - | ||||||||||
Preferred Stocks | - | 9,540 | - | ||||||||||
Investment Companies | 54,468,307 | - | - | ||||||||||
U.S. Government Agency Notes | - | 2,000,000 | - | ||||||||||
Total Investments in Securities | $ | 60,186,973 | $ | 5,865,667 | $ | - | |||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | - | 3,488 | - | ||||||||||
Total Assets | $ | 60,186,973 | $ | 5,869,155 | $ | - | |||||||
Liabilities | |||||||||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | $ | - | $ | 44,068 | $ | - | |||||||
(a) | Other financial instruments include forward foreign currency exchange, futures, written options, written swaptions, and swap contracts. Forward foreign currency exchange contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures, certain written options on futures, and centrally cleared swap contracts are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Written options, written swaptions, and other swap contracts are reported at their market value at measurement date. | ||||||||||||
28 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at value(1) | $ | 66,052,640 | ||||
Cash | 428,166 | |||||
Forward foreign currency exchange contracts | 3,488 | |||||
Non-interested Trustees' deferred compensation | 1,269 | |||||
Receivables: | ||||||
Fund shares sold | 100,637 | |||||
Dividends | 25,128 | |||||
Foreign tax reclaims | 5,898 | |||||
Investments sold | 3,336 | |||||
Other assets | 828 | |||||
Total Assets |
|
| 66,621,390 |
| ||
Liabilities: | ||||||
Forward foreign currency exchange contracts | 44,068 | |||||
Payables: | — | |||||
Fund shares repurchased | 107,783 | |||||
Professional fees | 23,029 | |||||
Custodian fees | 22,885 | |||||
Advisory fees | 10,195 | |||||
Accounting systems fees | 8,831 | |||||
Transfer agent fees and expenses | 2,875 | |||||
12b-1 Distribution and shareholder servicing fees | 1,777 | |||||
Non-interested Trustees' deferred compensation fees | 1,269 | |||||
Fund administration fees | 449 | |||||
Non-interested Trustees' fees and expenses | 445 | |||||
Accrued expenses and other payables | 11,150 | |||||
Total Liabilities |
|
| 234,756 |
| ||
Net Assets |
| $ | 66,386,634 |
| ||
See Notes to Financial Statements. | |
Janus Investment Fund | 29 |
Janus Henderson Adaptive Global Allocation Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 61,921,927 | ||||
Undistributed net investment income/(loss) | (377,334) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 639,727 | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 4,202,314 | |||||
Total Net Assets |
| $ | 66,386,634 |
| ||
Net Assets - Class A Shares | $ | 796,935 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 75,135 | |||||
Net Asset Value Per Share(2) |
| $ | 10.61 |
| ||
Maximum Offering Price Per Share(3) |
| $ | 11.26 |
| ||
Net Assets - Class C Shares | $ | 1,527,313 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 144,625 | |||||
Net Asset Value Per Share(2) |
| $ | 10.56 |
| ||
Net Assets - Class D Shares | $ | 2,144,628 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 202,367 | |||||
Net Asset Value Per Share |
| $ | 10.60 |
| ||
Net Assets - Class I Shares | $ | 4,309,964 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 405,880 | |||||
Net Asset Value Per Share |
| $ | 10.62 |
| ||
Net Assets - Class N Shares | $ | 53,757,712 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 5,064,071 | |||||
Net Asset Value Per Share |
| $ | 10.62 |
| ||
Net Assets - Class S Shares | $ | 1,293,001 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 121,966 | |||||
Net Asset Value Per Share |
| $ | 10.60 |
| ||
Net Assets - Class T Shares | $ | 2,557,081 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 241,252 | |||||
Net Asset Value Per Share |
| $ | 10.60 |
| ||
(1) Includes cost of $61,810,045. (2) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (3) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
30 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Statement of Operations (unaudited)
For the period ended December 31, 2017
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 817,467 | ||
Interest | 3,523 | ||||
Other income | 45 | ||||
Foreign tax withheld | (6,199) | ||||
Total Investment Income |
| 814,836 |
| ||
Expenses: | |||||
Advisory fees | 235,622 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 965 | ||||
Class C Shares | 6,660 | ||||
Class S Shares | 1,541 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 1,103 | ||||
Class S Shares | 1,541 | ||||
Class T Shares | 3,053 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 19 | ||||
Class C Shares | 17 | ||||
Class I Shares | 2,045 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 44 | ||||
Class C Shares | 63 | ||||
Class D Shares | 143 | ||||
Class I Shares | 110 | ||||
Class N Shares | 852 | ||||
Class S Shares | 11 | ||||
Class T Shares | 25 | ||||
Custodian fees | 79,241 | ||||
Registration fees | 44,541 | ||||
Professional fees | 29,827 | ||||
Shareholder reports expense | 9,079 | ||||
Fund administration fees | 2,533 | ||||
Non-interested Trustees’ fees and expenses | 1,039 | ||||
Other expenses | 7,989 | ||||
Total Expenses |
| 428,063 |
| ||
Less: Excess Expense Reimbursement and Waivers |
| (171,678) |
| ||
Net Expenses |
| 256,385 |
| ||
Net Investment Income/(Loss) |
| 558,451 |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | 2,830,072 | ||||
Purchased options contracts | (84,943) | ||||
Forward foreign currency exchange contracts | (217,236) | ||||
Written options contracts | 86,713 | ||||
Total Net Realized Gain/(Loss) on Investments |
| 2,614,606 |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,752,094 | ||||
Forward foreign currency exchange contracts | 25,660 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 1,777,754 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 4,950,811 |
| ||
See Notes to Financial Statements. | |
Janus Investment Fund | 31 |
Janus Henderson Adaptive Global Allocation Fund
Statements of Changes in Net Assets
|
|
| Period ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | 558,451 | $ | 562,650 | ||||
Net realized gain/(loss) on investments | 2,614,606 | 4,303,273 | ||||||
Change in unrealized net appreciation/depreciation | 1,777,754 | 1,595,291 | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 4,950,811 |
|
| 6,461,214 | |||
Dividends and Distributions to Shareholders: | ||||||||
Dividends from Net Investment Income | ||||||||
Class A Shares | (12,386) | (5,289) | ||||||
Class C Shares | (15,309) | (1,847) | ||||||
Class D Shares | (34,259) | (13,395) | ||||||
Class I Shares | (74,095) | (12,820) | ||||||
Class N Shares | (959,456) | (544,951) | ||||||
Class S Shares | (18,359) | (8,556) | ||||||
Class T Shares | (42,761) | (11,892) | ||||||
| Total Dividends from Net Investment Income |
| (1,156,625) |
|
| (598,750) | ||
Distributions from Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (42,830) | — | ||||||
Class C Shares | (83,298) | — | ||||||
Class D Shares | (110,002) | — | ||||||
Class I Shares | (229,169) | — | ||||||
Class N Shares | (2,889,637) | — | ||||||
Class S Shares | (69,088) | — | ||||||
Class T Shares | (138,227) | — | ||||||
| Total Distributions from Net Realized Gain from Investment Transactions | (3,562,251) |
|
| — | |||
Net Decrease from Dividends and Distributions to Shareholders |
| (4,718,876) |
|
| (598,750) | |||
Capital Share Transactions: | ||||||||
Class A Shares | 49,346 | 108,044 | ||||||
Class C Shares | 302,253 | 61,795 | ||||||
Class D Shares | 525,413 | 179,662 | ||||||
Class I Shares | (322,992) | 3,267,488 | ||||||
Class N Shares | 4,778,777 | (4,666,016) | ||||||
Class S Shares | 102,014 | 8,507 | ||||||
Class T Shares | 256,457 | 1,085,345 | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 5,691,268 |
|
| 44,825 | |||
Net Increase/(Decrease) in Net Assets |
| 5,923,203 |
|
| 5,907,289 | |||
Net Assets: | ||||||||
Beginning of period | 60,463,431 | 54,556,142 | ||||||
| End of period | $ | 66,386,634 |
| $ | 60,463,431 | ||
Undistributed Net Investment Income/(Loss) | $ | (377,334) |
| $ | 220,840 | |||
See Notes to Financial Statements. | |
32 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Financial Highlights
Class A Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
| ||||
Net Asset Value, Beginning of Period |
| $10.55 |
|
| $9.49 |
|
| $9.69 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(1) | 0.08 | 0.09 | 0.05 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.78 | 1.06 | (0.23) | (0.32) | |||||||||||
Total from Investment Operations |
| 0.86 |
|
| 1.15 |
|
| (0.18) |
|
| (0.31) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.18) | (0.09) | (0.02) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.80) |
|
| (0.09) |
|
| (0.02) |
|
| — |
| |||
Net Asset Value, End of Period | $10.61 | $10.55 | $9.49 | $9.69 | |||||||||||
Total Return* |
| 8.11% |
|
| 12.17% |
|
| (1.85)% |
|
| (3.10)% |
| |||
Net Assets, End of Period (in thousands) | $797 | $743 | $571 | $485 | |||||||||||
Average Net Assets for the Period (in thousands) | $770 | $609 | $530 | $496 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.55% | 1.52% | 1.54% | 13.45% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.02% | 1.07% | 1.09% | 1.07% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.54% | 0.86% | 0.55% | 5.04% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(2) | 122% | 10% | |||||||||||
1 | |||||||||||||||
Class C Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
| ||||
Net Asset Value, Beginning of Period |
| $10.48 |
|
| $9.44 |
|
| $9.69 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(1) | 0.05 | 0.01 | (0.01) | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.76 | 1.05 | (0.23) | (0.32) | |||||||||||
Total from Investment Operations |
| 0.81 |
|
| 1.06 |
|
| (0.24) |
|
| (0.31) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.11) | (0.02) | (0.01) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.73) |
|
| (0.02) |
|
| (0.01) |
|
| — |
| |||
Net Asset Value, End of Period | $10.56 | $10.48 | $9.44 | $9.69 | |||||||||||
Total Return* |
| 7.72% |
|
| 11.21% |
|
| (2.52)% |
|
| (3.10)% |
| |||
Net Assets, End of Period (in thousands) | $1,527 | $1,225 | $1,046 | $24 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,326 | $1,112 | $827 | $25 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.30% | 2.27% | 2.29% | 14.19% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.77% | 1.83% | 1.84% | 1.82% | |||||||||||
Ratio of Net Investment Income/(Loss) | 0.87% | 0.05% | (0.06)% | 4.29% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(2) | 122% | 10% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Per share amounts are calculated based on average shares outstanding during the year or period. (2) The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements. | |
Janus Investment Fund | 33 |
Janus Henderson Adaptive Global Allocation Fund
Financial Highlights
Class D Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.54 |
|
| $9.49 |
|
| $9.70 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.09 | 0.09 | 0.06 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.78 | 1.05 | (0.25) | (0.31) | |||||||||||
Total from Investment Operations |
| 0.87 |
|
| 1.14 |
|
| (0.19) |
|
| (0.30) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.19) | (0.09) | (0.02) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.81) |
|
| (0.09) |
|
| (0.02) |
|
| — |
| |||
Net Asset Value, End of Period | $10.60 | $10.54 | $9.49 | $9.70 | |||||||||||
Total Return* |
| 8.24% |
|
| 12.13% |
|
| (1.93)% |
|
| (3.00)% |
| |||
Net Assets, End of Period (in thousands) | $2,145 | $1,619 | $1,285 | $102 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,829 | $1,435 | $973 | $64 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.82% | 2.01% | 2.59% | 20.64% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.89% | 0.96% | 1.10% | 0.98% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.73% | 0.94% | 0.69% | 5.03% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(3) | 122% | 10% | |||||||||||
Class I Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
| ||||
Net Asset Value, Beginning of Period |
| $10.57 |
|
| $9.51 |
|
| $9.69 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.09 | 0.17 | 0.09 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.78 | 1.00 | (0.24) | (0.32) | |||||||||||
Total from Investment Operations |
| 0.87 |
|
| 1.17 |
|
| (0.15) |
|
| (0.31) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.20) | (0.11) | (0.03) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.82) |
|
| (0.11) |
|
| (0.03) |
|
| — |
| |||
Net Asset Value, End of Period | $10.62 | $10.57 | $9.51 | $9.69 | |||||||||||
Total Return* |
| 8.20% |
|
| 12.42% |
|
| (1.55)% |
|
| (3.10)% |
| |||
Net Assets, End of Period (in thousands) | $4,310 | $4,596 | $1,090 | $48 | |||||||||||
Average Net Assets for the Period (in thousands) | $4,328 | $1,802 | $854 | $50 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.38% | 1.40% | 1.28% | 13.19% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.86% | 0.80% | 0.83% | 0.82% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.67% | 1.69% | 0.94% | 5.29% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(3) | 122% | 10% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 23, 2015 (inception date) through June 30, 2015. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements. | |
34 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Financial Highlights
Class N Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.56 |
|
| $9.51 |
|
| $9.70 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.10 | 0.10 | 0.07 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.78 | 1.06 | (0.23) | (0.31) | |||||||||||
Total from Investment Operations |
| 0.88 |
|
| 1.16 |
|
| (0.16) |
|
| (0.30) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.20) | (0.11) | (0.03) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.82) |
|
| (0.11) |
|
| (0.03) |
|
| — |
| |||
Net Asset Value, End of Period | $10.62 | $10.56 | $9.51 | $9.70 | |||||||||||
Total Return* |
| 8.25% |
|
| 12.43% |
|
| (1.65)% |
|
| (3.00)% |
| |||
Net Assets, End of Period (in thousands) | $53,758 | $48,806 | $48,423 | $53,702 | |||||||||||
Average Net Assets for the Period (in thousands) | $50,701 | $48,134 | $49,786 | $9,234 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.29% | 1.24% | 1.27% | 67.74% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.76% | 0.81% | 0.83% | 0.82% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.82% | 1.03% | 0.73% | 6.84% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(3) | 122% | 10% | |||||||||||
Class S Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.53 |
|
| $9.48 |
|
| $9.69 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.08 | 0.07 | 0.05 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.77 | 1.06 | (0.24) | (0.32) | |||||||||||
Total from Investment Operations |
| 0.85 |
|
| 1.13 |
|
| (0.19) |
|
| (0.31) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.16) | (0.08) | (0.02) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.78) |
|
| (0.08) |
|
| (0.02) |
|
| — |
| |||
Net Asset Value, End of Period | $10.60 | $10.53 | $9.48 | $9.69 | |||||||||||
Total Return* |
| 8.08% |
|
| 11.95% |
|
| (1.99)% |
|
| (3.10)% |
| |||
Net Assets, End of Period (in thousands) | $1,293 | $1,183 | $1,057 | $24 | |||||||||||
Average Net Assets for the Period (in thousands) | $1,229 | $1,110 | $831 | $25 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.79% | 1.75% | 1.78% | 13.69% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.14% | 1.17% | 1.24% | 1.32% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.43% | 0.70% | 0.53% | 4.79% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(3) | 122% | 10% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 23, 2015 (inception date) through June 30, 2015. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements. | |
Janus Investment Fund | 35 |
Janus Henderson Adaptive Global Allocation Fund
Financial Highlights
Class T Shares | |||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.55 |
|
| $9.50 |
|
| $9.69 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.09 | 0.09 | 0.07 | 0.01 | |||||||||||
Net realized and unrealized gain/(loss) | 0.77 | 1.06 | (0.24) | (0.32) | |||||||||||
Total from Investment Operations |
| 0.86 |
|
| 1.15 |
|
| (0.17) |
|
| (0.31) |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.19) | (0.10) | (0.02) | — | |||||||||||
Distributions (from capital gains) | (0.62) | — | — | — | |||||||||||
Total Dividends and Distributions |
| (0.81) |
|
| (0.10) |
|
| (0.02) |
|
| — |
| |||
Net Asset Value, End of Period | $10.60 | $10.55 | $9.50 | $9.69 | |||||||||||
Total Return* |
| 8.13% |
|
| 12.17% |
|
| (1.72)% |
|
| (3.10)% |
| |||
Net Assets, End of Period (in thousands) | $2,557 | $2,291 | $1,085 | $48 | |||||||||||
Average Net Assets for the Period (in thousands) | $2,433 | $1,204 | $856 | $50 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.54% | 1.51% | 1.53% | 13.44% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.95% | 0.94% | 1.00% | 1.07% | |||||||||||
Ratio of Net Investment Income/(Loss) | 1.64% | 0.95% | 0.77% | 5.04% | |||||||||||
Portfolio Turnover Rate | 238% | 302%(3) | 122% | 10% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 23, 2015 (inception date) through June 30, 2015. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) The increase in the portfolio turnover rate was due to a restructuring of the Fund’s portfolio as a result of a change in its principal investment strategies. |
See Notes to Financial Statements. | |
36 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Henderson Adaptive Global Allocation Fund (the “Fund”) is a series of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers 50 funds, each of which offers multiple share classes, with differing investment objectives and policies. The Fund seeks total return through growth of capital and income. The Fund is classified as nondiversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus Henderson funds. Class D Shares are available only to investors who hold accounts directly with the Janus Henderson funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus Henderson funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments, who established Class I Share accounts before August 4, 2017.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of: 1) certain adviser-assisted, employer-sponsored retirement plans, including 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and certain welfare benefit plans, such as health savings accounts, and nonqualified deferred compensation plans; and 2) retail investors purchasing in qualified or nonqualified accounts, whose accounts are held through an omnibus account at their financial intermediary, and where the financial intermediary requires no payment or reimbursement from the Fund, Janus Capital Management LLC (“Janus Capital”), or its affiliates. Class N Shares are also available to Janus Henderson proprietary products and to certain direct institutional investors approved by Janus Distributors LLC dba Janus Henderson Distributors (“Janus Henderson Distributors”) including, but not limited to, corporations, certain retirement plans, public plans, and foundations and endowments, subject to minimum investment requirements.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price.
Janus Investment Fund | 37 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of December 31, 2017 to fair value the Fund’s investments
38 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund recognizes transfers between the levels as of the beginning of the fiscal year. The following describes the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period.
Financial assets of $5,902,341 were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current period and no factor was applied at the end of the prior fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or the Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the
Janus Investment Fund | 39 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
Internal Revenue Service (IRS) could challenge the Fund's equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Currently, Management does not believe the bill will have a material impact on the Fund’s intention to continue to qualify as a regulated investment company, which is generally not subject to U.S. federal income tax.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2017 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of the Schedule of Investments.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
40 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for non-hedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund.
Janus Investment Fund | 41 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
Options Contracts
An options contract provides the purchaser with the right, but not the obligation, to buy (call option) or sell (put option) a financial instrument at an agreed upon price on or before a specified date. The purchaser pays a premium to the seller for this right. The seller has the corresponding obligation to sell or buy a financial instrument if the purchaser (owner) "exercises" the option. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option are adjusted by the amount of premium received or paid. Upon expiration, or closing of the option transaction, a realized gain or loss is reported on the Statement of Operations (if applicable). The difference between the premium paid/received and the market value of the option is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported on the Statement of Operations (if applicable). Option contracts are typically valued using an approved vendor’s option valuation model. To the extent reliable market quotations are available, option contracts are valued using market quotations. In cases when an approved vendor cannot provide coverage for an option and there is no reliable market quotation, a broker quotation or an internal valuation using the Black-Scholes model, the Cox-Rubinstein Binomial Option Pricing Model, or other appropriate option pricing model is used. Certain options contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities as “Variation margin receivable” or “Variation margin payable” (if applicable).
The Fund may use options contracts to hedge against changes in interest rates, the values of equities, or foreign currencies. The Fund generally invests in options to hedge against adverse movements in the value of portfolio holdings. The use of such instruments may involve certain additional risks as a result of unanticipated movements in the market. A lack of correlation between the value of an instrument underlying an option and the asset being hedged, or unexpected adverse price movements, could render the Fund’s hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased or sold. The Fund may be subject to counterparty risk, interest rate risk, liquidity risk, equity risk, commodity risk, and currency risk in the normal course of pursuing its investment objective through its investments in options contracts.
Options traded on an exchange are regulated and the terms of the options are standardized. Options traded OTC expose the Fund to counterparty risk in the event that the counterparty does not perform. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase call options to hedge against an increase in the price of securities that it may buy in the future. The premium paid for the call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying security rises sufficiently, the option may expire worthless to the Fund. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Options purchased are reported in the Schedule of Investments (if applicable).
During the period, the Fund purchased put options on various ETFs for the purpose of decreasing exposure to individual equity risk.
In writing an option, the Fund bears the risk of an unfavorable change in the price of the security underlying the written option. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options written are reported as a liability on the Statement of Assets and Liabilities as “Options written, at value” (if applicable). The risk in writing call options is that the Fund gives up the opportunity for profit if the market price of the security increases and the options are exercised. The risk in writing put options is that the Fund may incur a loss if the market price of the security decreases and the options are exercised. The risk in buying options is that the Fund pays a premium whether or not the options are exercised. Exercise of an option written by the Fund could result in the Fund buying or selling a security at a price different from the current market value.
During the period, the Fund wrote put options on various ETFs for the purpose of increasing exposure to individual equity risk and/or generating income.There were no purchased or written options held at December 31, 2017.
42 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) of 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. The risk of investing in securities in the European markets may also be heightened due to the referendum in which the United Kingdom voted to exit the EU (known as “Brexit”). There is considerable uncertainty about how Brexit will be conducted, how negotiations of necessary treaties and trade agreements will proceed, or how financial markets will react. In addition, one or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery
Janus Investment Fund | 43 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Exchange-Traded and Mutual Funds
The Fund may invest in exchange-traded funds (“ETFs”) and mutual funds to gain exposure to a particular portion of the market. ETFs are typically open-end investment companies, which may seek to track the performance of a specific index or be actively managed. ETFs are traded on a national securities exchange at market prices that may vary from the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF or mutual fund, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF's or mutual fund’s expenses. As a result, the cost of investing in the Fund may be higher than the cost of investing directly in ETFs or mutual funds and may be higher than other mutual funds that invest directly in stocks and bonds. ETFs also involve the risk that an active trading market for an ETF's shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Fund may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Fund’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Fund may invest in a broad range of ETFs and mutual funds, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, emerging markets risk, fixed-income risk, and commodity-linked investments risk. The Fund is also subject to the risks associated with the securities in which the ETF or mutual fund invests.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
44 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
The following tables present gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the “Fair Value of Derivative Instruments as of December 31, 2017” table located in the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross Amounts | |||||||||
of Recognized | Offsetting Asset | Collateral | |||||||
Counterparty | Assets | or Liability(a) | Pledged(b) | Net Amount | |||||
Bank of America | $ | 1,571 | $ | (1,571) | $ | — | $ | — | |
Citibank NA | 1,917 | — | — | 1,917 | |||||
Total | $ | 3,488 | $ | (1,571) | $ | — | $ | 1,917 | |
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross Amounts | |||||||||
of Recognized | Offsetting Asset | Collateral | |||||||
Counterparty | Liabilities | or Liability(a) | Pledged(b) | Net Amount | |||||
Bank of America | $ | 39,533 | $ | (1,571) | $ | — | $ | 37,962 | |
HSBC Securities (USA), Inc. | 4,535 | — | — | 4,535 | |||||
Total | $ | 44,068 | $ | (1,571) | $ | — | $ | 42,497 | |
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | ||||||||
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | ||||||||
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
Sovereign Debt
The Fund may invest in U.S. and non-U.S. government debt securities (“sovereign debt”). Some investments in sovereign debt, such as U.S. sovereign debt, are considered low risk. However, investments in sovereign debt, especially the debt of less developed countries, can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors including, but not limited to, its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such
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Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid. In addition, to the extent the Fund invests in non-U.S. sovereign debt, it may be subject to currency risk.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily Net Assets of the Fund | Contractual Investment Advisory Fee (%) |
First $2 Billion | 0.75 |
Next $2 Billion | 0.72 |
Over $4 Billion | 0.70 |
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses, including the investment advisory fee, but excluding the fees payable pursuant to a Rule 12b-1 plan, shareholder servicing fees, such as transfer agency fees (including out-of-pocket costs), administrative services fees and any networking/omnibus/administrative fees payable by any share class, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 0.71% of the Fund’s average daily net assets. In addition, Janus Capital shall additionally reimburse or waive acquired fund fees and expenses to the extent they exceed 0.10%. Janus Capital has agreed to continue the waivers until at least November 1, 2018. The previous expense limit (until November 1, 2018) was 0.82%. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement and Waivers” on the Statement of Operations.
For a period of three years subsequent to the Fund’s commencement of operations, or until the Fund’s assets exceed the first breakpoint in the investment advisory fee schedule, whichever occurs first, Janus Capital may recover from the Fund fees and expenses previously waived or reimbursed, if the Fund’s expense ratio, including recovered expenses, falls below the expense limit. If applicable, this amount is disclosed as “Recoupment expense” on the Statement of Operations. During the period ended December 31, 2017, Janus Capital reimbursed the Fund $171,678 of fees and expenses that are eligible for recoupment. As of December 31, 2017, the aggregate amount of recoupment that may potentially be made to Janus Capital is $816,010. The recoupment of such reimbursements expires June 23, 2018.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
46 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or 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. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital. For all share classes except Class D Shares, Janus Services also seeks reimbursement for costs it incurs as transfer agent and for providing servicing.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Henderson Distributors, a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Henderson Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution and shareholder servicing fees” in the Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services to the Fund, including providing office space for the Fund and providing personnel to serve as officers to the Fund. The Fund reimburses Janus Capital for certain of its costs in providing these services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). These costs include some or all of the salaries, fees, and expenses of Janus Capital employees and Fund officers, including the Fund’s Chief Compliance Officer and compliance staff, who provide specified administration and compliance services to the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. Total compensation of $217,876 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2017. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus Henderson funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2017 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred
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Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2017 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $210,375 were paid by the Trust to the Trustees under the Deferred Plan during the period ended December 31, 2017.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Henderson Distributors and financial intermediaries. During the period ended December 31, 2017, Janus Henderson Distributors retained upfront sales charges of $232.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Henderson Distributors during the period ended December 31, 2017.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2017, redeeming shareholders of Class C Shares paid CDSCs of $2,620.
As of December 31, 2017, shares of the Fund were owned by affiliates of Janus Henderson Investors, and/or other funds advised by Janus Henderson, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| |
Class A Shares | 72 | % | 1 | % | |
Class C Shares | 82 | 2 | |||
Class D Shares | 64 | 2 | |||
Class I Shares | 30 | 2 | |||
Class N Shares | 98 | 79 | |||
Class S Shares | 98 | 2 | |||
Class T Shares | 51 | 2 | |||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
48 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2017 are noted below. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships and investments in passive foreign investment companies.
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ 62,048,533 | $ 4,162,561 | $ (158,454) | $ 4,004,107 |
Information on the tax components of derivatives as of December 31, 2017 is as follows:
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ - | $ 3,488 | $ (44,068) | $ (40,580) |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
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Janus Henderson Adaptive Global Allocation Fund
Notes to Financial Statements (unaudited)
6. Capital Share Transactions
Period ended December 31, 2017 | Year ended June 30, 2017 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 3,508 | $ 38,775 | 10,099 | $ 106,444 | ||
Reinvested dividends and distributions | 5,219 | 55,216 | 540 | 5,289 | ||
Shares repurchased | (4,075) | (44,645) | (350) | (3,689) | ||
Net Increase/(Decrease) | 4,652 | $ 49,346 |
| 10,289 | $ 108,044 | |
Class C Shares: | ||||||
Shares sold | 18,571 | $ 205,287 | 7,963 | $ 80,428 | ||
Reinvested dividends and distributions | 9,356 | 98,607 | 189 | 1,847 | ||
Shares repurchased | (156) | (1,641) | (2,086) | (20,480) | ||
Net Increase/(Decrease) | 27,771 | $ 302,253 |
| 6,066 | $ 61,795 | |
Class D Shares: | ||||||
Shares sold | 37,849 | $ 410,903 | 38,178 | $ 379,076 | ||
Reinvested dividends and distributions | 13,642 | 144,192 | 1,369 | 13,386 | ||
Shares repurchased | (2,689) | (29,682) | (21,398) | (212,800) | ||
Net Increase/(Decrease) | 48,802 | $ 525,413 |
| 18,149 | $ 179,662 | |
Class I Shares: | ||||||
Shares sold | 44,309 | $ 482,975 | 342,781 | $ 3,504,650 | ||
Reinvested dividends and distributions | 28,637 | 303,264 | 1,308 | 12,820 | ||
Shares repurchased | (101,925) | (1,109,231) | (23,808) | (249,982) | ||
Net Increase/(Decrease) | (28,979) | $ (322,992) |
| 320,281 | $ 3,267,488 | |
Class N Shares: | ||||||
Shares sold | 240,847 | $2,675,631 | 82,790 | $ 825,703 | ||
Reinvested dividends and distributions | 363,465 | 3,849,093 | 55,607 | 544,951 | ||
Shares repurchased | (159,959) | (1,745,947) | (610,500) | (6,036,670) | ||
Net Increase/(Decrease) | 444,353 | $4,778,777 |
| (472,103) | $(4,666,016) | |
Class S Shares: | ||||||
Shares sold | 1,412 | $ 15,000 | - | $ - | ||
Reinvested dividends and distributions | 8,273 | 87,447 | 875 | 8,556 | ||
Shares repurchased | (41) | (433) | (6) | (49) | ||
Net Increase/(Decrease) | 9,644 | $ 102,014 |
| 869 | $ 8,507 | |
Class T Shares: | ||||||
Shares sold | 11,522 | $ 127,354 | 103,305 | $ 1,088,835 | ||
Reinvested dividends and distributions | 17,123 | 180,988 | 1,215 | 11,892 | ||
Shares repurchased | (4,633) | (51,885) | (1,559) | (15,382) | ||
Net Increase/(Decrease) | 24,012 | $ 256,457 |
| 102,961 | $ 1,085,345 | |
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Notes to Financial Statements (unaudited)
7. Purchases and Sales of Investment Securities
For the period ended December 31, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$147,591,127 | $ 148,253,241 | $ - | $ - |
8. Recent Accounting Pronouncements
The Securities and Exchange Commission ("SEC") adopted new rules as well as amendments to its rules to modernize the reporting and disclosure of information by registered investment companies. In addition, the SEC adopted amendments to Regulation S-X, which require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date of the amendments to Regulation S-X was August 1, 2017. This report incorporates the amendments to Regulation S-X.
The FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") to amend the amortization period for certain purchased callable debt securities held at a premium. The guidance requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Management is currently evaluating the impacts of ASU 2017-08 on the financial statements.
9. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to December 31, 2017 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-1093; (ii) on the Fund’s website at janushenderson.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janushenderson.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Full Holdings
The Fund is required to disclose its complete holdings in the quarterly holdings report on Form N-Q within 60 days of the end of the first and third fiscal quarters, and in the annual report and semiannual report to Fund shareholders. These reports (i) are available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) are available without charge, upon request, by calling a Janus Henderson representative at 1-877-335-2687 (toll free) (or 1-800-525-3713 if you hold Class D shares). Portfolio holdings consisting of at least the names of the holdings are generally available on a monthly basis with a 30-day lag. Holdings are generally posted approximately two business days thereafter under Full Holdings for the Fund at janushenderson.com/info (or janushenderson.com/reports if you hold Class D Shares).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 14 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
Additionally, in connection with their consideration of whether to continue the investment advisory agreement and subadvisory agreement for each Fund, as applicable, the Trustees also received and reviewed information in connection with the transaction to combine the respective businesses of Henderson Group plc and Janus Capital Group, Inc., the parent company of Janus Capital (the “Transaction”), announced in October 2016, which closed in the second quarter of 2017. In this regard, the Trustees reviewed information regarding the impact of the Transaction on the services to be provided by Janus Capital and each subadviser, as applicable, to the Funds under such agreements prior to the close of the Transaction as well as the services provided after the Transaction closed.
At a meeting held on December 7, 2017, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2018 through February 1, 2019, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the
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Additional Information (unaudited)
agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies 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 and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2017, approximately 70% of the Funds were in the top two quartiles of performance, as reported by Morningstar, and for the 12 months ended September 30, 2017, approximately 46% of the Funds were in the top two quartiles of performance, as reported by Morningstar.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge
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quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Strategic Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Select Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson International Opportunities Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Henderson International Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that
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the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson All Asset Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Contrarian Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Enterprise Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Forty Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Growth and Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
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Additional Information (unaudited)
· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital and Intech had taken or were taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Intech had taken or were taking to improve performance.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Forty Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of
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that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the average management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 10% below the average total expenses of their respective Broadridge Expense Group peers and 18% below the average total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 8% below the average management fees for their Expense Groups and 9% below the average for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the average total expenses for its Broadridge Expense Group peers and to average total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional clients and to the fees Janus Capital charges to funds subadvised by Janus Capital; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) Janus mutual fund investors enjoy reasonable fees relative to the fees charged to Janus institutional and subadvised fund investors; (4) in three of seven product categories, the Funds receive proportionally better pricing than the industry in relation to Janus institutional clients; and (5) in seven of eight strategies, Janus Capital has lower management fees than funds subadvised by Janus Capital’s portfolio managers.
The Trustees considered the fees for each Fund for its fiscal year ended in 2016, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were
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Additional Information (unaudited)
reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to waive 11 basis points of management fees effective February 1, 2018 and also has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Strategic Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
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Additional Information (unaudited)
· For Janus Henderson Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
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Additional Information (unaudited)
Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson All Asset Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s total expenses effective June 5, 2017.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Research Fund, the Trustees noted that, although the Fund’s total expenses were equal to or exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective February 1, 2017.
· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
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Additional Information (unaudited)
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group averages for all share classes.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
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Additional Information (unaudited)
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for its sole share class.
The Trustees reviewed information on the overall profitability to Janus Capital and its affiliates of their relationship with the Funds, and considered profitability data of other fund managers. The Trustees also considered the financial information, estimated profitability and corporate structure of Janus Capital’s parent company before and after the Transaction. The Trustees recognized that profitability comparisons among fund managers are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. The Trustees also noted that the Trustees’ independent fee consultant reviewed the overall profitability of Janus Capital’s parent company prior to the Transaction, and the independent fee consultant found that, while assessing the reasonableness of Fund expenses in light of such profits was dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons were limited in accuracy by differences in complex size, business mix, institutional account orientation and other factors, after accepting these limitations, the level of profit earned by Janus Capital’s parent company was reasonable. In this regard, the independent consultant concluded that the profitability of Janus Capital’s parent company did not show excess nor did it show any insufficiency that could limit the ability to invest the resources needed to drive strong future investment performance on behalf of the Funds.
Additionally, the Trustees considered the estimated profitability to Janus Capital from the investment management services it provided to each Fund. The Trustees also considered such estimated profitability taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. In reviewing profitability, the Trustees noted that the estimated profitability for an individual Fund is necessarily a product of the allocation methodology utilized by Janus Capital to allocate its expenses as part of the estimated profitability calculation. In this regard, the Trustees noted that the independent fee consultant concluded that (1) the expense allocation methodology utilized by Janus Capital was reasonable and (2) the estimated profitability to Janus Capital from the investment management services it provided to each Fund was reasonable, including after taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. The Trustees also considered that the estimated profitability for an individual Fund was influenced by a number of factors, including not only the allocation methodology selected, but also the presence of fee waivers and expense caps, and whether the Fund’s investment management agreement contained breakpoints or a performance fee component. The Trustees determined, after taking into account these factors, among others, that Janus Capital’s estimated profitability with respect to each Fund was not unreasonable in relation to the services provided, and that the variation in the range of such estimated profitability among the Funds was not a material factor in the Board’s approval of the reasonableness of any Fund’s investment management fees.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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Additional Information (unaudited)
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted their independent fee consultant’s analysis of economies of scale in prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints or performance fees, their independent fee consultant concluded that 86% of these Funds’ share classes have contractual management fees (gross of waivers) below their Broadridge expense group averages. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing certain of these Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including past research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale it had considered in prior years, and their conflicting results, it is difficult to analytically confirm or deny the existence of economies of scale in the Janus complex. The independent consultant concluded that (1) to the extent there were economies of scale at Janus Capital, Janus Capital’s general strategy of setting fixed management fees below peers appeared to share any such economies with investors even on smaller Funds which have not yet achieved those economies and (2) by setting lower fixed fees from the start on these Funds, Janus Capital appeared to be investing to increase the likelihood that these Funds will grow to a level to achieve any scale economies that may exist. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
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Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2017. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus Henderson in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, swaptions, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
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Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
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Janus Henderson Adaptive Global Allocation Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
68 | DECEMBER 31, 2017 |
Janus Henderson Adaptive Global Allocation Fund
Notes
NotesPage1
Janus Investment Fund | 69 |
Knowledge. Shared
At Janus Henderson, we believe in the sharing of expert insight for better investment and business decisions. We call this ethos Knowledge. Shared.
Learn more by visiting janushenderson.com.
| ||||||||
This report is submitted for the general information of shareholders of the Fund. It is not an offer or solicitation for the Fund and is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||||||||
Janus Henderson, Janus, Henderson, Perkins, Intech and Henderson Geneva are trademarks or registered trademarks of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC. Funds distributed by Janus Henderson Distributors | ||||||||
125-24-93059 02-18 | ||||||||
SEMIANNUAL REPORT December 31, 2017 | |||
Janus Henderson All Asset Fund (formerly named Henderson All Asset Fund) | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | |||
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Table of Contents
Janus Henderson All Asset Fund
Janus Henderson All Asset Fund (unaudited)
PERFORMANCE
The Janus Henderson All Asset Fund’s Class I Shares generated a positive absolute return of 5.50% over the 6-month period from July 1, 2017 to December 31, 2017. The Fund’s primary benchmark of 3-Month USD LIBOR returned 0.61% and its secondary benchmark, the MSCI World Index, returned 10.61%. Since inception in 2012, the Fund has returned 4.66% annualized.
INVESTMENT ENVIRONMENT
The six months to the end of December 2017 were characterized by strong credit and equity markets against a backdrop of good macroeconomic momentum. Geopolitics generated headlines but had little investment impact in the end as volatility in equity markets dropped to historic lows.
Developments in North Korea dominated the headlines in August following missile launches and nuclear tests. However, these events didn’t have a lasting influence on financial markets and investors quickly moved on to other topics. There were plenty to focus on. In Japan, market sentiment was boosted by Prime Minister Abe’s significant victory in the snap elections, reaffirming his mandate to pull the Japanese economy out of stagnation. European equity markets had a tougher time, however, as a declaration of independence from Spain by Catalonia and a setback for Chancellor Merkel in the German election brought back some political instability in the eurozone. However, the year ended with a strong rally in many markets as U.S. tax reform was finally passed and is now expected to boost both corporate earnings and U.S. growth, at least in the near term.
U.S. equity markets slightly outperformed international markets over the period, although regions such as Japan and emerging markets produced particularly strong returns. The S&P 500® continued to hit new highs throughout the second half of 2017, led by very strong performance from the technology sector. International equity exposure received a boost from weakness in the U.S. dollar.
In U.S. Treasurys, longer-maturity bonds outperformed their shorter-dated equivalents as yields fell modestly for 30-year maturity debt. Two-year yields continued to be pushed higher by interest rate increases by the Federal Reserve, which expects to raise interest rates a further three times in 2018. However, the board remains split between those worried about future weakness in inflation and those that believe that tax reform may spur stronger growth and therefore inflation.
Corporate bonds benefited from falling credit spreads for both investment-grade and high-yield bonds as investors continued to look for yield. Similarly, emerging market debt gained from lower credit spreads but also from the weakness in the U.S. dollar, which supported local currency bonds.
Gold performed well in the commodities space due to weakness in the greenback to finish a strong year for the precious metal. Oil also rose strongly over the period as U.S. inventories dropped and geopolitical tensions mounted.
PERFORMANCE DISCUSSION
The Fund outperformed its primary benchmark over the reporting period. Outperformance was largely generated by the Fund’s risk assets, with equity holdings providing the majority of returns.
All equity regions contributed to performance, with the largest contributions coming from emerging markets and Japanese equities. The Janus Henderson Emerging Markets Fund and TOPIX futures were the leading performers over the period. Futures positions in the UK FTSE 100 and Eurostoxx also contributed during the six months.
In U.S. equities, sector positions in regional banks and technology added value. Technology was by far the best-performing equity sector over 2017 and this was captured
Janus Investment Fund | 1 |
Janus Henderson All Asset Fund (unaudited)
through the Vanguard Information Technology ETF, which we sold during the period. The SPDR S&P Regional Banking ETF benefited as the Federal Reserve continued to raise interest rates and tax reform added to optimism about economic growth.
Fixed income returns were smaller but still positive. While the U.S. Treasury holdings were flat overall, we generated some positive performance from the U.S. Treasury Inflation-Protected Securities exposure that offset a small decline in U.S. Treasury futures. Corporate bonds and emerging market debt were helped by falling credit spreads over Treasurys and good performance of emerging market currencies against the U.S. dollar.
Alternatives added value over the period, with each of the alternative investment strategies generating good performance. The Sprott Physical Gold Trust also rose modestly, helped by a weaker U.S. dollar. Along with the U.S. Treasury futures, property was also a modest detractor over the period. We have been reducing the property exposure and continue to do so.
Please see the Derivative Instruments section in the “Notes to Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
On balance, our core macro view as we enter 2018 is a constructive one, featuring a synchronized global recovery, a modest pick-up in inflation, and a gradual normalization of monetary policy. Still, with few assets looking particularly cheap, we have to question the extent to which many of the positives features of our view are already priced into financial markets.
We enter the year with equities remaining, we believe, our preferred asset class. While the ending of quantitative easing will be a challenge for all financial markets, equities look best from a relative valuation perspective and offer solid earnings growth as well. However, since absolute valuations are far from cheap, the bull market is long in the tooth and some signs of investor complacency are emerging. We do not see this as a time to be “all-in.” Looking ahead, we expect lower returns and higher volatility compared to 2017 and think it is sensible to start the year keeping some firepower in reserve, in the form of cash that we can put to work in any dips that do materialize.
Thank you for your investment in Janus Henderson All Asset Fund.
2 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund (unaudited)
Fund At A Glance
December 31, 2017
Holdings - (% of Net Assets) | |||
Fidelity Investments Money Market Treasury Portfolio | 39.2 | % | |
iShares TIPS Bond ETF | 6.0 | ||
Janus Henderson Emerging Markets Fund - Class N Shares | 4.7 | ||
AQR Equity Market Neutral Fund | 4.0 | ||
PIMCO Enhanced Short Maturity Active ETF | 3.8 | ||
T Rowe Price US High Yield Fund | 3.8 | ||
Janus Henderson Global Equity Income Fund - Class N Shares | 3.8 | ||
AQR Managed Futures Strategy Fund | 3.5 | ||
BlackRock Emerging Markets Flexible Dynamic Bond Portfolio | 3.2 | ||
iShares Edge MSCI Min Vol Emerging Markets | 3.2 | ||
PowerShares International Dividend Achievers Portfolio | 3.0 | ||
SPDR S&P Regional Banking | 3.0 | ||
PowerShares Senior Loan Portfolio | 2.9 | ||
Janus Henderson Strategic Income Fund - Class N Shares | 2.7 | ||
iShares Edge MSCI Min Vol EAFE | 2.5 | ||
iShares JP Morgan USD Emerging Markets Bond | 2.4 | ||
Sprott Physical Gold Trust | 2.0 | ||
ASG Global Alternatives Fund | 2.0 | ||
US Cities Fund LP | 1.7 | ||
VanEck Vectors JP Morgan EM Local Currency Bond | 1.4 |
Asset Allocation - (% of Net Assets) | ||||
Money Markets | 39.2% | |||
Exchange-Traded Funds (ETFs) | 30.2% | |||
Fixed Income Funds | 13.5% | |||
Alternative Funds | 9.5% | |||
Equity Funds | 6.4% | |||
Other | 1.2% | |||
100.0% | ||||
Janus Investment Fund | 3 |
Janus Henderson All Asset Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended December 31, 2017 |
|
| per the October 27, 2017 prospectuses | |||||||
|
| Fiscal | One | Five | Since |
|
| Total Annual Fund | Net Annual Fund | |
Class A Shares at NAV |
| 5.36% | 10.96% | 4.55% | 4.40% |
|
| 1.54% | 1.29% | |
Class A Shares at MOP |
| -0.68% | 4.58% | 3.32% | 3.33% |
|
|
|
| |
Class C Shares at NAV | 5.03% | 10.19% | 3.76% | 3.61% |
|
| 2.30% | 2.05% | ||
Class C Shares at CDSC |
| 4.04% | 9.19% | 3.76% | 3.61% |
|
|
|
| |
Class D Shares(1) |
| 5.49% | 11.07% | 4.51% | 4.36% |
|
| 1.37% | 1.11% | |
Class I Shares |
| 5.50% | 11.23% | 4.80% | 4.66% |
|
| 1.27% | 1.03% | |
Class N Shares |
| 5.54% | 11.28% | 4.69% | 4.53% |
|
| 1.23% | 0.97% | |
Class S Shares |
| 5.27% | 10.70% | 4.16% | 4.01% |
|
| 1.71% | 1.46% | |
Class T Shares |
| 5.52% | 11.06% | 4.43% | 4.28% |
|
| 1.46% | 1.21% | |
3-Month USD LIBOR |
| 0.61% | 1.11% | 0.50% | 0.50% |
|
|
|
| |
MSCI World Index (Net) |
| 10.61% | 22.40% | 11.64% | 10.75% |
|
|
|
| |
MSCI World Index (Gross) |
| 10.86% | 23.07% | 12.26% | 11.38% |
|
|
|
| |
Morningstar Quartile - Class I Shares |
| - | 4th | 4th | 4th |
|
|
|
| |
Morningstar Ranking - based on total returns for World Allocation Funds |
| - | 399/459 | 301/391 | 299/376 |
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Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 800.668.0434 (or 800.525.3713 if you hold shares directly with Janus Henderson) or visit janushenderson.com/performance (or janushenderson.com/allfunds if you hold shares directly with Janus Henderson).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
4 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund (unaudited)
Performance
Net expense ratios reflect the expense waiver, if any, contractually agreed to through November 1, 2018.
The expense ratios shown are estimated.
Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes.
See Financial Highlights for actual expense ratios during the reporting period.
Returns of the Fund shown prior to June 5, 2017 are those for Henderson All Asset Fund (the “Predecessor Fund”), which merged into the Fund after the close of business on June 2, 2017. The Predecessor Fund was advised by Henderson Global Investors (North America) Inc. and subadvised by Henderson Investment Management Limited. Class A Shares, Class C Shares, Class I Shares, and Class R6 Shares of the Predecessor Fund were reorganized into Class A Shares, Class C Shares, Class I Shares, and Class N Shares, respectively, of the Fund. In connection with this reorganization, certain shareholders of the Predecessor Fund who held shares directly with the Predecessor Fund and not through an intermediary had the Class A Shares, Class C Shares, Class I Shares, and Class N Shares of the Fund received in the reorganization automatically exchanged for Class D Shares of the Fund following the reorganization. Class A Shares, Class C Shares, and Class I Shares of the Predecessor Fund commenced operations with the Predecessor Fund’s inception on March 30, 2012. Class R6 Shares of the Predecessor Fund commenced operations on November 30, 2015.
Performance of Class A Shares shown for periods prior to June 5, 2017 reflects the performance of Class A Shares of the Predecessor Fund, calculated using the fees and expenses of Class A Shares of the Predecessor Fund, in effect during the periods shown, net of any fee and expense limitations or waivers.
Performance of Class C Shares shown for periods prior to June 5, 2017 reflects the performance of Class C Shares of the Predecessor Fund, calculated using the fees and expenses of Class C Shares of the Predecessor Fund, in effect during the periods shown, net of any fee and expense limitations or waivers.
Performance of Class I Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the fees and expenses of Class I Shares of the Predecessor Fund, in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Performance of Class N Shares shown for periods prior to June 5, 2017 reflects the performance of Class R6 Shares of the Predecessor Fund, calculated using the fees and expenses of Class R6 Shares of the Predecessor Fund, in effect during the periods shown, net of any applicable fee and expense limitations or waivers, except that for periods prior to November 30, 2015, performance for Class N Shares reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class N Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class S Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class S Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class T Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class D Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2017 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions.
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.
See “Useful Information About Your Fund Report.”
Effective June 5, 2017, the Fund’s performance is compared to the MSCI World Index net of foreign withholding taxes. Previously, the Predecessor Fund used the MSCI World Index gross of foreign withholding taxes. The net version of the benchmark is believed to more closely reflect the Fund’s investment universe.
Janus Investment Fund | 5 |
Janus Henderson All Asset Fund (unaudited)
Performance
*The Predecessor Fund’s inception date – March 30, 2012
(1) Closed to certain new investors.
6 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical | |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,053.60 | $4.56 |
| $1,000.00 | $1,020.77 | $4.48 | 0.88% | ||
Class C Shares | $1,000.00 | $1,050.30 | $8.32 |
| $1,000.00 | $1,017.09 | $8.19 | 1.61% | ||
Class D Shares | $1,000.00 | $1,054.90 | $3.63 |
| $1,000.00 | $1,021.68 | $3.57 | 0.70% | ||
Class I Shares | $1,000.00 | $1,055.00 | $3.21 |
| $1,000.00 | $1,022.08 | $3.16 | 0.62% | ||
Class N Shares | $1,000.00 | $1,055.40 | $2.85 |
| $1,000.00 | $1,022.43 | $2.80 | 0.55% | ||
Class S Shares | $1,000.00 | $1,052.70 | $4.76 |
| $1,000.00 | $1,020.57 | $4.69 | 0.92% | ||
Class T Shares | $1,000.00 | $1,055.20 | $3.47 |
| $1,000.00 | $1,021.83 | $3.41 | 0.67% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
Janus Investment Fund | 7 |
Janus Henderson All Asset Fund
Schedule of Investments (unaudited)
December 31, 2017
| Value | ||||||
Investment Companies – 98.8% | |||||||
Alternative Funds – 9.5% | |||||||
AQR Equity Market Neutral Fund | 162,124 | $1,992,507 | |||||
AQR Managed Futures Strategy Fund* | 190,973 | 1,764,591 | |||||
ASG Global Alternatives Fund | 88,889 | 999,112 | |||||
4,756,210 | |||||||
Equity Funds – 6.4% | |||||||
Janus Henderson Emerging Markets Fund - Class N Shares£ | 216,898 | 2,346,838 | |||||
US Cities Fund LP | 1,508 | 850,308 | |||||
3,197,146 | |||||||
Exchange-Traded Funds (ETFs) – 30.2% | |||||||
iShares Edge MSCI Min Vol EAFE | 17,038 | 1,243,433 | |||||
iShares Edge MSCI Min Vol Emerging Markets | 26,389 | 1,603,396 | |||||
iShares JP Morgan USD Emerging Markets Bond | 10,422 | 1,209,994 | |||||
iShares TIPS Bond ETF | 26,632 | 3,038,179 | |||||
PIMCO Enhanced Short Maturity Active ETF | 19,098 | 1,939,593 | |||||
PowerShares International Dividend Achievers Portfolio | 92,109 | 1,523,483 | |||||
PowerShares Senior Loan Portfolio | 62,715 | 1,444,954 | |||||
SPDR S&P Regional Banking | 25,275 | 1,487,434 | |||||
Sprott Physical Gold Trust* | 96,641 | 1,023,428 | |||||
VanEck Vectors JP Morgan EM Local Currency Bond | 37,367 | 709,226 | |||||
15,223,120 | |||||||
Fixed Income Funds – 13.5% | |||||||
BlackRock Emerging Markets Flexible Dynamic Bond Portfolio | 171,376 | 1,617,787 | |||||
Janus Henderson Global Equity Income Fund - Class N Shares£ | 237,962 | 1,901,316 | |||||
Janus Henderson Strategic Income Fund - Class N Shares£ | 143,875 | 1,366,808 | |||||
T Rowe Price US High Yield Fund | 191,542 | 1,928,825 | |||||
6,814,736 | |||||||
Money Markets – 39.2% | |||||||
Fidelity Investments Money Market Treasury Portfolio, 1.1400%ºº | 19,706,014 | 19,706,014 | |||||
Total Investments (total cost $48,196,039) – 98.8% | 49,697,226 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 1.2% | 624,878 | ||||||
Net Assets – 100% | $50,322,104 | ||||||
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of | |||||
Investment | |||||
Country | Value | Securities | |||
United States | $48,673,798 | 97.9 | % | ||
Canada | 1,023,428 | 2.1 | |||
Total | $49,697,226 | 100.0 | % |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
8 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Schedule of Investments (unaudited)
December 31, 2017
Schedules of Affiliated Investments – (% of Net Assets)
Dividend Income(1) | Realized Gain/(Loss)(1) | Change in Unrealized Appreciation/ Depreciation(1) | Value at 12/31/17 | |||||||
Investment Companies – 11.2% | ||||||||||
Equity Funds – 4.7% | ||||||||||
Janus Henderson Emerging Markets Fund - Class N Shares | $ | 70,388 | $ | — | $ | 197,437 | $ | 2,346,838 | ||
Fixed Income Funds – 6.5% | ||||||||||
Janus Henderson Global Equity Income Fund - Class N Shares | 50,925 | — | 98,019 | 1,901,316 | ||||||
Janus Henderson Strategic Income Fund - Class N Shares | 17,662 | — | 8,534 | 1,366,808 | ||||||
Total Fixed Income Funds | $ | 68,587 | $ | — | $ | 106,553 | $ | 3,268,124 | ||
Total Affiliated Investments – 11.2% | $ | 138,975 | $ | — | $ | 303,990 | $ | 5,614,962 | ||
(1)For securities that were affiliated for a portion of the period ended December 31, 2017, this column reflects amounts for the entire period ended December 31, 2017 and not just the period in which the security was affiliated.
Share Balance at 6/30/17 | Purchases | Sales | Share Balance at 12/31/17 | |||||||
Investment Companies – 11.2% | ||||||||||
Equity Funds – 4.7% | ||||||||||
Janus Henderson Emerging Markets Fund - Class N Shares | 210,214 | 6,684 | — | 216,898 | ||||||
Fixed Income Funds – 6.5% | ||||||||||
Janus Henderson Global Equity Income Fund - Class N Shares | 231,489 | 6,473 | — | 237,962 | ||||||
Janus Henderson Strategic Income Fund - Class N Shares | 142,014 | 1,861 | — | 143,875 | ||||||
Schedule of Forward Foreign Currency Exchange Contracts, Open |
Counterparty/ Foreign Currency | Settlement Date | Foreign Currency Amount (Sold)/ Purchased | USD Currency Amount (Sold)/ Purchased | Market Value and Unrealized Appreciation/ (Depreciation) | ||||
BNP Paribas: | ||||||||
British Pound | 1/22/18 | 1,112,706 | $ | (1,488,766) | $ | 14,409 | ||
Euro | 1/22/18 | 1,745,828 | (2,066,181) | 31,143 | ||||
Japanese Yen | 1/22/18 | 279,992,749 | (2,474,853) | 13,241 | ||||
Total | $ | 58,793 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Henderson All Asset Fund
Schedule of Investments (unaudited)
December 31, 2017
Schedule of Futures
Description | Number of Contracts | Expiration Date | Value and Notional Amount | Unrealized Appreciation/ (Depreciation) | Variation Margin Asset/(Liability) | ||||||||
Futures Purchased: | |||||||||||||
10-Year US Treasury Note | 21 | 3/20/18 | $ | 2,604,984 | $ | (10,641) | $ | 12,141 | |||||
EURO STOXX 50 Index | 92 | 3/22/18 | 3,855,316 | (96,610) | (52,809) | ||||||||
FTSE 100 Index | 27 | 3/23/18 | 2,783,828 | 72,971 | 39,635 | ||||||||
NIKKEI 225 | 8 | 3/19/18 | 1,615,480 | 13,076 | (7,102) | ||||||||
S&P 500 E-mini | 11 | 3/16/18 | 1,471,800 | 6,380 | (5,500) | ||||||||
TOPIX Index | 15 | 3/20/18 | 2,419,226 | 43,326 | (13,303) | ||||||||
Total | $ | 28,502 | $ | (26,938) | |||||||||
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2017.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of December 31, 2017 | ||||||||||
|
|
|
| Currency |
| Equity |
| Interest Rate |
| Total |
Asset Derivatives: | ||||||||||
Forward foreign currency exchange contracts | $ 58,793 | $ - | $ - | $ 58,793 | ||||||
Variation margin receivable | - | 39,635 | 12,141 | 51,776 | ||||||
Total Asset Derivatives |
| $ 58,793 |
| $ 39,635 |
| $ 12,141 |
| $110,569 | ||
| ||||||||||
Liability Derivatives: | ||||||||||
Variation margin payable | $ - | $ 78,714 | $ - | $ 78,714 | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Schedule of Investments (unaudited)
December 31, 2017
The following tables provides information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2017.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended December 31, 2017 | |||||||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | |||||||||
Derivative | Currency |
| Equity |
| Interest Rate |
| Total | ||
Futures contracts | $ - | $616,140 | $ (6,210) | $609,930 | |||||
Forward foreign currency exchange contracts | 179,544 | - | - | 179,544 | |||||
Total | $179,544 |
| $616,140 |
| $ (6,210) |
| $789,474 | ||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | |||||||||
Derivative | Currency |
| Equity |
| Interest Rate |
| Total | ||
Futures contracts | $ - | $212,136 | $ (5,719) | $206,417 | |||||
Forward foreign currency exchange contracts | (16,711) | - | - | (16,711) | |||||
Total | $ (16,711) |
| $212,136 |
| $ (5,719) |
| $189,706 | ||
Please see the "Net Realized Gain/(Loss) on Investments" and "Change in Unrealized Net Appreciation/Depreciation" sections of the Fund’s Statement of Operations.
Average Ending Monthly Market Value of Derivative Instruments During the Period Ended December 31, 2017 | |
| Market Value |
Forward foreign currency exchange contracts, purchased | $ 8,065,196 |
Futures contracts, purchased | 13,087,460 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Henderson All Asset Fund
Notes to Schedule of Investments and Other Information (unaudited)
LIBOR (London Interbank Offered Rate) | LIBOR (London Interbank Offered Rate) is a short-term interest rate that banks offer one another and generally represents current cash rates. |
MSCI World IndexSM | MSCI World IndexSM reflects the equity market performance of global developed markets. |
S&P 500® Index | S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance. |
ETF | Exchange-Traded Fund |
LP | Limited Partnership |
SPDR | Standard & Poor's Depositary Receipt |
* | Non-income producing security. |
ºº | Rate shown is the 7-day yield as of December 31, 2017. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. |
12 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of December 31, 2017. See Notes to Financial Statements for more information. | |||||||||||||
Valuation Inputs Summary | |||||||||||||
Level 2 - | Level 3 - | ||||||||||||
Level 1 - | Other Significant | Significant | |||||||||||
Quotes Prices | Observable Inputs | Unobservable Inputs | |||||||||||
Assets | |||||||||||||
Investments in Securities: | |||||||||||||
Investment Companies | |||||||||||||
Alternative Funds | $ | 4,756,210 | $ | - | $ | - | |||||||
Equity Funds | 2,346,838 | 850,308 | - | ||||||||||
Exchange-Traded Funds (ETFs) | 15,223,120 | - | - | ||||||||||
Fixed Income Funds | 6,814,736 | - | - | ||||||||||
Money Markets | 19,706,014 | - | - | ||||||||||
Total Investments in Securities | $ | 48,846,918 | $ | 850,308 | $ | - | |||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | - | 58,793 | - | ||||||||||
Variation Margin Receivable | 51,776 | - | - | ||||||||||
Total Assets | $ | 48,898,694 | $ | 909,101 | $ | - | |||||||
Liabilities | |||||||||||||
Other Financial Instruments(a): | |||||||||||||
Variation Margin Payable | 78,714 | - | - | ||||||||||
Total Liabilities | $ | 78,714 | $ | - | $ | - | |||||||
(a) | Other financial instruments include forward foreign currency exchange, futures, written options, written swaptions, and swap contracts. Forward foreign currency exchange contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures, certain written options on futures, and centrally cleared swap contracts are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Written options, written swaptions, and other swap contracts are reported at their market value at measurement date. | ||||||||||||
Janus Investment Fund | 13 |
Janus Henderson All Asset Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Unaffiliated investments, at value(1) | $ | 44,082,264 | ||||
Affiliated investments, at value(2) | 5,614,962 | |||||
Deposits with brokers for futures | 551,652 | |||||
Forward foreign currency exchange contracts | 58,793 | |||||
Variation margin receivable | 51,776 | |||||
Non-interested Trustees' deferred compensation | 961 | |||||
Receivables: | ||||||
Fund shares sold | 81,409 | |||||
Dividends | 26,987 | |||||
Foreign tax reclaims | 570 | |||||
Other assets | 34,579 | |||||
Total Assets |
|
| 50,503,953 |
| ||
Liabilities: | ||||||
Due to custodian | 2,045 | |||||
Variation margin payable | 78,714 | |||||
Payables: | — | |||||
Fund shares repurchased | 35,132 | |||||
Investments purchased | 27,895 | |||||
Printing fees | 17,781 | |||||
12b-1 Distribution and shareholder servicing fees | 7,138 | |||||
Advisory fees | 4,279 | |||||
Transfer agent fees and expenses | 2,587 | |||||
Registration fees | 2,518 | |||||
Custodian fees | 1,317 | |||||
Non-interested Trustees' deferred compensation fees | 961 | |||||
Fund administration fees | 344 | |||||
Non-interested Trustees' fees and expenses | 277 | |||||
Professional fees | 68 | |||||
Accrued expenses and other payables | 793 | |||||
Total Liabilities |
|
| 181,849 |
| ||
Net Assets |
| $ | 50,322,104 |
| ||
See Notes to Financial Statements. | |
14 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 48,420,401 | ||||
Undistributed net investment income/(loss) | (31,363) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 342,991 | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 1,590,075 | |||||
Total Net Assets |
| $ | 50,322,104 |
| ||
Net Assets - Class A Shares | $ | 1,915,965 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 182,337 | |||||
Net Asset Value Per Share(3) |
| $ | 10.51 |
| ||
Maximum Offering Price Per Share(4) |
| $ | 11.15 |
| ||
Net Assets - Class C Shares | $ | 7,537,802 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 729,274 | |||||
Net Asset Value Per Share(3) |
| $ | 10.34 |
| ||
Net Assets - Class D Shares | $ | 726,840 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 69,622 | |||||
Net Asset Value Per Share |
| $ | 10.44 |
| ||
Net Assets - Class I Shares | $ | 7,561,371 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 724,142 | |||||
Net Asset Value Per Share |
| $ | 10.44 |
| ||
Net Assets - Class N Shares | $ | 32,475,691 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,117,370 | |||||
Net Asset Value Per Share |
| $ | 10.42 |
| ||
Net Assets - Class S Shares | $ | 52,181 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,991 | |||||
Net Asset Value Per Share |
| $ | 10.46 |
| ||
Net Assets - Class T Shares | $ | 52,254 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 4,997 | |||||
Net Asset Value Per Share |
| $ | 10.46 |
| ||
(1) Includes cost of $43,069,932. (2) Includes cost of $5,126,107. (3) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (4) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
Janus Investment Fund | 15 |
Janus Henderson All Asset Fund
Statement of Operations (unaudited)
For the period ended December 31, 2017
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 462,456 | ||
Dividends from affiliates | 138,975 | ||||
Other income | 24,500 | ||||
Total Investment Income |
| 625,931 |
| ||
Expenses: | |||||
Advisory fees | 98,796 | ||||
12b-1 Distribution and shareholder servicing fees: | |||||
Class A Shares | 2,388 | ||||
Class C Shares | 38,237 | ||||
Class S Shares | 64 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 208 | ||||
Class S Shares | 64 | ||||
Class T Shares | 64 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 718 | ||||
Class C Shares | 2,480 | ||||
Class I Shares | 2,488 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 141 | ||||
Class C Shares | 415 | ||||
Class D Shares | 49 | ||||
Class I Shares | 232 | ||||
Class N Shares | 657 | ||||
Registration fees | 25,658 | ||||
Professional fees | 24,287 | ||||
Custodian fees | 5,405 | ||||
Shareholder reports expense | 3,808 | ||||
Accounting systems fee | 3,266 | ||||
Fund administration fees | 1,993 | ||||
Non-interested Trustees’ fees and expenses | 143 | ||||
Other expenses | 8,315 | ||||
Total Expenses |
| 219,876 |
| ||
Less: Excess Expense Reimbursement and Waivers |
| (36,417) |
| ||
Net Expenses |
| 183,459 |
| ||
Net Investment Income/(Loss) |
| 442,472 |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | 266,938 | ||||
Forward foreign currency exchange contracts | 179,544 | ||||
Futures contracts | 609,930 | ||||
Capital gain distributions from underlying funds | 45,266 | ||||
Total Net Realized Gain/(Loss) on Investments |
| 1,101,678 |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 557,956 | ||||
Investments in affiliates | 303,990 | ||||
Forward foreign currency exchange contracts | (16,711) | ||||
Futures contracts | 206,417 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 1,051,652 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 2,595,802 |
| ||
See Notes to Financial Statements. | |
16 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Statements of Changes in Net Assets
|
|
| Period ended |
| Period ended |
| Year ended | ||||
Operations: | |||||||||||
Net investment income/(loss) | $ | 442,472 | $ | 473,118 | $ | 467,923 | |||||
Net realized gain/(loss) on investments | 1,101,678 | 3,531,639 | (1,417,530) | ||||||||
Change in unrealized net appreciation/depreciation | 1,051,652 | (1,033,928) | 290,617 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 2,595,802 |
|
| 2,970,829 |
|
| (658,990) | |||
Dividends and Distributions to Shareholders: | |||||||||||
Dividends from Net Investment Income | |||||||||||
Class A Shares | (29,769) | (16,309) | (15,397) | ||||||||
Class C Shares | (40,623) | — | — | ||||||||
Class D Shares | (14,536) | — | N/A | ||||||||
Class I Shares | (156,220) | (52,539) | (101,094) | ||||||||
Class N Shares | (667,439) | (241,031) | (230,208) | ||||||||
Class S Shares | (905) | — | N/A | ||||||||
Class T Shares | (974) | — | N/A | ||||||||
| Total Dividends from Net Investment Income |
| (910,466) |
|
| (309,879) |
|
| (346,699) | ||
Distributions from Net Realized Gain from Investment Transactions | |||||||||||
Class A Shares | (100,034) | — | (161,332) | ||||||||
Class C Shares | (413,271) | — | (297,759) | ||||||||
Class D Shares | (37,421) | — | N/A | ||||||||
Class I Shares | (400,627) | — | (411,454) | ||||||||
Class N Shares | (1,696,854) | — | (860,579) | ||||||||
Class S Shares | (2,726) | — | N/A | ||||||||
Class T Shares | (2,726) | — | N/A | ||||||||
| Total Distributions from Net Realized Gain from Investment Transactions | (2,653,659) |
|
| — |
|
| (1,731,124) | |||
Net Decrease from Dividends and Distributions to Shareholders |
| (3,564,125) |
|
| (309,879) |
|
| (2,077,823) | |||
Capital Share Transactions: | |||||||||||
Class A Shares | 84,729 | (2,312,576) | (2,065,085) | ||||||||
Class C Shares | (355,233) | (1,732,547) | (1,096,409) | ||||||||
Class D Shares | 682,232 | 79,738 | N/A | ||||||||
Class I Shares | 379,552 | (3,845,659) | (32,054,787) | ||||||||
Class N Shares | 2,364,293 | 149,275 | 29,428,493 | ||||||||
Class S Shares | 3,631 | 50,010 | N/A | ||||||||
Class T Shares | 3,700 | 50,010 | N/A | ||||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 3,162,904 |
|
| (7,561,749) |
|
| (5,787,788) | |||
Net Increase/(Decrease) in Net Assets |
| 2,194,581 |
|
| (4,900,799) |
|
| (8,524,601) | |||
Net Assets: | |||||||||||
Beginning of period | 48,127,523 | 53,028,322 | 61,552,923 | ||||||||
| End of period | $ | 50,322,104 |
| $ | 48,127,523 |
| $ | 53,028,322 | ||
Undistributed Net Investment Income/(Loss) | $ | (31,363) |
| $ | 436,631 |
| $ | 68,893 | |||
(1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Period from June 5, 2017 (inception date) through June 30, 2017 for Class D Shares, Class S Shares and Class T Shares. (3) Period from November 30, 2015 (inception date) through July 31, 2016 for Class N Shares. (4) Certain prior year amounts have been reclassified to conform to the current year presentation. Presentation of certain financial statement line item descriptions have been changed to conform to the current year presentation. |
See Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Henderson All Asset Fund
Financial Highlights
Class A Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.70 |
|
| $10.12 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.09 | 0.09 | |||||||
Net realized and unrealized gain/(loss) | 0.48 | 0.53 | |||||||
Total from Investment Operations |
| 0.57 |
|
| 0.62 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.17) | (0.04) | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.76) |
|
| (0.04) |
| |||
Net Asset Value, End of Period | $10.51 | $10.70 | |||||||
Total Return* |
| 5.36% |
|
| 6.18% |
| |||
Net Assets, End of Period (in thousands) | $1,916 | $1,862 | |||||||
Average Net Assets for the Period (in thousands) | $1,905 | $3,232 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 1.03% | 1.01% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 0.88% | 0.85% | |||||||
Ratio of Net Investment Income/(Loss)(3) | 1.61% | 0.91% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
Class C Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.46 |
|
| $9.93 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.05 | 0.02 | |||||||
Net realized and unrealized gain/(loss) | 0.48 | 0.51 | |||||||
Total from Investment Operations |
| 0.53 |
|
| 0.53 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.06) | — | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.65) |
|
| — |
| |||
Net Asset Value, End of Period | $10.34 | $10.46 | |||||||
Total Return* |
| 5.03% |
|
| 5.34% |
| |||
Net Assets, End of Period (in thousands) | $7,538 | $7,979 | |||||||
Average Net Assets for the Period (in thousands) | $7,643 | $8,949 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 1.76% | 1.78% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 1.61% | 1.60% | |||||||
Ratio of Net Investment Income/(Loss)(3) | 0.89% | 0.22% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements. | |
18 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Financial Highlights
Class A Shares | ||||||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012(1) |
| |||
Net Asset Value, Beginning of Period |
| $10.55 |
|
| $10.76 |
|
| $10.52 |
|
| $9.93 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss)(2) | 0.08 | 0.09 | 0.10 | 0.09 | 0.01 | |||||||||||||
Net realized and unrealized gain/(loss) | (0.17) | 0.12 | 0.56 | 0.61 | (0.08) | |||||||||||||
Total from Investment Operations |
| (0.09) |
|
| 0.21 |
|
| 0.66 |
|
| 0.70 |
|
| (0.07) |
| |||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.03) | (0.14) | (0.11) | (0.09) | — | |||||||||||||
Distributions (from capital gains) | (0.31) | (0.28) | (0.31) | (0.02) | — | |||||||||||||
Total Dividends and Distributions |
| (0.34) |
|
| (0.42) |
|
| (0.42) |
|
| (0.11) |
|
| — |
| |||
Net Asset Value, End of Period | $10.12 | $10.55 | $10.76 | $10.52 | $9.93 | |||||||||||||
Total Return* |
| (0.71)% |
|
| 1.94% |
|
| 6.44% |
|
| 7.05% |
|
| (0.70)% |
| |||
Net Assets, End of Period (in thousands) | $4,011 | $6,396 | $8,929 | $12,023 | $5,740 | |||||||||||||
Average Net Assets for the Period (in thousands) | $4,935 | $7,122 | $10,041 | $10,644 | $1,617 | |||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 0.95%(4) | 0.91% | 0.93% | 1.10% | 2.13% | |||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 0.85% | 0.85% | 0.85% | 0.85% | 0.85% | |||||||||||||
Ratio of Net Investment Income/(Loss)(3) | 0.84% | 0.88% | 0.94% | 0.86% | 0.43% | |||||||||||||
Portfolio Turnover Rate | 44% | 19% | 52% | 37% | 7% | |||||||||||||
1 | ||||||||||||||||||
Class C Shares | ||||||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012(1) |
| |||
Net Asset Value, Beginning of Period |
| $10.39 |
|
| $10.63 |
|
| $10.43 |
|
| $9.91 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss)(2) | 0.01 | 0.02 | 0.02 | 0.02 | (0.01) | |||||||||||||
Net realized and unrealized gain/(loss) | (0.16) | 0.10 | 0.56 | 0.59 | (0.08) | |||||||||||||
Total from Investment Operations |
| (0.15) |
|
| 0.12 |
|
| 0.58 |
|
| 0.61 |
|
| (0.09) |
| |||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | — | (0.08) | (0.07) | (0.07) | — | |||||||||||||
Distributions (from capital gains) | (0.31) | (0.28) | (0.31) | (0.02) | — | |||||||||||||
Total Dividends and Distributions |
| (0.31) |
|
| (0.36) |
|
| (0.38) |
|
| (0.09) |
|
| — |
| |||
Net Asset Value, End of Period | $9.93 | $10.39 | $10.63 | $10.43 | $9.91 | |||||||||||||
Total Return* |
| (1.37)% |
|
| 1.14% |
|
| 5.61% |
|
| 6.18% |
|
| (0.90)% |
| |||
Net Assets, End of Period (in thousands) | $9,247 | $10,824 | $11,094 | $9,357 | $1,013 | |||||||||||||
Average Net Assets for the Period (in thousands) | $9,422 | $11,557 | $10,389 | $5,333 | $376 | |||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 1.71%(4) | 1.68% | 1.67% | 1.80% | 4.49% | |||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 1.60% | 1.60% | 1.60% | 1.60% | 1.60% | |||||||||||||
Ratio of Net Investment Income/(Loss)(3) | 0.09% | 0.18% | 0.20% | 0.20% | (0.24)% | |||||||||||||
Portfolio Turnover Rate | 44% | 19% | 52% | 37% | 7% | |||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from March 30, 2012 (inception date) through July 31, 2012. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. (4) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.01% higher had the custodian not reimbursed the Fund.. |
See Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Henderson All Asset Fund
Financial Highlights
Class D Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.67 |
|
| $10.76 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.14 | 0.03 | |||||||
Net realized and unrealized gain/(loss) | 0.45 | (0.12)(3) | |||||||
Total from Investment Operations |
| 0.59 |
|
| (0.09) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.23) | — | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.82) |
|
| — |
| |||
Net Asset Value, End of Period | $10.44 | $10.67 | |||||||
Total Return* |
| 5.49% |
|
| (0.84)% |
| |||
Net Assets, End of Period (in thousands) | $727 | $79 | |||||||
Average Net Assets for the Period (in thousands) | $341 | $77 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(4) | 1.14% | 0.86% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(4) | 0.70% | 0.69% | |||||||
Ratio of Net Investment Income/(Loss)(4) | 2.68% | 3.79% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
Class I Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(5) |
| ||||
Net Asset Value, Beginning of Period |
| $10.67 |
|
| $10.10 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.11 | 0.11 | |||||||
Net realized and unrealized gain/(loss) | 0.48 | 0.53 | |||||||
Total from Investment Operations |
| 0.59 |
|
| 0.64 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.23) | (0.07) | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.82) |
|
| (0.07) |
| |||
Net Asset Value, End of Period | $10.44 | $10.67 | |||||||
Total Return* |
| 5.50% |
|
| 6.38% |
| |||
Net Assets, End of Period (in thousands) | $7,561 | $7,334 | |||||||
Average Net Assets for the Period (in thousands) | $7,609 | $8,349 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(4) | 0.76% | 0.79% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(4) | 0.62% | 0.59% | |||||||
Ratio of Net Investment Income/(Loss)(4) | 1.91% | 1.19% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 5, 2017 (inception date) through June 30, 2017. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. (4) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. (5) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. |
See Notes to Financial Statements. | |
20 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Financial Highlights
Class I Shares | ||||||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013 |
|
| 2012(1) |
| |||
Net Asset Value, Beginning of Period |
| $10.55 |
|
| $10.77 |
|
| $10.54 |
|
| $9.94 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | ||||||||||||||||||
Net investment income/(loss)(2) | 0.07 | 0.13 | 0.13 | 0.11 | 0.02 | |||||||||||||
Net realized and unrealized gain/(loss) | (0.13) | 0.10 | 0.56 | 0.61 | (0.08) | |||||||||||||
Total from Investment Operations |
| (0.06) |
|
| 0.23 |
|
| 0.69 |
|
| 0.72 |
|
| (0.06) |
| |||
Less Dividends and Distributions: | ||||||||||||||||||
Dividends (from net investment income) | (0.08) | (0.17) | (0.15) | (0.10) | — | |||||||||||||
Distributions (from capital gains) | (0.31) | (0.28) | (0.31) | (0.02) | — | |||||||||||||
Total Dividends and Distributions |
| (0.39) |
|
| (0.45) |
|
| (0.46) |
|
| (0.12) |
|
| — |
| |||
Net Asset Value, End of Period | $10.10 | $10.55 | $10.77 | $10.54 | $9.94 | |||||||||||||
Total Return* |
| (0.45)% |
|
| 2.20% |
|
| 6.72% |
|
| 7.28% |
|
| (0.60)% |
| |||
Net Assets, End of Period (in thousands) | $10,750 | $44,333 | $46,867 | $43,221 | $28,875 | |||||||||||||
Average Net Assets for the Period (in thousands) | $22,035 | $45,011 | $52,153 | $35,799 | $27,898 | |||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 0.68%(4) | 0.63% | 0.62% | 0.79% | 1.41% | |||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 0.60% | 0.60% | 0.60% | 0.60% | 0.60% | |||||||||||||
Ratio of Net Investment Income/(Loss)(3) | 0.69% | 1.18% | 1.22% | 1.10% | 0.52% | |||||||||||||
Portfolio Turnover Rate | 44% | 19% | 52% | 37% | 7% | |||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from March 30, 2012 (inception date) through July 31, 2012. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. (4) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.01% higher had the custodian not reimbursed the Fund.. |
See Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Henderson All Asset Fund
Financial Highlights
Class N Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.65 |
|
| $10.09 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.11 | 0.12 | |||||||
Net realized and unrealized gain/(loss) | 0.48 | 0.52 | |||||||
Total from Investment Operations |
| 0.59 |
|
| 0.64 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.23) | (0.08) | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.82) |
|
| (0.08) |
| |||
Net Asset Value, End of Period | $10.42 | $10.65 | |||||||
Total Return* |
| 5.54% |
|
| 6.43% |
| |||
Net Assets, End of Period (in thousands) | $32,476 | $30,774 | |||||||
Average Net Assets for the Period (in thousands) | $31,647 | $29,638 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 0.69% | 0.71% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 0.55% | 0.60% | |||||||
Ratio of Net Investment Income/(Loss)(3) | 1.97% | 1.24% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
Class S Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(4) |
| ||||
Net Asset Value, Beginning of Period |
| $10.67 |
|
| $10.76 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.09 | 0.03 | |||||||
Net realized and unrealized gain/(loss) | 0.48 | (0.12)(5) | |||||||
Total from Investment Operations |
| 0.57 |
|
| (0.09) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.19) | — | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.78) |
|
| — |
| |||
Net Asset Value, End of Period | $10.46 | $10.67 | |||||||
Total Return* |
| 5.27% |
|
| (0.84)% |
| |||
Net Assets, End of Period (in thousands) | $52 | $50 | |||||||
Average Net Assets for the Period (in thousands) | $51 | $50 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(3) | 1.19% | 1.26% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(3) | 0.92% | 1.09% | |||||||
Ratio of Net Investment Income/(Loss)(3) | 1.60% | 3.31% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. (4) Period from June 5, 2017 (inception date) through June 30, 2017. (5) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. |
See Notes to Financial Statements. | |
22 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Financial Highlights
Class N Shares | ||||||
For a share outstanding during the period ended July 31 |
| 2016(1) |
| |||
Net Asset Value, Beginning of Period |
| $10.25 |
| |||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.12 | |||||
Net realized and unrealized gain/(loss) | 0.11(3) | |||||
Total from Investment Operations |
| 0.23 |
| |||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | (0.08) | |||||
Distributions (from capital gains) | (0.31) | |||||
Total Dividends and Distributions |
| (0.39) |
| |||
Net Asset Value, End of Period | $10.09 | |||||
Total Return* |
| 2.37% |
| |||
Net Assets, End of Period (in thousands) | $29,020 | |||||
Average Net Assets for the Period (in thousands) | $27,943 | |||||
Ratios to Average Net Assets**: |
|
|
| |||
Ratio of Gross Expenses(4) | 0.64%(5) | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(4) | 0.60% | |||||
Ratio of Net Investment Income/(Loss)(4) | 1.88% | |||||
Portfolio Turnover Rate | 44% | |||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from November 30, 2015 (inception date) through July 31, 2016. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. (4) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. (5) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.01% higher had the custodian not reimbursed the Fund.. |
See Notes to Financial Statements. | |
Janus Investment Fund | 23 |
Janus Henderson All Asset Fund
Financial Highlights
Class T Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.67 |
|
| $10.76 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.10 | 0.03 | |||||||
Net realized and unrealized gain/(loss) | 0.49 | (0.12)(3) | |||||||
Total from Investment Operations |
| 0.59 |
|
| (0.09) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.21) | — | |||||||
Distributions (from capital gains) | (0.59) | — | |||||||
Total Dividends and Distributions |
| (0.80) |
|
| — |
| |||
Net Asset Value, End of Period | $10.46 | $10.67 | |||||||
Total Return* |
| 5.52% |
|
| (0.84)% |
| |||
Net Assets, End of Period (in thousands) | $52 | $50 | |||||||
Average Net Assets for the Period (in thousands) | $51 | $50 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses(4) | 0.94% | 0.99% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets)(4) | 0.67% | 0.82% | |||||||
Ratio of Net Investment Income/(Loss)(4) | 1.84% | 3.58% | |||||||
Portfolio Turnover Rate | 9% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 5, 2017 (inception date) through June 30, 2017. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. (4) Ratios do not include indirect expenses of the underlying funds and/or investment companies in which the Fund invests. |
See Notes to Financial Statements. | |
24 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Henderson All Asset Fund (formerly named Henderson All Asset Fund) (the “Fund”) is a series of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Fund operates as a “fund of funds,” meaning substantially all of the Fund’s assets will be invested in other underlying funds (the “underlying funds”). The Trust offers 50 funds, each of which offers multiple share classes, with differing investment objectives and policies. The Fund seeks to provide total return by investing in a broad range of asset classes. The Fund is classified as diversified, as defined in the 1940 Act.
Pursuant to the Agreement and Plan of Reorganization, the Fund acquired all the assets and liabilities of the Henderson All Asset Fund (the “Predecessor Fund”), a series of Henderson Global Funds, in exchange for Class A, Class C, Class I and Class N Fund shares having an aggregate net asset value equal to the value of the aggregate net assets of the same share class of the Predecessor Fund (except that Class R6 Predecessor Fund shares were exchanged for Class N Fund shares) (the “Reorganization”). The Reorganization occurred at the close of business on June 2, 2017.
The Predecessor Fund and the Fund had identical investment objectives and substantially similar investment policies and principal risks. For financial reporting purposes, the Predecessor Fund’s financial and performance history prior to the Reorganization is carried forward and reflected in the Fund’s financial statements and financial highlights. For the fiscal year ended July 31, 2016, and prior periods, the audits of those financial statements were performed by auditors different from the auditors of this report.
The last fiscal year end of the Predecessor Fund was July 31, 2016. Subsequent to July 31, 2016, the Fund changed its fiscal year end to June 30, 2017, to reflect the fiscal year end of certain funds of the Trust. Certain prior year amounts have been reclassified to conform to the current period presentation. Presentation of certain financial statement line item descriptions have been changed to conform to the current period presentation.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus Henderson funds. Class D Shares are available only to investors who hold accounts directly with the Janus Henderson funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus Henderson funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments, who established Class I Share accounts before August 4, 2017.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of: 1) certain adviser-assisted, employer-sponsored retirement plans, including 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and certain welfare benefit plans, such as health savings accounts, and nonqualified deferred compensation plans; and 2) retail investors purchasing in qualified or nonqualified accounts, whose accounts are held through an omnibus account at their financial intermediary, and where the financial intermediary requires no payment or reimbursement from the Fund, Janus Capital Management LLC (“Janus Capital”), or its affiliates. Class N Shares are also available to Janus Henderson proprietary products and to certain direct institutional investors approved by Janus Distributors LLC dba Janus Henderson
Janus Investment Fund | 25 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
Distributors (“Janus Henderson Distributors”) including, but not limited to, corporations, certain retirement plans, public plans, and foundations and endowments, subject to minimum investment requirements.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Underlying Funds
The Fund may seek exposure to both traditional asset classes (such as equity and fixed-income investments) and alternative asset classes (such as real estate, commodities, currencies, private equity, and absolute return strategies) by investing in other investment companies or investment pools, by investing directly in securities and other investments or through the use of derivatives. Such investment companies and investment pools might include, for example, other open-end or closed-end investment companies (including investment companies that concentrate their investments in one or more industries or economic or market sectors), exchange-traded funds (“ETFs”, which are open-end investment companies whose shares may be bought or sold by investors in transactions on major stock exchanges), unit investment trusts, and domestic or foreign private investment pools (including investment companies not registered under the 1940 Act, such as “hedge funds”) or indexes of investment pools. Additional details and descriptions of the investment objectives and strategies of each of the underlying funds are available in the underlying funds’ prospectuses. The Trustees of the underlying funds may change the investment objectives or strategies of the underlying funds at any time without prior notice to the Fund’s shareholders.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
The Fund’s net asset value (“NAV”) is calculated based upon the NAV of each of the underlying funds in which the Fund invests on the day of valuation. The NAV for each class of the underlying funds is computed by dividing the total value of securities and other assets allocated to the class, less liabilities allocated to that class, by the total number of shares outstanding for the class.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
The Fund classifies each of its investments in certain underlying funds as Level 1, without consideration as to the classification level of the specific investments held by the underlying funds.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair
26 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of December 31, 2017 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities held by the underlying funds will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Any distributions from the underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf. Additionally, the Fund, as a shareholder in the underlying funds, will also indirectly bear its pro rata share of the expenses incurred by the underlying funds. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Janus Investment Fund | 27 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or the Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Fund's equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The underlying funds may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the underlying funds distribute such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Currently, Management does not believe the bill will have a material impact on the Fund’s intention to continue to qualify as a regulated investment company, which is generally not subject to U.S. federal income tax.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2017 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of the Schedule of Investments.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
28 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for non-hedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE
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Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
The Fund may enter into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund and/or in order to take a positive outlook on the related currency to increase exposure to currency risk. The Fund may enter into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund and/or in order to take a negative outlook on the related currency to increase exposure to currency risk.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/depreciation is reported on the Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
The Fund may purchase or sell futures on equity indices to increase or decrease exposure to equity risk.
The Fund may purchase or sell futures on interest rate futures to increase or decrease exposure to interest rate risk.
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
30 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) of 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. The risk of investing in securities in the European markets may also be heightened due to the referendum in which the United Kingdom voted to exit the EU (known as “Brexit”). There is considerable uncertainty about how Brexit will be conducted, how negotiations of necessary treaties and trade agreements will proceed, or how financial markets will react. In addition, one or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Exchange-Traded and Mutual Funds
The Fund may invest in exchange-traded funds (“ETFs”) and mutual funds to gain exposure to a particular portion of the market. ETFs are typically open-end investment companies, which may seek to track the performance of a specific index or be actively managed. ETFs are traded on a national securities exchange at market prices that may vary from
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Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
the net asset value of their underlying investments. Accordingly, there may be times when an ETF trades at a premium or discount. When the Fund invests in an ETF or mutual fund, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF's or mutual fund’s expenses. As a result, the cost of investing in the Fund may be higher than the cost of investing directly in ETFs or mutual funds and may be higher than other mutual funds that invest directly in stocks and bonds. ETFs also involve the risk that an active trading market for an ETF's shares may not develop or be maintained. Similarly, because the value of ETF shares depends on the demand in the market, the Fund may not be able to purchase or sell an ETF at the most optimal time, which could adversely affect the Fund’s performance. In addition, ETFs that track particular indices may be unable to match the performance of such underlying indices due to the temporary unavailability of certain index securities in the secondary market or other factors, such as discrepancies with respect to the weighting of securities. Because the Fund may invest in a broad range of ETFs and mutual funds, such risks may include, but are not limited to, leverage risk, foreign exposure risk, interest rate risk, emerging markets risk, fixed-income risk, and commodity-linked investments risk. The Fund is also subject to the risks associated with the securities in which the ETF or mutual fund invests.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
The following table presents gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the “Fair Value of Derivative Instruments as of December 31, 2017” table located in the Fund’s Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross Amounts | |||||||||
of Recognized | Offsetting Asset | Collateral | |||||||
Counterparty | Assets | or Liability(a) | Pledged(b) | Net Amount | |||||
BNP Paribas | $ | 58,793 | $ | — | $ | — | $ | 58,793 | |
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | ||||||||
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | ||||||||
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The Fund’s contractual investment advisory fee rate (expressed as an annual rate) is 0.40% of its average daily net assets.
32 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
Prior to the Reorganization, the Fund paid Henderson Global Investors (North America) Inc. (“HGINA”), the Predecessor Fund’s investment advisor. The following table reflects the Predecessor Fund’s investment advisory fee rate (expressed as an annual rate).
Average Daily Net Assets of the Fund | Contractual Investment Advisory Fee (%) |
All Asset Levels | 0.40 |
Henderson Investment Management Limited (“HIML”) serves as subadviser to the Fund. As subadviser, HIML provides day-to-day management of the investment operations of the Fund subject to the general oversight of the Board of Trustees and Janus Capital. HIML is an affiliate of Janus Capital through a common parent company.
Janus Capital pays HIML a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
Prior to the Reorganization, HGINA engaged “HIML” to act as the investment sub-adviser to the Predecessor Fund. The sub-advisers provided research, advice and recommendations with respect to the purchase and sale of securities and made investment decisions regarding assets of the Predecessor Fund subject to the oversight of the Predecessor Fund’s Board of Trustees and the Predecessor Fund’s Adviser. No additional fees were charged to the Predecessor Fund for services of the sub-advisers as these fees were paid from the fees earned by HGINA.
Janus Capital has contractually agreed to waive the investment advisory fee and/or reimburse operating expenses to the extent that the Fund’s total annual fund operating expenses but excluding the 12b-1 distribution and shareholder servicing fees (applicable to Class A Shares, Class C Shares, and Class S Shares) such as transfer agency fees (including out-of-pocket costs), administrative services fees, and any networking/omnibus/administrative fees payable by any share class, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses) exceed the annual rate of 0.51% of the Fund’s average daily net assets. Janus Capital has agreed to continue the waiver until November 1, 2018. Class R shares, If applicable, amounts reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement and Waivers” on the Statement of Operations.
For the year ended July 31, 2016 and the period prior to the Reorganization, HGINA agreed to waive or limit its management fee and, if necessary, to reimburse expenses of the Predecessor Fund in order to limit total annual ordinary operating expenses, including distribution and service fees, but excluding any acquired fund fees and expenses as a result of investing in other funds, as a percentage of average daily net assets was 0.85%, 1.60%, 0.60%, and 0.60% for Class A, Class C, Class I, and Class R6, respectively. With respect to investments in affiliated underlying funds, HGINA contractually agreed to reduce or waive the Predecessor Fund’s management fee to limit the combined management fees paid to the Advisor for those assets to the greater of 1.00% or the affiliate underlying fund’s management fee. Any waiver calculated as a result of limiting these combined management fees is in addition to the general expense limitation highlighted in the table. Indirect net expenses associated with the Predecessor Fund’s investments in underlying investment companies are not subject to the contractual expense limitation.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s and the underlying funds’ transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
Janus Investment Fund | 33 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or 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. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital. For all share classes except Class D Shares, Janus Services also seeks reimbursement for costs it incurs as transfer agent and for providing servicing.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Prior to the Reorganization, shares of the Predecessor Fund were often purchased through financial intermediaries who were agents of the Predecessor Fund for the limited purpose of completing purchases and sales. These intermediaries may provide certain networking and sub-transfer agent services with respect to Predecessor Fund shares held by that intermediary for its customers, and the intermediary may charge HGINA for those services. The Predecessor Fund reimbursed HGINA for such fees within limits specified by the Predecessor Fund’s Board of Trustees. The fees were incurred at the class level based on activity, asset levels and/or number of accounts.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Henderson Distributors, a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Henderson Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Distributors is entitled to retain all fees paid under the Class C Plan for the first 12 months on any investment in Class C Shares to recoup its expenses with respect to the payment of commissions on sales of Class C Shares. Financial intermediaries will become eligible for compensation under the Class C Plan beginning in the 13th month following the purchase of Class C Shares, although Janus Distributors may, pursuant to a written agreement between Janus Distributors and a particular financial intermediary, pay such financial intermediary 12b-1 fees prior to the 13th month following the purchase of Class C Shares.
34 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes to Financial Statements (unaudited)
Prior to the Reorganization, the Predecessor Fund’s Trust adopted a distribution plan for Class A, Class B (until termination on November 4, 2015), Class C, Class R, and Class IF shares of the Predecessor Fund in accordance with Rule 12b-1 under the 1940 Act (the “12b-1 Plan”). Under the 12b-1 Plan, the Predecessor Fund paid the distributor an annual fee of 0.25% of the average daily net assets attributable to Class A shares, and annual fee of 1.00% of the average daily net assets attributable to Class B (until termination on November 4, 2015) and Class C shares, an annual fee of 0.50% of the average daily net assets attributable to Class R shares and an annual fee of 0.05% of the average daily net assets attributable to Class IF Shares. The 12b-1 Plan was used to induce or compensate financial intermediaries (including brokerage firms, depository institutions and other firms) to provide distribution services to the Predecessor Fund and their shareholders.
Janus Capital furnishes certain administration, compliance, and accounting services to the Fund, including providing office space for the Fund and providing personnel to serve as officers to the Fund. The Fund reimburses Janus Capital for certain of its costs in providing these services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). These costs include some or all of the salaries, fees, and expenses of Janus Capital employees and Fund officers, including the Fund’s Chief Compliance Officer and compliance staff, who provide specified administration and compliance services to the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. Total compensation of $217,876 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2017. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus Henderson funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2017 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2017 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $210,375 were paid by the Trust to the Trustees under the Deferred Plan during the period ended December 31, 2017.
Prior to the Reorganization, certain officers and trustees of the Predecessor Fund’s Trust were also officers of HGINA. None of the Predecessor Fund’s Trust’s officers, other than the Chief Compliance Officer, were compensated by the Predecessor Fund’s Trust. The Predecessor Fund’s Trust made no direct payments to the trustees affiliated with HGINA. The Predecessor Fund paid part of the full compensation paid to the Predecessor Fund’s Chief Compliance Officer.
Prior to the Reorganization, State Street served as the administrator for the Predecessor Fund. As compensation for the administrative services provided by State Street, the Predecessor Fund paid State Street an annual administration fee based upon a percentage of the average net assets of the Predecessor Fund.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2017 can be found in a table located in the Schedule of Investments and Other Information.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Henderson Distributors and financial intermediaries. During the period ended December 31, 2017, Janus Henderson Distributors retained upfront sales charges of $2,656.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00%
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of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Henderson Distributors during the period ended December 31, 2017.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2017, redeeming shareholders of Class C Shares paid CDSCs of $643.
As of December 31, 2017, shares of the Fund were owned by affiliates of Janus Henderson Investors, and/or other funds advised by Janus Henderson, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| ||
Class A Shares | - | %* | - | %* | ||
Class C Shares | -* | -* | ||||
Class D Shares | 7 | -* | ||||
Class I Shares | -* | -* | ||||
Class N Shares | -* | -* | ||||
Class S Shares | 100 | -* | ||||
Class T Shares | 100 | -* | ||||
* | Less than 0.50% | |||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2017 are noted below. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships and investments in passive foreign investment companies.
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ 48,225,608 | $ 1,703,996 | $ (232,378) | $ 1,471,618 |
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Information on the tax components of derivatives as of December 31, 2017 is as follows:
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ - | $ 194,546 | $ (107,251) | $ 87,295 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
6. Capital Share Transactions
Period ended December 31, 2017 | Period ended June 30, 2017(1) | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 37,871 | $ 416,294 | 48,061 | $ 489,973 | ||
Reinvested dividends and distributions | 12,312 | 129,155 | 926 | 9,384 | ||
Shares repurchased | (41,848) | (460,720) | (271,215) | (2,811,933) | ||
Net Increase/(Decrease) | 8,335 | $ 84,729 |
| (222,228) | $(2,312,576) | |
Class C Shares: | ||||||
Shares sold | 54,079 | $ 581,401 | 272,453 | $ 2,717,264 | ||
Reinvested dividends and distributions | 35,136 | 362,603 | - | - | ||
Shares repurchased | (122,564) | (1,299,237) | (441,397) | (4,449,811) | ||
Net Increase/(Decrease) | (33,349) | $ (355,233) |
| (168,944) | $(1,732,547) | |
Class D Shares: | ||||||
Shares sold | 58,724 | $ 645,816 | 7,406 | $ 79,738 | ||
Reinvested dividends and distributions | 4,981 | 51,957 | - | - | ||
Shares repurchased | (1,489) | (15,541) | - | - | ||
Net Increase/(Decrease) | 62,216 | $ 682,232 |
| 7,406 | $ 79,738 | |
Class I Shares: | ||||||
Shares sold | 65,660 | $ 715,450 | 220,782 | $ 2,264,674 | ||
Reinvested dividends and distributions | 51,183 | 533,836 | 5,108 | 51,538 | ||
Shares repurchased | (79,848) | (869,734) | (602,702) | (6,161,871) | ||
Net Increase/(Decrease) | 36,995 | $ 379,552 |
| (376,812) | $(3,845,659) | |
Class N Shares: | ||||||
Shares sold | - | $ - | 4,417 | $ 44,259 | ||
Reinvested dividends and distributions | 227,336 | 2,364,293 | 23,932 | 240,992 | ||
Shares repurchased | - | - | (13,373) | (135,976) | ||
Net Increase/(Decrease) | 227,336 | $2,364,293 |
| 14,976 | $ 149,275 | |
Class S Shares: | ||||||
Shares sold | - | $ - | 4,644 | $ 50,010 | ||
Reinvested dividends and distributions | 347 | 3,631 | - | - | ||
Shares repurchased | - | - | - | - | ||
Net Increase/(Decrease) | 347 | $ 3,631 |
| 4,644 | $ 50,010 | |
Class T Shares: | ||||||
Shares sold | 354 | $ 3,711 | 4,644 | $ 50,010 | ||
Reinvested dividends and distributions | 330 | 3,700 | - | - | ||
Shares repurchased | (331) | (3,711) | - | - | ||
Net Increase/(Decrease) | 353 | $ 3,700 |
| 4,644 | $ 50,010 | |
(1) | Period from June 5, 2017 (inception date) through June 30, 2017 for Class D Shares, Class S Shares and Class T Shares. | |||||
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Year ended July 31, 2016(1) | Shares | Amount | |
Class A Shares: | |||
Shares sold | 242,349 | $ 2,389,247 | |
Reinvested dividends and distributions | 17,076 | 168,932 | |
Shares repurchased | (469,446) | (4,623,264) | |
Net Increase/(Decrease) | (210,021) | $ (2,065,085) | |
Class C Shares: | |||
Shares sold | 328,077 | $ 3,171,463 | |
Reinvested dividends and distributions | 26,511 | 257,689 | |
Shares repurchased | (464,349) | (4,525,561) | |
Net Increase/(Decrease) | (109,761) | $ (1,096,409) | |
Class I Shares: | |||
Shares sold | 270,034 | $ 2,652,602 | |
Reinvested dividends and distributions | 51,382 | 507,864 | |
Shares repurchased | (3,460,698) | (35,215,253) | |
Net Increase/(Decrease) | (3,139,282) | $(32,054,787) | |
Class N Shares: | |||
Shares sold | 2,765,534 | $ 28,346,633 | |
Reinvested dividends and distributions | 110,490 | 1,090,787 | |
Shares repurchased | (966) | (8,927) | |
Net Increase/(Decrease) | 2,875,058 | $ 29,428,493 | |
(1) | Period from November 30, 2015 (inception date) through July 31, 2016 for Class N Shares. | ||
7. Purchases and Sales of Investment Securities
For the period ended December 31, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$ 2,854,886 | $ 5,614,717 | $ - | $ - |
For the period ended June 30, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$17,933,841 | $ 20,391,430 | $ - | $ - |
8. Recent Accounting Pronouncements
The Securities and Exchange Commission ("SEC") adopted new rules as well as amendments to its rules to modernize the reporting and disclosure of information by registered investment companies. In addition, the SEC adopted amendments to Regulation S-X, which require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date of the amendments to Regulation S-X was August 1, 2017. This report incorporates the amendments to Regulation S-X.
The FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") to amend the amortization period for certain purchased callable debt securities held at a premium. The guidance requires certain
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Notes to Financial Statements (unaudited)
premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Management is currently evaluating the impacts of ASU 2017-08 on the financial statements.
9. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to December 31, 2017 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
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Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-1093; (ii) on the Fund’s website at janushenderson.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janushenderson.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Full Holdings
The Fund is required to disclose its complete holdings in the quarterly holdings report on Form N-Q within 60 days of the end of the first and third fiscal quarters, and in the annual report and semiannual report to Fund shareholders. These reports (i) are available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) are available without charge, upon request, by calling a Janus Henderson representative at 1-877-335-2687 (toll free) (or 1-800-525-3713 if you hold Class D shares). Portfolio holdings consisting of at least the names of the holdings are generally available on a monthly basis with a 30-day lag. Holdings are generally posted approximately two business days thereafter under Full Holdings for the Fund at janushenderson.com/info (or janushenderson.com/reports if you hold Class D Shares).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 14 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
Additionally, in connection with their consideration of whether to continue the investment advisory agreement and subadvisory agreement for each Fund, as applicable, the Trustees also received and reviewed information in connection with the transaction to combine the respective businesses of Henderson Group plc and Janus Capital Group, Inc., the parent company of Janus Capital (the “Transaction”), announced in October 2016, which closed in the second quarter of 2017. In this regard, the Trustees reviewed information regarding the impact of the Transaction on the services to be provided by Janus Capital and each subadviser, as applicable, to the Funds under such agreements prior to the close of the Transaction as well as the services provided after the Transaction closed.
At a meeting held on December 7, 2017, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2018 through February 1, 2019, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the
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Additional Information (unaudited)
agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies 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 and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2017, approximately 70% of the Funds were in the top two quartiles of performance, as reported by Morningstar, and for the 12 months ended September 30, 2017, approximately 46% of the Funds were in the top two quartiles of performance, as reported by Morningstar.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge
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quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Strategic Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Select Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson International Opportunities Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Henderson International Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that
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the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson All Asset Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Contrarian Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Enterprise Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Forty Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Growth and Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
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Additional Information (unaudited)
· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital and Intech had taken or were taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Intech had taken or were taking to improve performance.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Forty Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of
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Additional Information (unaudited)
that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the average management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 10% below the average total expenses of their respective Broadridge Expense Group peers and 18% below the average total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 8% below the average management fees for their Expense Groups and 9% below the average for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the average total expenses for its Broadridge Expense Group peers and to average total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional clients and to the fees Janus Capital charges to funds subadvised by Janus Capital; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) Janus mutual fund investors enjoy reasonable fees relative to the fees charged to Janus institutional and subadvised fund investors; (4) in three of seven product categories, the Funds receive proportionally better pricing than the industry in relation to Janus institutional clients; and (5) in seven of eight strategies, Janus Capital has lower management fees than funds subadvised by Janus Capital’s portfolio managers.
The Trustees considered the fees for each Fund for its fiscal year ended in 2016, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were
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reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to waive 11 basis points of management fees effective February 1, 2018 and also has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Strategic Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
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Additional Information (unaudited)
· For Janus Henderson Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
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Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson All Asset Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s total expenses effective June 5, 2017.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Research Fund, the Trustees noted that, although the Fund’s total expenses were equal to or exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective February 1, 2017.
· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
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Additional Information (unaudited)
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group averages for all share classes.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
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Additional Information (unaudited)
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for its sole share class.
The Trustees reviewed information on the overall profitability to Janus Capital and its affiliates of their relationship with the Funds, and considered profitability data of other fund managers. The Trustees also considered the financial information, estimated profitability and corporate structure of Janus Capital’s parent company before and after the Transaction. The Trustees recognized that profitability comparisons among fund managers are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. The Trustees also noted that the Trustees’ independent fee consultant reviewed the overall profitability of Janus Capital’s parent company prior to the Transaction, and the independent fee consultant found that, while assessing the reasonableness of Fund expenses in light of such profits was dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons were limited in accuracy by differences in complex size, business mix, institutional account orientation and other factors, after accepting these limitations, the level of profit earned by Janus Capital’s parent company was reasonable. In this regard, the independent consultant concluded that the profitability of Janus Capital’s parent company did not show excess nor did it show any insufficiency that could limit the ability to invest the resources needed to drive strong future investment performance on behalf of the Funds.
Additionally, the Trustees considered the estimated profitability to Janus Capital from the investment management services it provided to each Fund. The Trustees also considered such estimated profitability taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. In reviewing profitability, the Trustees noted that the estimated profitability for an individual Fund is necessarily a product of the allocation methodology utilized by Janus Capital to allocate its expenses as part of the estimated profitability calculation. In this regard, the Trustees noted that the independent fee consultant concluded that (1) the expense allocation methodology utilized by Janus Capital was reasonable and (2) the estimated profitability to Janus Capital from the investment management services it provided to each Fund was reasonable, including after taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. The Trustees also considered that the estimated profitability for an individual Fund was influenced by a number of factors, including not only the allocation methodology selected, but also the presence of fee waivers and expense caps, and whether the Fund’s investment management agreement contained breakpoints or a performance fee component. The Trustees determined, after taking into account these factors, among others, that Janus Capital’s estimated profitability with respect to each Fund was not unreasonable in relation to the services provided, and that the variation in the range of such estimated profitability among the Funds was not a material factor in the Board’s approval of the reasonableness of any Fund’s investment management fees.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
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Additional Information (unaudited)
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted their independent fee consultant’s analysis of economies of scale in prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints or performance fees, their independent fee consultant concluded that 86% of these Funds’ share classes have contractual management fees (gross of waivers) below their Broadridge expense group averages. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing certain of these Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including past research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale it had considered in prior years, and their conflicting results, it is difficult to analytically confirm or deny the existence of economies of scale in the Janus complex. The independent consultant concluded that (1) to the extent there were economies of scale at Janus Capital, Janus Capital’s general strategy of setting fixed management fees below peers appeared to share any such economies with investors even on smaller Funds which have not yet achieved those economies and (2) by setting lower fixed fees from the start on these Funds, Janus Capital appeared to be investing to increase the likelihood that these Funds will grow to a level to achieve any scale economies that may exist. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
Janus Investment Fund | 53 |
Janus Henderson All Asset Fund
Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2017. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus Henderson in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Financial Highlights” in this report.
Schedule of Investments
Following the performance overview section is the Fund’s Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, swaptions, and swaps follow the Fund’s Schedule of Investments (if applicable).
Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
54 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
Janus Investment Fund | 55 |
Janus Henderson All Asset Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
56 | DECEMBER 31, 2017 |
Janus Henderson All Asset Fund
Notes
NotesPage1
Janus Investment Fund | 57 |
Knowledge. Shared
At Janus Henderson, we believe in the sharing of expert insight for better investment and business decisions. We call this ethos Knowledge. Shared.
Learn more by visiting janushenderson.com.
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This report is submitted for the general information of shareholders of the Fund. It is not an offer or solicitation for the Fund and is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||||||||
Janus Henderson, Janus, Henderson, Perkins, Intech and Henderson Geneva are trademarks or registered trademarks of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC. Funds distributed by Janus Henderson Distributors | ||||||||
125-24-93074 02-18 | ||||||||
SEMIANNUAL REPORT December 31, 2017 | |||
Janus Henderson Diversified Alternatives Fund | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | ||
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Table of Contents
Janus Henderson Diversified Alternatives Fund
Investments | |
Information | |
Janus Henderson Diversified Alternatives Fund (unaudited)
PERFORMANCE SUMMARY
For the six-month period ended December 31, 2017, Janus Henderson Diversified Alternatives Fund’s Class I Shares returned 2.04%, compared with a return of 1.24% for its primary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, and 2.03% for its secondary benchmark, LIBOR + 3%.
MARKET ENVIRONMENT
Positive earnings data, strengthening fundamentals and an upward trajectory in global growth boosted risk assets in the second half of 2017. Geopolitical concerns in August weighed on markets as North Korea fired missiles over Japan, with equities and corporate credit selling off and investors retreating to U.S. Treasury securities. However, sentiment quickly reversed and markets rebounded. Late in the period, the passage of U.S. tax reform and optimism around its potential to provide tailwinds for the U.S. economy propelled markets to new highs. Investment-grade corporate credit spreads reached post-crisis tights, and spreads on high-yield corporate credit also tightened over the period.
The Federal Reserve (Fed) raised its benchmark rate in December, marking the third rate hike of 2017, and began normalizing its balance sheet. The Treasury curve flattened during the year. The 10-year Treasury note yield closed December at 2.41%, compared with 2.31% at the end of June.
The prospects of synchronized growth and a U.S. dollar that weakened over much of the period boosted emerging market stocks. On a sector basis, energy was among the strongest performers, fueled by strong gains in the benchmark for global crude.
PERFORMANCE DISCUSSION
The Fund outperformed its primary benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, and performed in line with its secondary benchmark, LIBOR + 3%, during the six-month period. Over time, the Fund seeks to provide positive absolute returns and offer true diversification with low correlation to stocks and bonds by investing in a portfolio of risk premia strategies.
Two of our equity strategies were the leading contributors to returns during the period as the trend of coordinated global growth continued to play out. The equity momentum strategy aided returns as the period saw equity markets around the world experience continued strong growth. The equity momentum strategy seeks to capture directional momentum in equities through the quantitative analysis of equity index price movement. It outperformed as it was able to capture the strong upward trend in equities.
The equity value strategy, which aims to capture the potential return associated with holding value equities while also being short growth stocks, also aided returns. Value stocks rallied near the end of the year as investors priced in the increasing likelihood that tax reform would come to pass, and also benefited from its eventual passage in December. Since value companies tend to pay high effective corporate tax rates, value stocks are expected to be bigger beneficiaries of the tax bill than growth stocks. The strong performance from the segment led to the strategy’s outperformance.
The commodity roll yield strategy was another leading contributor to returns. This strategy seeks to generate returns by providing liquidity to the most “crowded” section of the commodity futures curve. It is typically short the most active front-month contract and long farther-dated tenors. The strategy benefited from a favorable supply/demand dynamic in livestock and wheat. A mild start to winter resulted in few supply disruptions, creating a favorable environment for the strategy.
Although most of the Fund’s equity strategies were able to capitalize on trends during the period, the equity size strategy delivered negative returns. This strategy invests in a basket of small-cap equities versus a short position in a basket of large-cap equities. Small caps, which typically
Janus Investment Fund | 1 |
Janus Henderson Diversified Alternatives Fund (unaudited)
pay a higher effective corporate tax rate, outperformed large caps in December as it became apparent that the U.S. tax bill would pass. However, weakness early in the period led them to underperform over the course of the period, which weighed on the strategy’s returns.
The rates momentum strategy, which looks to capture the persistence in the movement of interest rates, delivered negative returns. The 10-year Treasury note traded in a choppy, relatively range-bound fashion during the period, as did the 10-year German bund, which weighed on returns. The lack of sustained, consistent trends hindered the strategy’s ability to generate returns during the period.
The currency carry strategy also delivered negative returns. The strategy looks to generate returns by taking advantage of short-term yield differentials between various currencies. Losses in the New Zealand dollar offset gains from our short positions in the yen and the Swiss franc.
DERIVATIVES USAGE
The Fund makes extensive use of derivatives because they are generally the most efficient and liquid way to gain our desired exposures. Swaps are used to take exposures in equity, fixed income and commodity indices. Futures are used to take exposures in commodities, currencies and long-end fixed income markets. Forwards are employed to take exposures in foreign currencies, generally one week in length. In aggregate, these positions contributed to performance during the period.
Please see the Derivative Instruments section in the “Notes to Consolidated Financial Statements” for a discussion of derivatives used by the Fund.
OUTLOOK
The Fund’s model undergoes a monthly rebalancing in which it adjusts its allocations to the 11 risk premia strategies according to the market conditions experienced during the month. This rebalancing process is designed to optimize the weightings of the strategies in order to deliver consistent, absolute returns with low correlation to stocks and bonds and a targeted volatility of 5% to 7%. While operating in today’s abnormally low volatility environment, the model has become increasingly sensitive to any sudden movements in asset classes while undertaking the monthly rebalancing. In fact, the correlations between many of the strategies have dropped to zero – meaning they are not correlated – or negative – meaning that they are inversely correlated. Given these relationships, the model is signaling that it needs more leverage in order to meet its volatility target. However, the Fund has already reached the maximum amount of leverage allowed (i.e., its leverage cap).
While this may seem problematic, we value that this cap can help minimize the potential impact from the reversal of an overly-levered trade between strategies that are negatively correlated. For example, the commodity roll yield strategy was negatively correlated with the equity emerging strategy as of year-end. The impact of winter temperatures on the price of natural gas has been one of the driving factors of returns in the commodity roll yield strategy. Given the negative correlation, one could erroneously infer that winter temperatures are a natural hedge to equity emerging markets. Our common sense, however, makes us question this relationship.
Therefore, the leverage cap is currently playing an important role by keeping the Fund’s model from rebalancing based on distorted correlation data. The relative weightings of the strategies will therefore be less important until volatility returns to normal levels – whether from the normalization of global interest rates or because of an exogenous geopolitical event.
Thank you for investing in Janus Henderson Diversified Alternative Fund.
2 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund (unaudited)
Fund At A Glance
December 31, 2017
Asset Allocation |
|
Commodity | 43.8% |
Equity | 25.0% |
Fixed Income | 16.0% |
Currency | 11.4% |
Cash & Cash Equivalents | 3.8% |
100.0% | |
The allocations shown reflect absolute notional exposures to various asset classes. The allocations are calculated net of cash segregated for future obligations. | |
Janus Investment Fund | 3 |
Janus Henderson Diversified Alternatives Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended December 31, 2017 |
|
| per the October 27, 2017 prospectuses | |||||||
|
| Fiscal | One | Five | Since |
|
| Total Annual Fund | Net Annual Fund | |
Class A Shares at NAV |
| 1.97% | 3.60% | 1.61% | 1.63% |
|
| 1.62% | 1.36% | |
Class A Shares at MOP |
| -3.90% | -2.36% | 0.42% | 0.44% |
|
|
|
| |
Class C Shares at NAV | 1.52% | 2.87% | 0.96% | 0.98% |
|
| 2.34% | 2.10% | ||
Class C Shares at CDSC |
| 0.52% | 1.87% | 0.96% | 0.98% |
|
|
|
| |
Class D Shares(1) |
| 2.06% | 3.79% | 1.73% | 1.75% |
|
| 1.66% | 1.24% | |
Class I Shares |
| 2.04% | 3.87% | 1.83% | 1.85% |
|
| 1.34% | 1.13% | |
Class N Shares |
| 2.13% | 3.95% | 1.88% | 1.90% |
|
| 1.32% | 1.09% | |
Class S Shares |
| 1.90% | 3.64% | 1.52% | 1.54% |
|
| 1.83% | 1.59% | |
Class T Shares |
| 1.99% | 3.73% | 1.70% | 1.72% |
|
| 1.56% | 1.34% | |
Bloomberg Barclays U.S. Aggregate Bond Index |
| 1.24% | 3.54% | 2.10% | 2.08% |
|
|
|
| |
London Interbank Offered Rate (LIBOR) + 3% |
| 2.03% | 4.35% | 3.80% | 3.80%** |
|
|
|
| |
Morningstar Quartile - Class I Shares |
| - | 3rd | 3rd | 3rd |
|
|
|
| |
Morningstar Ranking - based on total returns for Multialternative Funds |
| - | 254/416 | 146/200 | 148/200 |
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Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 800.668.0434 (or 800.525.3713 if you hold shares directly with Janus Henderson) or visit janushenderson.com/performance (or janushenderson.com/allfunds if you hold shares directly with Janus Henderson).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
4 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund (unaudited)
Performance
Net expense ratios reflect the expense waiver, if any, contractually agreed to through November 1, 2018.
Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.
There is a risk that the Fund’s investments will correlate with stocks and bonds to a greater degree than anticipated, and the investment process may not achieve the desired results. The Fund may underperform during up markets and be negatively affected in down markets. Diversification does not assure a profit or eliminate the risk of loss.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes..
See Consolidated Financial Highlights for actual expense ratios during the reporting period.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2017 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Consolidated Schedule of Investments and Other Information for index definitions..
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.
See “Useful Information About Your Fund Report.”
*The Fund’s inception date – December 28, 2012
** The London Interbank Offered Rate (LIBOR) + 3% since inception returns are calculated from December 31, 2012.
(1) Closed to certain new investors.
Janus Investment Fund | 5 |
Janus Henderson Diversified Alternatives Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical | |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,019.70 | $7.48 |
| $1,000.00 | $1,017.80 | $7.48 | 1.47% | ||
Class C Shares | $1,000.00 | $1,015.20 | $11.38 |
| $1,000.00 | $1,013.91 | $11.37 | 2.24% | ||
Class D Shares | $1,000.00 | $1,020.60 | $6.93 |
| $1,000.00 | $1,018.35 | $6.92 | 1.36% | ||
Class I Shares | $1,000.00 | $1,020.40 | $6.47 |
| $1,000.00 | $1,018.80 | $6.46 | 1.27% | ||
Class N Shares | $1,000.00 | $1,021.30 | $6.11 |
| $1,000.00 | $1,019.16 | $6.11 | 1.20% | ||
Class S Shares | $1,000.00 | $1,019.00 | $8.04 |
| $1,000.00 | $1,017.24 | $8.03 | 1.58% | ||
Class T Shares | $1,000.00 | $1,019.90 | $7.13 |
| $1,000.00 | $1,018.15 | $7.12 | 1.40% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Consolidated Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
6 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Investment Companies – 13.8% | |||||||
Money Markets – 13.8% | |||||||
Janus Cash Liquidity Fund LLC, 1.2731%(a),ºº,£ (cost $15,020,048) | 15,020,048 | $15,020,048 | |||||
U.S. Government Agency Notes – 85.4% | |||||||
United States Treasury Bill: | |||||||
0%, 1/11/18†,◊ | $13,000,000 | 12,996,173 | |||||
0%, 2/8/18†,◊ | 12,500,000 | 12,483,925 | |||||
0%, 3/8/18◊ | 17,000,000 | 16,960,289 | |||||
0%, 4/12/18◊ | 18,000,000 | 17,941,632 | |||||
0%, 5/10/18†,◊ | 18,000,000 | 17,908,800 | |||||
0%, 6/7/18◊ | 15,000,000 | 14,904,613 | |||||
Total U.S. Government Agency Notes (cost $93,207,421) | 93,195,432 | ||||||
Total Investments (total cost $108,227,469) – 99.2% | 108,215,480 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.8% | 830,408 | ||||||
Net Assets – 100% | $109,045,888 | ||||||
Schedules of Affiliated Investments – (% of Net Assets)
Dividend Income(1) | Realized Gain/(Loss)(1) | Change in Unrealized Appreciation/ Depreciation(1) | Value at 12/31/17 | |||||||
Investment Companies – 13.8% | ||||||||||
Money Markets – 13.8% | ||||||||||
Janus Cash Liquidity Fund LLC, 1.2731%(a),ºº | $ | 33,282 | $ | — | $ | — | $ | 15,020,048 | ||
(1) For securities that were affiliated for a portion of the period ended December 31, 2017, this column reflects amounts for the entire period ended December 31, 2017 and not just the period in which the security was affiliated.
Share Balance at 6/30/17 | Purchases | Sales | Share Balance at 12/31/17 | ||||||||
Investment Companies – 13.8% | |||||||||||
Money Markets – 13.8% | |||||||||||
Janus Cash Liquidity Fund LLC, 1.2731%(a),ºº | 5,561,820 | 60,639,598 | (51,181,370) | 15,020,048 | |||||||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 7 |
Janus Henderson Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
December 31, 2017
Schedule of Forward Foreign Currency Exchange Contracts, Open |
Counterparty/ Foreign Currency | Settlement Date | Foreign Currency Amount (Sold)/ Purchased | USD Currency Amount (Sold)/ Purchased | Value and Unrealized Appreciation/ (Depreciation) | ||||
HSBC Securities (USA), Inc.: | ||||||||
Australian Dollar | 1/5/18 | 2,490,000 | $ | (1,936,217) | $ | 6,230 | ||
British Pound | 1/5/18 | 682,000 | (914,978) | 5,722 | ||||
Canadian Dollar | 1/5/18 | 1,545,000 | (1,223,229) | 6,133 | ||||
Euro | 1/5/18 | (1,274,000) | 1,518,380 | (10,260) | ||||
Japanese Yen | 1/5/18 | (382,100,000) | 3,377,554 | (14,067) | ||||
New Zealand Dollar | 1/5/18 | 4,995,000 | (3,531,975) | 6,870 | ||||
Norwegian Krone | 1/5/18 | 3,740,000 | (452,688) | 3,008 | ||||
Swedish Krona | 1/5/18 | (13,800,000) | 1,671,807 | (11,379) | ||||
Swiss Franc | 1/5/18 | (5,404,000) | 5,484,925 | (62,726) | ||||
Total | $ | (70,469) | ||||||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements. | |
8 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
December 31, 2017
Schedule of Futures
Description | Number of Contracts | Expiration Date | Value and Notional Amount | Unrealized Appreciation/ (Depreciation) | Variation Margin Asset/(Liability) | ||||||||
Futures Purchased: | |||||||||||||
Brent Crude(a) | 33 | 1/31/18 | $ | 2,206,710 | $ | 108,594 | $ | 18,461 | |||||
Cotton(a) | 42 | 5/8/18 | 1,658,160 | (1,674) | (5,436) | ||||||||
Gold(a) | 13 | 4/26/18 | 1,708,200 | 30,711 | 10,846 | ||||||||
Live Cattle(a) | 48 | 6/29/18 | 2,182,080 | (73,689) | (2,545) | ||||||||
Natural Gas(a) | 104 | 2/26/18 | 3,022,240 | 306,800 | 29,120 | ||||||||
S&P 500 E-mini | 69 | 3/16/18 | 9,232,200 | (35,852) | (44,695) | ||||||||
Sugar(a) | 131 | 4/30/18 | 2,203,734 | 33,919 | 17,711 | ||||||||
WTI Crude(a) | 37 | 4/20/18 | 2,229,990 | 82,025 | 15,539 | ||||||||
Total - Futures Purchased | 450,834 | 39,001 | |||||||||||
Futures Sold: | |||||||||||||
10-Year US Treasury Note | 205 | 3/20/18 | (25,429,609) | 67,969 | (57,632) | ||||||||
Coffee(a) | 57 | 5/18/18 | (2,747,756) | (8,261) | (24,804) | ||||||||
Copper(a) | 32 | 5/29/18 | (2,652,000) | (1,979) | (5,288) | ||||||||
Corn(a) | 27 | 7/13/18 | (495,788) | (5,063) | 2,926 | ||||||||
Corn(a) | 119 | 5/14/18 | (2,136,050) | 4,837 | 5,646 | ||||||||
Natural Gas(a) | 104 | 3/27/18 | (2,858,960) | (192,608) | (28,080) | ||||||||
Silver(a) | 32 | 5/29/18 | (2,755,360) | (191,849) | (30,263) | ||||||||
Soybean(a) | 54 | 5/14/18 | (2,627,100) | 81,171 | (11,491) | ||||||||
US Dollar Index | 203 | 3/19/18 | (18,640,678) | 261,116 | 94,775 | ||||||||
Wheat(a) | 117 | 7/13/18 | (2,651,513) | (690) | 2,580 | ||||||||
Total - Futures Sold | 14,643 | (51,631) | |||||||||||
Total | $ | 465,477 | $ | (12,630) | |||||||||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 9 |
Janus Henderson Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
December 31, 2017
Schedule of Total Return Swaps | |||||||||||
Counterparty/ Return Paid by the Fund | Return Received by the Fund | Payment Frequency | Termination Date | Notional Amount | Value and Unrealized Appreciation/ (Depreciation) | ||||||
Barclays Capital, Inc.:
3 month USD LIBOR plus 20 basis points | Bloomberg Barclays U.S. Credit RBI Series-1 Index | Monthly | 2/1/18 | 28,800,000 | USD | $ | (24,243) |
BNP Paribas:
Plus 19 basis points(a) | A long/short basket of commodity indices(1) | Monthly | 1/31/18 | 114,600,000 | USD | 10 | |||||
Plus 40 basis points | A long/short basket of equity indices(2) | Monthly | 2/5/18 | 19,600,000 | USD | 20 | |||||
Minus 20 basis points | A long/short basket of equity indices(3) | Monthly | 2/5/18 | 20,500,000 | USD | 23 | |||||
53 |
Goldman Sachs International:
MSCI Daily Total Return Gross World USD | 1 month USD LIBOR Plus 25 basis points | Monthly | 7/5/18 | (17,709,348) | USD | (86,946) | |||||
1 month USD LIBOR plus 90 basis points | MSCI Daily Total Return Net Emerging Markets | Monthly | 7/5/18 | 17,449,228 | USD | 350,654 | |||||
263,708 | |||||||||||
Total | $ | 239,518 |
(1) Long Index – Bloomberg Commodity Index 2-4-6 Forward Blend, Short Index – Bloomberg Commodity Index
(2) Long Index – S&P 500 Pure Value TR Index, Short Index – S&P 500 Pure Growth TR Index
(3) Long Index – Russell 2000 Total Return Index, Short Index – Russell 1000 Total Return Index
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Consolidated Statement of Assets and Liabilities as of December 31, 2017.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of December 31, 2017 | ||||||||||||||
|
|
|
| Commodity |
| Credit |
| Currency |
| Equity |
| Interest Rate |
| Total |
Asset Derivatives: | ||||||||||||||
Forward foreign currency exchange contracts | $ - | $ - | $ 27,963 | $ - | $ - | $ 27,963 | ||||||||
Outstanding swap contracts, at value | 10 | - | - | 350,697 | - | 350,707 | ||||||||
Variation margin receivable | 102,829 | - | 94,775 | - | - | 197,604 | ||||||||
Total Asset Derivatives |
| $ 102,839 |
| $ - |
| $122,738 |
| $350,697 |
| $ - |
| $576,274 | ||
| ||||||||||||||
Liability Derivatives: | ||||||||||||||
Forward foreign currency exchange contracts | $ - | $ - | $ 98,432 | $ - | $ - | $ 98,432 | ||||||||
Outstanding swap contracts, at value | - | 24,243 | - | 86,946 | - | 111,189 | ||||||||
Variation margin payable | 107,907 | - | - | 44,695 | 57,632 | 210,234 | ||||||||
Total Liability Derivatives |
| $ 107,907 |
| $ 24,243 |
| $ 98,432 |
| $131,641 |
| $ 57,632 |
| $419,855 | ||
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements. | |
10 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Schedule of Investments (unaudited)
December 31, 2017
The following table provide information about the effect of derivatives and hedging activities on the Fund’s Consolidated Statement of Operations for the period ended December 31, 2017.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Consolidated Statement of Operations for the period ended December 31, 2017 | |||||||||||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | |||||||||||||
Derivative | Commodity |
| Credit |
| Currency |
| Equity |
| Interest Rate |
| Total | ||
Futures contracts | $ (360,624) | $ - | $283,922 | $ 800,126 | $ (470,894) | $ 252,530 | |||||||
Forward foreign currency exchange contracts | - | - | (125,279) | - | - | (125,279) | |||||||
Swap contracts | 334,152 | - | - | 548,948 | 161,263 | 1,044,363 | |||||||
Total | $ (26,472) |
| $ - |
| $158,643 |
| $1,349,074 |
| $ (309,631) |
| $1,171,614 | ||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | |||||||||||||
Derivative | Commodity |
| Credit |
| Currency |
| Equity |
| Interest Rate |
| Total | ||
Futures contracts | $ 430,888 | $ - | $ (16,011) | $ 27,601 | $ 50,212 | $ 492,690 | |||||||
Forward foreign currency exchange contracts | - | - | (82,112) | - | - | (82,112) | |||||||
Swap contracts | (8) | (27,599) | - | 259,667 | - | 232,060 | |||||||
Total | $ 430,880 |
| $(27,599) |
| $ (98,123) |
| $ 287,268 |
| $ 50,212 |
| $ 642,638 | ||
Please see the “Net Realized Gain/(Loss) on Investments” and “Change in Unrealized Net Appreciation/Depreciation” section of the Fund’s Consolidated Statement of Operations.
Average Ending Monthly Market Value of Derivative Instruments During the Period Ended December 31, 2017 | |
| Market Value |
Forward foreign currency exchange contracts, purchased | $ 6,670,978 |
Forward foreign currency exchange contracts, sold | 9,468,366 |
Futures contracts, purchased | 42,619,504 |
Futures contracts, sold | 45,035,811 |
Total return swaps, long | 331,165 |
Total return swaps, short | (140,101) |
See Notes to Consolidated Schedule of Investments and Other Information and Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 11 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Schedule of Investments and Other Information (unaudited)
Bloomberg Barclays U.S. Aggregate Bond Index | Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based measure of the investment grade, US dollar-denominated, fixed-rate taxable bond market. |
London Interbank Offered Rate (LIBOR) | LIBOR (London Interbank Offered Rate) is a short-term interest rate that banks offer one another and generally represents current cash rates. |
S&P 500® Index | S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance. |
LLC | Limited Liability Company |
(a) | All or a portion of this security is owned by Janus Diversified Alternatives Subsidiary, Ltd. See Note 1 in Notes to Consolidated Financial Statements. |
† | A portion of this security has been segregated to cover margin or segregation requirements on open futures contracts, forward currency contracts, options contracts, short sales, swap agreements, and/or securities with extended settlement dates, the value of which, as of December 31, 2017, is $24,443,579. |
ºº | Rate shown is the 7-day yield as of December 31, 2017. |
◊ | Zero coupon bond. |
£ | The Fund may invest in certain securities that are considered affiliated companies. As defined by the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control. |
12 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of December 31, 2017. See Notes to Consolidated Financial Statements for more information. | |||||||||||||
Valuation Inputs Summary | |||||||||||||
Level 2 - | Level 3 - | ||||||||||||
Level 1 - | Other Significant | Significant | |||||||||||
Quotes Prices | Observable Inputs | Unobservable Inputs | |||||||||||
Assets | |||||||||||||
Investments in Securities: | |||||||||||||
Investment Companies | $ | - | $ | 15,020,048 | $ | - | |||||||
U.S. Government Agency Notes | - | 93,195,432 | - | ||||||||||
Total Investments in Securities | $ | - | $ | 108,215,480 | $ | - | |||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | - | 27,963 | - | ||||||||||
Outstanding Swap Contracts, at Value | - | 350,707 | - | ||||||||||
Variation Margin Receivable | 197,604 | - | - | ||||||||||
Total Assets | $ | 197,604 | $ | 108,594,150 | $ | - | |||||||
Liabilities | |||||||||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | $ | - | $ | 98,432 | $ | - | |||||||
Outstanding Swap Contracts, at Value | - | 111,189 | - | ||||||||||
Variation Margin Payable | 210,234 | - | - | ||||||||||
Total Liabilities | $ | 210,234 | $ | 209,621 | $ | - | |||||||
(a) | Other financial instruments include forward foreign currency exchange, futures, written options, written swaptions, and swap contracts. Forward foreign currency exchange contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures, certain written options on futures, and centrally cleared swap contracts are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Written options, written swaptions, and other swap contracts are reported at their market value at measurement date. | ||||||||||||
Janus Investment Fund | 13 |
Janus Henderson Diversified Alternatives Fund
Consolidated Statement of Assets and Liabilities (unaudited)
December 31, 2017
See footnotes at the end of the Consolidated Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Unaffiliated investments, at value(1) | $ | 93,195,432 | ||||
Affiliated investments, at value(2) | 15,020,048 | |||||
Restricted cash (Note 1) | 2,300,000 | |||||
Forward foreign currency exchange contracts | 27,963 | |||||
Closed foreign currency contracts | 112,544 | |||||
Outstanding swap contracts, at value | 350,707 | |||||
Variation margin receivable | 197,604 | |||||
Non-interested Trustees' deferred compensation | 2,084 | |||||
Receivables: | ||||||
Investments sold | 531,125 | |||||
Fund shares sold | 68,714 | |||||
Dividends from affiliates | 10,015 | |||||
Dividends and interest on swap contracts | 2,997 | |||||
Foreign tax reclaims | 454 | |||||
Other assets | 639 | |||||
Total Assets |
|
| 111,820,326 |
| ||
Liabilities: | ||||||
Due to custodian | 2,003,846 | |||||
Forward foreign currency exchange contracts | 98,432 | |||||
Outstanding swap contracts, at value | 111,189 | |||||
Closed foreign currency contracts | 28,091 | |||||
Variation margin payable | 210,234 | |||||
Payables: | — | |||||
Dividends and interest on swap contracts | 81,433 | |||||
Advisory fees | 58,320 | |||||
Fund shares repurchased | 36,074 | |||||
Professional fees | 26,749 | |||||
Transfer agent fees and expenses | 4,374 | |||||
Custodian fees | 3,100 | |||||
12b-1 Distribution and shareholder servicing fees | 2,930 | |||||
Non-interested Trustees' deferred compensation fees | 2,084 | |||||
Fund administration fees | 737 | |||||
Non-interested Trustees' fees and expenses | 526 | |||||
Accrued expenses and other payables | 106,319 | |||||
Total Liabilities |
|
| 2,774,438 |
| ||
Net Assets |
| $ | 109,045,888 |
| ||
See Notes to Consolidated Financial Statements. | |
14 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Statement of Assets and Liabilities (unaudited)
December 31, 2017
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 108,948,760 | ||||
Undistributed net investment income/(loss) | (1,193,790) | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 668,139 | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 622,779 | |||||
Total Net Assets |
| $ | 109,045,888 |
| ||
Net Assets - Class A Shares | $ | 3,334,543 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 330,189 | |||||
Net Asset Value Per Share(3) |
| $ | 10.10 |
| ||
Maximum Offering Price Per Share(4) |
| $ | 10.72 |
| ||
Net Assets - Class C Shares | $ | 2,148,024 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 216,123 | |||||
Net Asset Value Per Share(3) |
| $ | 9.94 |
| ||
Net Assets - Class D Shares | $ | 4,838,077 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 477,308 | |||||
Net Asset Value Per Share |
| $ | 10.14 |
| ||
Net Assets - Class I Shares | $ | 13,642,784 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 1,344,394 | |||||
Net Asset Value Per Share |
| $ | 10.15 |
| ||
Net Assets - Class N Shares | $ | 78,076,099 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 7,672,268 | |||||
Net Asset Value Per Share |
| $ | 10.18 |
| ||
Net Assets - Class S Shares | $ | 1,479,683 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 147,139 | |||||
Net Asset Value Per Share |
| $ | 10.06 |
| ||
Net Assets - Class T Shares | $ | 5,526,678 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 547,914 | |||||
Net Asset Value Per Share |
| $ | 10.09 |
| ||
(1) Includes cost of $93,207,421. (2) Includes cost of $15,020,048. (3) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (4) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 15 |
Janus Henderson Diversified Alternatives Fund
Consolidated Statement of Operations (unaudited)
For the period ended December 31, 2017
|
|
|
|
|
|
Investment Income: | |||||
| Interest | $ | 377,663 | ||
Dividends from affiliates | 33,282 | ||||
Other income | 3,675 | ||||
Total Investment Income |
| 414,620 |
| ||
Expenses: | |||||
Advisory fees | 473,276 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 3,291 | ||||
Class C Shares | 10,619 | ||||
Class S Shares | 1,843 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 2,973 | ||||
Class S Shares | 1,843 | ||||
Class T Shares | 5,173 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 176 | ||||
Class C Shares | 300 | ||||
Class I Shares | 3,524 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 131 | ||||
Class C Shares | 100 | ||||
Class D Shares | 780 | ||||
Class I Shares | 226 | ||||
Class N Shares | 911 | ||||
Class S Shares | 12 | ||||
Class T Shares | 57 | ||||
Registration fees | 95,418 | ||||
Professional fees | 33,632 | ||||
Shareholder reports expense | 16,606 | ||||
Custodian fees | 8,855 | ||||
Fund administration fees | 3,363 | ||||
Non-interested Trustees’ fees and expenses | 1,209 | ||||
Other expenses | 6,538 | ||||
Total Expenses |
| 670,856 |
| ||
Less: Excess Expense Reimbursement and Waivers |
| (139,196) |
| ||
Net Expenses |
| 531,660 |
| ||
Net Investment Income/(Loss) |
| (117,040) |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | 1,524 | ||||
Forward foreign currency exchange contracts | (125,279) | ||||
Futures contracts | 252,530 | ||||
Swap contracts | 1,044,363 | ||||
Total Net Realized Gain/(Loss) on Investments |
| 1,173,138 |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | (11,436) | ||||
Forward foreign currency exchange contracts | (82,112) | ||||
Futures contracts | 492,690 | ||||
Swap contracts | 232,060 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 631,202 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 1,687,300 |
| ||
See Notes to Consolidated Financial Statements. | |
16 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Statements of Changes in Net Assets
|
|
| Period ended |
| Year ended | |||
Operations: | ||||||||
Net investment income/(loss) | $ | (117,040) | $ | (581,252) | ||||
Net realized gain/(loss) on investments | 1,173,138 | 5,436,962 | ||||||
Change in unrealized net appreciation/depreciation | 631,202 | (1,392,807) | ||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 1,687,300 |
|
| 3,462,903 | |||
Dividends and Distributions to Shareholders: | ||||||||
Dividends from Net Investment Income | ||||||||
Class A Shares | (39,665) | (84,982) | ||||||
Class C Shares | (3,459) | (39,641) | ||||||
Class D Shares | (62,629) | (129,036) | ||||||
Class I Shares | (208,324) | (105,459) | ||||||
Class N Shares | (1,223,347) | (1,334,148) | ||||||
Class S Shares | (13,853) | (41,439) | ||||||
Class T Shares | (77,225) | (70,488) | ||||||
| Total Dividends from Net Investment Income |
| (1,628,502) |
|
| (1,805,193) | ||
Distributions from Net Realized Gain from Investment Transactions | ||||||||
Class A Shares | (43,076) | — | ||||||
Class C Shares | (28,894) | — | ||||||
Class D Shares | (62,973) | — | ||||||
Class I Shares | (172,208) | — | ||||||
Class N Shares | (1,013,987) | — | ||||||
Class S Shares | (19,521) | — | ||||||
Class T Shares | (70,833) | — | ||||||
| Total Distributions from Net Realized Gain from Investment Transactions | (1,411,492) |
|
| — | |||
Net Decrease from Dividends and Distributions to Shareholders |
| (3,039,994) |
|
| (1,805,193) | |||
Capital Share Transactions: | ||||||||
Class A Shares | 1,066,723 | (648,350) | ||||||
Class C Shares | 78,383 | 280,356 | ||||||
Class D Shares | 6,661 | (8,871) | ||||||
Class I Shares | 7,139,761 | 4,238,843 | ||||||
Class N Shares | 28,659,684 | 1,786,193 | ||||||
Class S Shares | 33,374 | 41,439 | ||||||
Class T Shares | 1,894,671 | 2,073,135 | ||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 38,879,257 |
|
| 7,762,745 | |||
Net Increase/(Decrease) in Net Assets |
| 37,526,563 |
|
| 9,420,455 | |||
Net Assets: | ||||||||
Beginning of period | 71,519,325 | 62,098,870 | ||||||
| End of period | $ | 109,045,888 |
| $ | 71,519,325 | ||
Undistributed Net Investment Income/(Loss) | $ | (1,193,790) |
| $ | 551,752 | |||
See Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 17 |
Janus Henderson Diversified Alternatives Fund
Consolidated Financial Highlights
Class A Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) | |||||
Net Asset Value, Beginning of Period |
| $10.16 |
|
| $9.92 |
|
| $9.98 |
|
| $9.84 |
|
| $9.82 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.03)(2) | (0.11)(2) | (0.14)(2) | (0.15)(2) | (0.13)(2) | (0.10) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.24 | 0.63 | 0.18 | 0.37 | 0.15 | (0.08) | |||||||||||||||
Total from Investment Operations |
| 0.21 |
|
| 0.52 |
|
| 0.04 |
|
| 0.22 |
|
| 0.02 |
|
| (0.18) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.13) | (0.28) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.27) |
|
| (0.28) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.10 | $10.16 | $9.92 | $9.98 | $9.84 | $9.82 | |||||||||||||||
Total Return* |
| 1.97% |
|
| 5.29% |
|
| 0.42% |
|
| 2.22% |
|
| 0.20% |
|
| (1.80)% |
| |||
Net Assets, End of Period (in thousands) | $3,335 | $2,297 | $2,882 | $2,740 | $4,055 | $3,523 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,618 | $2,737 | $2,730 | $2,048 | $3,752 | $3,557 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.78% | 1.83% | 1.89% | 1.84% | 1.70% | 3.05% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.47% | 1.54% | 1.53% | 1.52% | 1.46% | 1.52% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.66)% | (1.13)% | (1.42)% | (1.51)% | (1.34)% | (1.36)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
1 | |||||||||||||||||||||
Class C Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| ||||
Net Asset Value, Beginning of Period |
| $9.94 |
|
| $9.72 |
|
| $9.84 |
|
| $9.79 |
|
| $9.78 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.11)(2) | (0.18)(2) | (0.21)(2) | (0.23)(2) | (0.15)(2) | (0.14) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.27 | 0.61 | 0.19 | 0.36 | 0.16 | (0.08) | |||||||||||||||
Total from Investment Operations |
| 0.16 |
|
| 0.43 |
|
| (0.02) |
|
| 0.13 |
|
| 0.01 |
|
| (0.22) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.02) | (0.21) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.16) |
|
| (0.21) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $9.94 | $9.94 | $9.72 | $9.84 | $9.79 | $9.78 | |||||||||||||||
Total Return* |
| 1.52% |
|
| 4.48% |
|
| (0.19)% |
|
| 1.31% |
|
| 0.10% |
|
| (2.20)% |
| |||
Net Assets, End of Period (in thousands) | $2,148 | $2,071 | $1,749 | $1,709 | $3,516 | $3,566 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $2,117 | $1,885 | $1,685 | $1,752 | $3,551 | $3,578 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.53% | 2.56% | 2.63% | 2.59% | 1.89% | 3.92% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 2.24% | 2.29% | 2.27% | 2.26% | 1.64% | 2.27% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (2.22)% | (1.85)% | (2.15)% | (2.26)% | (1.52)% | (2.11)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2012 (inception date) through June 30, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements. | |
18 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Financial Highlights
Class D Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) | |||||
Net Asset Value, Beginning of Period |
| $10.20 |
|
| $9.96 |
|
| $10.00 |
|
| $9.85 |
|
| $9.82 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.08)(2) | (0.10)(2) | (0.13)(2) | (0.14)(2) | (0.13)(2) | (0.08) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.30 | 0.63 | 0.19 | 0.37 | 0.16 | (0.10) | |||||||||||||||
Total from Investment Operations |
| 0.22 |
|
| 0.53 |
|
| 0.06 |
|
| 0.23 |
|
| 0.03 |
|
| (0.18) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.14) | (0.29) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.28) |
|
| (0.29) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.14 | $10.20 | $9.96 | $10.00 | $9.85 | $9.82 | |||||||||||||||
Total Return* |
| 2.06% |
|
| 5.38% |
|
| 0.62% |
|
| 2.32% |
|
| 0.31% |
|
| (1.80)% |
| |||
Net Assets, End of Period (in thousands) | $4,838 | $4,857 | $4,758 | $3,060 | $6,170 | $6,008 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,942 | $4,638 | $3,829 | $3,281 | $5,964 | $4,995 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.84% | 1.87% | 2.05% | 1.96% | 1.66% | 3.20% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.36% | 1.41% | 1.42% | 1.43% | 1.41% | 1.39% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (1.46)% | (0.97)% | (1.30)% | (1.42)% | (1.28)% | (1.23)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
Class I Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.24 |
|
| $10.00 |
|
| $10.02 |
|
| $9.87 |
|
| $9.83 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | 0.01(2) | (0.08)(2) | (0.11)(2) | (0.13)(2) | (0.11)(2) | (0.08) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.20 | 0.63 | 0.19 | 0.36 | 0.15 | (0.09) | |||||||||||||||
Total from Investment Operations |
| 0.21 |
|
| 0.55 |
|
| 0.08 |
|
| 0.23 |
|
| 0.04 |
|
| (0.17) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.16) | (0.31) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.30) |
|
| (0.31) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.15 | $10.24 | $10.00 | $10.02 | $9.87 | $9.83 | |||||||||||||||
Total Return* |
| 2.04% |
|
| 5.51% |
|
| 0.82% |
|
| 2.32% |
|
| 0.41% |
|
| (1.70)% |
| |||
Net Assets, End of Period (in thousands) | $13,643 | $6,713 | $2,383 | $2,265 | $5,727 | $6,464 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $9,348 | $4,396 | $2,318 | $2,586 | $6,201 | $5,751 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.60% | 1.55% | 1.63% | 1.59% | 1.50% | 2.58% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.27% | 1.31% | 1.27% | 1.26% | 1.25% | 1.27% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | 0.10% | (0.81)% | (1.16)% | (1.26)% | (1.13)% | (1.10)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2012 (inception date) through June 30, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 19 |
Janus Henderson Diversified Alternatives Fund
Consolidated Financial Highlights
Class N Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) | |||||
Net Asset Value, Beginning of Period |
| $10.26 |
|
| $10.01 |
|
| $10.04 |
|
| $9.87 |
|
| $9.83 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.01)(2) | (0.08)(2) | (0.11)(2) | (0.13)(2) | (0.11)(2) | (0.05) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.23 | 0.63 | 0.18 | 0.38 | 0.15 | (0.12) | |||||||||||||||
Total from Investment Operations |
| 0.22 |
|
| 0.55 |
|
| 0.07 |
|
| 0.25 |
|
| 0.04 |
|
| (0.17) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.16) | (0.30) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.30) |
|
| (0.30) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.18 | $10.26 | $10.01 | $10.04 | $9.87 | $9.83 | |||||||||||||||
Total Return* |
| 2.13% |
|
| 5.58% |
|
| 0.72% |
|
| 2.52% |
|
| 0.41% |
|
| (1.70)% |
| |||
Net Assets, End of Period (in thousands) | $78,076 | $50,421 | $47,367 | $52,478 | $57,190 | $57,935 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $58,671 | $47,482 | $48,364 | $54,416 | $57,130 | $30,839 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.51% | 1.53% | 1.62% | 1.60% | 1.49% | 1.84% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.20% | 1.26% | 1.25% | 1.25% | 1.25% | 1.25% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.11)% | (0.83)% | (1.14)% | (1.24)% | (1.13)% | (1.06)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
Class S Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| ||||
Net Asset Value, Beginning of Period |
| $10.10 |
|
| $9.89 |
|
| $9.92 |
|
| $9.82 |
|
| $9.81 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.08)(2) | (0.12)(2) | (0.12)(2) | (0.18)(2) | (0.14)(2) | (0.11) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.28 | 0.63 | 0.19 | 0.36 | 0.15 | (0.08) | |||||||||||||||
Total from Investment Operations |
| 0.20 |
|
| 0.51 |
|
| 0.07 |
|
| 0.18 |
|
| 0.01 |
|
| (0.19) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.10) | (0.30) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.24) |
|
| (0.30) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.06 | $10.10 | $9.89 | $9.92 | $9.82 | $9.81 | |||||||||||||||
Total Return* |
| 1.90% |
|
| 5.17% |
|
| 0.72% |
|
| 1.82% |
|
| 0.10% |
|
| (1.90)% |
| |||
Net Assets, End of Period (in thousands) | $1,480 | $1,453 | $1,381 | $1,371 | $3,506 | $3,502 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $1,470 | $1,425 | $1,340 | $1,578 | $3,492 | $3,548 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.00% | 2.04% | 2.12% | 2.07% | 1.95% | 3.19% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.58% | 1.64% | 1.33% | 1.75% | 1.58% | 1.76% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (1.61)% | (1.21)% | (1.22)% | (1.74)% | (1.46)% | (1.60)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2012 (inception date) through June 30, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements. | |
20 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Consolidated Financial Highlights
Class T Shares | |||||||||||||||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and each year or period ended June 30 | 2017 |
|
| 2017 |
|
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) | |||||
Net Asset Value, Beginning of Period |
| $10.17 |
|
| $9.95 |
|
| $9.98 |
|
| $9.85 |
|
| $9.82 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||||||||
Net investment income/(loss) | (0.02)(2) | (0.10)(2) | (0.10)(2) | (0.15)(2) | (0.13)(2) | (0.11) | |||||||||||||||
Net realized and unrealized gain/(loss) | 0.23 | 0.63 | 0.17 | 0.36 | 0.16 | (0.07) | |||||||||||||||
Total from Investment Operations |
| 0.21 |
|
| 0.53 |
|
| 0.07 |
|
| 0.21 |
|
| 0.03 |
|
| (0.18) |
| |||
Less Dividends and Distributions: | |||||||||||||||||||||
Dividends (from net investment income) | (0.15) | (0.31) | — | — | — | — | |||||||||||||||
Distributions (from capital gains) | (0.14) | — | (0.10) | (0.08) | — | — | |||||||||||||||
Total Dividends and Distributions |
| (0.29) |
|
| (0.31) |
|
| (0.10) |
|
| (0.08) |
|
| — |
|
| — |
| |||
Net Asset Value, End of Period | $10.09 | $10.17 | $9.95 | $9.98 | $9.85 | $9.82 | |||||||||||||||
Total Return* |
| 1.99% |
|
| 5.39% |
|
| 0.72% |
|
| 2.12% |
|
| 0.31% |
|
| (1.80)% |
| |||
Net Assets, End of Period (in thousands) | $5,527 | $3,708 | $1,579 | $2,517 | $3,809 | $3,772 | |||||||||||||||
Average Net Assets for the Period (in thousands) | $4,115 | $2,556 | $1,689 | $2,162 | $3,773 | $4,004 | |||||||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.76% | 1.77% | 1.87% | 1.83% | 1.75% | 2.94% | |||||||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.40% | 1.45% | 1.18% | 1.51% | 1.40% | 1.51% | |||||||||||||||
Ratio of Net Investment Income/(Loss) | (0.39)% | (0.97)% | (1.08)% | (1.50)% | (1.28)% | (1.36)% | |||||||||||||||
Portfolio Turnover Rate | 0% | 16% | 0% | 0% | 59% | 38% | |||||||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from December 28, 2012 (inception date) through June 30, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Consolidated Financial Statements. | |
Janus Investment Fund | 21 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Henderson Diversified Alternatives Fund (the “Fund”) is a series of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers 50 funds which include multiple series of shares, with differing investment objectives and policies. The Fund seeks absolute return with low correlation to stocks and bonds. The Fund is classified as diversified, as defined in the 1940 Act.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D Shares are closed to certain new investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus Henderson funds. Class D Shares are available only to investors who hold accounts directly with the Janus Henderson funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus Henderson funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments, who established Class I Share accounts before August 4, 2017.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of: 1) certain adviser-assisted, employer-sponsored retirement plans, including 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and certain welfare benefit plans, such as health savings accounts, and nonqualified deferred compensation plans; and 2) retail investors purchasing in qualified or nonqualified accounts, whose accounts are held through an omnibus account at their financial intermediary, and where the financial intermediary requires no payment or reimbursement from the Fund, Janus Capital Management LLC (“Janus Capital”), or its affiliates. Class N Shares are also available to Janus Henderson proprietary products and to certain direct institutional investors approved by Janus Distributors LLC dba Janus Henderson Distributors (“Janus Henderson Distributors”) including, but not limited to, corporations, certain retirement plans, public plans, and foundations and endowments, subject to minimum investment requirements.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
Investment in Subsidiary
To qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”), 90% of the Fund’s income must be from certain qualified sources. Direct investment in many commodities-related investments generates income that is not from a qualifying source for purposes of meeting this 90% test. The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Janus Diversified Alternatives Subsidiary, Ltd., a wholly-owned subsidiary of the Fund (”Subsidiary”) organized under the laws of the Cayman Islands, which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary
22 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
may invest without limitation in commodity index-linked swaps, commodity futures, commodity swaps, commodity-linked notes, and other commodity-linked derivative instruments. The Subsidiary may also invest in fixed-income securities and other investments which may serve as margin or collateral for the Subsidiary’s derivatives positions. The Fund may invest 25% or less of its total assets in the Subsidiary. Income or net capital gains from the Fund’s investment in the Subsidiary would be treated as ordinary income to the Fund. Janus Capital is the adviser to the Subsidiary. The Subsidiary will not be subject to U.S. laws (including securities laws) and their protections. The Subsidiary is subject to the laws of a foreign jurisdiction, which can be affected by developments in that jurisdiction.
By investing in the Subsidiary, the Fund will be indirectly exposed to the risks associated with the Subsidiary’s investments, which are generally similar to those that are permitted to be held by the Fund. The Subsidiary is not registered under the 1940 Act, and is not subject to all of the provisions of the 1940 Act. The IRS has previously issued a number of private letter rulings to mutual funds (but not the Fund) in which it ruled that income from a fund’s investment in a wholly-owned foreign subsidiary that invests in commodity-linked derivatives, such as the Subsidiary, constitutes qualifying income. The IRS has suspended issuance of any further private letter rulings pending a review of its position. A change in the IRS’ position or changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to operate and could adversely affect the Fund. In particular, unfavorable treatment of the income derived from the Fund’s investment in the Subsidiary could jeopardize the Fund’s status as a regulated investment company under the Code, which in turn may subject the Fund to higher tax rates and/or penalties. Additionally, the Commodity Futures Trading Commission (“CFTC”) adopted changes to Rule 4.5 under the Commodity Exchange Act in 2012 that required Janus Capital to register with the CFTC, and operation of the Fund and Subsidiary is subject to certain CFTC rules and regulations. Existing or new CFTC regulation may increase the costs of implementing the Fund’s strategies, which could negatively affect the Fund’s returns.
The Subsidiary was incorporated on December 28, 2012 as a wholly-owned subsidiary of Janus Diversified Alternatives Fund. As of December 31, 2017, the Fund owns 688,356 shares of the Subsidiary, with a market value of $8,472,703. This represents 8% of the Fund’s net assets. The Fund’s Consolidated Schedule of Investments, Consolidated Statement of Assets and Liabilities, Consolidated Statement of Operations, Consolidated Statements of Changes in Net Assets, and Consolidated Financial Highlights include the accounts of both the Fund and the Subsidiary. All inter-company transactions and balances have been eliminated in consolidation.
As of December 31, 2017, Subsidiary information included in the Consolidated Financial Statements is as follows:
Net assets | $ 8,472,703 |
Market value of investments | 8,292,377 |
Net income/(loss) | 21,781 |
Net realized gain/(loss) | (26,437) |
Net change in unrealized appreciation/depreciation | 430,870 |
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60
Janus Investment Fund | 23 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Information on the valuation of certain derivatives is contained in Note 2 below.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of December 31, 2017 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Consolidated Schedule of Investments and Other Information.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period. The Fund recognizes transfers between the levels as of the beginning of the fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of
24 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class. Additionally, the Fund, as a shareholder in the Subsidiary, will also indirectly bear its pro rata share of the expenses incurred by the Subsidiary.
Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the consolidated financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the consolidated financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
The Fund generally declares and distributes dividends of net investment income and realized capital gains (if any) annually. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or the Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Fund's equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s consolidated financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Janus Investment Fund | 25 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Currently, Management does not believe the bill will have a material impact on the Fund’s intention to continue to qualify as a regulated investment company, which is generally not subject to U.S. federal income tax.
Restricted Cash
As of December 31, 2017, the Fund has restricted cash in the amount of $2,300,000. The restricted cash represents collateral pledged in relation to derivatives and/or securities with extended settlement dates. The carrying value of the restricted cash approximates fair value.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2017 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of the Consolidated Statement of Investments.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
26 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Commodity-Linked Investments
The Fund may invest in commodity index-linked swap agreements, commodity options and futures, and options on futures that provide exposure to the investment returns of the commodities markets. The Fund may also invest in other commodity-linked derivative instruments, such as commodity-linked notes (“structured notes”). The Fund will seek to gain exposure to the commodity markets, in whole or in part, through investments in the Subsidiary which is generally subject to the same investment policies and restrictions as the Fund. The Subsidiary invests in commodity-linked investments and other investments which may serve as margin or collateral for the Subsidiary’s derivative positions. Such exposure may subject the Fund to greater volatility than investments in traditional securities. The value of a given commodity-linked derivative investment typically is based upon the price movements of a physical commodity (such as heating oil, livestock, or agricultural products), a commodity futures contract or commodity index, or some other readily measurable economic variable. The value of commodity-linked derivative instruments may therefore be affected by changes in overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry or commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward currency contracts for non-hedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Consolidated Statement of Assets and Liabilities as a receivable or payable and in the Consolidated Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Consolidated Statement of Operations (if applicable).
During the period, the Fund entered into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to take a positive outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
Janus Investment Fund | 27 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
During the period, the Fund entered into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to take a negative outlook on the related currency. These forward contracts seek to increase exposure to currency risk.
Futures Contracts
A futures contract is an exchange-traded agreement to take or make delivery of an underlying asset at a specific time in the future for a specific predetermined negotiated price. The Fund may enter into futures contracts to gain exposure to the stock market or other markets pending investment of cash balances or to meet liquidity needs. The Fund is subject to interest rate risk, equity risk, and currency risk in the normal course of pursuing its investment objective through its investments in futures contracts. The Fund may also use such derivative instruments to hedge or protect from adverse movements in securities prices, currency rates or interest rates. The use of futures contracts may involve risks such as the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.
Futures contracts on commodities are valued at the settlement price on valuation date on the commodities exchange as reported by an approved vendor. Mini contracts, as defined in the description of the contract, shall be valued using the Actual Settlement Price or “ASET” price type as reported by an approved vendor. In the event that foreign futures trade when the foreign equity markets are closed, the last foreign futures trade price shall be used. Futures contracts are marked-to-market daily, and the daily variation margin is recorded as a receivable or payable on the Consolidated Statement of Assets and Liabilities (if applicable). The change in unrealized net appreciation/depreciation is reported on the Consolidated Statement of Operations (if applicable). When a contract is closed, a realized gain or loss is reported on the Consolidated Statement of Operations (if applicable), equal to the difference between the opening and closing value of the contract. Securities held by the Fund that are designated as collateral for market value on futures contracts are noted on the Consolidated Schedule of Investments (if applicable). Such collateral is in the possession of the Fund’s futures commission merchant.
With futures, there is minimal counterparty credit risk to the Fund since futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
During the period, the Fund purchased interest rate futures to increase exposure to interest rate risk.
During the period, the Fund sold interest rate futures to decrease exposure to interest rate risk.
During the period, the Fund purchased commodity futures to increase exposure to commodity risk.
During the period, the Fund sold commodity futures to decrease exposure to commodity risk.
During the period, the Fund purchased futures on equity indices to increase exposure to equity risk.
During the period, the Fund purchased futures on currency indices to increase exposure to currency risk.
During the period, the Fund sold futures on currency indices to decrease exposure to currency risk.
Swaps
Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one year to exchange one set of cash flows for another. The most significant factor in the performance of swap agreements is the change in value of the specific index, security, or currency, or other factors that determine the amounts of payments due to and from the Fund. The use of swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Swap transactions may in some instances involve the delivery of securities or other underlying assets by the Fund or its counterparty to collateralize obligations under the swap. If the other party to a swap that is not collateralized defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. Swap agreements entail the risk that a party will default on its payment obligations to the Fund. If the other party to a swap defaults, the Fund would risk the loss of the net amount of the payments that it contractually is entitled to receive. If the Fund utilizes a swap at the wrong time or judges market conditions incorrectly, the swap may result in a loss to the Fund and reduce the Fund’s total return.
Swap agreements also bear the risk that the Fund will not be able to meet its obligation to the counterparty. Swap agreements are typically privately negotiated and entered into in the OTC market. However, certain swap agreements are required to be cleared through a clearinghouse and traded on an exchange or swap execution facility. Swaps that
28 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
are required to be cleared are required to post initial and variation margins in accordance with the exchange requirements. Regulations enacted require the Fund to centrally clear certain interest rate and credit default index swaps through a clearinghouse or central counterparty (“CCP”). To clear a swap with a CCP, the Fund will submit the swap to, and post collateral with, a futures clearing merchant (“FCM”) that is a clearinghouse member. Alternatively, the Fund may enter into a swap with a financial institution other than the FCM (the “Executing Dealer”) and arrange for the swap to be transferred to the FCM for clearing. The Fund may also enter into a swap with the FCM itself. The CCP, the FCM, and the Executing Dealer are all subject to regulatory oversight by the U.S. Commodity Futures Trading Commission (“CFTC”). A default or failure by a CCP or an FCM, or the failure of a swap to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting swap positions, accessing collateral, or fully implementing its investment strategies. The regulatory requirement to clear certain swaps could, either temporarily or permanently, reduce the liquidity of cleared swaps or increase the costs of entering into those swaps.
Index swaps, interest rate swaps, and credit default swaps are valued using an approved vendor supplied price. Basket swaps are valued using a broker supplied price. Equity swaps that consist of a single underlying equity are valued either at the closing price, the latest bid price, or the last sale price on the primary market or exchange it trades. The market value of swap contracts are aggregated by positive and negative values and are disclosed separately as an asset or liability on the Fund’s Consolidated Statement of Assets and Liabilities (if applicable). Realized gains and losses are reported on the Fund’s Consolidated Statement of Operations (if applicable). The change in unrealized net appreciation or depreciation during the period is included in the Consolidated Statement of Operations (if applicable).
The Fund’s maximum risk of loss from counterparty risk or credit risk is the discounted value of the payments to be received from/paid to the counterparty over the contract’s remaining life, to the extent that the amount is positive. The risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty.
Total return swaps involve an exchange by two parties in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains over the payment period. A fixed-income total return swap may be written on many different kinds of underlying reference assets, and may include different indices for various kinds of debt securities (e.g., U.S. investment grade bonds, high-yield bonds, or emerging market bonds).
During the period, the Fund entered into total return swaps on equity indices or custom baskets of equity indices to increase exposure to equity risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of securities or an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same securities or index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities.
During the period, the Fund entered into total return swaps on equity indices to decrease exposure to equity risk. These total return swaps require the Fund to pay an amount equal to the positive price movement of securities or an index multiplied by the notional amount of the contract and, in some cases, dividends paid on the securities. The Fund will receive payments of a floating reference interest rate and an amount equal to the negative price movement of the same securities or index multiplied by the notional amount of the contract.
During the period, the Fund entered into total return swaps on a custom basket of commodity indices to increase exposure to commodity risk. These total return swaps require the Fund to pay a fixed or a floating reference interest rate, and an amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
During the period, the Fund entered into total return swaps on credit indices to increase exposure to credit risk. These total return swaps require the Fund to pay a floating reference interest rate, and an amount equal to the negative price movement of an index multiplied by the notional amount of the contract. The Fund will receive payments equal to the positive price movement of the same index multiplied by the notional amount of the contract.
Janus Investment Fund | 29 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) of 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future. The risk of investing in securities in the European markets may also be heightened due to the referendum in which the United Kingdom voted to exit the EU (known as “Brexit”). There is considerable uncertainty about how Brexit will be conducted, how negotiations of necessary treaties and trade agreements will proceed, or how financial markets will react. In addition, one or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery
30 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the consolidated financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Consolidated Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Consolidated Statement of Assets and Liabilities.
The following tables present gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the “Fair Value of Derivative Instruments as of December 31, 2017” table located in the Fund’s Consolidated Schedule of Investments.
Offsetting of Financial Assets and Derivative Assets | ||||||||
Gross Amounts | ||||||||
of Recognized | Offsetting Asset | Collateral | ||||||
Counterparty | Assets | or Liability(a) | Pledged(b) | Net Amount | ||||
BNP Paribas(c) | $ | 10 | $ | — | $ | (10) | $ | — |
BNP Paribas | 43 | — | — | 43 | ||||
Goldman Sachs International | 350,654 | (86,946) | — | 263,708 | ||||
HSBC Securities (USA), Inc. | 27,963 | (27,963) | — | — | ||||
Total | $ | 378,670 | $ | (114,909) | $ | (53) | $ | 263,708 |
Janus Investment Fund | 31 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross Amounts | |||||||||
of Recognized | Offsetting Asset | Collateral | |||||||
Counterparty | Liabilities | or Liability(a) | Pledged(b) | Net Amount | |||||
Barclays Capital, Inc. | $ | 24,243 | $ | — | $ | — | $ | 24,243 | |
Goldman Sachs International | 86,946 | (86,946) | — | — | |||||
HSBC Securities (USA), Inc. | 98,432 | (27,963) | — | 70,469 | |||||
Total | $ | 209,621 | $ | (114,909) | $ | — | $ | 94,712 | |
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Consolidated Statement of Assets and Liabilities. | ||||||||
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | ||||||||
(c) | This counterparty has an ISDA Master Agreement with the Fund and a separate ISDA Master Agreement with the Subsidiary. Exposure from OTC derivatives can only be netted across transactions governed under the same ISDA Master Agreement with the same legal entity. The Fund and Subsidiary are recognized as two separate legal entities. As such, exposure cannot be netted. This line item represents the amount from the Subsidiary. | ||||||||
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Consolidated Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
The Fund may require the counterparty to pledge securities as collateral daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized gain on OTC derivative contracts with a particular counterparty. The Fund may deposit cash as collateral with the counterparty and/or custodian daily (based on the daily valuation of the financial asset) if the Fund has a net aggregate unrealized loss on OTC derivative contracts with a particular counterparty. The collateral amounts are subject to minimum exposure requirements and initial margin requirements. Collateral amounts are monitored and subsequently adjusted up or down as valuations fluctuate by at least the minimum exposure requirement. Collateral may reduce the risk of loss.
Sovereign Debt
The Fund may invest in U.S. and non-U.S. government debt securities (“sovereign debt”). Some investments in sovereign debt, such as U.S. sovereign debt, are considered low risk. However, investments in sovereign debt, especially the debt of less developed countries, can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or to pay the interest on its sovereign debt in a timely manner. A sovereign debtor’s willingness or ability to satisfy its debt obligation may be affected by various factors including, but not limited to, its cash flow situation, the extent of its foreign currency reserves, the availability of foreign exchange when a payment is due, the relative size of its debt position in relation to its economy as a whole, the sovereign debtor’s policy toward international lenders, and local political constraints to which the governmental entity may be subject. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies, and other entities. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance, or repay principal or interest when due may result in the cancellation of third party commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to timely service its debts. The Fund may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to governmental entities, which may adversely affect the Fund’s holdings. In the event of default, there may be limited or no legal remedies for collecting sovereign debt and there may be no bankruptcy proceedings through which the Fund may collect all or part of the sovereign debt that a governmental entity has not repaid. In addition, to the extent the Fund invests in non-U.S. sovereign debt, it may be subject to currency risk.
32 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund and the Subsidiary each pay Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s and the Subsidiary's contractual investment advisory fee rate (expressed as an annual rate).
Average Daily Net Assets of the Fund | Contractual Investment Advisory Fee (%) |
First $1 Billion | 1.00 |
Over $1 Billion | 0.95 |
Janus Capital has contractually agreed to waive a portion of the Fund’s management fee in an amount equal to the management fee paid to Janus Capital by the Subsidiary. The management fee waiver arrangement related to the Subsidiary may not be discontinued by Janus Capital as long as its contract with the Subsidiary is in place.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses, which include the other expenses of the Subsidiary, including the investment advisory fee, but excluding the fees payable pursuant to a Rule 12b-1 plan, shareholder servicing fees, such as transfer agency fees (including out-of-pocket costs), administrative services fees and any networking/omnibus/administrative fees payable by any share class, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 1.09% of the Fund’s average daily net assets. Janus Capital has agreed to continue the waivers until at least November 1, 2018. The previous expense limit (until November 1, 2017) was 1.25%.If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement and Waivers” on the Consolidated Statement of Operations.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s and the Subsidiary's transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Consolidated Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Consolidated Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Consolidated Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or 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. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement
Janus Investment Fund | 33 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Consolidated Statement of Operations.
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital. For all share classes except Class D Shares, Janus Services also seeks reimbursement for costs it incurs as transfer agent and for providing servicing.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Consolidated Statement of Operations.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Henderson Distributors, a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets, and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Henderson Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Consolidated Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution and shareholder servicing fees” in the Consolidated Statement of Operations.
Janus Capital furnishes certain administration, compliance, and accounting services to the Fund, including providing office space for the Fund and providing personnel to serve as officers to the Fund. The Fund reimburses Janus Capital for certain of its costs in providing these services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). These costs include some or all of the salaries, fees, and expenses of Janus Capital employees and Fund officers, including the Fund’s Chief Compliance Officer and compliance staff, who provide specified administration and compliance services to the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Consolidated Statement of Operations. Total compensation of $217,876 was paid to the Chief Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2017. The Fund's portion is reported as part of “Other expenses” on the Consolidated Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus Henderson funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2017 on the Consolidated Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Consolidated Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2017 are included in “Non-interested Trustees’ fees and expenses” on the Consolidated Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the
34 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
Deferred Plan. Deferred fees of $210,375 were paid by the Trust to the Trustees under the Deferred Plan during the period ended December 31, 2017.
Pursuant to the provisions of the 1940 Act and related rules, the Fund may participate in an affiliated or nonaffiliated cash sweep program. In the cash sweep program, uninvested cash balances of the Fund may be used to purchase shares of affiliated or nonaffiliated money market funds or cash management pooled investment vehicles. The Fund is eligible to participate in the cash sweep program (the “Investing Funds”). As adviser, Janus Capital has an inherent conflict of interest because of its fiduciary duties to the affiliated money market funds or cash management pooled investment vehicles and the Investing Funds. Janus Cash Liquidity Fund LLC is an affiliated unregistered cash management pooled investment vehicle that invests primarily in highly-rated short-term fixed-income securities. Janus Cash Liquidity Fund LLC currently maintains a NAV of $1.00 per share and distributes income daily in a manner consistent with a registered product compliant with Rule 2a-7 under the 1940 Act. There are no restrictions on the Fund's ability to withdraw investments from Janus Cash Liquidity Fund LLC at will, and there are no unfunded capital commitments due from the Fund to Janus Cash Liquidity Fund LLC. The units of Janus Cash Liquidity Fund LLC are not charged any management fee, sales charge or service fee.
Any purchases and sales, realized gains/losses and recorded dividends from affiliated investments during the period ended December 31, 2017 can be found in a table located in the Consolidated Schedule of Investments.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Henderson Distributors and financial intermediaries. During the period ended December 31, 2017, Janus Henderson Distributors retained upfront sales charges of $78.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Henderson Distributors during the period ended December 31, 2017.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2017, redeeming shareholders of Class C Shares paid CDSCs of $100.
As of December 31, 2017, shares of the Fund were owned by affiliates of Janus Henderson Investors, and/or other funds advised by Janus Henderson, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| |
Class A Shares | 35 | % | 1 | % | |
Class C Shares | 66 | 1 | |||
Class D Shares | - | - | |||
Class I Shares | - | - | |||
Class N Shares | 98 | 70 | |||
Class S Shares | 100 | 1 | |||
Class T Shares | 24 | 1 | |||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
Janus Investment Fund | 35 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2017 are noted below. The primary difference between book and tax appreciation or depreciation of investments is investments in partnerships.
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ 108,227,469 | $ 1,109 | $ (13,098) | $ (11,989) |
Information on the tax components of derivatives as of December 31, 2017 is as follows:
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ - | $ 1,355,812 | $ (721,286) | $ 634,526 |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
36 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
6. Capital Share Transactions
Period ended December 31, 2017 | Year ended June 30, 2017 | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 112,365 | $ 1,152,597 | 68,349 | $ 693,334 | ||
Reinvested dividends and distributions | 8,168 | 82,741 | 8,507 | 84,982 | ||
Shares repurchased | (16,420) | (168,615) | (141,210) | (1,426,666) | ||
Net Increase/(Decrease) | 104,113 | $ 1,066,723 |
| (64,354) | $ (648,350) | |
Class C Shares: | ||||||
Shares sold | 7,236 | $ 73,065 | 27,955 | $ 276,529 | ||
Reinvested dividends and distributions | 3,245 | 32,353 | 4,041 | 39,641 | ||
Shares repurchased | (2,687) | (27,035) | (3,618) | (35,814) | ||
Net Increase/(Decrease) | 7,794 | $ 78,383 |
| 28,378 | $ 280,356 | |
Class D Shares: | ||||||
Shares sold | 69,128 | $ 713,581 | 275,006 | $2,801,234 | ||
Reinvested dividends and distributions | 12,180 | 123,867 | 12,801 | 128,390 | ||
Shares repurchased | (80,322) | (830,787) | (289,307) | (2,938,495) | ||
Net Increase/(Decrease) | 986 | $ 6,661 |
| (1,500) | $ (8,871) | |
Class I Shares: | ||||||
Shares sold | 693,977 | $ 7,203,471 | 730,298 | $7,421,286 | ||
Reinvested dividends and distributions | 37,380 | 380,532 | 10,483 | 105,459 | ||
Shares repurchased | (42,751) | (444,242) | (323,385) | (3,287,902) | ||
Net Increase/(Decrease) | 688,606 | $ 7,139,761 |
| 417,396 | $4,238,843 | |
Class N Shares: | ||||||
Shares sold | 2,775,201 | $28,886,991 | 815,553 | $8,243,513 | ||
Reinvested dividends and distributions | 219,132 | 2,237,334 | 132,356 | 1,334,148 | ||
Shares repurchased | (237,494) | (2,464,641) | (763,744) | (7,791,468) | ||
Net Increase/(Decrease) | 2,756,839 | $28,659,684 |
| 184,165 | $1,786,193 | |
Class S Shares: | ||||||
Shares sold | - | $ - | - | $ - | ||
Reinvested dividends and distributions | 3,311 | 33,374 | 4,173 | 41,439 | ||
Shares repurchased | - | - | - | - | ||
Net Increase/(Decrease) | 3,311 | $ 33,374 |
| 4,173 | $ 41,439 | |
Class T Shares: | ||||||
Shares sold | 259,633 | $ 2,682,751 | 301,264 | $3,042,024 | ||
Reinvested dividends and distributions | 14,630 | 148,058 | 7,049 | 70,488 | ||
Shares repurchased | (91,087) | (936,138) | (102,214) | (1,039,377) | ||
Net Increase/(Decrease) | 183,176 | $ 1,894,671 |
| 206,099 | $2,073,135 | |
7. Purchases and Sales of Investment Securities
For the period ended December 31, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$ - | $ 2,575,000 | $ - | $ - |
8. Recent Accounting Pronouncements
The Securities and Exchange Commission ("SEC") adopted new rules as well as amendments to its rules to modernize the reporting and disclosure of information by registered investment companies. In addition, the SEC adopted amendments to Regulation S-X, which require standardized, enhanced disclosure about derivatives in investment
Janus Investment Fund | 37 |
Janus Henderson Diversified Alternatives Fund
Notes to Consolidated Financial Statements (unaudited)
company financial statements, as well as other amendments. The compliance date of the amendments to Regulation S-X was August 1, 2017. This report incorporates the amendments to Regulation S-X.
The FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") to amend the amortization period for certain purchased callable debt securities held at a premium. The guidance requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Management is currently evaluating the impacts of ASU 2017-08 on the financial statements.
9. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to December 31, 2017 and through the date of issuance of the Fund’s consolidated financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s consolidated financial statements.
38 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-1093; (ii) on the Fund’s website at janushenderson.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janushenderson.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Full Holdings
The Fund is required to disclose its complete holdings in the quarterly holdings report on Form N-Q within 60 days of the end of the first and third fiscal quarters, and in the annual report and semiannual report to Fund shareholders. These reports (i) are available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) are available without charge, upon request, by calling a Janus Henderson representative at 1-877-335-2687 (toll free) (or 1-800-525-3713 if you hold Class D shares). Portfolio holdings consisting of at least the names of the holdings are generally available on a monthly basis with a 30-day lag. Holdings are generally posted approximately two business days thereafter under Full Holdings for the Fund at janushenderson.com/info (or janushenderson.com/reports if you hold Class D Shares).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 14 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
Additionally, in connection with their consideration of whether to continue the investment advisory agreement and subadvisory agreement for each Fund, as applicable, the Trustees also received and reviewed information in connection with the transaction to combine the respective businesses of Henderson Group plc and Janus Capital Group, Inc., the parent company of Janus Capital (the “Transaction”), announced in October 2016, which closed in the second quarter of 2017. In this regard, the Trustees reviewed information regarding the impact of the Transaction on the services to be provided by Janus Capital and each subadviser, as applicable, to the Funds under such agreements prior to the close of the Transaction as well as the services provided after the Transaction closed.
At a meeting held on December 7, 2017, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2018 through February 1, 2019, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the
Janus Investment Fund | 39 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies 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 and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2017, approximately 70% of the Funds were in the top two quartiles of performance, as reported by Morningstar, and for the 12 months ended September 30, 2017, approximately 46% of the Funds were in the top two quartiles of performance, as reported by Morningstar.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge
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quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Strategic Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Select Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson International Opportunities Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Henderson International Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that
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the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance.
Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson All Asset Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Contrarian Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Enterprise Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Forty Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Growth and Income Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Research Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital and Intech had taken or were taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Intech had taken or were taking to improve performance.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
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· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Forty Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Allocation Portfolio – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital and Perkins had taken or were taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
In consideration of each Fund’s performance, the Trustees concluded that, taking into account the factors relevant to performance, as well as other considerations, including steps taken to improve performance, the Fund’s performance warranted continuation of the Fund’s investment advisory and subadvisory agreement(s).
Costs of Services Provided
The Trustees examined information regarding the fees and expenses of each Fund in comparison to similar information for other comparable funds as provided by Broadridge, an independent data provider. They also reviewed an analysis of
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that information provided by their independent fee consultant and noted that the rate of management (investment advisory and any administration, but excluding out-of-pocket costs) fees for many of the Funds, after applicable waivers, was below the average management fee rate of the respective peer group of funds selected by an independent data provider. The Trustees also examined information regarding the subadvisory fees charged for subadvisory services, as applicable, noting that all such fees were paid by Janus Capital out of its management fees collected from such Fund.
The independent fee consultant provided its belief that the management fees charged by Janus Capital to each of the Funds under the current investment advisory and administration agreements are reasonable in relation to the services provided by Janus Capital. The independent fee consultant found: (1) the total expenses and management fees of the Funds to be reasonable relative to other mutual funds; (2) total expenses, on average, were 10% below the average total expenses of their respective Broadridge Expense Group peers and 18% below the average total expenses for their Broadridge Expense Universes; (3) management fees for the Funds, on average, were 8% below the average management fees for their Expense Groups and 9% below the average for their Expense Universes; and (4) Fund expenses at the functional level for each asset and share class category were reasonable. The Trustees also considered the total expenses for each share class of each Fund compared to the average total expenses for its Broadridge Expense Group peers and to average total expenses for its Broadridge Expense Universe.
The independent fee consultant concluded that, based on its strategic review of expenses at the complex, category and individual fund level, Fund expenses were found to be reasonable relative to both Expense Group and Expense Universe benchmarks. Further, for certain Funds, the independent fee consultant also performed a systematic “focus list” analysis of expenses in the context of the performance or service delivered to each set of investors in each share class in each selected Fund. Based on this analysis, the independent fee consultant found that the combination of service quality/performance and expenses on these individual Funds and share classes were reasonable in light of performance trends, performance histories, and existence of performance fees, breakpoints, and expense waivers on such Funds.
The Trustees considered the methodology used by Janus Capital and each subadviser in determining compensation payable to portfolio managers, the competitive environment for investment management talent, and the competitive market for mutual funds in different distribution channels.
The Trustees also reviewed management fees charged by Janus Capital and each subadviser to comparable separate account clients and to comparable non-affiliated funds subadvised by Janus Capital or by a subadviser (for which Janus Capital or the subadviser provides only or primarily portfolio management services). Although in most instances subadvisory and separate account fee rates for various investment strategies were lower than management fee rates for Funds having a similar strategy, the Trustees considered that Janus Capital noted that, under the terms of the management agreements with the Funds, Janus Capital performs significant additional services for the Funds that it does not provide to those other clients, including administration services, oversight of the Funds’ other service providers, trustee support, regulatory compliance and numerous other services, and that, in serving the Funds, Janus Capital assumes many legal risks and other costs that it does not assume in servicing its other clients. Moreover, they noted that the independent fee consultant found that: (1) the management fees Janus Capital charges to the Funds are reasonable in relation to the management fees Janus Capital charges to its institutional clients and to the fees Janus Capital charges to funds subadvised by Janus Capital; (2) these institutional and subadvised accounts have different service and infrastructure needs; (3) Janus mutual fund investors enjoy reasonable fees relative to the fees charged to Janus institutional and subadvised fund investors; (4) in three of seven product categories, the Funds receive proportionally better pricing than the industry in relation to Janus institutional clients; and (5) in seven of eight strategies, Janus Capital has lower management fees than funds subadvised by Janus Capital’s portfolio managers.
The Trustees considered the fees for each Fund for its fiscal year ended in 2016, and noted the following with regard to each Fund’s total expenses, net of applicable fee waivers (the Fund’s “total expenses”):
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were
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reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Real Return Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to waive 11 basis points of management fees effective February 1, 2018 and also has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Strategic Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
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Additional Information (unaudited)
· For Janus Henderson Emerging Markets Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Select Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson International Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Money Market Funds
· For Janus Henderson Government Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
· For Janus Henderson Money Market Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes. In addition, the Trustees considered that Janus Capital voluntarily waives one-half of its advisory fee and other expenses in order to maintain a positive yield.
48 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
Multi-Asset Funds
· For Janus Henderson Adaptive Global Allocation Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson All Asset Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s total expenses effective June 5, 2017.
· For Janus Henderson Dividend & Income Builder Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Value Plus Income Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Multi-Asset U.S. Equity Funds
· For Janus Henderson Balanced Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Contrarian Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Enterprise Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Growth and Income Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Research Fund, the Trustees noted that, although the Fund’s total expenses were equal to or exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective February 1, 2017.
· For Janus Henderson Triton Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson U.S. Growth Opportunities Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses effective June 5, 2017.
· For Janus Henderson Venture Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
Janus Investment Fund | 49 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
Quantitative Equity Funds
· For Janus Henderson Emerging Markets Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Income Managed Volatility Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson International Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson U.S. Managed Volatility Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
U.S. Equity Funds
· For Janus Henderson Large Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Mid Cap Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group average for all share classes.
· For Janus Henderson Select Value Fund, the Trustees noted that the Fund’s total expenses were below the peer group averages for all share classes.
· For Janus Henderson Small Cap Value Fund, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for certain share classes, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
Janus Aspen Series
· For Janus Henderson Balanced Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Enterprise Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Flexible Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses, although this limit did not apply because the Fund’s total expenses were already below the applicable fee limit.
· For Janus Henderson Forty Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable.
· For Janus Henderson Global Allocation Portfolio - Moderate, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
· For Janus Henderson Global Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Technology Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Global Unconstrained Bond Portfolio, the Trustees noted that, although the Fund’s total expenses exceeded the peer group average for one share class, overall the Fund’s total expenses were reasonable. The Trustees also noted that Janus Capital has contractually agreed to limit the Fund’s expenses.
50 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
· For Janus Henderson Mid Cap Value Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Overseas Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson Research Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for both share classes.
· For Janus Henderson U.S. Low Volatility Portfolio, the Trustees noted that the Fund’s total expenses were below the peer group average for its sole share class.
The Trustees reviewed information on the overall profitability to Janus Capital and its affiliates of their relationship with the Funds, and considered profitability data of other fund managers. The Trustees also considered the financial information, estimated profitability and corporate structure of Janus Capital’s parent company before and after the Transaction. The Trustees recognized that profitability comparisons among fund managers are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund manager is affected by numerous factors, including the organizational structure of the particular fund manager, the types of funds and other accounts it manages, possible other lines of business, the methodology for allocating expenses, and the fund manager’s capital structure and cost of capital. The Trustees also noted that the Trustees’ independent fee consultant reviewed the overall profitability of Janus Capital’s parent company prior to the Transaction, and the independent fee consultant found that, while assessing the reasonableness of Fund expenses in light of such profits was dependent on comparisons with other publicly-traded mutual fund advisers, and that these comparisons were limited in accuracy by differences in complex size, business mix, institutional account orientation and other factors, after accepting these limitations, the level of profit earned by Janus Capital’s parent company was reasonable. In this regard, the independent consultant concluded that the profitability of Janus Capital’s parent company did not show excess nor did it show any insufficiency that could limit the ability to invest the resources needed to drive strong future investment performance on behalf of the Funds.
Additionally, the Trustees considered the estimated profitability to Janus Capital from the investment management services it provided to each Fund. The Trustees also considered such estimated profitability taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. In their review, the Trustees considered whether Janus Capital and each subadviser receive adequate incentives and resources to manage the Funds effectively. In reviewing profitability, the Trustees noted that the estimated profitability for an individual Fund is necessarily a product of the allocation methodology utilized by Janus Capital to allocate its expenses as part of the estimated profitability calculation. In this regard, the Trustees noted that the independent fee consultant concluded that (1) the expense allocation methodology utilized by Janus Capital was reasonable and (2) the estimated profitability to Janus Capital from the investment management services it provided to each Fund was reasonable, including after taking into account the impact of the Transaction on Janus Capital’s expense structure on a pro forma basis. The Trustees also considered that the estimated profitability for an individual Fund was influenced by a number of factors, including not only the allocation methodology selected, but also the presence of fee waivers and expense caps, and whether the Fund’s investment management agreement contained breakpoints or a performance fee component. The Trustees determined, after taking into account these factors, among others, that Janus Capital’s estimated profitability with respect to each Fund was not unreasonable in relation to the services provided, and that the variation in the range of such estimated profitability among the Funds was not a material factor in the Board’s approval of the reasonableness of any Fund’s investment management fees.
The Trustees concluded that the management fees payable by each Fund to Janus Capital and its affiliates, as well as the fees paid by Janus Capital to the subadvisers of subadvised Funds, were reasonable in relation to the nature, extent, and quality of the services provided, taking into account the fees charged by other advisers for managing comparable mutual funds with similar strategies, the fees Janus Capital and the subadvisers charge to other clients, and, as applicable, the impact of fund performance on management fees payable by the Funds. The Trustees also concluded that each Fund’s total expenses were reasonable, taking into account the size of the Fund, the quality of services provided by Janus Capital and any subadviser, the investment performance of the Fund, and any expense limitations agreed to or provided by Janus Capital.
Janus Investment Fund | 51 |
Janus Henderson Diversified Alternatives Fund
Additional Information (unaudited)
Economies of Scale
The Trustees considered information about the potential for Janus Capital to realize economies of scale as the assets of the Funds increase. They noted their independent fee consultant’s analysis of economies of scale in prior years. They also noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, without any breakpoints or performance fees, their independent fee consultant concluded that 86% of these Funds’ share classes have contractual management fees (gross of waivers) below their Broadridge expense group averages. They also noted that for those Funds whose expenses are being reduced by the contractual expense limitations of Janus Capital, Janus Capital is subsidizing certain of these Funds because they have not reached adequate scale. Moreover, as the assets of some of the Funds have declined in the past few years, certain Funds have benefited from having advisory fee rates that have remained constant rather than increasing as assets declined. In addition, performance fee structures have been implemented for various Funds that have caused the effective rate of advisory fees payable by such a Fund to vary depending on the investment performance of the Fund relative to its benchmark index over the measurement period; and a few Funds have fee schedules with breakpoints and reduced fee rates above certain asset levels. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, including past research and analysis conducted by the Trustees’ independent fee consultant, the Trustees concluded that the current fee structure of each Fund was reasonable and that the current rates of fees do reflect a sharing between Janus Capital and the Fund of any economies of scale that may be present at the current asset level of the Fund.
The independent fee consultant concluded that, given the limitations of various analytical approaches to economies of scale it had considered in prior years, and their conflicting results, it is difficult to analytically confirm or deny the existence of economies of scale in the Janus complex. The independent consultant concluded that (1) to the extent there were economies of scale at Janus Capital, Janus Capital’s general strategy of setting fixed management fees below peers appeared to share any such economies with investors even on smaller Funds which have not yet achieved those economies and (2) by setting lower fixed fees from the start on these Funds, Janus Capital appeared to be investing to increase the likelihood that these Funds will grow to a level to achieve any scale economies that may exist. Further, the independent fee consultant provided its belief that Fund investors are well-served by the fee levels and performance fee structures in place on the Funds in light of any economies of scale that may be present at Janus Capital.
Other Benefits to Janus Capital
The Trustees also considered benefits that accrue to Janus Capital and its affiliates and subadvisers to the Funds from their relationships with the Funds. They recognized that two affiliates of Janus Capital separately serve the Funds as transfer agent and distributor, respectively, and the transfer agent receives compensation directly from the non-money market funds for services provided. The Trustees also considered Janus Capital’s past and proposed use of commissions paid by the Funds on portfolio brokerage transactions to obtain proprietary and third-party research products and services benefiting the Fund and/or other clients of Janus Capital and/or Janus Capital, and/or a subadviser to a Fund. The Trustees concluded that Janus Capital’s and the subadvisers’ use of these types of client commission arrangements to obtain proprietary and third-party research products and services was consistent with regulatory requirements and guidelines and was likely to benefit each Fund. The Trustees also concluded that, other than the services provided by Janus Capital and its affiliates and subadvisers pursuant to the agreements and the fees to be paid by each Fund therefor, the Funds and Janus Capital and the subadvisers may potentially benefit from their relationship with each other in other ways. They concluded that Janus Capital and/or the subadvisers benefits from the receipt of research products and services acquired through commissions paid on portfolio transactions of the Funds and that the Funds benefit from Janus Capital’s and/or the subadvisers’ receipt of those products and services as well as research products and services acquired through commissions paid by other clients of Janus Capital and/or other clients of the subadvisers. They further concluded that the success of any Fund could attract other business to Janus Capital, the subadvisers or other Janus funds, and that the success of Janus Capital and the subadvisers could enhance Janus Capital’s and the subadvisers’ ability to serve the Funds.
52 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Useful Information About Your Fund Report (unaudited)
The Management Commentary in this report includes valuable insight as well as statistical information to help you understand how your Fund’s performance and characteristics stack up against those of comparable indices.
If the Fund invests in foreign securities, this report may include information about country exposure. Country exposure is based primarily on the country of risk. A company may be allocated to a country based on other factors such as location of the company’s principal office, the location of the principal trading market for the company’s securities, or the country where a majority of the company’s revenues are derived.
Please keep in mind that the opinions expressed in the Management Commentary are just that: opinions. They are a reflection based on best judgment at the time this report was compiled, which was December 31, 2017. As the investing environment changes, so could opinions. These views are unique and are not necessarily shared by fellow employees or by Janus Henderson in general.
Performance Overviews
Performance overview graphs compare the performance of a hypothetical $10,000 investment in the Fund with one or more widely used market indices. When comparing the performance of the Fund with an index, keep in mind that market indices are not available for investment and do not reflect deduction of expenses.
Average annual total returns are quoted for a Fund with more than one year of performance history. Average annual total return is calculated by taking the growth or decline in value of an investment over a period of time, including reinvestment of dividends and distributions, then calculating the annual compounded percentage rate that would have produced the same result had the rate of growth been constant throughout the period. Average annual total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Cumulative total returns are quoted for a Fund with less than one year of performance history. Cumulative total return is the growth or decline in value of an investment over time, independent of the period of time involved. Cumulative total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares.
Pursuant to federal securities rules, expense ratios shown in the performance chart reflect subsidized (if applicable) and unsubsidized ratios. The total annual fund operating expenses ratio is gross of any fee waivers, reflecting the Fund’s unsubsidized expense ratio. The net annual fund operating expenses ratio (if applicable) includes contractual waivers of Janus Capital and reflects the Fund’s subsidized expense ratio. Ratios may be higher or lower than those shown in the “Consolidated Financial Highlights” in this report.
Consolidated Schedule of Investments
Following the performance overview section is the Fund’s Consolidated Schedule of Investments. This schedule reports the types of securities held in the Fund on the last day of the reporting period. Securities are usually listed by type (common stock, corporate bonds, U.S. Government obligations, etc.) and by industry classification (banking, communications, insurance, etc.). Holdings are subject to change without notice.
The value of each security is quoted as of the last day of the reporting period. The value of securities denominated in foreign currencies is converted into U.S. dollars.
If the Fund invests in foreign securities, it will also provide a summary of investments by country. This summary reports the Fund exposure to different countries by providing the percentage of securities invested in each country. The country of each security represents the country of risk. The Fund’s Consolidated Schedule of Investments relies upon the industry group and country classifications published by Barclays and/or MSCI Inc.
Tables listing details of individual forward currency contracts, futures, written options, swaptions, and swaps follow the Fund’s Consolidated Schedule of Investments (if applicable).
Consolidated Statement of Assets and Liabilities
This statement is often referred to as the “balance sheet.” It lists the assets and liabilities of the Fund on the last day of the reporting period.
Janus Investment Fund | 53 |
Janus Henderson Diversified Alternatives Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s assets are calculated by adding the value of the securities owned, the receivable for securities sold but not yet settled, the receivable for dividends declared but not yet received on securities owned, and the receivable for Fund shares sold to investors but not yet settled. The Fund’s liabilities include payables for securities purchased but not yet settled, Fund shares redeemed but not yet paid, and expenses owed but not yet paid. Additionally, there may be other assets and liabilities such as unrealized gain or loss on forward currency contracts.
The section entitled “Net Assets Consist of” breaks down the components of the Fund’s net assets. Because the Fund must distribute substantially all earnings, you will notice that a significant portion of net assets is shareholder capital.
The last section of this statement reports the net asset value (“NAV”) per share on the last day of the reporting period. The NAV is calculated by dividing the Fund’s net assets for each share class (assets minus liabilities) by the number of shares outstanding.
Consolidated Statement of Operations
This statement details the Fund’s income, expenses, realized gains and losses on securities and currency transactions, and changes in unrealized appreciation or depreciation of Fund holdings.
The first section in this statement, entitled “Investment Income,” reports the dividends earned from securities and interest earned from interest-bearing securities in the Fund.
The next section reports the expenses incurred by the Fund, including the advisory fee paid to the investment adviser, transfer agent fees and expenses, and printing and postage for mailing statements, financial reports and prospectuses. Expense offsets and expense reimbursements, if any, are also shown.
The last section lists the amounts of realized gains or losses from investment and foreign currency transactions, and changes in unrealized appreciation or depreciation of investments and foreign currency-denominated assets and liabilities. The Fund will realize a gain (or loss) when it sells its position in a particular security. A change in unrealized gain (or loss) refers to the change in net appreciation or depreciation of the Fund during the reporting period. “Net Realized and Unrealized Gain/(Loss) on Investments” is affected both by changes in the market value of Fund holdings and by gains (or losses) realized during the reporting period.
Consolidated Statements of Changes in Net Assets
These statements report the increase or decrease in the Fund’s net assets during the reporting period. Changes in the Fund’s net assets are attributable to investment operations, dividends and distributions to investors, and capital share transactions. This is important to investors because it shows exactly what caused the Fund’s net asset size to change during the period.
The first section summarizes the information from the Consolidated Statement of Operations regarding changes in net assets due to the Fund’s investment operations. The Fund’s net assets may also change as a result of dividend and capital gains distributions to investors. If investors receive their dividends and/or distributions in cash, money is taken out of the Fund to pay the dividend and/or distribution. If investors reinvest their dividends and/or distributions, the Fund’s net assets will not be affected. If you compare the Fund’s “Net Decrease from Dividends and Distributions” to “Reinvested Dividends and Distributions,” you will notice that dividends and distributions have little effect on the Fund’s net assets. This is because the majority of the Fund’s investors reinvest their dividends and/or distributions.
The reinvestment of dividends and distributions is included under “Capital Share Transactions.” “Capital Shares” refers to the money investors contribute to the Fund through purchases or withdrawals via redemptions. The Fund’s net assets will increase and decrease in value as investors purchase and redeem shares from the Fund.
Consolidated Financial Highlights
This schedule provides a per-share breakdown of the components that affect the Fund’s NAV for current and past reporting periods as well as total return, asset size, ratios, and portfolio turnover rate.
The first line in the table reflects the NAV per share at the beginning of the reporting period. The next line reports the net investment income/(loss) per share. Following is the per share total of net gains/(losses), realized and unrealized. Per share dividends and distributions to investors are then subtracted to arrive at the NAV per share at the end of the period. The next line reflects the total return for the period. Also included are ratios of expenses and net investment income to average net assets.
54 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Useful Information About Your Fund Report (unaudited)
The Fund’s expenses may be reduced through expense offsets and expense reimbursements. The ratios shown reflect expenses before and after any such offsets and reimbursements.
The ratio of net investment income/(loss) summarizes the income earned less expenses, divided by the average net assets of the Fund during the reporting period. Do not confuse this ratio with the Fund’s yield. The net investment income ratio is not a true measure of the Fund’s yield because it does not take into account the dividends distributed to the Fund’s investors.
The next figure is the portfolio turnover rate, which measures the buying and selling activity in the Fund. Portfolio turnover is affected by market conditions, changes in the asset size of the Fund, fluctuating volume of shareholder purchase and redemption orders, the nature of the Fund’s investments, and the investment style and/or outlook of the portfolio manager(s) and/or investment personnel. A 100% rate implies that an amount equal to the value of the entire portfolio was replaced once during the fiscal year; a 50% rate means that an amount equal to the value of half the portfolio is traded in a year; and a 200% rate means that an amount equal to the value of the entire portfolio is traded every six months.
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Janus Henderson Diversified Alternatives Fund
Notes
NotesPage1
56 | DECEMBER 31, 2017 |
Janus Henderson Diversified Alternatives Fund
Notes
NotesPage2
Janus Investment Fund | 57 |
Knowledge. Shared
At Janus Henderson, we believe in the sharing of expert insight for better investment and business decisions. We call this ethos Knowledge. Shared.
Learn more by visiting janushenderson.com.
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This report is submitted for the general information of shareholders of the Fund. It is not an offer or solicitation for the Fund and is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||||||||
Janus Henderson, Janus, Henderson, Perkins, Intech and Henderson Geneva are trademarks or registered trademarks of Janus Henderson Investors. © Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC. Funds distributed by Janus Henderson Distributors | ||||||||
125-24-93018 02-18 | ||||||||
SEMIANNUAL REPORT December 31, 2017 | |||
Janus Henderson Dividend & Income Builder Fund (formerly named Henderson Dividend & Income Builder Fund) | |||
Janus Investment Fund | |||
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HIGHLIGHTS · Portfolio management perspective · Investment strategy behind your fund · Fund performance, characteristics | ||
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Table of Contents
Janus Henderson Dividend & Income Builder Fund
Janus Henderson Dividend & Income Builder Fund (unaudited)
PERFORMANCE
The Janus Henderson Dividend & Income Builder Fund Class I Shares returned 7.38% over the 6-month reporting period ended December 31, 2017. The Fund’s primary benchmark, MSCI World IndexSM (Net), returned 10.61% and its peer group, Morningstar World Allocation category, returned 6.60%.
INVESTMENT ENVIRONMENT
Global equity markets rose throughout the period, with the MSCI World Index (Net) producing a total return of 10.61% in U.S. dollars. Within this, U.S. equities performed particularly strongly, as Republican tax reform (including a significant cut to the corporation tax rate) was successfully passed, providing a boost to U.S. corporate earnings growth expectations in 2018. European (ex-UK) markets also performed well on the back of stronger than expected economic growth, and on news that the European Central Bank’s tapering of the quantitative easing program would be less severe than consensus believed.
During the period, sector performance diverged widely; cyclical sectors such as materials, energy and information technology performed strongly while on the whole defensive sectors such as consumer staples lagged. This divergence in performance was, we think, for two (not unrelated) reasons – largely resilient global economic data and a rise in global commodity prices.
PERFORMANCE DISCUSSION
The Fund underperformed its primary benchmark, the MSCI World Index (Net), during the period; however the Fund met its income growth objectives. Lagging relative performance was primarily a result of the Fund’s allocation to the fixed income sub-portfolio (which returned positive performance on an absolute basis but was a drag relative to the to the equity benchmark) as bond yields rose.
By region, the Fund’s overweight position in Europe (including UK) was a positive contributor to performance. However this was offset by the Fund’s underweight positions in the U.S. and Japan (both of which performed strongly). The U.S. and Japan are lower-yielding markets and the Fund maintains a structural underweight position in them.
By sector, the Fund’s defensive bias was a detractor as the market favored cyclicals over the period. More broadly at the sector level the Fund’s overweight in the energy sector was a positive contributor to returns. The Fund increased its energy position over the last year to an overweight position on the back of an improvement in
Janus Investment Fund | 1 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
cash flows for the sector which has increased dividend cover. The recent increase in the oil price further supports the investment case, and we believe there is scope for dividend yields to compress as the market gains confidence in the sustainability of dividend payments.
Among the largest relative detractors by sector was the Fund’s underweight position to the information technology sector as a number of low dividend yield shares such as Apple and Alphabet (which the Fund does not own) performed strongly.
Please see the Derivative Instruments section in the "notes to financial statements" for a discussion of derivatives used by the Fund.
OUTLOOK
The Fund remains quite defensively positioned, with overweight positions in sectors including telecommunication services and consumer staples (food, beverage and tobacco). This is partly as a result of the high income objectives of the Fund, as these more defensive sectors tend to have more stable free cash flow generation that lends itself well to paying an attractive dividend to shareholders. It is also a factor of current valuation levels. As the global economy is growing well, cyclical sectors performed strongly in 2017 and we are tending to find better value among defensive sectors.
Within the global bond market, the default environment remains benign although the range and speed of industry disruptions is something we continue to pay close attention to. Against this backdrop we retain a focus on seeking out quality businesses with sustainable cash flows. We expect coupons to provide the main source of returns for the fixed income portfolio going forward.
Thank you for your investment in Janus Henderson Dividend & Income Builder Fund.
2 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Fund At A Glance
December 31, 2017
5 Top Performers - Holdings |
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Contribution | Contribution | |||||
Microsoft Corp | 0.85% | General Electric Co | -0.33% | |||
Royal Dutch Shell PLC | 0.53% | Wells Fargo & Co | -0.14% | |||
Deutsche Post AG | 0.52% | Philip Morris International Inc | -0.10% | |||
BP PLC | 0.47% | Hanesbrands Inc. | -0.09% | |||
Chevron Corp | 0.46% | Nielsen Holdings PLC | -0.09% | |||
5 Top Performers - Sectors* |
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Fund | Fund Weighting | MSCI World Index (Net) | ||||
Contribution | (Average % of Equity) | Weighting | ||||
Energy | 0.66% | 8.21% | 6.13% | |||
Health Care | 0.34% | 9.78% | 12.19% | |||
Real Estate | 0.21% | 4.72% | 3.17% | |||
Utilities | 0.19% | 2.89% | 3.17% | |||
Telecom Services | 0.09% | 6.17% | 2.86% | |||
5 Bottom Performers - Sectors* |
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Fund | Fund Weighting | MSCI World Index (Net) | ||||
Contribution | (Average % of Equity) | Weighting | ||||
Other** | -0.71% | 5.83% | 0.00% | |||
Industrials | -0.61% | 12.21% | 11.46% | |||
Consumer Staples | -0.49% | 11.69% | 9.23% | |||
Financials | -0.40% | 18.54% | 18.03% | |||
Consumer Discretionary | -0.29% | 8.24% | 12.18% | |||
Security contribution to performance is measured by using an algorithm that multiplies the daily performance of each security with the previous day’s ending weight in the portfolio and is gross of advisory fees. Fixed income securities and certain equity securities, such as private placements and some share classes of equity securities, are excluded. | ||||||
* | Based on sector classification according to the Global Industry Classification Standard (“GICS”) codes, which are the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s. | |||||
** | Not a GICS classified sector. | |||||
Janus Investment Fund | 3 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Fund At A Glance
December 31, 2017
5 Largest Equity Holdings - (% of Net Assets) | |
Microsoft Corp | |
Software | 3.0% |
Pfizer Inc | |
Pharmaceuticals | 2.2% |
RELX NV | |
Professional Services | 2.1% |
Chevron Corp | |
Oil, Gas & Consumable Fuels | 1.8% |
Deutsche Post AG | |
Air Freight & Logistics | 1.8% |
10.9% | |
Asset Allocation - (% of Net Assets) | |||||
Common Stocks | 80.3% | ||||
Corporate Bonds | 15.7% | ||||
Investment Companies | 3.6% | ||||
Other | 0.4% | ||||
100.0% | |||||
Top Country Allocations - Long Positions - (% of Investment Securities) | |
As of December 31, 2017
| As of June 30, 2017
|
4 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Performance
See important disclosures on the next page. |
| Expense Ratios - | |||||||||
Average Annual Total Return - for the periods ended December 31, 2017 |
|
| per the October 27, 2017 prospectuses | |||||||
|
| Fiscal | One | Five | Since |
|
| Total Annual Fund | Net Annual Fund | |
Class A Shares at NAV |
| 7.30% | 17.48% | 8.60% | 9.26% |
|
| 1.30% | 1.15% | |
Class A Shares at MOP |
| 1.13% | 11.61% | 7.49% | 8.22% |
|
|
|
| |
Class C Shares at NAV | 6.94% | 16.61% | 7.78% | 8.44% |
|
| 2.07% | 1.92% | ||
Class C Shares at CDSC |
| 5.94% | 15.61% | 7.78% | 8.44% |
|
|
|
| |
Class D Shares(1) |
| 7.39% | 17.62% | 8.74% | 9.39% |
|
| 1.15% | 1.00% | |
Class I Shares |
| 7.38% | 17.78% | 8.85% | 9.50% |
|
| 1.09% | 0.94% | |
Class N Shares |
| 7.45% | 17.66% | 8.75% | 9.41% |
|
| 1.15% | 1.00% | |
Class S Shares |
| 7.24% | 17.28% | 8.37% | 9.03% |
|
| 1.50% | 1.35% | |
Class T Shares |
| 7.30% | 17.47% | 8.62% | 9.28% |
|
| 1.25% | 1.10% | |
MSCI World Index (Net) |
| 10.61% | 22.40% | 11.64% | 12.31% |
|
|
|
| |
MSCI World Index (Gross) |
| 10.86% | 23.07% | 12.26% | 12.94% |
|
|
|
| |
Morningstar Quartile - Class I Shares |
| - | 1st | 1st | 1st |
|
|
|
| |
Morningstar Ranking - based on total returns for World Allocation Funds |
| - | 69/459 | 22/391 | 15/388 |
|
|
|
| |
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold. For the most recent month-end performance call 800.668.0434 (or 800.525.3713 if you hold shares directly with Janus Henderson) or visit janushenderson.com/performance (or janushenderson.com/allfunds if you hold shares directly with Janus Henderson).
Maximum Offering Price (MOP) returns include the maximum sales charge of 5.75%. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
CDSC returns include a 1% contingent deferred sales charge (CDSC) on Shares redeemed within 12 months of purchase. Net Asset Value (NAV) returns exclude this charge, which would have reduced returns.
Net expense ratios reflect the expense waiver, if any, contractually agreed to through at least November 1, 2018.
Janus Investment Fund | 5 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Performance
The expense ratios shown are estimated.
Performance may be affected by risks that include those associated with non-diversification, portfolio turnover, short sales, potential conflicts of interest, foreign and emerging markets, initial public offerings (IPOs), high-yield and high-risk securities, undervalued, overlooked and smaller capitalization companies, real estate related securities including Real Estate Investment Trusts (REITs), derivatives, and commodity-linked investments. Each product has different risks. Please see the prospectus for more information about risks, holdings and other details.
Returns include reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. The returns do not include adjustments in accordance with generally accepted accounting principles required at the period end for financial reporting purposes..
See Financial Highlights for actual expense ratios during the reporting period.
Returns of the Fund shown prior to June 5, 2017 are those for Henderson Dividend & Income Builder Fund (the “Predecessor Fund”), which merged into the Fund after the close of business on June 2, 2017. The Predecessor Fund was advised by Henderson Global Investors (North America) Inc. and subadvised by Henderson Investment Management Limited. Class A Shares, Class C Shares, Class I Shares, and Class R6 Shares of the Predecessor Fund were reorganized into Class A Shares, Class C Shares, Class I Shares, and Class N Shares, respectively, of the Fund. In connection with this reorganization, certain shareholders of the Predecessor Fund who held shares directly with the Predecessor Fund and not through an intermediary had the Class A Shares, Class C Shares, Class I Shares, and Class N Shares of the Fund received in the reorganization automatically exchanged for Class D Shares of the Fund following the reorganization. Class A Shares, Class C Shares, and Class I Shares of the Predecessor Fund commenced operations with the Predecessor Fund’s inception on August 1, 2012. Class R6 Shares of the Predecessor Fund commenced operations on November 30, 2015.
Performance of Class A Shares shown for periods prior to June 5, 2017 reflects the performance of Class A Shares of the Predecessor Fund, calculated using the fees and expenses of Class A Shares of the Predecessor Fund, in effect during the periods shown, net of any fee and expense limitations or waivers.
Performance of Class C Shares shown for periods prior to June 5, 2017 reflects the performance of Class C Shares of the Predecessor Fund, calculated using the fees and expenses of Class C Shares of the Predecessor Fund, in effect during the periods shown, net of any fee and expense limitations or waivers.
Performance of Class I Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the fees and expenses of Class I Shares of the Predecessor Fund, in effect during the periods shown, net of any applicable fee and expense limitations or waivers.
Performance of Class N Shares shown for periods prior to June 5, 2017 reflects the performance of Class R6 Shares of the Predecessor Fund, calculated using the fees and expenses of Class R6 Shares of the Predecessor Fund, in effect during the periods shown, net of any applicable fee and expense limitations or waivers, except that for periods prior to November 30, 2015, performance for Class N Shares reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class N Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class S Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class S Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class T Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class T Shares, net of any applicable fee and expense limitations or waivers.
Performance of Class D Shares shown for periods prior to June 5, 2017 reflects the performance of Class I Shares of the Predecessor Fund, calculated using the estimated fees and expenses of Class D Shares, net of any applicable fee and expense limitations or waivers.
If each share class of the Fund had been available during periods prior to its commencement, the performance shown may have been different. The performance shown for periods following the Fund’s commencement of each share class reflects the fees and expenses of each respective share class, net of any applicable fee and expense limitations or waivers. Please refer to the Fund’s prospectuses for further details concerning historical performance.
Ranking is for the share class shown only; other classes may have different performance characteristics. When an expense waiver is in effect, it may have a material effect on the total return, and therefore the ranking for the period.
© 2017 Morningstar, Inc. All Rights Reserved.
There is no assurance that the investment process will consistently lead to successful investing.
See Notes to Schedule of Investments and Other Information for index definitions..
Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.
6 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Performance
See “Useful Information About Your Fund Report.”
Effective June 5, 2017, the Fund’s performance is compared to the MSCI World Index net of foreign withholding taxes. Previously, the Predecessor Fund used the MSCI World Index gross of foreign withholding taxes. The net version of the benchmark is believed to more closely reflect the Fund’s investment universe.
*The Predecessor Fund’s inception date – August 1, 2012
(1) Closed to certain new investors.
Janus Investment Fund | 7 |
Janus Henderson Dividend & Income Builder Fund (unaudited)
Expense Examples
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments (applicable to Class A Shares only); and (2) ongoing costs, including management fees; 12b-1 distribution and shareholder servicing fees; transfer agent fees and expenses payable pursuant to the Transfer Agency Agreement; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. The example is based upon an investment of $1,000 invested at the beginning of the period and held for the six-months indicated, unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate column for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based upon the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Additionally, for an analysis of the fees associated with an investment in any share class or other similar funds, please visit www.finra.org/fundanalyzer.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. These fees are fully described in the Fund’s prospectuses. Therefore, the hypothetical examples are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Actual | Hypothetical | |||||||||
| Beginning | Ending | Expenses |
| Beginning | Ending | Expenses | Net Annualized | ||
Class A Shares | $1,000.00 | $1,073.00 | $5.96 |
| $1,000.00 | $1,019.46 | $5.80 | 1.14% | ||
Class C Shares | $1,000.00 | $1,069.40 | $9.91 |
| $1,000.00 | $1,015.63 | $9.65 | 1.90% | ||
Class D Shares | $1,000.00 | $1,073.90 | $5.23 |
| $1,000.00 | $1,020.16 | $5.09 | 1.00% | ||
Class I Shares | $1,000.00 | $1,073.80 | $4.81 |
| $1,000.00 | $1,020.57 | $4.69 | 0.92% | ||
Class N Shares | $1,000.00 | $1,074.50 | $4.55 |
| $1,000.00 | $1,020.82 | $4.43 | 0.87% | ||
Class S Shares | $1,000.00 | $1,072.40 | $6.27 |
| $1,000.00 | $1,019.16 | $6.11 | 1.20% | ||
Class T Shares | $1,000.00 | $1,073.00 | $5.80 |
| $1,000.00 | $1,019.61 | $5.65 | 1.11% | ||
† | Expenses Paid During Period are equal to the Net Annualized Expense Ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses in the examples include the effect of applicable fee waivers and/or expense reimbursements, if any. Had such waivers and/or reimbursements not been in effect, your expenses would have been higher. Please refer to the Notes to Financial Statements or the Fund’s prospectuses for more information regarding waivers and/or reimbursements. | |||||||||
8 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Corporate Bonds – 15.7% | |||||||
Banking – 2.1% | |||||||
Barclays Bank PLC, ICE LIBOR USD 3 Month + 1.5500%, 6.2780%µ | $1,000,000 | $1,150,701 | |||||
HBOS Capital Funding LP, 6.8500%µ | 100,000 | 102,345 | |||||
Lloyds Banking Group PLC, ICE LIBOR USD 3 Month + 1.2700%, 6.6570%µ | 546,000 | 638,820 | |||||
Royal Bank of Scotland Group PLC, 6.1000%, 6/10/23 | 500,000 | 550,503 | |||||
Wachovia Capital Trust III, ICE LIBOR USD 3 Month + 0.9300%, 5.5698%µ | 1,000,000 | 1,007,500 | |||||
3,449,869 | |||||||
Capital Goods – 1.8% | |||||||
Ardagh Packaging Finance PLC / Ardagh Holdings USA Inc, | |||||||
4.6250%, 5/15/23 (144A) | 600,000 | 612,000 | |||||
Berry Global Inc, 5.1250%, 7/15/23 | 1,000,000 | 1,040,000 | |||||
Crown Americas LLC / Crown Americas Capital Corp IV, 4.5000%, 1/15/23 | 1,000,000 | 1,015,000 | |||||
Sealed Air Corp, 5.2500%, 4/1/23 | 200,000 | 213,000 | |||||
2,880,000 | |||||||
Communications – 2.3% | |||||||
CCO Holdings LLC / CCO Holdings Capital Corp, 5.8750%, 5/1/27 | 1,000,000 | 1,027,500 | |||||
Sirius XM Radio Inc, 6.0000%, 7/15/24 | 1,000,000 | 1,057,500 | |||||
Unitymedia Hessen GmbH & Co KG / Unitymedia NRW GmbH, 5.0000%, 1/15/25 | 500,000 | 511,250 | |||||
Zayo Group LLC / Zayo Capital Inc, 5.7500%, 1/15/27 (144A) | 1,000,000 | 1,020,000 | |||||
3,616,250 | |||||||
Consumer Cyclical – 1.9% | |||||||
Amazon.com Inc, 3.1500%, 8/22/27 (144A) | 1,000,000 | 1,001,210 | |||||
International Game Technology PLC, 6.2500%, 2/15/22 | 1,000,000 | 1,077,500 | |||||
Service Corp International/US, 8.0000%, 11/15/21 | 200,000 | 233,750 | |||||
Service Corp International/US, 5.3750%, 5/15/24 | 700,000 | 737,625 | |||||
3,050,085 | |||||||
Consumer Non-Cyclical – 3.2% | |||||||
Altria Group Inc, 5.3750%, 1/31/44 | 125,000 | 151,931 | |||||
Aramark Services Inc, 5.1250%, 1/15/24 | 715,000 | 750,392 | |||||
Aramark Services Inc, 4.7500%, 6/1/26 | 291,000 | 295,365 | |||||
HCA Inc, 5.2500%, 6/15/26 | 1,000,000 | 1,060,000 | |||||
Imperial Brands Finance PLC, 4.2500%, 7/21/25 | 1,000,000 | 1,048,298 | |||||
Johnson & Johnson, 2.9000%, 1/15/28 | 1,000,000 | 1,001,173 | |||||
PepsiCo Inc, 4.4500%, 4/14/46 | 700,000 | 794,701 | |||||
5,101,860 | |||||||
Insurance – 1.2% | |||||||
Prudential PLC, 5.2500%µ | 900,000 | 915,750 | |||||
UnitedHealth Group Inc, 2.9500%, 10/15/27 | 1,000,000 | 996,773 | |||||
1,912,523 | |||||||
Technology – 3.2% | |||||||
Apple Inc, 3.3500%, 2/9/27 | 1,000,000 | 1,024,086 | |||||
Equinix Inc, 5.3750%, 4/1/23 | 600,000 | 620,400 | |||||
Iron Mountain Inc, 4.8750%, 9/15/27 (144A) | 1,000,000 | 1,000,000 | |||||
Microsoft Corp, 3.3000%, 2/6/27 | 1,000,000 | 1,031,211 | |||||
Oracle Corp, 3.9000%, 5/15/35 | 700,000 | 740,990 | |||||
VMware Inc, 3.9000%, 8/21/27 | 708,000 | 714,508 | |||||
5,131,195 | |||||||
Total Corporate Bonds (cost $24,860,441) | 25,141,782 | ||||||
Common Stocks – 80.3% | |||||||
Aerospace & Defense – 0.8% | |||||||
BAE Systems PLC | 156,389 | 1,202,598 | |||||
Air Freight & Logistics – 1.8% | |||||||
Deutsche Post AG | 59,685 | 2,834,983 | |||||
Auto Components – 0.6% | |||||||
GKN PLC | 214,382 | 920,357 | |||||
Automobiles – 3.5% | |||||||
General Motors Co | 30,908 | 1,266,919 | |||||
Renault SA | 24,305 | 2,442,543 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 9 |
Janus Henderson Dividend & Income Builder Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Automobiles – (continued) | |||||||
Toyota Motor Corp | 30,500 | $1,953,351 | |||||
5,662,813 | |||||||
Banks – 9.4% | |||||||
Bank of China Ltd | 2,345,000 | 1,150,746 | |||||
BAWAG Group AG* | 25,889 | 1,380,887 | |||||
BNP Paribas SA | 32,176 | 2,399,195 | |||||
ING Groep NV | 129,659 | 2,385,537 | |||||
JPMorgan Chase & Co | 12,130 | 1,297,182 | |||||
Mitsubishi UFJ Financial Group Inc | 325,500 | 2,388,641 | |||||
Nordea Bank AB | 163,194 | 1,975,809 | |||||
Swedbank AB | 82,377 | 1,983,943 | |||||
14,961,940 | |||||||
Beverages – 3.6% | |||||||
Carlsberg A/S | 10,340 | 1,238,727 | |||||
Coca-Cola Co | 29,484 | 1,352,726 | |||||
Coca-Cola European Partners PLC | 27,051 | 1,077,982 | |||||
Diageo PLC | 57,951 | 2,120,504 | |||||
5,789,939 | |||||||
Capital Markets – 3.0% | |||||||
Blackstone Group LP | 50,546 | 1,618,483 | |||||
Credit Suisse Group AG* | 43,824 | 780,281 | |||||
Natixis SA | 301,794 | 2,387,155 | |||||
4,785,919 | |||||||
Chemicals – 1.6% | |||||||
Agrium Inc | 11,093 | 1,275,695 | |||||
DowDuPont Inc | 17,859 | 1,271,918 | |||||
2,547,613 | |||||||
Commercial Services & Supplies – 1.8% | |||||||
Prosegur Cash SA | 541,107 | 1,735,767 | |||||
Societe BIC SA | 9,933 | 1,092,113 | |||||
2,827,880 | |||||||
Communications Equipment – 1.2% | |||||||
Cisco Systems Inc | 50,091 | 1,918,485 | |||||
Diversified Financial Services – 1.3% | |||||||
Standard Life Aberdeen PLC | 349,702 | 2,059,808 | |||||
Diversified Telecommunication Services – 3.4% | |||||||
Bezeq The Israeli Telecommunication Corp Ltd | 407,867 | 617,421 | |||||
Deutsche Telekom AG | 96,370 | 1,708,876 | |||||
Orange SA | 102,659 | 1,781,210 | |||||
Verizon Communications Inc | 26,116 | 1,382,320 | |||||
5,489,827 | |||||||
Electric Utilities – 2.2% | |||||||
Enel SpA | 319,508 | 1,963,649 | |||||
SSE PLC | 90,121 | 1,605,171 | |||||
3,568,820 | |||||||
Energy Equipment & Services – 0.9% | |||||||
Tenaris SA | 91,316 | 1,441,271 | |||||
Equity Real Estate Investment Trusts (REITs) – 2.4% | |||||||
Crown Castle International Corp | 12,404 | 1,376,968 | |||||
Eurocommercial Properties NV | 24,691 | 1,075,432 | |||||
ICADE | 14,193 | 1,394,820 | |||||
3,847,220 | |||||||
Food Products – 0.8% | |||||||
Nestle SA | 14,404 | 1,238,084 | |||||
Health Care Equipment & Supplies – 1.0% | |||||||
Medtronic PLC | 20,573 | 1,661,270 | |||||
Hotels, Restaurants & Leisure – 0.9% | |||||||
Las Vegas Sands Corp | 19,599 | 1,361,935 | |||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
10 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Industrial Conglomerates – 3.0% | |||||||
CK Hutchison Holdings Ltd | 118,000 | $1,481,535 | |||||
General Electric Co | 42,449 | 740,735 | |||||
Siemens AG | 18,866 | 2,617,319 | |||||
4,839,589 | |||||||
Insurance – 2.3% | |||||||
AXA SA | 44,379 | 1,315,164 | |||||
Prudential PLC | 90,737 | 2,332,416 | |||||
3,647,580 | |||||||
Media – 1.5% | |||||||
ITV PLC | 428,585 | 954,017 | |||||
NOS SGPS SA | 222,748 | 1,464,406 | |||||
2,418,423 | |||||||
Metals & Mining – 1.1% | |||||||
Rio Tinto PLC | 34,480 | 1,819,407 | |||||
Oil, Gas & Consumable Fuels – 7.3% | |||||||
BP PLC | 398,856 | 2,812,397 | |||||
Chevron Corp | 23,207 | 2,905,284 | |||||
Royal Dutch Shell PLC | 83,524 | 2,785,094 | |||||
Snam SpA | 126,125 | 617,462 | |||||
TOTAL SA | 44,644 | 2,462,944 | |||||
11,583,181 | |||||||
Paper & Forest Products – 1.0% | |||||||
UPM-Kymmene OYJ | 52,995 | 1,644,146 | |||||
Personal Products – 1.0% | |||||||
Unilever NV | 28,900 | 1,623,528 | |||||
Pharmaceuticals – 7.5% | |||||||
Bayer AG | 18,399 | 2,288,096 | |||||
Johnson & Johnson | 7,650 | 1,068,858 | |||||
Novartis AG | 24,689 | 2,087,787 | |||||
Novo Nordisk A/S | 20,566 | 1,105,537 | |||||
Pfizer Inc | 96,468 | 3,494,071 | |||||
Roche Holding AG | 7,803 | 1,974,222 | |||||
12,018,571 | |||||||
Professional Services – 2.1% | |||||||
RELX NV | 144,325 | 3,317,461 | |||||
Real Estate Management & Development – 0.6% | |||||||
Nexity SA* | 16,810 | 1,000,427 | |||||
Semiconductor & Semiconductor Equipment – 2.2% | |||||||
Maxim Integrated Products Inc | 25,442 | 1,330,108 | |||||
Taiwan Semiconductor Manufacturing Co Ltd (ADR) | 55,566 | 2,203,192 | |||||
3,533,300 | |||||||
Software – 3.0% | |||||||
Microsoft Corp | 56,288 | 4,814,876 | |||||
Specialty Retail – 0.7% | |||||||
Best Buy Co Inc | 15,274 | 1,045,811 | |||||
Technology Hardware, Storage & Peripherals – 0.9% | |||||||
HP Inc | 66,860 | 1,404,729 | |||||
Textiles, Apparel & Luxury Goods – 1.1% | |||||||
Hanesbrands Inc | 46,461 | 971,500 | |||||
Pandora A/S | 6,577 | 715,911 | |||||
1,687,411 | |||||||
Tobacco – 4.0% | |||||||
British American Tobacco PLC | 19,540 | 1,318,511 | |||||
Imperial Brands PLC | 59,422 | 2,538,913 | |||||
Japan Tobacco Inc | 42,000 | 1,352,921 | |||||
Philip Morris International Inc | 10,609 | 1,120,841 | |||||
6,331,186 | |||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 11 |
Janus Henderson Dividend & Income Builder Fund
Schedule of Investments (unaudited)
December 31, 2017
Shares or | Value | ||||||
Common Stocks – (continued) | |||||||
Wireless Telecommunication Services – 0.8% | |||||||
Vodafone Group PLC | 397,978 | $1,257,000 | |||||
Total Common Stocks (cost $109,723,810) | 128,107,388 | ||||||
Investment Companies – 3.6% | |||||||
Money Markets – 3.6% | |||||||
Fidelity Investments Money Market Treasury Portfolio, 1.1400%ºº (cost $5,735,114) | 5,735,114 | 5,735,114 | |||||
Total Investments (total cost $140,319,365) – 99.6% | 158,984,284 | ||||||
Cash, Receivables and Other Assets, net of Liabilities – 0.4% | 596,411 | ||||||
Net Assets – 100% | $159,580,695 | ||||||
Summary of Investments by Country - (Long Positions) (unaudited) | |||||
% of | |||||
Investment | |||||
Country | Value | Securities | |||
United States | $58,752,248 | 37.0 | % | ||
United Kingdom | 28,132,610 | 17.7 | |||
France | 16,275,571 | 10.2 | |||
Germany | 9,960,524 | 6.3 | |||
Netherlands | 9,479,940 | 6.0 | |||
Switzerland | 6,080,374 | 3.8 | |||
Japan | 5,694,913 | 3.6 | |||
Italy | 4,022,382 | 2.5 | |||
Sweden | 3,959,752 | 2.5 | |||
Denmark | 3,060,175 | 1.9 | |||
Taiwan | 2,203,192 | 1.4 | |||
Spain | 1,735,767 | 1.1 | |||
Finland | 1,644,146 | 1.0 | |||
Hong Kong | 1,481,535 | 0.9 | |||
Portugal | 1,464,406 | 0.9 | |||
Austria | 1,380,887 | 0.9 | |||
Canada | 1,275,695 | 0.8 | |||
China | 1,150,746 | 0.7 | |||
Israel | 617,421 | 0.4 | |||
Ireland | 612,000 | 0.4 | |||
Total | $158,984,284 | 100.0 | % |
Schedule of Forward Foreign Currency Exchange Contracts, Open |
Counterparty/ Foreign Currency | Settlement Date | Foreign Currency Amount (Sold)/ Purchased | USD Currency Amount (Sold)/ Purchased | Market Value and Unrealized Appreciation/ (Depreciation) | ||||
BNP Paribas: | ||||||||
British Pound | 1/22/18 | (5,277,849) | $ | 7,060,167 | $ | (69,775) | ||
Euro | 1/22/18 | (7,099,267) | 8,397,972 | (130,626) | ||||
Total | $ | (200,401) | ||||||
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
12 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Schedule of Investments (unaudited)
December 31, 2017
The following table, grouped by derivative type, provides information about the fair value and location of derivatives within the Statement of Assets and Liabilities as of December 31, 2017.
Fair Value of Derivative Instruments (not accounted for as hedging instruments) as of December 31, 2017 | |||||
|
|
|
| Currency |
|
Liability Derivatives: | |||||
Forward foreign currency exchange contracts | $200,401 | ||||
The following table provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the period ended December 31, 2017.
The effect of Derivative Instruments (not accounted for as hedging instruments) on the Statement of Operations for the period ended December 31, 2017 | ||||
Amount of Realized Gain/(Loss) Recognized on Derivatives | ||||
Derivative | Currency |
| ||
Forward foreign currency exchange contracts | $(526,337) | |||
Amount of Change in Unrealized Appreciation/Depreciation Recognized on Derivatives | ||||
Derivative | Currency |
| ||
Forward foreign currency exchange contracts | $ 74,036 | |||
Please see the "Net Realized Gain/(Loss) on Investments" and "Change in Unrealized Net Appreciation/Depreciation" section of the Fund’s Statement of Operations.
Average Ending Monthly Market Value of Derivative Instruments During the Period Ended December 31, 2017 | |
| Market Value |
Forward foreign currency exchange contracts, sold | $15,386,960 |
See Notes to Schedule of Investments and Other Information and Notes to Financial Statements. | |
Janus Investment Fund | 13 |
Janus Henderson Dividend & Income Builder Fund
Notes to Schedule of Investments and Other Information (unaudited)
MSCI World IndexSM | MSCI World IndexSM reflects the equity market performance of global developed markets. |
ADR | American Depositary Receipt |
ICE | Intercontinental Exchange |
LIBOR | London Interbank Offered Rate |
LLC | Limited Liability Company |
LP | Limited Partnership |
PLC | Public Limited Company |
144A | Securities sold under Rule 144A of the Securities Act of 1933, as amended, are subject to legal and/or contractual restrictions on resale and may not be publicly sold without registration under the 1933 Act. Unless otherwise noted, these securities have been determined to be liquid under guidelines established by the Board of Trustees. The total value of 144A securities as of the period ended December 31, 2017 is $3,633,210, which represents 2.3% of net assets. |
* | Non-income producing security. |
ºº | Rate shown is the 7-day yield as of December 31, 2017. |
µ | This variable rate security is a perpetual bond. Perpetual bonds have no contractual maturity date, are not redeemable, and pay an indefinite stream of interest. The coupon rate shown represents the current interest rate. |
14 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Schedule of Investments and Other Information (unaudited)
The following is a summary of the inputs that were used to value the Fund’s investments in securities and other financial instruments as of December 31, 2017. See Notes to Financial Statements for more information. | |||||||||||||
Valuation Inputs Summary | |||||||||||||
Level 2 - | Level 3 - | ||||||||||||
Level 1 - | Other Significant | Significant | |||||||||||
Quotes Prices | Observable Inputs | Unobservable Inputs | |||||||||||
Assets | |||||||||||||
Investments in Securities: | |||||||||||||
Corporate Bonds | $ | - | $ | 25,141,782 | $ | - | |||||||
Common Stocks | |||||||||||||
Aerospace & Defense | - | 1,202,598 | - | ||||||||||
Air Freight & Logistics | - | 2,834,983 | - | ||||||||||
Auto Components | - | 920,357 | - | ||||||||||
Automobiles | 1,266,919 | 4,395,894 | - | ||||||||||
Banks | 1,297,182 | 13,664,758 | - | ||||||||||
Beverages | 2,430,708 | 3,359,231 | - | ||||||||||
Capital Markets | 1,618,483 | 3,167,436 | - | ||||||||||
Commercial Services & Supplies | - | 2,827,880 | - | ||||||||||
Diversified Financial Services | - | 2,059,808 | - | ||||||||||
Diversified Telecommunication Services | 1,382,320 | 4,107,507 | - | ||||||||||
Electric Utilities | - | 3,568,820 | - | ||||||||||
Energy Equipment & Services | - | 1,441,271 | - | ||||||||||
Equity Real Estate Investment Trusts (REITs) | 1,376,968 | 2,470,252 | - | ||||||||||
Food Products | - | 1,238,084 | - | ||||||||||
Industrial Conglomerates | 740,735 | 4,098,854 | - | ||||||||||
Insurance | - | 3,647,580 | - | ||||||||||
Media | - | 2,418,423 | - | ||||||||||
Metals & Mining | - | 1,819,407 | - | ||||||||||
Oil, Gas & Consumable Fuels | 2,905,284 | 8,677,897 | - | ||||||||||
Paper & Forest Products | - | 1,644,146 | - | ||||||||||
Personal Products | - | 1,623,528 | - | ||||||||||
Pharmaceuticals | 4,562,929 | 7,455,642 | - | ||||||||||
Professional Services | - | 3,317,461 | - | ||||||||||
Real Estate Management & Development | - | 1,000,427 | - | ||||||||||
Textiles, Apparel & Luxury Goods | 971,500 | 715,911 | - | ||||||||||
Tobacco | 1,120,841 | 5,210,345 | - | ||||||||||
Wireless Telecommunication Services | - | 1,257,000 | - | ||||||||||
All Other | 18,288,019 | - | - | ||||||||||
Investment Companies | 5,735,114 | - | - | ||||||||||
Total Assets | $ | 43,697,002 | $ | 115,287,282 | $ | - | |||||||
Liabilities | |||||||||||||
Other Financial Instruments(a): | |||||||||||||
Forward Foreign Currency Exchange Contracts | $ | - | $ | 200,401 | $ | - | |||||||
(a) | Other financial instruments include forward foreign currency exchange, futures, written options, written swaptions, and swap contracts. Forward foreign currency exchange contracts are reported at their unrealized appreciation/(depreciation) at measurement date, which represents the change in the contract's value from trade date. Futures, certain written options on futures, and centrally cleared swap contracts are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Written options, written swaptions, and other swap contracts are reported at their market value at measurement date. | ||||||||||||
Janus Investment Fund | 15 |
Janus Henderson Dividend & Income Builder Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
See footnotes at the end of the Statement. |
|
|
|
|
|
|
|
Assets: | ||||||
Investments, at value(1) | $ | 158,984,284 | ||||
Cash | 13 | |||||
Cash denominated in foreign currency(2) | 47,735 | |||||
Non-interested Trustees' deferred compensation | 3,045 | |||||
Receivables: | ||||||
Fund shares sold | 436,157 | |||||
Interest | 310,363 | |||||
Dividends | 148,622 | |||||
Foreign tax reclaims | 145,328 | |||||
Other assets | 7,881 | |||||
Total Assets |
|
| 160,083,428 |
| ||
Liabilities: | ||||||
Forward foreign currency exchange contracts | 200,401 | |||||
Payables: | — | |||||
Fund shares repurchased | 125,797 | |||||
Advisory fees | 97,602 | |||||
12b-1 Distribution and shareholder servicing fees | 33,719 | |||||
Professional fees | 17,185 | |||||
Transfer agent fees and expenses | 15,766 | |||||
Non-interested Trustees' deferred compensation fees | 3,045 | |||||
Custodian fees | 1,891 | |||||
Fund administration fees | 1,066 | |||||
Non-interested Trustees' fees and expenses | 815 | |||||
Accrued expenses and other payables | 5,446 | |||||
Total Liabilities |
|
| 502,733 |
| ||
Net Assets |
| $ | 159,580,695 |
| ||
See Notes to Financial Statements. | |
16 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Statement of Assets and Liabilities (unaudited)
December 31, 2017
|
|
|
|
|
|
|
Net Assets Consist of: | ||||||
Capital (par value and paid-in surplus) | $ | 140,520,104 | ||||
Undistributed net investment income/(loss) | 398,594 | |||||
Undistributed net realized gain/(loss) from investments and foreign currency transactions | 196,451 | |||||
Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation | 18,465,546 | |||||
Total Net Assets |
| $ | 159,580,695 |
| ||
Net Assets - Class A Shares | $ | 27,802,129 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,029,487 | |||||
Net Asset Value Per Share(3) |
| $ | 13.70 |
| ||
Maximum Offering Price Per Share(4) |
| $ | 14.54 |
| ||
Net Assets - Class C Shares | $ | 31,922,018 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 2,356,721 | |||||
Net Asset Value Per Share(3) |
| $ | 13.55 |
| ||
Net Assets - Class D Shares | $ | 4,507,036 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 329,205 | |||||
Net Asset Value Per Share |
| $ | 13.69 |
| ||
Net Assets - Class I Shares | $ | 91,650,137 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 6,689,698 | |||||
Net Asset Value Per Share |
| $ | 13.70 |
| ||
Net Assets - Class N Shares | $ | 633,915 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 46,380 | |||||
Net Asset Value Per Share |
| $ | 13.67 |
| ||
Net Assets - Class S Shares | $ | 52,910 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 3,865 | |||||
Net Asset Value Per Share |
| $ | 13.69 |
| ||
Net Assets - Class T Shares | $ | 3,012,550 | ||||
Shares Outstanding, $0.01 Par Value (unlimited shares authorized) | 220,139 | |||||
Net Asset Value Per Share |
| $ | 13.68 |
| ||
(1) Includes cost of $140,319,365. (2) Includes cost of $47,735. (3) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (4) Maximum offering price is computed at 100/94.25 of net asset value. |
See Notes to Financial Statements. | |
Janus Investment Fund | 17 |
Janus Henderson Dividend & Income Builder Fund
Statement of Operations (unaudited)
For the period ended December 31, 2017
|
|
|
|
|
|
Investment Income: | |||||
| Dividends | $ | 1,651,767 | ||
Interest | 493,234 | ||||
Other income | 29,388 | ||||
Foreign tax withheld | (85,326) | ||||
Total Investment Income |
| 2,089,063 |
| ||
Expenses: | |||||
Advisory fees | 547,420 | ||||
12b-1Distribution and shareholder servicing fees: | |||||
Class A Shares | 32,869 | ||||
Class C Shares | 156,693 | ||||
Class S Shares | 55 | ||||
Transfer agent administrative fees and expenses: | |||||
Class D Shares | 1,133 | ||||
Class S Shares | 64 | ||||
Class T Shares | 1,002 | ||||
Transfer agent networking and omnibus fees: | |||||
Class A Shares | 4,616 | ||||
Class C Shares | 8,052 | ||||
Class I Shares | 28,898 | ||||
Other transfer agent fees and expenses: | |||||
Class A Shares | 1,448 | ||||
Class C Shares | 1,780 | ||||
Class D Shares | 236 | ||||
Class I Shares | 1,924 | ||||
Class N Shares | 30 | ||||
Class T Shares | 11 | ||||
Registration fees | 26,124 | ||||
Professional fees | 25,374 | ||||
Fund administration fees | 5,878 | ||||
Shareholder reports expense | 5,419 | ||||
Custodian fees | 3,430 | ||||
Non-interested Trustees’ fees and expenses | 598 | ||||
Other expenses | 10,967 | ||||
Total Expenses |
| 864,021 |
| ||
Less: Excess Expense Reimbursement and Waivers |
| (5,827) |
| ||
Net Expenses |
| 858,194 |
| ||
Net Investment Income/(Loss) |
| 1,230,869 |
| ||
Net Realized Gain/(Loss) on Investments: | |||||
Investments and foreign currency transactions | 1,300,960 | ||||
Forward foreign currency exchange contracts | (526,337) | ||||
Total Net Realized Gain/(Loss) on Investments |
| 774,623 |
| ||
Change in Unrealized Net Appreciation/Depreciation: | |||||
Investments, foreign currency translations and non-interested Trustees’ deferred compensation | 8,054,033 | ||||
Forward foreign currency exchange contracts | 74,036 | ||||
Total Change in Unrealized Net Appreciation/Depreciation |
| 8,128,069 |
| ||
Net Increase/(Decrease) in Net Assets Resulting from Operations | $ | 10,133,561 |
| ||
See Notes to Financial Statements. | |
18 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Statements of Changes in Net Assets
|
|
| Period ended |
| Period ended |
| Year ended | ||||
Operations: | |||||||||||
Net investment income/(loss) | $ | 1,230,869 | $ | 4,140,712 | $ | 2,864,282 | |||||
Net realized gain/(loss) on investments | 774,623 | 1,660,388 | (1,888,832) | ||||||||
Change in unrealized net appreciation/depreciation | 8,128,069 | 6,376,130 | 2,134,525 | ||||||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
| 10,133,561 |
|
| 12,177,230 |
|
| 3,109,975 | |||
Dividends and Distributions to Shareholders: | |||||||||||
Dividends from Net Investment Income | |||||||||||
Class A Shares | (352,827) | (821,245) | (868,814) | ||||||||
Class C Shares | (342,027) | (693,252) | (547,913) | ||||||||
Class D Shares | (32,539) | (3,726) | N/A | ||||||||
Class I Shares | (1,231,935) | (2,076,324) | (1,120,978) | ||||||||
Class N Shares | (5,781) | (7,195) | (8,044) | ||||||||
Class S Shares | (660) | (466) | N/A | ||||||||
Class T Shares | (13,941) | (565) | N/A | ||||||||
Net Decrease from Dividends and Distributions to Shareholders |
| (1,979,710) |
|
| (3,602,773) |
|
| (2,545,749) | |||
Capital Share Transactions: | |||||||||||
Class A Shares | 492,579 | (16,630,544) | 24,280,254 | ||||||||
Class C Shares | (481,348) | (4,742,089) | 19,255,636 | ||||||||
Class D Shares | 3,950,400 | 479,492 | N/A | ||||||||
Class I Shares | 8,223,352 | 27,280,884 | 22,396,737 | ||||||||
Class N Shares | 569,669 | (370,933) | 394,912 | ||||||||
Class S Shares | 660 | 50,476 | N/A | ||||||||
Class T Shares | 2,916,282 | 60,575 | N/A | ||||||||
Net Increase/(Decrease) from Capital Share Transactions |
| 15,671,594 |
|
| 6,127,861 |
|
| 66,327,539 | |||
Net Increase/(Decrease) in Net Assets |
| 23,825,445 |
|
| 14,702,318 |
|
| 66,891,765 | |||
Net Assets: | |||||||||||
Beginning of period | 135,755,250 | 121,052,932 | 54,161,167 | ||||||||
| End of period | $ | 159,580,695 |
| $ | 135,755,250 |
| $ | 121,052,932 | ||
Undistributed Net Investment Income/(Loss) | $ | 398,594 |
| $ | 1,147,435 |
| $ | 606,452 | |||
(1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Period from June 5, 2017 (inception date) through June 30, 2017 for Class D Shares, Class S Shares and Class T Shares. (3) Period from November 30, 2015 (inception date) through July 31, 2016 for Class N Shares. (4) Certain prior year amounts have been reclassified to conform to the current year presentation. Presentation of certain financial statement line item descriptions have been changed to conform to the current year presentation. |
See Notes to Financial Statements. | |
Janus Investment Fund | 19 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class A Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $12.94 |
|
| $12.16 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.12 | 0.38 | |||||||
Net realized and unrealized gain/(loss) | 0.82 | 0.75 | |||||||
Total from Investment Operations |
| 0.94 |
|
| 1.13 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.18) | (0.35) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.18) |
|
| (0.35) |
| |||
Net Asset Value, End of Period | $13.70 | $12.94 | |||||||
Total Return* |
| 7.30% |
|
| 9.44% |
| |||
Net Assets, End of Period (in thousands) | $27,802 | $25,824 | |||||||
Average Net Assets for the Period (in thousands) | $26,212 | $29,932 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.15% | 1.23% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.14% | 1.23% | |||||||
Ratio of Net Investment Income/(Loss) | 1.72% | 3.36% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
Class C Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $12.81 |
|
| $12.05 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.06 | 0.30 | |||||||
Net realized and unrealized gain/(loss) | 0.83 | 0.73 | |||||||
Total from Investment Operations |
| 0.89 |
|
| 1.03 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.15) | (0.27) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.15) |
|
| (0.27) |
| |||
Net Asset Value, End of Period | $13.55 | $12.81 | |||||||
Total Return* |
| 6.94% |
|
| 8.62% |
| |||
Net Assets, End of Period (in thousands) | $31,922 | $30,671 | |||||||
Average Net Assets for the Period (in thousands) | $31,244 | $32,821 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.91% | 2.01% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.90% | 2.01% | |||||||
Ratio of Net Investment Income/(Loss) | 0.95% | 2.68% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Per share amounts are calculated based on average shares outstanding during the year or period. |
See Notes to Financial Statements. | |
20 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class A Shares | |||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| |||
Net Asset Value, Beginning of Period |
| $12.50 |
|
| $12.57 |
|
| $11.40 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.40 | 0.35 | 0.40 | 0.33 | |||||||||||
Net realized and unrealized gain/(loss) | (0.40)(3) | 0.11 | 1.10 | 1.33 | |||||||||||
Total from Investment Operations |
| — |
|
| 0.46 |
|
| 1.50 |
|
| 1.66 |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.34) | (0.33) | (0.31) | (0.26) | |||||||||||
Distributions (from capital gains) | — | (0.20) | (0.02) | — | |||||||||||
Total Dividends and Distributions |
| (0.34) |
|
| (0.53) |
|
| (0.33) |
|
| (0.26) |
| |||
Net Asset Value, End of Period | $12.16 | $12.50 | $12.57 | $11.40 | |||||||||||
Total Return* |
| 0.19% |
|
| 3.81% |
|
| 13.26% |
|
| 16.79% |
| |||
Net Assets, End of Period (in thousands) | $40,869 | $15,959 | $14,308 | $1,891 | |||||||||||
Average Net Assets for the Period (in thousands) | $30,357 | $15,010 | $12,099 | $327 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.27%(4) | 1.46% | 1.94% | 7.35% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.27%(5) | 1.30% | 1.30% | 1.30% | |||||||||||
Ratio of Net Investment Income/(Loss) | 3.37%(6) | 2.84% | 3.20% | 2.98% | |||||||||||
Portfolio Turnover Rate | 39% | 26% | 78% | 188% | |||||||||||
1 | |||||||||||||||
Class C Shares | |||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| |||
Net Asset Value, Beginning of Period |
| $12.40 |
|
| $12.49 |
|
| $11.35 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.30 | 0.26 | 0.30 | 0.25 | |||||||||||
Net realized and unrealized gain/(loss) | (0.39)(3) | 0.10 | 1.10 | 1.33 | |||||||||||
Total from Investment Operations |
| (0.09) |
|
| 0.36 |
|
| 1.40 |
|
| 1.58 |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.26) | (0.25) | (0.24) | (0.23) | |||||||||||
Distributions (from capital gains) | — | (0.20) | (0.02) | — | |||||||||||
Total Dividends and Distributions |
| (0.26) |
|
| (0.45) |
|
| (0.26) |
|
| (0.23) |
| |||
Net Asset Value, End of Period | $12.05 | $12.40 | $12.49 | $11.35 | |||||||||||
Total Return* |
| (0.58)% |
|
| 3.00% |
|
| 12.45% |
|
| 15.94% |
| |||
Net Assets, End of Period (in thousands) | $33,327 | $13,846 | $4,525 | $463 | |||||||||||
Average Net Assets for the Period (in thousands) | $24,477 | $10,077 | $2,561 | $128 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 2.04%(4) | 2.23% | 2.68% | 8.17% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 2.03%(5) | 2.05% | 2.05% | 2.05% | |||||||||||
Ratio of Net Investment Income/(Loss) | 2.55%(6) | 2.15% | 2.38% | 2.32% | |||||||||||
Portfolio Turnover Rate | 39% | 26% | 78% | 188% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2012 (inception date) through July 31, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund's securities for the year or period due to the timing of sales and repurchases of the Fund's shares in relation to fluctuating market values for the Fund's securities. (4) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.02% higher had the custodian not reimbursed the Fund.. (5) The Ratio of Net Expenses (After Waivers and Expense Offsets) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Expenses (After Waivers and Expense Offsets) would have been 0.01% higher had the custodian not reimbursed the Fund. (6) The Ratio of Net Investment Income/(Loss) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Investment Income/(Loss) would have been 0.01% lower had the custodian not reimbursed the Fund. |
See Notes to Financial Statements. | |
Janus Investment Fund | 21 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class D Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $12.93 |
|
| $13.18 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.12 | 0.04 | |||||||
Net realized and unrealized gain/(loss) | 0.83 | (0.17)(3) | |||||||
Total from Investment Operations |
| 0.95 |
|
| (0.13) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.19) | (0.12) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.19) |
|
| (0.12) |
| |||
Net Asset Value, End of Period | $13.69 | $12.93 | |||||||
Total Return* |
| 7.39% |
|
| 0.96% |
| |||
Net Assets, End of Period (in thousands) | $4,507 | $472 | |||||||
Average Net Assets for the Period (in thousands) | $1,854 | $343 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.10% | 1.10% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.00% | 1.05% | |||||||
Ratio of Net Investment Income/(Loss) | 1.78% | 4.27% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
Class I Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(4) |
| ||||
Net Asset Value, Beginning of Period |
| $12.94 |
|
| $12.16 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.13 | 0.45 | |||||||
Net realized and unrealized gain/(loss) | 0.82 | 0.71 | |||||||
Total from Investment Operations |
| 0.95 |
|
| 1.16 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.19) | (0.38) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.19) |
|
| (0.38) |
| |||
Net Asset Value, End of Period | $13.70 | $12.94 | |||||||
Total Return* |
| 7.38% |
|
| 9.70% |
| |||
Net Assets, End of Period (in thousands) | $91,650 | $78,630 | |||||||
Average Net Assets for the Period (in thousands) | $84,973 | $66,190 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.92% | 1.00% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.92% | 1.00% | |||||||
Ratio of Net Investment Income/(Loss) | 1.93% | 3.97% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 5, 2017 (inception date) through June 30, 2017. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. (4) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. |
See Notes to Financial Statements. | |
22 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class I Shares | |||||||||||||||
For a share outstanding during the year or period ended July 31 |
| 2016 |
|
| 2015 |
|
| 2014 |
|
| 2013(1) |
| |||
Net Asset Value, Beginning of Period |
| $12.49 |
|
| $12.57 |
|
| $11.39 |
|
| $10.00 |
| |||
Income/(Loss) from Investment Operations: | |||||||||||||||
Net investment income/(loss)(2) | 0.40 | 0.39 | 0.44 | 0.46 | |||||||||||
Net realized and unrealized gain/(loss) | (0.37)(3) | 0.09 | 1.09 | 1.22 | |||||||||||
Total from Investment Operations |
| 0.03 |
|
| 0.48 |
|
| 1.53 |
|
| 1.68 |
| |||
Less Dividends and Distributions: | |||||||||||||||
Dividends (from net investment income) | (0.36) | (0.36) | (0.33) | (0.29) | |||||||||||
Distributions (from capital gains) | — | (0.20) | (0.02) | — | |||||||||||
Total Dividends and Distributions |
| (0.36) |
|
| (0.56) |
|
| (0.35) |
|
| (0.29) |
| |||
Net Asset Value, End of Period | $12.16 | $12.49 | $12.57 | $11.39 | |||||||||||
Total Return* |
| 0.48% |
|
| 3.97% |
|
| 13.56% |
|
| 17.01% |
| |||
Net Assets, End of Period (in thousands) | $46,454 | $24,356 | $8,156 | $1,463 | |||||||||||
Average Net Assets for the Period (in thousands) | $36,087 | $14,987 | $4,251 | $1,982 | |||||||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
|
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.04%(4) | 1.24% | 1.66% | 7.11% | |||||||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.04%(5) | 1.05% | 1.05% | 1.05% | |||||||||||
Ratio of Net Investment Income/(Loss) | 3.37%(6) | 3.13% | 3.50% | 4.18% | |||||||||||
Portfolio Turnover Rate | 39% | 26% | 78% | 188% | |||||||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2012 (inception date) through July 31, 2013. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. (4) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.02% higher had the custodian not reimbursed the Fund.. (5) The Ratio of Net Expenses (After Waivers and Expense Offsets) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Expenses (After Waivers and Expense Offsets) would have been 0.01% higher had the custodian not reimbursed the Fund. (6) The Ratio of Net Investment Income/(Loss) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Investment Income/(Loss) would have been 0.01% lower had the custodian not reimbursed the Fund. |
See Notes to Financial Statements. | |
Janus Investment Fund | 23 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class N Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $12.91 |
|
| $12.17 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.12 | 0.40 | |||||||
Net realized and unrealized gain/(loss) | 0.84 | 0.73 | |||||||
Total from Investment Operations |
| 0.96 |
|
| 1.13 |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.20) | (0.39) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.20) |
|
| (0.39) |
| |||
Net Asset Value, End of Period | $13.67 | $12.91 | |||||||
Total Return* |
| 7.45% |
|
| 9.44% |
| |||
Net Assets, End of Period (in thousands) | $634 | $50 | |||||||
Average Net Assets for the Period (in thousands) | $289 | $281 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 0.90% | 1.12% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 0.87% | 1.06% | |||||||
Ratio of Net Investment Income/(Loss) | 1.83% | 3.58% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
Class S Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(3) |
| ||||
Net Asset Value, Beginning of Period |
| $12.93 |
|
| $13.18 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.11 | 0.03 | |||||||
Net realized and unrealized gain/(loss) | 0.82 | (0.16)(4) | |||||||
Total from Investment Operations |
| 0.93 |
|
| (0.13) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.17) | (0.12) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.17) |
|
| (0.12) |
| |||
Net Asset Value, End of Period | $13.69 | $12.93 | |||||||
Total Return* |
| 7.24% |
|
| 0.97% |
| |||
Net Assets, End of Period (in thousands) | $53 | $49 | |||||||
Average Net Assets for the Period (in thousands) | $51 | $50 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.32% | 1.44% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.20% | 1.44% | |||||||
Ratio of Net Investment Income/(Loss) | 1.65% | 3.22% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from August 1, 2016 through June 30, 2017. The Fund changed its fiscal year end from July 31 to June 30. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) Period from June 5, 2017 (inception date) through June 30, 2017. (4) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. |
See Notes to Financial Statements. | |
24 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class N Shares | ||||||
For a share outstanding during the period ended July 31 |
| 2016(1) |
| |||
Net Asset Value, Beginning of Period |
| $11.95 |
| |||
Income/(Loss) from Investment Operations: | ||||||
Net investment income/(loss)(2) | 0.28 | |||||
Net realized and unrealized gain/(loss) | 0.17 | |||||
Total from Investment Operations |
| 0.45 |
| |||
Less Dividends and Distributions: | ||||||
Dividends (from net investment income) | (0.23) | |||||
Distributions (from capital gains) | — | |||||
Total Dividends and Distributions |
| (0.23) |
| |||
Net Asset Value, End of Period | $12.17 | |||||
Total Return* |
| 3.93% |
| |||
Net Assets, End of Period (in thousands) | $403 | |||||
Average Net Assets for the Period (in thousands) | $406 | |||||
Ratios to Average Net Assets**: |
|
|
| |||
Ratio of Gross Expenses | 1.09%(3) | |||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.03%(4) | |||||
Ratio of Net Investment Income/(Loss) | 3.51%(5) | |||||
Portfolio Turnover Rate | 39% | |||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from November 30, 2015 (inception date) through July 31, 2016. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) The Ratio of Gross Expenses include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Gross Expenses would have been 0.02% higher had the custodian not reimbursed the Fund.. (4) The Ratio of Net Expenses (After Waivers and Expense Offsets) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Expenses (After Waivers and Expense Offsets) would have been 0.01% higher had the custodian not reimbursed the Fund. (5) The Ratio of Net Investment Income/(Loss) include a reimbursement of prior period custodian out-of-pocket expenses. The Ratio of Net Investment Income/(Loss) would have been 0.01% lower had the custodian not reimbursed the Fund. |
See Notes to Financial Statements. | |
Janus Investment Fund | 25 |
Janus Henderson Dividend & Income Builder Fund
Financial Highlights
Class T Shares | |||||||||
For a share outstanding during the period ended December 31, 2017 (unaudited) and the period ended June 30, 2017 | 2017 |
|
| 2017(1) |
| ||||
Net Asset Value, Beginning of Period |
| $12.93 |
|
| $13.18 |
| |||
Income/(Loss) from Investment Operations: | |||||||||
Net investment income/(loss)(2) | 0.11 | 0.03 | |||||||
Net realized and unrealized gain/(loss) | 0.83 | (0.16)(3) | |||||||
Total from Investment Operations |
| 0.94 |
|
| (0.13) |
| |||
Less Dividends and Distributions: | |||||||||
Dividends (from net investment income) | (0.19) | (0.12) | |||||||
Distributions (from capital gains) | — | — | |||||||
Total Dividends and Distributions |
| (0.19) |
|
| (0.12) |
| |||
Net Asset Value, End of Period | $13.68 | $12.93 | |||||||
Total Return* |
| 7.30% |
|
| 0.96% |
| |||
Net Assets, End of Period (in thousands) | $3,013 | $59 | |||||||
Average Net Assets for the Period (in thousands) | $780 | $52 | |||||||
Ratios to Average Net Assets**: |
|
|
|
|
|
| |||
Ratio of Gross Expenses | 1.17% | 1.20% | |||||||
Ratio of Net Expenses (After Waivers and Expense Offsets) | 1.11% | 1.19% | |||||||
Ratio of Net Investment Income/(Loss) | 1.79% | 3.48% | |||||||
Portfolio Turnover Rate | 18% | 55% | |||||||
* Total return not annualized for periods of less than one full year. ** Annualized for periods of less than one full year. (1) Period from June 5, 2017 (inception date) through June 30, 2017. (2) Per share amounts are calculated based on average shares outstanding during the year or period. (3) This amount does not agree with the change in the aggregate gains and losses in the Fund’s securities for the year or period due to the timing of sales and repurchases of the Fund’s shares in relation to fluctuating market values for the Fund’s securities. |
See Notes to Financial Statements. | |
26 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Janus Henderson Dividend & Income Builder Fund (fomerly named Henderson Dividend & Income Builder Fund) (the “Fund”) is a series of Janus Investment Fund (the “Trust”), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and therefore has applied the specialized accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The Trust offers 50 funds, each of which offers multiple share classes, with differing investment objectives and policies. The Fund seeks to provide current income from a portfolio of securities that exceeds the average yield on global stocks, and aims to provide a growing stream of income per share over time. The Fund's secondary objective is to seek to provide long-term capital appreciation. The Fund is classified as diversified, as defined in the 1940 Act.
Pursuant to the Agreement and Plan of Reorganization, the Fund acquired all the assets and liabilities of the Henderson Dividend & Income Builder Fund (the “Predecessor Fund”), a series of Henderson Global Funds, in exchange for Class A, Class C, Class I and Class N Fund shares having an aggregate net asset value equal to the value of the aggregate net assets of the same share class of the Predecessor Fund (except that Class R6 Predecessor Fund shares were exchanged for Class N Fund shares)) (the “Reorganization”). The Reorganization occurred at the close of business on June 2, 2017.
The Predecessor Fund and the Fund had identical investment objectives and substantially similar investment policies and principal risks. For financial reporting purposes, the Predecessor Fund’s financial and performance history prior to the Reorganization is carried forward and reflected in the Fund’s financial statements and financial highlights. For the fiscal year ended July 31, 2016, and prior periods, the audits of those financial statements were performed by auditors different from the auditors of this report.
The last fiscal year end of the Predecessor Fund was July 31, 2016. Subsequent to July 31, 2016, the Fund changed its fiscal year end to June 30, 2017, to reflect the fiscal year end of certain funds of the Trust. Certain prior year amounts have been reclassified to conform to the current period presentation. Presentation of certain financial statement line item descriptions have been changed to conform to the current period presentation.
The Fund offers multiple classes of shares in order to meet the needs of various types of investors. Each class represents an interest in the same portfolio of investments. Certain financial intermediaries may not offer all classes of shares. Class D shares are closed to new investors.
Class A Shares and Class C Shares are generally offered through financial intermediary platforms including, but not limited to, traditional brokerage platforms, mutual fund wrap fee programs, bank trust platforms, and retirement platforms.
Class D Shares are generally no longer being made available to new investors who do not already have a direct account with the Janus Henderson funds. Class D Shares are available only to investors who hold accounts directly with the Janus Henderson funds, to immediate family members or members of the same household of an eligible individual investor, and to existing beneficial owners of sole proprietorships or partnerships that hold accounts directly with the Janus Henderson funds.
Class I Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. Class I Shares are also available to certain direct institutional investors including, but not limited to, corporations, certain retirement plans, public plans, and foundations/endowments, who established Class I Share accounts before August 4, 2017.
Class N Shares are generally available only to financial intermediaries purchasing on behalf of: 1) certain adviser-assisted, employer-sponsored retirement plans, including 401(k) plans, 457 plans, 403(b) plans, Taft-Hartley multi-employer plans, profit-sharing and money purchase pension plans, defined benefit plans and certain welfare benefit plans, such as health savings accounts, and nonqualified deferred compensation plans; and 2) retail investors purchasing in qualified or nonqualified accounts, whose accounts are held through an omnibus account at their financial intermediary, and where the financial intermediary requires no payment or reimbursement from the Fund, Janus Capital Management LLC (“Janus Capital”), or its affiliates. Class N Shares are also available to Janus Henderson proprietary products and to certain direct institutional investors approved by Janus Distributors LLC dba Janus Henderson
Janus Investment Fund | 27 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Distributors (“Janus Henderson Distributors”) including, but not limited to, corporations, certain retirement plans, public plans, and foundations and endowments, subject to minimum investment requirements.
Class S Shares are offered through financial intermediary platforms including, but not limited to, retirement platforms and asset allocation, mutual fund wrap, or other discretionary or nondiscretionary fee-based investment advisory programs. In addition, Class S Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class S Shares on their supermarket platforms.
Class T Shares are available through certain financial intermediary platforms including, but not limited to, mutual fund wrap fee programs, managed account programs, asset allocation programs, bank trust platforms, as well as certain retirement platforms. In addition, Class T Shares may be available through certain financial intermediaries who have an agreement with Janus Capital or its affiliates to offer Class T Shares on their supermarket platforms.
The following accounting policies have been followed by the Fund and are in conformity with accounting principles generally accepted in the United States of America.
Investment Valuation
Securities held by the Fund are valued in accordance with policies and procedures established by and under the supervision of the Trustees (the “Valuation Procedures”). Equity securities traded on a domestic securities exchange are generally valued at the closing prices on the primary market or exchange on which they trade. If such price is lacking for the trading period immediately preceding the time of determination, such securities are valued at their current bid price. Equity securities that are traded on a foreign exchange are generally valued at the closing prices on such markets. In the event that there is no current trading volume on a particular security in such foreign exchange, the bid price from the primary exchange is generally used to value the security. Securities that are traded on the over-the-counter (“OTC”) markets are generally valued at their closing or latest bid prices as available. Foreign securities and currencies are converted to U.S. dollars using the applicable exchange rate in effect at the close of the New York Stock Exchange (“NYSE”). The Fund will determine the market value of individual securities held by it by using prices provided by one or more approved professional pricing services or, as needed, by obtaining market quotations from independent broker-dealers. Most debt securities are valued in accordance with the evaluated bid price supplied by the pricing service that is intended to reflect market value. The evaluated bid price supplied by the pricing service is an evaluation that may consider factors such as security prices, yields, maturities and ratings. Certain short-term securities maturing within 60 days or less may be evaluated and valued on an amortized cost basis provided that the amortized cost determined approximates market value. Securities for which market quotations or evaluated prices are not readily available or deemed unreliable are valued at fair value determined in good faith under the Valuation Procedures. Circumstances in which fair value pricing may be utilized include, but are not limited to: (i) a significant event that may affect the securities of a single issuer, such as a merger, bankruptcy, or significant issuer-specific development; (ii) an event that may affect an entire market, such as a natural disaster or significant governmental action; (iii) a nonsignificant event such as a market closing early or not opening, or a security trading halt; and (iv) pricing of a nonvalued security and a restricted or nonpublic security. Special valuation considerations may apply with respect to “odd-lot” fixed-income transactions which, due to their small size, may receive evaluated prices by pricing services which reflect a large block trade and not what actually could be obtained for the odd-lot position. The Fund uses systematic fair valuation models provided by independent third parties to value international equity securities in order to adjust for stale pricing, which may occur between the close of certain foreign exchanges and the close of the NYSE.
Valuation Inputs Summary
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurements. This standard emphasizes that fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability and establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. These inputs are summarized into three broad levels:
Level 1 – Unadjusted quoted prices in active markets the Fund has the ability to access for identical assets or liabilities.
Level 2 – Observable inputs other than unadjusted quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
28 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Assets or liabilities categorized as Level 2 in the hierarchy generally include: debt securities fair valued in accordance with the evaluated bid or ask prices supplied by a pricing service; securities traded on OTC markets and listed securities for which no sales are reported that are fair valued at the latest bid price (or yield equivalent thereof) obtained from one or more dealers transacting in a market for such securities or by a pricing service approved by the Fund’s Trustees; certain short-term debt securities with maturities of 60 days or less that are fair valued at amortized cost; and equity securities of foreign issuers whose fair value is determined by using systematic fair valuation models provided by independent third parties in order to adjust for stale pricing which may occur between the close of certain foreign exchanges and the close of the NYSE. Other securities that may be categorized as Level 2 in the hierarchy include, but are not limited to, preferred stocks, bank loans, swaps, investments in unregistered investment companies, options, and forward contracts.
Level 3 – Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
There have been no significant changes in valuation techniques used in valuing any such positions held by the Fund since the beginning of the fiscal year.
The inputs or methodology used for fair valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of inputs used as of December 31, 2017 to fair value the Fund’s investments in securities and other financial instruments is included in the “Valuation Inputs Summary” in the Notes to Schedule of Investments and Other Information.
The Fund recognizes transfers between the levels as of the beginning of the fiscal year. The following describes the amounts of transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy during the period.
Financial assets of $64,407,131 were transferred out of Level 1 to Level 2 since certain foreign equity prices were applied a fair valuation adjustment factor at the end of the current period and no factor was applied at the end of the prior fiscal year.
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold (trade date). Dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend, if such information is obtained subsequent to the ex-dividend date. Dividends from foreign securities may be subject to withholding taxes in foreign jurisdictions. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts. Gains and losses are determined on the identified cost basis, which is the same basis used for federal income tax purposes. Income, as well as gains and losses, both realized and unrealized, are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets.
Expenses
The Fund bears expenses incurred specifically on its behalf. Each class of shares bears a portion of general expenses, which are allocated daily to each class of shares based upon the ratio of net assets represented by each class as a percentage of total net assets. Expenses directly attributable to a specific class of shares are charged against the operations of such class.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Indemnifications
In the normal course of business, the Fund may enter into contracts that contain provisions for indemnification of other parties against certain potential liabilities. The Fund’s maximum exposure under these arrangements is unknown, and would involve future claims that may be made against the Fund that have not yet occurred. Currently, the risk of material loss from such claims is considered remote.
Janus Investment Fund | 29 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Foreign Currency Translations
The Fund does not isolate that portion of the results of operations resulting from the effect of changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held at the date of the financial statements. Net unrealized appreciation or depreciation of investments and foreign currency translations arise from changes in the value of assets and liabilities, including investments in securities held at the date of the financial statements, resulting from changes in the exchange rates and changes in market prices of securities held.
Currency gains and losses are also calculated on payables and receivables that are denominated in foreign currencies. The payables and receivables are generally related to foreign security transactions and income translations.
Foreign currency-denominated assets and forward currency contracts may involve more risks than domestic transactions, including currency risk, counterparty risk, political and economic risk, regulatory risk and equity risk. Risks may arise from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
Dividends and Distributions
Dividends are declared and distributed quarterly for the fund. Realized capital gains, if any are declared and distributed in December. The Fund may treat a portion of the amount paid to redeem shares as a distribution of investment company taxable income and realized capital gains that are reflected in the net asset value. This practice, commonly referred to as “equalization,” has no effect on the redeeming shareholder or a Fund’s total return, but may reduce the amounts that would otherwise be required to be paid as taxable dividends to the remaining shareholders. It is possible that the Internal Revenue Service (IRS) could challenge the Funds’ equalization methodology or calculations, and any such challenge could result in additional tax, interest, or penalties to be paid by the Fund.
The Fund may make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits, resulting in the excess portion of such dividends being designated as a return of capital. If the Fund distributes such amounts, such distributions could constitute a return of capital to shareholders for federal income tax purposes.
Federal Income Taxes
The Fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income in accordance with the requirements of Subchapter M of the Internal Revenue Code. Management has analyzed the Fund’s tax positions taken for all open federal income tax years, generally a three-year period, and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Currently, Management does not believe the bill will have a material impact on the Fund’s intention to continue to qualify as a regulated investment company, which is generally not subject to U.S. federal income tax.
2. Derivative Instruments
The Fund may invest in various types of derivatives, which may at times result in significant derivative exposure. A derivative is a financial instrument whose performance is derived from the performance of another asset. The Fund may invest in derivative instruments including, but not limited to: futures contracts, put options, call options, options on future contracts, options on foreign currencies, options on recovery locks, options on security and commodity indices, swaps, forward contracts, structured investments, and other equity-linked derivatives. Each derivative instrument that was held by the Fund during the period ended December 31, 2017 is discussed in further detail below. A summary of derivative activity by the Fund is reflected in the tables at the end of the Schedule of Investments.
The Fund may use derivative instruments for hedging purposes (to offset risks associated with an investment, currency exposure, or market conditions), to adjust currency exposure relative to a benchmark index, or for speculative purposes (to earn income and seek to enhance returns). When the Fund invests in a derivative for speculative purposes, the Fund will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative’s cost. The Fund may not use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly. The Fund’s ability to use derivative instruments may also be limited by tax considerations.
30 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate over time. Investments in derivatives may not directly correlate with the price movements of the underlying instrument. As a result, the use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case. Derivatives can be volatile and may involve significant risks.
In pursuit of its investment objective, the Fund may seek to use derivatives to increase or decrease exposure to the following market risk factors:
· Commodity Risk – the risk related to the change in value of commodities or commodity-linked investments due to changes in the overall market movements, volatility of the underlying benchmark, changes in interest rates, or other factors affecting a particular industry of commodity such as drought, floods, weather, livestock disease, embargoes, tariffs, and international economic, political, and regulatory developments.
· Counterparty Risk – the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to the Fund.
· Credit Risk – the risk an issuer will be unable to make principal and interest payments when due, or will default on its obligations.
· Currency Risk – the risk that changes in the exchange rate between currencies will adversely affect the value (in U.S. dollar terms) of an investment.
· Equity Risk – the risk related to the change in value of equity securities as they relate to increases or decreases in the general market.
· Index Risk – if the derivative is linked to the performance of an index, it will be subject to the risks associated with changes in that index. If the index changes, the Fund could receive lower interest payments or experience a reduction in the value of the derivative to below what the Fund paid. Certain indexed securities, including inverse securities (which move in an opposite direction to the index), may create leverage, to the extent that they increase or decrease in value at a rate that is a multiple of the changes in the applicable index.
· Interest Rate Risk – the risk that the value of fixed-income securities will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease.
· Leverage Risk – the risk associated with certain types of leveraged investments or trading strategies pursuant to which relatively small market movements may result in large changes in the value of an investment. The Fund creates leverage by investing in instruments, including derivatives, where the investment loss can exceed the original amount invested. Certain investments or trading strategies, such as short sales, that involve leverage can result in losses that greatly exceed the amount originally invested.
· Liquidity Risk – the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.
Derivatives may generally be traded OTC or on an exchange. Derivatives traded OTC are agreements that are individually negotiated between parties and can be tailored to meet a purchaser’s needs. OTC derivatives are not guaranteed by a clearing agency and may be subject to increased credit risk.
In an effort to mitigate credit risk associated with derivatives traded OTC, the Fund may enter into collateral agreements with certain counterparties whereby, subject to certain minimum exposure requirements, the Fund may require the counterparty to post collateral if the Fund has a net aggregate unrealized gain on all OTC derivative contracts with a particular counterparty. There is no guarantee that counterparty exposure is reduced and these arrangements are dependent on Janus Capital’s ability to establish and maintain appropriate systems and trading.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract (“forward currency contract”) is an obligation to buy or sell a specified currency at a future date at a negotiated rate (which may be U.S. dollars or a foreign currency). The Fund may enter into forward currency contracts for hedging purposes, including, but not limited to, reducing exposure to changes in foreign currency exchange rates on foreign portfolio holdings and locking in the U.S. dollar cost of firm purchase and sale commitments for securities denominated in or exposed to foreign currencies. The Fund may also invest in forward
Janus Investment Fund | 31 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
currency contracts for non-hedging purposes such as seeking to enhance returns. The Fund is subject to currency risk and counterparty risk in the normal course of pursuing its investment objective through its investments in forward currency contracts.
Forward currency contracts are valued by converting the foreign value to U.S. dollars by using the current spot U.S. dollar exchange rate and/or forward rate for that currency. Exchange and forward rates as of the close of the NYSE shall be used to value the forward currency contracts. The unrealized appreciation/(depreciation) for forward currency contracts is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations for the change in unrealized net appreciation/depreciation (if applicable). The gain or loss arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing a forward currency contract is reported on the Statement of Operations (if applicable).
The Fund may enter into forward currency contracts with the obligation to purchase foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund and/or in order to take a positive outlook on the related currency to increase exposure to currency risk. The Fund may enter into forward currency contracts with the obligation to sell foreign currencies in the future at an agreed upon rate in order to decrease exposure to currency risk associated with foreign currency denominated securities held by the Fund and/or in order to take a negative outlook on the related currency to increase exposure to currency risk.
3. Other Investments and Strategies
Additional Investment Risk
The financial crisis in both the U.S. and global economies over the past several years has resulted, and may continue to result, in a significant decline in the value and liquidity of many securities of issuers worldwide in the equity and fixed-income/credit markets. In response to the crisis, the United States and certain foreign governments, along with the U.S. Federal Reserve and certain foreign central banks, took steps to support the financial markets. The withdrawal of this support, a failure of measures put in place to respond to the crisis, or investor perception that such efforts were not sufficient could each negatively affect financial markets generally, and the value and liquidity of specific securities. In addition, policy and legislative changes in the United States and in other countries continue to impact many aspects of financial regulation. The effect of these changes on the markets, and the practical implications for market participants, including the Fund, may not be fully known for some time. As a result, it may also be unusually difficult to identify both investment risks and opportunities, which could limit or preclude the Fund’s ability to achieve its investment objective. Therefore, it is important to understand that the value of your investment may fall, sometimes sharply, and you could lose money.
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) of 2010 provided for widespread regulation of financial institutions, consumer financial products and services, broker-dealers, OTC derivatives, investment advisers, credit rating agencies, and mortgage lending, which expanded federal oversight in the financial sector, including the investment management industry. Many provisions of the Dodd-Frank Act remain pending and will be implemented through future rulemaking. Therefore, the ultimate impact of the Dodd-Frank Act and the regulations under the Dodd-Frank Act on the Fund and the investment management industry as a whole, is not yet certain.
A number of countries in the European Union (“EU”) have experienced, and may continue to experience, severe economic and financial difficulties. In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit. As a result, financial markets in the EU experienced extreme volatility and declines in asset values and liquidity. Responses to these financial problems by European governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world. Greece, Ireland, and Portugal have already received one or more "bailouts" from other Eurozone member states, and it is unclear how much additional funding they will require or if additional Eurozone
32 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
member states will require bailouts in the future. The risk of investing in securities in the European markets may also be heightened due to the referendum in which the United Kingdom voted to exit the EU (known as “Brexit”). There is considerable uncertainty about how Brexit will be conducted, how negotiations of necessary treaties and trade agreements will proceed, or how financial markets will react. In addition, one or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
Certain areas of the world have historically been prone to and economically sensitive to environmental events such as, but not limited to, hurricanes, earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes, wildfires or droughts, tornadoes, mudslides, or other weather-related phenomena. Such disasters, and the resulting physical or economic damage, could have a severe and negative impact on the Fund’s investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses as they would under normal conditions. Adverse weather conditions may also have a particularly significant negative effect on issuers in the agricultural sector and on insurance companies that insure against the impact of natural disasters.
Counterparties
Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund (“counterparty risk”). Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed. The extent of the Fund’s exposure to counterparty risk with respect to financial assets and liabilities approximates its carrying value. See the "Offsetting Assets and Liabilities" section of this Note for further details.
The Fund may be exposed to counterparty risk through participation in various programs, including, but not limited to, lending its securities to third parties, cash sweep arrangements whereby the Fund’s cash balance is invested in one or more types of cash management vehicles, as well as investments in, but not limited to, repurchase agreements, debt securities, and derivatives, including various types of swaps, futures and options. The Fund intends to enter into financial transactions with counterparties that Janus Capital believes to be creditworthy at the time of the transaction. There is always the risk that Janus Capital’s analysis of a counterparty’s creditworthiness is incorrect or may change due to market conditions. To the extent that the Fund focuses its transactions with a limited number of counterparties, it will have greater exposure to the risks associated with one or more counterparties.
Offsetting Assets and Liabilities
The Fund presents gross and net information about transactions that are either offset in the financial statements or subject to an enforceable master netting arrangement or similar agreement with a designated counterparty, regardless of whether the transactions are actually offset in the Statement of Assets and Liabilities.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, in the event of a default and/or termination event, the Fund may offset with each counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. For financial reporting purposes, the Fund does not offset certain derivative financial instruments’ payables and receivables and related collateral on the Statement of Assets and Liabilities.
Janus Investment Fund | 33 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
The following table presents gross amounts of recognized assets and/or liabilities and the net amounts after deducting collateral that has been pledged by counterparties or has been pledged to counterparties (if applicable). For corresponding information grouped by type of instrument, see the “Fair Value of Derivative Instruments as of December 31, 2017” table located in the Fund’s Schedule of Investments.
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross Amounts | |||||||||
of Recognized | Offsetting Asset | Collateral | |||||||
Counterparty | Liabilities | or Liability(a) | Pledged(b) | Net Amount | |||||
BNP Paribas | $ | 200,401 | $ | — | $ | — | $ | 200,401 | |
(a) | Represents the amount of assets or liabilities that could be offset with the same counterparty under master netting or similar agreements that management elects not to offset on the Statement of Assets and Liabilities. | ||||||||
(b) | Collateral pledged is limited to the net outstanding amount due to/from an individual counterparty. The actual collateral amounts pledged may exceed these amounts and may fluctuate in value. | ||||||||
The Fund does not exchange collateral on its forward currency contracts with its counterparties; however, the Fund may segregate cash or high-grade securities in an amount at all times equal to or greater than the Fund’s commitment with respect to these contracts. Such segregated assets, if with the Fund’s custodian, are denoted on the accompanying Schedule of Investments and are evaluated daily to ensure their market value equals or exceeds the current market value of the Fund’s corresponding forward currency contracts.
Real Estate Investing
The Fund may invest in equity and debt securities of real estate-related companies. Such companies may include those in the real estate industry or real estate-related industries. These securities may include common stocks, corporate bonds, preferred stocks, and other equity securities, including, but not limited to, mortgage-backed securities, real estate-backed securities, securities of REITs and similar REIT-like entities. A REIT is a trust that invests in real estate-related projects, such as properties, mortgage loans, and construction loans. REITs are generally categorized as equity, mortgage, or hybrid REITs. A REIT may be listed on an exchange or traded OTC.
4. Investment Advisory Agreements and Other Transactions with Affiliates
The Fund pays Janus Capital an investment advisory fee which is calculated daily and paid monthly. The following table reflects the Fund’s contractual investment advisory fee rate (expressed as an annual rate).
Average Daily Net Assets of the Portfolio | Contractual Investment Advisory Fee (%) |
First $1 Billion | 0.75 |
Next $1 Billion | 0.65 |
Above $2 Billion | 0.55 |
Prior to the Reorganization, the Fund paid Henderson Global Investors (North America) Inc. (“HGINA”), the Predecessor Fund’s investment advisor. The following table reflects the Predecessor Fund’s investment advisory fee rate (expressed as an annual rate).
Average Daily Net Assets of the Portfolio | Contractual Investment Advisory Fee (%) |
First $1 Billion | 0.75 |
Next $1 Billion | 0.65 |
Above $2 Billion | 0.55 |
Henderson Investment Management Limited (“HIML”) serves as subadviser to the Fund. As subadviser, HIML provides day-to-day management of the investment operations of the Fund subject to the general oversight of the Board of Trustees and Janus Capital. HIML is an affiliate of Janus Capital through a common parent company.
Janus Capital pays HIML a subadvisory fee rate equal to 50% of the investment advisory fee paid by the Fund to Janus Capital (net of any fee waivers and expense reimbursements).
34 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Prior to the Reorganization, HGINA engaged Henderson Investment Management Limited (“HIML”) to act as the investment sub-adviser to the Predecessor Fund. The sub-advisers provided research, advice and recommendations with respect to the purchase and sale of securities and made investment decisions regarding assets of the Predecessor Fund subject to the oversight of the Predecessor Fund’s Board of Trustees and the Predecessor Fund’s Adviser. No additional fees were charged to the Predecessor Fund for services of the sub-advisers as these fees were paid from the fees earned by HGINA.
Janus Capital has contractually agreed to waive the advisory fee payable by the Fund or reimburse expenses in an amount equal to the amount, if any, that the Fund’s normal operating expenses, including the investment advisory fee, but excluding the fees payable pursuant to a Rule 12b-1 plan, shareholder servicing fees, such as transfer agency fees (including out-of-pocket costs), administrative services fees and any networking/omnibus/administrative fees payable by any share class, brokerage commissions, interest, dividends, taxes, acquired fund fees and expenses, and extraordinary expenses, exceed the annual rate of 0.84% of the Fund’s average daily net assets. Janus Capital has agreed to continue the waivers until at least at least November 1, 2018. If applicable, amounts waived and/or reimbursed to the Fund by Janus Capital are disclosed as “Excess Expense Reimbursement and Waivers” on the Statement of Operations.
For the year ended July 31, 2016 and the period prior to the Reorganization, HGINA agreed to waive or limit its management fee and, if necessary, to reimburse expenses of the Predecessor Fund in order to limit total annual ordinary operating expenses, including distribution and service fees, but excluding any acquired fund fees and expenses as a result of investing in other funds, as a percentage of average daily net assets was 1.30%, 2.05%, 1.05%, and 1.05% for Class A, Class C, Class I, and Class R6, respectively.
Janus Services LLC (“Janus Services”), a wholly-owned subsidiary of Janus Capital, is the Fund’s transfer agent. In addition, Janus Services provides or arranges for the provision of certain other administrative services including, but not limited to, recordkeeping, accounting, order processing, and other shareholder services for the Fund. Janus Services is not compensated for its services related to the shares, except for out-of-pocket costs. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Certain, but not all, intermediaries may charge administrative fees (such as networking and omnibus) to investors in Class A Shares, Class C Shares, and Class I Shares for administrative services provided on behalf of such investors. These administrative fees are paid by the Class A Shares, Class C Shares, and Class I Shares of the Fund to Janus Services, which uses such fees to reimburse intermediaries. Consistent with the Transfer Agency Agreement between Janus Services and the Fund, Janus Services may negotiate the level, structure, and/or terms of the administrative fees with intermediaries requiring such fees on behalf of the Fund. Janus Capital and its affiliates benefit from an increase in assets that may result from such relationships. The Funds’ Trustees have set limits on fees that the Funds may incur with respect to administrative fees paid for omnibus or networked accounts. Such limits are subject to change by the Trustees in the future. These amounts are disclosed as “Transfer agent networking and omnibus fees” on the Statement of Operations.
The Fund’s Class D Shares pay an administrative services fee at an annual rate of 0.12% of the average daily net assets of Class D Shares for shareholder services provided by Janus Services. Janus Services provides or arranges for the provision of shareholder services including, but not limited to, recordkeeping, accounting, answering inquiries regarding accounts, transaction processing, transaction confirmations, and the mailing of prospectuses and shareholder reports. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Services receives an administrative services fee at an annual rate of up to 0.25% of the average daily net assets of the Fund’s Class S Shares and Class T Shares for providing or procuring administrative services to investors in Class S Shares and Class T Shares of the Fund. Janus Services expects to use all or 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. Janus Services or its affiliates may also pay fees for services provided by intermediaries to the extent the fees charged by intermediaries exceed the 0.25% of net assets charged to Class S Shares and Class T Shares of the Fund. Janus Services may keep certain amounts retained for reimbursement of out-of-pocket costs incurred for servicing clients of Class S Shares and Class T Shares. These amounts are disclosed as “Transfer agent administrative fees and expenses” on the Statement of Operations.
Janus Investment Fund | 35 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Services provided by these financial intermediaries may include, but are not limited to, recordkeeping, subaccounting, order processing, providing order confirmations, periodic statements, forwarding prospectuses, shareholder reports, and other materials to existing customers, answering inquiries regarding accounts, and other administrative services. Order processing includes the submission of transactions through the National Securities Clearing Corporation (“NSCC”) or similar systems, or those processed on a manual basis with Janus Capital. For all share classes except Class D Shares, Janus Services also seeks reimbursement for costs it incurs as transfer agent and for providing servicing.
Janus Services is compensated for its services related to the Fund’s Class D Shares. In addition to the administrative fees discussed above, Janus Services receives reimbursement for out-of-pocket costs it incurs for serving as transfer agent and providing, or arranging for, servicing to shareholders. These amounts are disclosed as “Other transfer agent fees and expenses” on the Statement of Operations.
Prior to the Reorganization, shares of the Predecessor Fund were often purchased through financial intermediaries who were agents of the Predecessor Fund for the limited purpose of completing purchases and sales. These intermediaries may provide certain networking and sub-transfer agent services with respect to Predecessor Fund shares held by that intermediary for its customers, and the intermediary may charge HGINA for those services. The Predecessor Fund reimbursed HGINA for such fees within limits specified by the Predecessor Fund’s Board of Trustees. The fees were incurred at the class level based on activity, asset levels and/or number of accounts.
Under a distribution and shareholder servicing plan (the “Plan”) adopted in accordance with Rule 12b-1 under the 1940 Act, the Fund pays the Trust’s distributor, Janus Henderson Distributors, a wholly-owned subsidiary of Janus Capital, a fee for the sale and distribution and/or shareholder servicing of the Shares at an annual rate of up to 0.25% of the Class A Shares’ average daily net assets, of up to 1.00% of the Class C Shares’ average daily net assets and of up to 0.25% of the Class S Shares’ average daily net assets. Under the terms of the Plan, the Trust is authorized to make payments to Janus Henderson Distributors for remittance to retirement plan service providers, broker-dealers, bank trust departments, financial advisors, and other financial intermediaries, as compensation for distribution and/or shareholder services performed by such entities for their customers who are investors in the Fund. These amounts are disclosed as “12b-1 Distribution and shareholder servicing fees” on the Statement of Operations. Payments under the Plan are not tied exclusively to actual 12b-1 distribution and shareholder service expenses, and the payments may exceed 12b-1 distribution and shareholder service expenses actually incurred. If any of the Fund’s actual 12b-1 distribution and shareholder service expenses incurred during a calendar year are less than the payments made during a calendar year, the Fund will be refunded the difference. Refunds, if any, are included in “12b-1 Distribution fees and shareholder servicing fees” in the Statement of Operations.
Janus Distributors is entitled to retain all fees paid under the Class C Plan for the first 12 months on any investment in Class C Shares to recoup its expenses with respect to the payment of commissions on sales of Class C Shares. Financial intermediaries will become eligible for compensation under the Class C Plan beginning in the 13th month following the purchase of Class C Shares, although Janus Distributors may, pursuant to a written agreement between Janus Distributors and a particular financial intermediary, pay such financial intermediary 12b-1 fees prior to the 13th month following the purchase of Class C Shares.
Prior to the Reorganization, the Predecessor Fund’s Trust adopted a distribution plan for Class A and Class C shares of the Predecessor Fund in accordance with Rule 12b-1 under the 1940 Act (the “12b-1 Plan”). Under the 12b-1 Plan, the Predecessor Fund paid the distributor an annual fee of 0.25% of the average daily net assets attributable to Class A shares, an annual fee of 1.00% of the average daily net assets attributable to Class C shares. The 12b-1 Plan was used to induce or compensate financial intermediaries (including brokerage firms, depository institutions and other firms) to provide distribution services to the Predecessor Fund and their shareholders.
Janus Capital furnishes certain administration, compliance, and accounting services to the Fund, including providing office space for the Fund and providing personnel to serve as officers to the Fund. The Fund reimburses Janus Capital for certain of its costs in providing these services (to the extent Janus Capital seeks reimbursement and such costs are not otherwise waived). These costs include some or all of the salaries, fees, and expenses of Janus Capital employees and Fund officers, including the Fund’s Chief Compliance Officer and compliance staff, who provide specified administration and compliance services to the Fund. The Fund pays these costs based on out-of-pocket expenses incurred by Janus Capital, and these costs are separate and apart from advisory fees and other expenses paid in connection with the investment advisory services Janus Capital provides to the Fund. These amounts are disclosed as “Fund administration fees” on the Statement of Operations. Total compensation of $217,876 was paid to the Chief
36 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Compliance Officer and certain compliance staff by the Trust during the period ended December 31, 2017. The Fund's portion is reported as part of “Other expenses” on the Statement of Operations.
The Board of Trustees has adopted a deferred compensation plan (the “Deferred Plan”) for independent Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. All deferred fees are credited to an account established in the name of the Trustees. The amounts credited to the account then increase or decrease, as the case may be, in accordance with the performance of one or more of the Janus Henderson funds that are selected by the Trustees. The account balance continues to fluctuate in accordance with the performance of the selected fund or funds until final payment of all amounts are credited to the account. The fluctuation of the account balance is recorded by the Fund as unrealized appreciation/(depreciation) and is included as of December 31, 2017 on the Statement of Assets and Liabilities in the asset, “Non-interested Trustees’ deferred compensation,” and liability, “Non-interested Trustees’ deferred compensation fees.” Additionally, the recorded unrealized appreciation/(depreciation) is included in “Unrealized net appreciation/(depreciation) of investments, foreign currency translations and non-interested Trustees’ deferred compensation” on the Statement of Assets and Liabilities. Deferred compensation expenses for the period ended December 31, 2017 are included in “Non-interested Trustees’ fees and expenses” on the Statement of Operations. Trustees are allowed to change their designation of mutual funds from time to time. Amounts will be deferred until distributed in accordance with the Deferred Plan. Deferred fees of $210,375 were paid by the Trust to the Trustees under the Deferred Plan during the period ended December 31, 2017.
Prior to the Reorganization, certain officers and trustees of the Predecessor Fund’s Trust were also officers of HGINA. None of the Predecessor Fund’s Trust’s officers, other than the Chief Compliance Officer, were compensated by the Predecessor Fund’s Trust. The Predecessor Fund’s Trust made no direct payments to the trustees affiliated with HGINA. The Predecessor Fund paid part of the full compensation paid to the Predecessor Fund’s Chief Compliance Officer.
Prior to the Reorganization, State Street served as the administrator for the Predecessor Fund. As compensation for the administrative services provided by State Street, the Predecessor Fund paid State Street an annual administration fee based upon a percentage of the average net assets of the Predecessor Fund.
Class A Shares include a 5.75% upfront sales charge of the offering price of the Fund. The sales charge is allocated between Janus Henderson Distributors and financial intermediaries. During the period ended December 31, 2017, Janus Henderson Distributors retained upfront sales charges of $10,246.
A contingent deferred sales charge (“CDSC”) of 1.00% will be deducted with respect to Class A Shares purchased without a sales load and redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. There were no CDSCs paid by redeeming shareholders of Class A Shares to Janus Henderson Distributors during the period ended December 31, 2017.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended December 31, 2017, redeeming shareholders of Class C Shares paid CDSCs of $154.
Janus Investment Fund | 37 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
As of December 31, 2017, shares of the Fund were owned by affiliates of Janus Henderson Investors, and/or other funds advised by Janus Henderson, as indicated in the table below:
Class | % of Class Owned |
| % of Fund Owned |
| ||
Class A Shares | - | %* | - | %* | ||
Class C Shares | -* | -* | ||||
Class D Shares | 1 | -* | ||||
Class I Shares | -* | -* | ||||
Class N Shares | 8 | -* | ||||
Class S Shares | 100 | -* | ||||
Class T Shares | 2 | -* | ||||
* | Less than 0.50% | |||||
In addition, other shareholders, including other funds, individuals, accounts, as well as the Fund’s portfolio manager(s) and/or investment personnel, may from time to time own (beneficially or of record) a significant percentage of the Fund’s Shares and can be considered to “control” the Fund when that ownership exceeds 25% of the Fund’s assets (and which may differ from control as determined in accordance with accounting principles generally accepted in the United States of America).
5. Federal Income Tax
Income and capital gains distributions are determined in accordance with income tax regulations that may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as net short-term gains, deferral of wash sale losses, foreign currency transactions, net investment losses, and capital loss carryovers.
The Fund has elected to treat gains and losses on forward foreign currency contracts as capital gains and losses, if applicable. Other foreign currency gains and losses on debt instruments are treated as ordinary income for federal income tax purposes pursuant to Section 988 of the Internal Revenue Code.
Accumulated capital losses noted below represent net capital loss carryovers, as of June 30, 2017, that may be available to offset future realized capital gains and thereby reduce future taxable gains distributions. The following table shows these capital loss carryovers.
Capital Loss Carryover Schedule | |||||
For the period ended June 30, 2017 | |||||
No Expiration | |||||
| Short-Term | Long-Term | Accumulated | ||
| $ - | $ (875,255) | $ (875,255) | ||
The aggregate cost of investments and the composition of unrealized appreciation and depreciation of investment securities for federal income tax purposes as of December 31, 2017 are noted below. The primary differences between book and tax appreciation or depreciation of investments are wash sale loss deferrals, investments in partnerships and investments in passive foreign investment companies.
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ 140,337,619 | $20,591,791 | $ (1,945,126) | $ 18,646,665 |
38 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Information on the tax components of derivatives as of December 31, 2017 is as follows:
Federal Tax Cost | Unrealized | Unrealized | Net Tax Appreciation/ |
$ - | $ - | $ (200,401) | $ (200,401) |
Tax cost of investments and unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
6. Capital Share Transactions
Period ended December 31, 2017 | Period ended June 30, 2017(1) | |||||
Shares | Amount | Shares | Amount | |||
Class A Shares: | ||||||
Shares sold | 174,206 | $ 2,350,723 | 754,911 | $ 9,122,480 | ||
Reinvested dividends and distributions | 25,058 | 338,243 | 61,530 | 760,901 | ||
Shares repurchased | (165,112) | (2,196,387) | (2,181,055) | (26,513,925) | ||
Net Increase/(Decrease) | 34,152 | $ 492,579 |
| (1,364,614) | $(16,630,544) | |
Class C Shares: | ||||||
Shares sold | 241,480 | $ 3,209,137 | 834,857 | $ 9,909,376 | ||
Reinvested dividends and distributions | 22,752 | 303,621 | 50,464 | 619,971 | ||
Shares repurchased | (301,000) | (3,994,106) | (1,257,449) | (15,271,436) | ||
Net Increase/(Decrease) | (36,768) | $ (481,348) |
| (372,128) | $ (4,742,089) | |
Class D Shares: | ||||||
Shares sold | 311,725 | $ 4,206,214 | 36,199 | $ 475,766 | ||
Reinvested dividends and distributions | 2,377 | 32,248 | 287 | 3,726 | ||
Shares repurchased | (21,383) | (288,062) | - | - | ||
Net Increase/(Decrease) | 292,719 | $ 3,950,400 |
| 36,486 | $ 479,492 | |
Class I Shares: | ||||||
Shares sold | 904,363 | $12,123,014 | 4,236,743 | $ 51,301,987 | ||
Reinvested dividends and distributions | 89,336 | 1,206,154 | 159,418 | 1,982,927 | ||
Shares repurchased | (380,793) | (5,105,816) | (2,138,860) | (26,004,030) | ||
Net Increase/(Decrease) | 612,906 | $ 8,223,352 |
| 2,257,301 | $ 27,280,884 | |
Class N Shares: | ||||||
Shares sold | 43,304 | $ 580,318 | 8,803 | $ 110,868 | ||
Reinvested dividends and distributions | 429 | 5,781 | 592 | 7,195 | ||
Shares repurchased | (1,209) | (16,430) | (38,651) | (488,996) | ||
Net Increase/(Decrease) | 42,524 | $ 569,669 |
| (29,256) | $ (370,933) | |
Class S Shares: | ||||||
Shares sold | - | $ - | 3,780 | $ 50,010 | ||
Reinvested dividends and distributions | 49 | 660 | 36 | 466 | ||
Shares repurchased | - | - | - | - | ||
Net Increase/(Decrease) | 49 | $ 660 |
| 3,816 | $ 50,476 | |
Class T Shares: | ||||||
Shares sold | 214,687 | $ 2,904,473 | 4,543 | $ 60,010 | ||
Reinvested dividends and distributions | 1,023 | 13,941 | 43 | 565 | ||
Shares repurchased | (157) | (2,132) | - | - | ||
Net Increase/(Decrease) | 215,553 | $ 2,916,282 |
| 4,586 | $ 60,575 | |
(1) | Period from June 5, 2017 (inception date) through June 30, 2017 for Class D Shares, Class S Shares and Class T Shares. | |||||
Janus Investment Fund | 39 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
Period ended July 31, 2016(1) | Shares | Amount | |
Class A Shares: | |||
Shares sold | 2,785,583 | $32,547,025 | |
Reinvested dividends and distributions | 70,083 | 802,945 | |
Shares repurchased | (772,776) | (9,069,716) | |
Net Increase/(Decrease) | 2,082,890 | $24,280,254 | |
Class C Shares: | |||
Shares sold | 2,400,976 | $27,918,336 | |
Reinvested dividends and distributions | 42,557 | 482,691 | |
Shares repurchased | (794,960) | (9,145,391) | |
Net Increase/(Decrease) | 1,648,573 | $19,255,636 | |
Class I Shares: | |||
Shares sold | 3,995,617 | $47,186,699 | |
Reinvested dividends and distributions | 93,605 | 1,071,929 | |
Shares repurchased | (2,219,176) | (25,861,891) | |
Net Increase/(Decrease) | 1,870,046 | $22,396,737 | |
Class N Shares: | |||
Shares sold | 37,520 | $ 447,689 | |
Reinvested dividends and distributions | 696 | 8,044 | |
Shares repurchased | (5,104) | (60,821) | |
Net Increase/(Decrease) | 33,112 | $ 394,912 | |
(1) | Period from November 30, 2015 (inception date) through July 31, 2016 for Class N Shares. | ||
7. Purchases and Sales of Investment Securities
For the period ended December 31, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$40,750,100 | $ 25,037,571 | $ - | $ - |
For the period ended June 30, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding any short-term securities, short-term options contracts, TBAs, and in-kind transactions, as applicable) was as follows:
Purchases of | Proceeds from Sales | Purchases of Long- | Proceeds from Sales |
$73,955,864 | $ 68,221,543 | $ - | $ - |
8. Recent Accounting Pronouncements
The Securities and Exchange Commission ("SEC") adopted new rules as well as amendments to its rules to modernize the reporting and disclosure of information by registered investment companies. In addition, the SEC adopted amendments to Regulation S-X, which require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date of the amendments to Regulation S-X was August 1, 2017. This report incorporates the amendments to Regulation S-X.
The FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") to amend the amortization period for certain purchased callable debt securities held at a premium. The guidance requires certain
40 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Notes to Financial Statements (unaudited)
premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Management is currently evaluating the impacts of ASU 2017-08 on the financial statements.
9. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to December 31, 2017 and through the date of issuance of the Fund’s financial statements and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
Janus Investment Fund | 41 |
Janus Henderson Dividend & Income Builder Fund
Additional Information (unaudited)
Proxy Voting Policies and Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available without charge: (i) upon request, by calling 1-800-525-1093; (ii) on the Fund’s website at janushenderson.com/proxyvoting; and (iii) on the SEC’s website at http://www.sec.gov. Additionally, information regarding the Fund’s proxy voting record for the most recent twelve-month period ended June 30 is also available, free of charge, through janushenderson.com/proxyvoting and from the SEC’s website at http://www.sec.gov.
Full Holdings
The Fund is required to disclose its complete holdings in the quarterly holdings report on Form N-Q within 60 days of the end of the first and third fiscal quarters, and in the annual report and semiannual report to Fund shareholders. These reports (i) are available on the SEC’s website at http://www.sec.gov; (ii) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (information on the Public Reference Room may be obtained by calling 1-800-SEC-0330); and (iii) are available without charge, upon request, by calling a Janus Henderson representative at 1-877-335-2687 (toll free) (or 1-800-525-3713 if you hold Class D shares). Portfolio holdings consisting of at least the names of the holdings are generally available on a monthly basis with a 30-day lag. Holdings are generally posted approximately two business days thereafter under Full Holdings for the Fund at janushenderson.com/info (or janushenderson.com/reports if you hold Class D Shares).
APPROVAL OF ADVISORY AGREEMENTS DURING THE PERIOD
The Trustees of Janus Investment Fund and Janus Aspen Series, each of whom serves as an “independent” Trustee (the “Trustees”), oversee the management of each Fund of Janus Investment Fund and each Portfolio of Janus Aspen Series (each, a “Fund” and collectively, the “Funds”), and as required by law, determine annually whether to continue the investment advisory agreement for each Fund and the subadvisory agreements for the 14 Funds that utilize subadvisers.
In connection with their most recent consideration of those agreements for each Fund, the Trustees received and reviewed information provided by Janus Capital and the respective subadvisers in response to requests of the Trustees and their independent legal counsel. They also received and reviewed information and analysis provided by, and in response to requests of, their independent fee consultant. Throughout their consideration of the agreements, the Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and also met separately in executive session with their independent legal counsel and their independent fee consultant.
Additionally, in connection with their consideration of whether to continue the investment advisory agreement and subadvisory agreement for each Fund, as applicable, the Trustees also received and reviewed information in connection with the transaction to combine the respective businesses of Henderson Group plc and Janus Capital Group, Inc., the parent company of Janus Capital (the “Transaction”), announced in October 2016, which closed in the second quarter of 2017. In this regard, the Trustees reviewed information regarding the impact of the Transaction on the services to be provided by Janus Capital and each subadviser, as applicable, to the Funds under such agreements prior to the close of the Transaction as well as the services provided after the Transaction closed.
At a meeting held on December 7, 2017, based on the Trustees’ evaluation of the information provided by Janus Capital, the subadvisers, and the independent fee consultant, as well as other information, the Trustees determined that the overall arrangements between each Fund and Janus Capital and each subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by Janus Capital, its affiliates and the subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees unanimously approved the continuation of the investment advisory agreement for each Fund, and the subadvisory agreement for each subadvised Fund, for the period from February 1, 2018 through February 1, 2019, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below. Also included is a summary of the independent fee consultant’s conclusions and opinions that arose during, and were included as part of, the Trustees’ consideration of the
42 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Additional Information (unaudited)
agreements. “Management fees,” as used herein, reflect actual annual advisory fees and any administration fees (excluding out of pocket costs), net of any waivers.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by Janus Capital and the subadvisers to the Funds, taking into account the investment objective, strategies and policies 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 and each subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by Janus Capital or the subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered Janus Capital’s role as administrator to the Funds, noting that Janus Capital does not receive a fee for its services but is reimbursed for its out-of-pocket costs. The Trustees considered the role of Janus Capital in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, and overseeing communications with shareholders and the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
In this regard, the independent fee consultant noted that Janus Capital provides a number of different services for the Funds and Fund shareholders, ranging from investment management services to various other servicing functions, and that, in its opinion, Janus Capital is a capable provider of those services. The independent fee consultant also provided its belief that Janus Capital has developed a number of institutional competitive advantages that should enable it to provide superior investment and service performance over the long term.
The Trustees concluded that the nature, extent and quality of the services provided by Janus Capital or the subadviser to each Fund were appropriate and consistent with the terms of the respective advisory and subadvisory agreements, and that, taking into account steps taken to address those Funds whose performance lagged that of their peers for certain periods, the Funds were likely to benefit from the continued provision of those services. They also concluded that Janus Capital and each subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its ability to attract well-qualified personnel.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They noted that they considered Fund performance data throughout the year, including periodic meetings with each Fund’s portfolio manager(s), and also reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent data provider, and with the Fund’s benchmark index. In this regard, the independent fee consultant found that the overall Funds’ performance has been strong: for the 36 months ended September 30, 2017, approximately 70% of the Funds were in the top two quartiles of performance, as reported by Morningstar, and for the 12 months ended September 30, 2017, approximately 46% of the Funds were in the top two quartiles of performance, as reported by Morningstar.
The Trustees considered the performance of each Fund, noting that performance may vary by share class, and noted the following:
Alternative Funds
· For Janus Henderson Diversified Alternatives Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Long/Short Equity Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and the Fund’s limited performance history.
Asset Allocation Funds
· For Janus Henderson Global Allocation Fund – Conservative, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge
Janus Investment Fund | 43 |
Janus Henderson Dividend & Income Builder Fund
Additional Information (unaudited)
quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Growth, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Allocation Fund – Moderate, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
Fixed-Income Funds
· For Janus Henderson Flexible Bond Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Unconstrained Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson High-Yield Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Multi-Sector Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Real Return Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Short-Term Bond Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Strategic Income Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
Global and International Equity Funds
· For Janus Henderson Asia Equity Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
44 | DECEMBER 31, 2017 |
Janus Henderson Dividend & Income Builder Fund
Additional Information (unaudited)
· For Janus Henderson Emerging Markets Fund, the Trustees noted that the Fund’s performance was in the first Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson European Focus Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Equity Income Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Life Sciences Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Real Estate Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson Global Research Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the second Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Select Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, the steps Janus Capital had taken or was taking to improve performance, and that the performance trend was improving.
· For Janus Henderson Global Technology Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the third Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital had taken or was taking to improve performance.
· For Janus Henderson Global Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that the Fund has a performance fee structure that results in lower management fees during periods of underperformance, and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson International Opportunities Fund, the Trustees noted that the Fund’s performance was in the second Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017.
· For Janus Henderson International Small Cap Fund, the Trustees noted that, due to limited performance for the Fund, performance history was not a material factor.
· For Janus Henderson International Value Fund, the Trustees noted that the Fund’s performance was in the third Broadridge quartile for the 36 months ended May 31, 2017 and the bottom Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance and the steps Janus Capital and Perkins had taken or were taking to improve performance.
· For Janus Henderson Overseas Fund, the Trustees noted that the Fund’s performance was in the bottom Broadridge quartile for the 36 months ended May 31, 2017 and the first Broadridge quartile for the 12 months ended May 31, 2017. The Trustees noted the reasons for the Fund’s underperformance, while also noting that